theceomagazine.com | 141with several English clubs but says he’s still waiting for the
right opportunity.
He could, of course, sell his share of the Kings XI, which
has certainly gone up in value since its inception, but he
says only, “I’m not a seller.” It seems he’d like to win the IPL
at least once before cashing out.
Perhaps the most successful – as well as infamous –
investor in sporting teams was US real estate mogul Malcolm
Glazer, who bought the American National Football League
team the Tampa Bay Buccaneers in 1995 for US$192 million
(current value US$1 billion) and then purchased the slightly
more high-profile Manchester United Football Club for
US$1.4 billion in 2005.
The deal for United caused an outpouring of outrage from
its vast global fan base after it came out that Glazer had
leveraged the club’s assets and borrowed against them
to complete the deal.
It’s been estimated that, since then, more than US$1
billion has come out of the club’s earnings to service that
substantial debt and pay dividends to the owners – who are
now Glazer’s widow, Linda, and their six children. (Glazer
died in 2014.)
The Glazers have overseen a period of remarkable
financial returns from the club, which would net them more
than US$4 billion if they were to sell it today. Rumour has
it, however, that the family has developed a real sporting
passion for the club and refuses to let it go.
It probably helps that United is now a money-making
machine, netting profits for the family of US$42 million
in 2016–17. In 2017, Forbes rated Manchester United as the
most valuable football club in the world.GRAND GESTURES
Aside from sporting passions or the desire for financial
returns, the final factor driving the superwealthy to invest
in sports is a certain grandiosity – the same kind that inspires
them to buy superyachts or Rolls-Royces.
The UBS and PwC report found that heavy hitters often
invested in sport despite advice to the contrary, largely
because the price tags for clubs were so large only they could
afford them.
One of the co-authors of the report, John Matthews, says
he often advised his billionaire clients against investing in the
world of sport. “I would tell my clients the fastest way to
become a millionaire is to become a billionaire and then buy
a sports team.”
Buying a globally recognised sporting brand is one way
of writing your name in the history books, of course, but
it’s also a handy way to make connections. “One billionaire
told us that you do not really buy sports clubs for financial
returns,” the report says. “Instead, it opens the door to
amazing people — you sit at the table with ‘stars, sheikhs,
famous businessmen, and regular guys from around the
world, all in the same room, all talking only about the ball’.”
Sport, see? Proving that billionaires and regular guys are
just the same.“YOU SHOULDN’T
INVEST MONEY
THAT YOU CAN’T
AFFORD TO LOSE
INTO SPORTS.”
MOHIT BURMAN