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English football ‘shake-up’ will not deter Middle East investors

A 2021 match in League 2 – the old fourth division. The white paper will reportedly apply to the top five tiers of English football Jane Stokes/News Images/Sipa USA
A 2021 match in League 2 – the old fourth division. The white paper will reportedly apply to the top five tiers of English football
  • Football white paper may require investors to prove source of wealth
  • Experts confident that increased regulation will not put investors off
  • Nine of world’s top 20 clubs have investment links to Middle East

A shake-up of ownership rules in English football is unlikely to put off Middle East investors, industry analysts have said.

On Thursday, British tabloid The Sun reported that it had seen a leaked copy of the UK government’s football white paper, stating that takeovers of football clubs could be blocked if the prospective owners could not prove the source of their wealth.

The white paper, which could be published next week, reportedly stipulates that investors who are not transparent about their money will not be able to own teams across any of the five tiers of professional English football.

However Neil Joyce, founder and CEO of UK-based data consultancy CLV Group, told AGBI that any increased regulation would not affect potential buyers from the Gulf.

“With the strong medium-term investment returns expected from Premier League clubs, I do not see these measures impacting future investment from the Middle East given the increasing growth trajectory afforded by identifying, reaching and converting global fans and followers,” he said.

Nine of the 20 wealthiest clubs in world football have investment links to the Middle East, including four from the English Premier League, according to Deloitte’s annual rich list.

Newcastle United chairman Yasir Al-Rumayyan, who is also governor of Saudi Arabia's Public Investment Fund
Newcastle United chairman Yasir Al Rumayyan (centre) watches his side play Brentford. He is governor of Saudi Arabia’s Public Investment Fund, which led the 2021 takeover of the club. Picture: Reuters/Craig Brough

One of the four is Newcastle United, whose 2021 takeover by a Saudi-backed consortium led by the kingdom’s Public Investment Fund was subjected to intense scrutiny from the government and Premier League before being given the green light.

The Sun also reported that the white paper would advocate giving supporters a voice in the running of clubs, preventing new owners from making radical changes to team names, logos or colours. 

The late Egyptian-British businessman Assem Allam came under fire in 2015 when he announced plans to change the name of Hull City to Hull Tigers, a move that was rejected by the Football Association.

Joyce said this could “only be a good thing”, while a further measure for clubs to have a licence to be able to compete in competitions “will help to mitigate longstanding concerns of the re-emergence of the European Super League”.

In April 2021, 12 of Europe’s biggest clubs – including Arsenal, Chelsea, Liverpool, Manchester City, Manchester United and Tottenham Hotspur – unveiled a plan to set up a breakaway European league. The proposal was heavily criticised by fans and governing bodies, and the English clubs dropped out.

After the European Super League backlash in 2021, the government launched a fan-led review of English football led by former sport minister Tracey Crouch.

Manchester United fans protest outside Old Trafford stadium in 2021 after the club’s owners unveiled plans for a European Super League. Picture: Action Images via Reuters/Carl Recine

It recommended setting up an independent regulator for the game, as well as more powers for fans and stricter tests for potential club owners. Last November, a parliamentary meeting heard that the government accepted the need for independent regulation, but no significant progress had been made.

Simon Chadwick, professor of sport and geopolitical economy at Skema Business School in Paris, said he doubted that the football white paper would represent a great leap forward – but was confident that Middle East investors would not be deterred by any new regulations.

“Ultimately, we should expect a fudge, a compromise that falls some way short of headlines that refer to curbing the powers of dodgy owners and the greedy elite,” Chadwick said.

“Britain cannot afford to antagonise overseas owners, especially those from the Gulf that bring additional investment to the country which goes beyond single club investment.

“There will be a lot of noise, a lot of spin, and an eventual outcome that sees some improvements in the governance of domestic football. Britain is not, however, on the cusp of a radical shake-up of football – the country has been here before.”

Rishi Kapoor, co-founder of Bahrain-based alternative investments firm Investcorp, pointed out that there was a distinction between “emotional” and “financial investors” in football clubs.

“There is the financial investor – ie, us – and there is the emotional investor, who is looking at the asset for reasons beyond financial return, either because of a long emotional attachment or vanity,” he said.

Kapoor said Investcorp, which managed $50 billion in assets as of December 2022, was involved in a potential takeover of Italian giants AC Milan last year to “a rather deep and late level”. It ultimately lost out to US investment fund RedBird, which completed the acquisition for a reported $1.3 billion.

“As a financial investor we find it quite hard to compete against the emotional investor,” Kapoor said. “The likes of Manchester United and so on will attract a cadre of emotional investors that we would struggle to compete with.”

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