Buying a football club can still be lucrative – with the right business tactics.
Many Newcastle United fans cheered the announcement on 7 October that their club had finally been sold for £305m. The sale, to a consortium headed up by Saudi Arabia’s sovereign wealth fund, adds to a long list of clubs bought by the mega-rich, including Manchester City (owned by Sheikh Mansour), Arsenal (Stan Kroenke) and Chelsea (Roman Abramovich).
But why do wealthy people or states buy football clubs in the first place? What is it about owning a team in a volatile and generally loss-making industry where success on the pitch can never be guaranteed?
Certainly the more successful clubs are a safer financial bet than those further down the football pyramid, with the lower leagues regularly haemorrhaging money (the Championship notoriously spent an average of 107% of income on wages recently).
The Premier League, meanwhile, continues to flourish financially, with its clubs bringing in plenty of revenue. Collectively, they earned £4.5b in the 2019-20 season (the latest set of available accounts) and its members made up 12 of the top 30 clubs in the world by revenue.
Of those, the so-called ‘Big Six’ Premier League clubs – Manchester City, Manchester United, Chelsea, Liverpool, and Tottenham Hotspur – are indeed the biggest six earners. Even the lowest earning among them, Arsenal, made 45% more than the next Premier League club on the list, Everton.