American owners keep success in soccer business plan

ANTON RIPPON asks, if the Americans don’t “get soccer”, why do they keep buying our football clubs?

After watching the club for which he had just paid £300 million stumble against their bitterest rivals at Goodison Park last Sunday, Liverpool’s new owner, John W Henry of the Boston Red Sox, assumed a brave face.

In the Sky commentary box, Andy Gray had earlier mused: “I wonder if they get this sort of atmosphere in baseball?”

I can tell him that they do. Gray has obviously never been around Boston’s Fenway Park when the New York Yankees are in town. Atmosphere? The history of that particular fixture is littered with punch-ups. And it’s not just the fans. Coaches and players seem to hate each other, too.

John W Henry: now owner of the Liverpool Red Sox

For all sorts of reasons, the people who run New England Sports Ventures will have a sense of what they bought into here. No least because when NESV purchased the Red Sox in 2002, they found themselves with another club hitherto beset by questionable ownership, performing in an outdated stadium.

On the field, the Red Sox’s plight was even worse than Liverpool’s current malaise. Despite being an American sporting institution, they hadn’t won the World Series since 1918. Liverpool, at least, last won the English football title in 1990.

NESV changed all that in Boston to the point that Sports Illustrated named them the No1 ownership group in Major League Baseball.

What has any of this to do with Premier League football in general? On the face of it, not a lot. It hasn’t even got a lot to do with Liverpool in particular. Parallels between the Anfield club and the Red Sox are limited. The nature of professional sport in America is very different to ours.

Many of America’s major stadiums are municipally owned, but as well as owning NESN, the TV channel that broadcasts Red Sox games, NESV also runs the Fenway Sports Group that owns the Red Sox stadium. When the team is winning, NESN gets more viewers and more people go to Fenway.  An investment that helps the Red Sox to victory gives a triple return.

But NESV has no other interests tied directly to the success of Liverpool. So why do Americans get involved in soccer, a sport most of them can’t abide? It’s a question that still puzzles fans over here.

Take my club, Derby County. What do Derby’s American owners, General Sports and Entertainment Group, hope to get out of their involvement at Pride Park? The obvious answer is – a profit.

Like every business, that is what GSE is about. But that’s OK. In 1998, GSE bought the Fort Wayne Wizards, a minor league baseball club that had experienced seven straight years of decline. Apathy was the biggest commodity it had to offer. GSE turned it around before, in 2006, selling to Hardball Capital, an Atlanta-based company that invests in baseball-related businesses. The Fort Wayne franchise (now called the TinCaps) continues to set records and shatter attendances in its Midwest League.

Derby day: is success part of the business plan?

The comfort we Rams fans can draw from all this is that Derby County’s owners seem more capable than George Gillett and Tom Hicks. Never mind a profit, that dysfunctional duo were fortunate to escape from Merseyside with all their bits intact.

GSE’s executives aren’t Forbes billionaires like the Glazers at Manchester United. But that hardly turned out well.
I’m just happy to see the Rams apparently well run by people whose support for Derby’s former players’ association suggests that they also appreciate the club’s tradition.

And if GSE eventually sells at a profit – so what? The club’s debt is now manageable, the team is scoring goals, and we’re leaving Pride Park with a spring in our step. Mind you, until this weekend, Derby had gone six games unbeaten, one place off the play-off places …  I wonder if those Americans are starting to panic yet? Promotion to the Premier League probably wasn’t part of the short-term business plan. That would need a major rethink.

Just down the A38, Aston Villa fans might be alarmed at this week’s Sunday Mercury story that Villa’s owner, Randy Lerner, is locked in a huge legal battle over a “missing” £25 million investment that Lerner paid into a New York hedge fund three years ago.

Lerner’s lawyers claim Paige Capital Management has repeatedly refused to allow him to withdraw his cash – or even tell him where it has been invested.

Lerner took over Aston Villa in 2006 and invested heavily in the ground and players. But last season the club made a pre-tax loss of £30 million on a turnover of £84 million – principally due to a sky-high £70 million wage bill.

There then followed the sales of James Milner and Gareth Barry and the departure of Martin O’Neill. Overall, this American owner has been successful, but early optimism has given way to some anxious moments for the Villa faithful.

But don’t knock owners just because they are American. The Irish American, Ellis Short, has yet to upset Sunderland’s fans. He has bankrolled a few big-money signings and the club stands midway in the Premier League.

Meanwhile, Arsene Wenger has this week saluted the Arsenal model of ownership, headed by major stakeholder, the American entrepreneur Stan Kroenke.

Commenting on the Liverpool business, Wenger told Sky Sports News: “It shows that the way we manage our club is rewarded in the fact we are not involved in this kind of thing.”

The Gunners prosper under self-sustaining income from their 60,000-seater Emirates Stadium. Latest figures show record pre-tax profits of £56 million. Mind you, after five years, Arsenal fans wouldn’t mind a trophy anytime soon.

So who might own your club in the future? Does it really matter? Let’s face it – most supporters wouldn’t care if it was Joe Stalin’s long-lost cousin, so long as they were winning matches and weren’t about to go bust.

This is an edited version of a column that first appeared in the Derby Telegraph