megavideolinks
Joined: 19 Nov 2011
Posts: 86
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 Posted: Mon Nov 28, 2011 5:50 am Post subject: Only two nancing models now remain |
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The ¯rst works for about six clubs, chie°y
Manchester United and Barcelona: Have such a big global brand that you can generate
money to pay great players. The second and rising model is the sugar daddy. Find an
Arab sheikh to buy your club as a toy."
Simon Kuper, Financial Times
Financial support for football clubs from wealthy investors is a part of the football
business. In the Premier League, the top tier of professional English football, rich
individuals invest enormous sums of money to support the club and sometimes become
de facto club owners. A model case of this is Jack Walker's investment in the second
tier Blackburn Rovers F.C. in the early 1990s, which led the club to the Premier League
championship in 1994-1995.
As the cost of such investments has increased, the group of possible investors has be-
come more exclusive such that several very wealthy non-British sheikhs and tycoons are
now among the so-called "sugar daddy" club owners. For example, Roman Abramovich
invested about $701 million in Chelsea London from 2003 to June 2008. Sheik Mansour
invested about $395 million in Manchester City from August 2008 to the beginning of
2010. Mike Ashley invested about $250 million in Newcastle United from May 2007
to May 2009, and Mohamed Al-Fayed invested about $175 million in Fulham FC from
1997 to mid-2008.
1
According to Deloitte and Touche [2009], this ¯nance model is becoming a very
important trend in the English Premier League. Further, sugar daddies' investment
in football clubs is not a uniquely British phenomenon. In the Italian Serie A, Silvio
Berlusconi and Massimo Moratti regularly transfer great sums of money to the clubs AC
Milan and FC Internazionale Milano, respectively, at the end of the season. The "sugar
daddy concept" also appears to have become the dominant ¯nance model for clubs in
Eastern Europe since the decline of communism [Franck, 2010b].
The di®erence between this type of investment and more typical investment by pro¯t-
maximizing investors outside the sports industry is that these sugar daddies invest enor-
mous amounts of money and seem not to take the resulting ¯nancial losses into account.
The utility derived from sporting success appears to compensate for the ¯nancial losses.
2
Because these sugar daddies not only ¯nancially support their clubs but also become
actual club owners with "full control", Kuper [2009] may be right in the statement that
football clubs become the toys of wealthy persons.
_____________
Article de fête
Find a Sugar Daddie |
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