BBC Sport on Wednesday issued a special report on the finances of English soccer clubs relative to their Italian and Spanish counterparts, bringing in the question of foreign ownership. For starters, they say the margins for owning a big soccer club have traditionally been small. So why are foreign investors clamoring to take over English Premier League clubs? The short answer: these investors see an under-exploited opportunity in a free market where clubs are available to the highest bidder.
The EPL business is booming of late. TV revenues both at home and abroad are soaring, while ticket prices and merchandise sales, the other factors contributing massive sums to clubs’ bottom lines, also show steady upward growth. The league’s aggregate growth in revenues, slow between 2004 and 2006, is expected to soar by some $1.38 billion by the end of this year, followed by an astounding $3.35 billion in 2008, according to the financial firm Deloitte. For American sports tycoons like Tom Hicks and George Gillett (Liverpool’s new owners), the prospect of massive (and growing) overseas TV contracts is something that simply isn’t a reality for American baseball and hockey teams.