140 | theceomagazine.com
LOVE OR MONEY
So, is his a cautionary tale? Is buying a sporting team merely
a way for the very wealthy to divest themselves of a lot of
money, or can it be a good investment? One of the world’s
most famously ruthless billionaires, Rupert Murdoch, clearly
thought so. He became one of the forerunners of mighty
mogul team owners when he bought the Los Angeles
Dodgers for US$320 million in 1997, despite having so little
interest in baseball that he’d never even seen a game live.
Murdoch bought the team, and its stadium in LA, as a way
of helping his Fox network drum up viewers for a game he
figured could make him some ad dollars. Sure enough, the
Fox network had seen a big rise in baseball audiences by
the time Murdoch sold the Dodgers to Frank McCourt,
a Boston-based billionaire, in 2003 for US$450 million.
According to Forbes, McCourt – a property developer
- made roughly US$2 billion in pre-tax profit by the time he
sold the team, and its now highly valuable real estate, in 2011.
Remarkably, he turned all that profit despite being hated
by the team’s fans, and going to war with Major League
Baseball, which effectively forced him to sell up. That
kind of home-run return, married to a love of a particular
team, or sport, has seen a huge rush of billionaires buying
up big clubs.
According to a report from UBS and PwC called
‘Billionaires Insights’, more than 140 of the world’s top
sporting teams are now owned by a competitive group of just
109 billionaires.
Acquiring sports teams is a growing trend in Asia, where
more than half of the club acquisitions by minted individuals
took place in the past two years.
At this stage, 60 of the sports-team-owning billionaires
in the world are from the US, with 29 from Asia, and that
number looks like it will be growing.SOCIAL CHANGE
When it comes to high-dollar sports, it’s hard to go past the
booming cash cow that is the Indian Premier League (with
a brand value of US$6.3 billion).
Indian billionaire Mohit Burman is a co-owner of the Kings
XI franchise and says rich people flashing their cash on
sporting teams reflects a shift in social attitudes in Asia.
“Previously, it wouldn’t have been so acceptable to be
seen spending a lot of money on a sports team, but that
is changing now,” he says.
His own decision to buy into the IPL when it kicked off
10 years ago was driven only partly by the fact that he admits
to being “a massive cricket fan”.
“I definitely saw it as an investment,” Burman explains.
“At the same time, though, I knew it could be difficult to make
money owning a sports team – I was well aware of what
I was getting into. You shouldn’t invest money that you can’t
afford to lose into sports.”
Having money you can afford to lose is, obviously, one
of the defining characteristics of billionairism.
Burman, who has also owned badminton and hockey
franchises in India, has enjoyed the excitement of owning
an almost-winning team, though, with his Kings XI reaching
the finals of the 2014 competition and narrowly missing out
on the big prize.
Sadly, doing well on the field doesn’t always mean the
same for the balance sheet, he says. “When you win games,
your players want to be paid more, although when they don’t
do so well, the opposite certainly doesn’t apply.”
Like many hugely rich sports fans, Burman is keen on
buying a football team, and he’s been involved in negotiationsMORE THAN 140 OF
THE WORLD’S TOP
SPORTING TEAMS
ARE NOW OWNED
BY A COMPETITIVE
GROUP OF JUST
109 BILLIONAIRES.
INDULGE | High-dollar sports