AN EXCITING and eventful end to the 2021/22 football season in the UK has been topped by yet another major club changing hands. The £4.25bn sale of Chelsea FC to a consortium led by Todd Boehly suggests that US investors think the Premier League is still undervalued and that the dominance (usually) of a relatively small number of teams makes revenue streams reliable.
Arsenal (Stan Kroenke), Manchester United (Glazer family) and Liverpool FC (Fenway) are all US-controlled. One banker recently estimated that each of these and Chelsea could be worth more than $10bn in five years.
Turning the top flight of British football clubs into global brands has been surprisingly successful in recent years, supported by China’s demand for sports media content, as well as assistance in growing its own football industry from the grass roots up. However, any investor under the illusion that the Premier League is guaranteed to make the more billions is seriously misguided – even in the top third of the table.
I know the game pretty well: I was Vice Chairman of Tottenham Hotspur (fourth in the table) in 1991 and again from 2001 to 2006. It was at Spurs that I began my working relationship with former Buchler Phillips Partner, Paul Bobroff. Paul was chairman of the club for seven years, during which time Spurs became the first football club to float on the Stock Exchange. I first became involved in football club restructuring 30 years ago, when Buchler Phillips was appointed administrator to Harrow and Wealdstone FC. During the 1990s I advised Luton Town FC, Millwall FC, Oxford United FC, Swindon Town FC and Barnet FC, as well as, of course, Spurs.
So, to many, Buchler Phillips is synonymous with football finance. Our team’s success rate in restructuring and securing the future of troubled football clubs is unparalleled, always underpinned by a rigorous methodology for increasing revenues and turning losses into profits. This is a hard slog, as Chelsea’s previous owner, Roman Abramovich, knows very well, having supported the club through losses totalling billions over 20 years.
The same tight grip is an approach that is often needed across all areas of sport, which is dogged by business interruption, brand reputation and issues of health and safety more directly than many other sectors. For example, the impact of adverse weather conditions could be catastrophic before a major sporting event, incurring huge cost. Equally, a health and safety problem at a large stadium can or could severely damage the value of its owner’s brand. In addition to uncontrollable risks, there are corporate risks presented by poor management, which should be well within the control of the boardroom, not least in football clubs.
Buchler Phillips has a multi-disciplinary, experienced team that is highly skilled in all aspects of corporate finance advice and turnaround for all sectors including the sports sector. Our specialists provide a broad spectrum of operational and advisory services to a wide range of clubs, leagues, governing bodies, agents, sports marketing companies, government agencies, lenders and investors in the sector. We are also leading advisers to individual sportsmen and women. Our services for organisations include expert witness services; turnaround and debt restructuring; advice on stadium financing and real estate issues; valuation of intangible assets; and guidance on rights, royalties, licensing and commercial agreements. Businesses in any area of the sports sector wishing to explore strategies for financial restructuring and recovery are welcome to contact Buchler Phillips for a no-obligation discussion about suitable next steps.
Written by David Buchler, Chairman at Buchler Phillips, the UK’s leading independent corporate recovery, restructuring and turnaround firm.