Sector OVERVIEW – Football m&a

Today’s Financial Times reports on Deloitte’s Football Money League, the professional services firm’s annual ranking of the world’s wealthiest football clubs by revenue.  This year Barcelona has grabbed the top spot from arch-rivals Real Madrid, whilst Manchester United leads the table amongst UK clubs.

Away from the glamour of the Champions League, some of the UK’s less celebrated football clubs have been the subjects of takeovers, predominantly by Far Eastern and US buyers.  A total of 30 professional clubs have changed hands since 2015 (Aston Villa has been through two acquisitions).  The MarktoMarket Football M&A League ranks these deals by transaction value.

The clear winners of this league are Arsenal, a club with aspirations to return to the elite after three years of missing out on Champions League qualification.  The Gunners’ £1.8 billion valuation proves that its brand and income generating potential remains coveted, with Stan Kroenke acquiring a further 30% stake from Alisher Usmanov in August 2019.  Runner-up is Southampton, which became the latest Premiership club to come under Chinese ownership following its acquisition by businessman Gao Jisheng.  In the other Champions League spots are Swansea City and Crystal Palace, snapped-up by US consortiums for £131 million and £105 million respectively.

In mid-table are Aston Villa and Wolves.  In 2016 takeover Recon Group, owned by Xia Jiantong, acquired Villa from Randy Lerner for £87 million; in 2018 the Chinese magnate offloaded the club to a US/Egyptian backed consortium for an estimated £55 million (we use the latter valuation in our table).  Wolverhampton Wanderers also fell into Chinese hands in 2016 when Fosun International, the Hong Kong-listed conglomerate and investment company, acquired the club from Steve Morgan for £47 million.

Dicing with relegation in the MarktoMarket M&A league are Sheffield Wednesday, owned by Thai businessman Dejphon Chansiri since its £30 million acquisition in 2015; Wigan Athletic, acquired for £25 million by Hong Kong hotel and property group International Entertainment Corp; and Portsmouth, which was taken over by US investment group, Tornante Company, in 2017 for £7 million.

Propping up the table is Bradford City, acquired by ER Sports Group, a German consortium, in a £3 million deal in 2016.  Takeover rumours have recently resurfaced around the Bantams with Stefan Rupp, the power behind the ER Sports throne, reputed to be keen to offload the Yorkshire club.

Who will be next?  As well as Bradford City, sources say Swansea City may be back on the market and Newcastle United is always a reliable source for takeover gossip.  The dream of a Chinese tycoon or Middle Eastern billionaire injecting millions of petrodollars into the local club remains a real one for most supporters of British football clubs.

chart – marktomarket football league