PORTSMOUTH, United Kingdom: Many Newcastle United fans cheered the announcement on Oct 7 that their club had finally been sold for GBP305 million (US$420 million).
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 second-level Championship notoriously spent an average of 107 per cent of income on wages recently.
The Premier League meanwhile continues to flourish financially, with its clubs bringing in plenty of revenue. Collectively, they earned GBP4.5 billion in the 2019-2020 season 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 per cent more than the next Premier League club on the list, Everton.