In 1989, the businessman Michael Knighton bid £20mn for Manchester United. At the time it was the highest price ever offered for an English football club. United’s owner hastily accepted. But the takeover fell through, partly because Knighton raised questions about his own psychology when he insisted on juggling a ball in front of a full stadium while dressed in club kit.
Now British businessman Jim Ratcliffe and Qatari sheikh Jassim bin Hamad al-Thani are competing to buy United from the Glazer family. The valuation could exceed $6bn, which would be the highest ever for a sports club. Other than the sums, though, little has changed since Knighton’s day: rich men are still drawn to football by motives that are generally misunderstood, sometimes even by the rich men themselves. These people are less rational than they like to imagine.
The rich man often believes he’ll “run the club like a business”. He’ll apply his business genius to make profits and win trophies. This fantasy is currently helping to draw many American businesspeople into football.
But the “running it like a business” fantasy hardly ever pans out. Almost the only consistently profitable English clubs are Manchester United, Arsenal and Tottenham. They tend to make profits for two reasons: first, they have big historic fanbases and, second, they usually disappoint those fanbases by not pursuing championships.
Football’s sorry paradox is that to win titles, you have to break the bank by hiring the best players. A club that does that, like Roman Abramovich’s Chelsea, will tend to lose money. Most owners soon discover that that’s the choice they face. They can chase either trophies or profits, but not both.
They usually end up with neither. Ratcliffe built the Ineos chemicals empire, yet none of his sports teams — Lausanne and Nice in football, Ineos Britannia in sailing, Ineos Grenadiers in cycling — has done very well. The American investor Todd Boehly, who bought Chelsea last year, has already blown £600mn on new players while only making the team worse. (Ratcliffe, who bills himself as a United fan, also bid for Chelsea, where he was a longstanding season-ticket holder.)
I once asked Tony Fernandes, who built the airline AirAsia, why he did so badly in football with Queens Park Rangers. “Two things are different from AirAsia,” he said. “One is I can control almost everything in AirAsia. You can do whatever you want in football, but it’s up to 11 guys on the pitch at the end of the day, right? The second thing is you have a very vocal bunch of shareholders — called fans. Everyone has an opinion. The plans get thrown out of the window when you start losing. The excitement when you win a football game is unbelievable. The downside is that when you lose, you want to kill yourself.”
Sheikhs who buy clubs typically proclaim a different fantasy: they will further their countries’ national interests. Saudi Arabia, for instance, bought Newcastle United supposedly as part of a strategy to build soft power and reduce reliance on oil. EY consultants explain, with a straight face: “Saudi Arabia is experiencing a unique socio-economic transformation in which sports take centre stage in the Kingdom’s massive diversification efforts.”
Even if this really were what the Saudis wanted, it wouldn’t work. Similarly, Qatar’s hosting of the World Cup probably didn’t help the country. Hosting mostly just drew attention to Qatari mistreatment of migrants and LGBT people. But in fact, hard-headed, self-interested MBA language — which is the high-prestige vocabulary of our time — misunderstands billionaires’ motivations. Most simply aren’t very bothered about either profits or the national interest.
Some billionaires struggle to admit this even to themselves, but what they crave is status and/or fun. Like medieval kings, billionaires can do whatever they feel like: ease life’s tedium, meet famous people or be remembered for something. Status and fun are why Elon Musk bought Twitter, Vladimir Putin invaded Ukraine and why Abu Dhabi’s rulers have chosen to monopolise the Premier League through Manchester City. The whims of the world’s 2,640 billionaires, as counted by Forbes (12 times more than in Knighton’s day), can change (or end) our lives.
Weirdly, when billionaires tire of football and sell their clubs, they often make money anyway. The club turns out to be like a Picasso on your wall. It doesn’t throw off quarterly profits, but it does typically gain value over time. Best of all, when you show it to friends, they get so jealous that some go out and buy one of their own.
Follow Simon on Twitter @KuperSimon and email him at simon.kuper@ft.com
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