Why investors buy English Premiership clubs

Despite FIFA president Sepp Blatter saying this week that the biggest threat facing the game was foreign investors wanting football to serve them instead of them serving the game, English Premier League continue to prove attractive to men with large sums to spend, Reuters reported.

West Ham United became the sixth Premier League club to be acquired by overseas interests this week with Icelandic Eggert Magnusson, 59, a member of UEFA's Executive Committee, leading a consortium backed by billionaire compatriot Bjorgolfur Gudmundsson. They have paid $161.5 million) to acquire the club whose major, but sporadic, successes since they were formed in 1900 have come in cup competitions.

Analyst Bill Gerrard of Leeds University Business School says 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 $2.59 billion in 2004-05, with its nearest rival the Italian Serie A at $1.73 billion," he told Reuters. "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."

English clubs also generate the highest television revenues at an estimated $1.08 billion per season from 2007-08 and 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.

"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 ... 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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