Would professional football clubs still exist without wealthy owners?

[reddogkev]

This question has always interested me, especially with the suggestions on here that SL should sell up, but what happens if he decides he doesn't want to be the owner, this isn't for him, and there's no one else waiting to buy the club?

Is it too simple to suggest that would be the end of the club, or not just City, but any other football club in that circumstance?

Does the FA have any plan in place to prevent that sort of thing?  I find it amazing to think that there are that many wealthy groups/ syndicates / individuals willing to pump so much money into owning football clubs, without having the guarantee of making significant returns on their huge outlay.  They all open themselves up to the possibility of being abused or villified, losing tonnes of cash, and must all be a little bit bonkers!  

Football club owners, I salute you!

[Eddie Hitler]

I thought that many lower league clubs would go the Supporter Trust ownership model that is working well for Exeter.

But no, there is a constant queue of wealthy people desirous of making themselves less wealthy by buying a professional football club and losing millions every year.

I have always found that a bit odd.

[Sir Geoff]

7 minutes ago, reddogkev said:

This question has always interested me, especially with the suggestions on here that SL should sell up, but what happens if he decides he doesn't want to be the owner, this isn't for him, and there's no one else waiting to buy the club?

Is it too simple to suggest that would be the end of the club, or not just City, but any other football club in that circumstance?

Does the FA have any plan in place to prevent that sort of thing?  I find it amazing to think that there are that many wealthy groups/ syndicates / individuals willing to pump so much money into owning football clubs, without having the guarantee of making significant returns on their huge outlay.  They all open themselves up to the possibility of being abused or villified, losing tonnes of cash, and must all be a little bit bonkers!  

Football club owners, I salute you!

There actually is quite a long line of wealthy ( mainly American) people looking to buy EFL clubs. It just so happens (see other threads) that what we are selling is hugely bloated and over priced.

[Major Isewater]

Without wealthy owners bankrolling clubs the costs would be lower as players, staff and the like would not be able to demand such high wages. Pretty much as in the past the more successful clubs would generate more money and thrive thus attracting bigger gates and more revenue and the rest would have to get by on the scraps from the table. 
So , yes , professional clubs would still exist without wealthy owners. 
The Lansdown situation is an interesting one. If he really wants to sell then the asking price has to be interesting for a buyer which it appears it isn’t. So he drops the price or he leaves Aston Gate in a coffin and his wife or kids ‘profit’ from their inheritance. 

Edited April 5 by Major Isewater

[Mr Popodopolous]

Really interesting thread this.

I'd say..it depends. How far back do we want to go?

A club like Luton don't have a wealthy benefactor as far as I'm aware. However football at Chamoionship seems to require it.

Burnley are kind of self-sufficent or were, but a Leveraged buyout has transformed their position! Norwich and West Brom were too for a time.

Not a chance Bournemouth or Fulham e.g. rise the ranks as they have without. Going further back, Madjeski and Whelan (Reading and Wigan). Benham and Bloom albeit a combination of smarts and cash at Brentford and Brighton.

Fulham fans especially make me laugh given they go on about Financial Prudence given Shahid Khan converted some £550m or so of debt to equity in his first 9 years!! They also lost in the last 6 year's mix of PL and Parachute..-£45m, -£20m, -£48m, -£93m, £57-57.5m and-£26m but yes they are prudent and sensible.

[Blagdon red]

As the question didn't specify "UK club", I give you my German club, Union Berlin!

No owner other than the 60k plus members all paying our monthly sub. Playing top flight Bundesliga for the last 5 years, last 3 in Europe too (Champions League this season).

It can be done without billionaire owners.

[Mr Popodopolous]

1 hour ago, Sir Geoff said:

There actually is quite a long line of wealthy ( mainly American) people looking to buy EFL clubs. It just so happens (see other threads) that what we are selling is hugely bloated and over priced.

The thing is, some of these other purchase are not that attractive propositions at time of purchase.

The price reflects this often but I dunno.

ROI and Strategy for Knighthead e.g. if Birmingham get relegated I'll be happy as Larry given their arrogance and ignorance of some of their fans.

That aside I also hope Ipswich and West Brom run aground for differing reasons ie stay down but I'm interested in the overarching strategy and RoI for some of these.

Burnley has been most interesting, relegation in first full season, suddenly factoring Transfer Receipts, loads of money out of the club to fund their takeover..Ipswich transformed from a low base, Birmingham I struggle to see the ROI.

Edited April 5 by Mr Popodopolous

[Antman]

we come back to the point that Steve Lansdown has had to chuck money at the problems he himself created.

this isn't repeated benevolence, more self interest.

His tenure started as financial director and much of the debt is entirely down to his dubious and some downright terrible choices

His driving ambition seems to be based around creating a complex and over priced business model which he hope to get a large pay day from, but I don't see that happening.

so either he lowers his financial ambition on payback, or we are in some eternal limbo.

 

 

[Mr Popodopolous]

9 minutes ago, Antman said:

we come back to the point that Steve Lansdown has had to chuck money at the problems he himself created.

this isn't repeated benevolence, more self interest.

His tenure started as financial director and much of the debt is entirely down to his dubious and some downright terrible choices

His driving ambition seems to be based around creating a complex and over priced business model which he hope to get a large pay day from, but I don't see that happening.

so either he lowers his financial ambition on payback, or we are in some eternal limbo.

 

 

I'd say yes and no there, because the Championship has increasingly become a money pit. Just a question of how many millions albeit he has been in that context wasted money too.

I agree on the last bit certainly. His asking price whatever that might be is patently too high.

Edited April 5 by Mr Popodopolous

[Mr Popodopolous]

Let's have a look at a few clubs and their Cash Flow, Championship last season. They are selected clubs, some big, some not too big- in gates not necessarily history etc.

Stoke

Burnt through £20.65m in Cash for a bottom half finish.

Birmingham

Fulham are special however. This must be one of the highest in the 2nd tier in a single season, Parachute freshly Relegated, Year after Covid so mostly open again.

£103m in a season?? Cash wise.

Preston are generally seen as fairly sensible.

£10.663m of Cash. Lower sure.

 

[Son of Fred]

2 hours ago, reddogkev said:

This question has always interested me, especially with the suggestions on here that SL should sell up, but what happens if he decides he doesn't want to be the owner, this isn't for him, and there's no one else waiting to buy the club?

Is it too simple to suggest that would be the end of the club, or not just City, but any other football club in that circumstance?

Does the FA have any plan in place to prevent that sort of thing?  I find it amazing to think that there are that many wealthy groups/ syndicates / individuals willing to pump so much money into owning football clubs, without having the guarantee of making significant returns on their huge outlay.  They all open themselves up to the possibility of being abused or villified, losing tonnes of cash, and must all be a little bit bonkers!  

Football club owners, I salute you!

Would I exist without a wealthy owner ???

[CodeRed]

25 minutes ago, Mr Popodopolous said:

 

I agree on the last bit certainly. His asking price whatever that might be is patently too high.

Agreed, anything - a football club, your house, car, or something you're selling on eBay is only worth what someone is willing to pay. Other clubs - some already mentioned in the thread - have attracted buyers so clearly he's overvalued the club/Bristol Sport.

It must be an ego thing, with a nett worth of over £1 billion whatever he gets won't affect him or his family or his grandchildren who will still have enough to enjoy a very privileged life, and given he appears disillusioned with elements of football club ownership, and his son's unwillingness to take it forward in the longer term..........why not lower the price and move on??

[Mr Popodopolous]

Some of those sold relatively recently have been at a low ebb, cheaper than they might otherwise be.

Ipswich- League One, potential bargain.

Birmingham- Owners were under some quite serious level investigation by EFL (Hope that is still ongoing btw and not just quietly forgotten).

West Brom- Lai clearly out of his depth and possibly angry investors in China.

All US purchased but clearly the asking o4ife her is a stumbling block albeit I d9 have a concern with UD ownership...Leveraged buyout would be one issue I'd be concerned about and Private Equity yes and no.

No because the goal would be promotion and they would look to hire the best in class, a pressure to thrive may help, Yes because what if 5 years in we are still floundering..do PE hang around?

[Red Billy]

It’s an interesting question as there are examples to support either way but ultimately it’s not about what revenue you generate (or are bankrolled) but how wisely you spend your disposable income. Many teams have risen up the leagues with a relatively low expenditure whilst you only need to look at what we’ve spent as a club in comparison to others and where we sit in the football pyramid.  If all clubs were forced to be ran by trusts and only spend what they earn big clubs would still drop down the leagues like the size of Sunderland and Derby and the likes of Luton and Bournemouth would still get promoted. 
 

In the first premier league season there were three teams with a capacity under 20k - the same as this year. Lazy statistics maybe but shows that even with all the money small clubs can still reach the top.

[Mr Popodopolous]

Luton are an interesting example..mostly via their own endeavours and well within FFP but I didn't realise that the sale of some Tangible Asset, anyway, has given them a major cash boost.

Ultimately to help finance the stadium but combined with FFP headroom it will have assisted a push from a Cash Angle.

Says Asset under Construction intriguingly in the Year in which it was sold.

Edited April 5 by Mr Popodopolous

[Red Billy]

12 minutes ago, Mr Popodopolous said:

Luton are an interesting example..mostly via their own endeavours and well within FFP but I didn't realise that the sale of some Tangible Asset, anyway, has given them a major cash boost.

Says Asset under Construction intriguingly in the Year in which it was sold.

Purchase of intangible assets is an interesting line to put in accounts.  I notice we had it a few years back in our P&L.  It had a sub header reading Watkins and Engvall.

[22A]

The OP asks "This question has always interested me, especially with the suggestions on here that SL should sell up, but what happens if he decides he doesn't want to be the owner, this isn't for him, and there's no one else waiting to buy the club?"

Remember Rushden? Just 20 years ago City were playing them in League One. Max Griggs died and his relatives weren't interested so no more bank rolling the club. They dropped down the Leagues and in 2011 were expelled from the National League due to their unstable financial position. They have reformed but at a very low level,

Bury; financial difficulties and expelled from the EFL August 2019. Reformed and now play in the 9th tier.

[cityal]

If there were no wealthy owners would the "market" just not re-adjust itself in time.

i.e. clubs would eventually end up living within their means and being a bang average championship pro footballer (maybe £10k per week £500K per year) would not pay more than being a surgeon (maybe £100K pewr year)

*big cavbeat here these are googled figures ao could be way off, but the way football pays players is frankly at the point of being gross.

 

[Mr Popodopolous]

I'm interested in why nobody else should want to buy the club if the price and the package is right.

SL does need to change it up. The risk is, would a new prospective buyer have a medium to long term vision?

What if Ipswich, Hull, Birmingham are not up in 3 or 4 years. Will their owners start to change track, get cold feet. The ROI element is always one to consider.

[Mr Popodopolous]

Just now, cityal said:

If there were no wealthy owners would the "market" just not re-adjust itself in time.

i.e. clubs would eventually end up living within their means and being a bang average championship pro footballer (maybe £10k per week £500K per year) would not pay more than being a surgeon (maybe £100K pewr year)

*big cavbeat here these are googled figures ao could be way off, but the way football pays players is frankly at the point of being gross.

 

Eventually but I suspect a lot of clubs would have major medium term issues. If the wealthy owners suddenly ceased to exist or there was a sudden edict that Clubs had to be cash break even.

[Red Billy]

7 minutes ago, Mr Popodopolous said:

I'm interested in why nobody else should want to buy the club if the price and the package is right.

SL does need to change it up. The risk is, would a new prospective buyer have a medium to long term vision?

What if Ipswich, Hull, Birmingham are not up in 3 or 4 years. Will their owners start to change track, get cold feet. The ROI element is always one to consider.

It was talked about on another thread but once / if the hotel gets built and we were to get into the Premier League then the whole Bristol Sport package starts to look more attractive as a tangible asset. The football tourists who would snap up all those controversially available South Stand tickets whilst spending the night in the “Lansdown Plaza” perhaps make a weekend of it and watch the basketball on the Friday, Football on the Saturday and Rugby on the Sunday. “Build it and they will come”

[Mr Popodopolous]

Just now, Red Billy said:

It was talked about on another thread but once / if the hotel gets built and we were to get into the Premier League then the whole Bristol Sport package starts to look more attractive as a tangible asset. The football tourists who would snap up all those controversially available South Stand tickets whilst spending the night in the “Lansdown Plaza” perhaps make a weekend of it and watch the basketball on the Friday, Football on the Saturday and Rugby on the Sunday. “Build it and they will come”

I mean it's hard to say. On one hand I agree and it is notable that Birmingham (US) owners appear to he going for a Sporting Quarter or a Sports Quarter or similar.

Otoh it is on here seen as a millstone, if not necessarily financially then as a preference.

[ExiledAjax]

3 hours ago, reddogkev said:

This question has always interested me, especially with the suggestions on here that SL should sell up, but what happens if he decides he doesn't want to be the owner, this isn't for him, and there's no one else waiting to buy the club?

The club would enter administration, be deducted 12 points, and then ultimately likely be bought at a cut rate price.

Ultimately if absolutely no buyer could be found, then the clubs assets - the players registrations, the shares in the women's team, the training ground - would all be sold, the proceeds would go to creditors, and the company would be wound up.

The stadium, being owned by a separate company, would not be an asset of the club so would likely remain a solvent operational entity. It would lose a major revenue stream, but initially at least it would remain a sports stadium. 

Derby are the latest most relevant example.

3 hours ago, reddogkev said:

Does the FA have any plan in place to prevent that sort of thing?

No.

Other sports demonstrate that sport is possible without the involvement of the billionaires. I've said a few times that my opinion is that the basic corporate structure of football clubs - Ltd companies operating to generate value for their shareholders - is wrong. 

As @Blagdon red and @Eddie Hitler say, there are clubs out there like Union, like Exeter, that are existing and at times thriving despite having no sugar daddy. But the persistent ecosystem of football does not encourage that kind of set up.

So yes clubs can exist with billionaires, but the current system can't.

Edited April 5 by ExiledAjax

[Red Billy]

8 minutes ago, Mr Popodopolous said:

I mean it's hard to say. On one hand I agree and it is notable that Birmingham (US) owners appear to he going for a Sporting Quarter or a Sports Quarter or similar.

Otoh it is on here seen as a millstone, if not necessarily financially then as a preference.

Absolutely. Get promoted and we have Man City, Man United, Liverpool, Chelsea etc coming down in the masses. Get relegated and we have Lincoln, Stevenage, Wigan and Burton coming to town.  Not sure there will be demand for huge hotel in Ashton on a weekend without top flight sport. Could be a massive millstone. 

[Mr Popodopolous]

10 minutes ago, Red Billy said:

Absolutely. Get promoted and we have Man City, Man United, Liverpool, Chelsea etc coming down in the masses. Get relegated and we have Lincoln, Stevenage, Wigan and Burton coming to town.  Not sure there will be demand for huge hotel in Ashton on a weekend without top flight sport. Could be a massive millstone. 

Think we are cross purposes to a degree.

A premise on here is that the Rugby Club, the Basketball and possibly even the Women's side act as a millstone around the sale potential of the club.

What you say certainly makes sense too.

Edited April 5 by Mr Popodopolous

[reddogkev]

2 hours ago, Blagdon red said:

As the question didn't specify "UK club", I give you my German club, Union Berlin!

No owner other than the 60k plus members all paying our monthly sub. Playing top flight Bundesliga for the last 5 years, last 3 in Europe too (Champions League this season).

It can be done without billionaire owners.

Wow I would kill to have that model in place here, if you were a member you could claim to be one of the many owners of the club!  Let's do it, let's buy City!

Thanks for all responses, makes for fascinating reading!

[Red Billy]

16 minutes ago, Mr Popodopolous said:

Think we are cross purposes to a degree.

A premise on here is that the Rugby Club, the Basketball and possibly even the Women's side act as a millstone around the sale potential of the club.

What you say certainly makes sense too.

Ah - I see what you’re saying. Weirdly though without the football club it’s probably a better investment.  Lower incomes yes but lower outgoings. Cant see the basketball bringing in the money like it does in the NBA but the home they play in used as a music venue and conference centre could be a nice little earner.  It would probably put of a sole investor but maybe the Ontario Teachers Pension Fund might see it as a nice addition to the airport.

[joe jordans teeth]

With the luxury tax they are banging on about that might be coming in it gives all and sundry Middle Eastern backed clubs to have a absolute field day and here’s a token for the efl

[Hxj]

26 minutes ago, reddogkev said:

Wow I would kill to have that model in place here

Trouble is - it isn't what is seems.

Yes it looks good - but if you delve into the rules for members you will find that the club is tightly controlled - Zingler has been in charge for many years - in effect he uses other people's money to promote himself - at least the Lansdown's use their own.

Most of the funding is provided by corporate partners not the members.

[Hxj]

59 minutes ago, ExiledAjax said:

The stadium, being owned by a separate company, would not be an asset of the club so would likely remain a solvent operational entity.

It doesn't work like that though.  Funding is provided through Holdings.  The football club is generally funded with equity investments, at July 2023 the figures were roughly £25 million loans, £190 million equity.  Ashton Gate is almost entirely funded by loans, at £1 million equity and £70 million loans at the same date.

So if SL stopped funding Holdings and wanted his money out the whole structure would collapse immediately.  None of the companies could meet their on going financial obligations.