Saturday, November 25, 2006

EPL "the top domestic football league in the world"

English Premier League clubs are being bought by overseas investors because they offer potentially huge returns thanks to their large regular incomes, lucrative television revenues and international brand values. Analyst Bill Gerrard of Leeds University Business School told Reuters that a club’s past history does not really have a bearing on its future potential for a big-money investor. “The English Premiership is the top domestic football league in the world,” he said. “It’s got the best international coaches and players. It attracts an international audience and is the ultimate toy for the very rich boy.”

Analyst Alan Switzer of Deloitte & Touche said the financial and promotional lure of the Premier League could not be ignored. “The top 20 Premiership clubs generated combined revenue of US$2.59 billion in 2004-05, with its nearest rival the Italian Serie A at US$1.73 billion,” he said. “English clubs benefit from modern stadiums with extensive corporate facilities hence higher ticket prices than elsewhere in Europe. The clubs are very successful at extracting value from their stadia.”

The trend of non-British businessmen buying English football clubs started when Egyptian businessman, and owner of top London department store Harrods, Mohamed Al Fayed bought Fulham FC in 1997 for US$49 million, In 2003 Russian billionaire Roman Abramovich bought Chelsea for US$99.50 million, Texan Martin Glazer paid US$1.41billion to acquire Manchester United in 2004, while Aston Villa’s new owner is another American tycoon, Randy Lerner, who bought the club for US$119 million. Russian-French businessman Alexandre Gaydamak bought Portsmouth in 2006 for US$58.46 million from its former owner and another overseas investor, Milan Mandaric.

“Premiership club brands benefit from their great exposure,” Switzer said. “The global appeal of the Premiership is illustrated by the expected 50 percent increase in overseas TV rights for the new deals from 2007-08.” Of Europe’s top five football-playing nations, German clubs had the largest average league match attendance last season at 40,800 per game. England were second with an average of 33,800 followed by Spain, 28,500, France, 21,700 and Italy, 21,500. However, English clubs generate the highest television revenues at an estimated US$1.08 billion per season from 2007-08.

English clubs are also more accessible to foreign businessmen than their European counterparts because a number of them are publicly-owned companies listed on the Stock Exchange. “The largest Spanish clubs are owned by their members which makes them more difficult to take over than the listed clubs. Some Italian clubs are listed but others are held by powerful Italian figures or companies who to date have not wished to sell,” Switzer added.

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