New Southampton owner faces battle at home

Dragan Solak is the billionaire who likes to operate outside of the limelight. He’s spent more than two decades building a media empire but it was the acquisition of an English Premier League football club that changed everything.

Through London-based investment vehicle Sport Republic, Solak bought an 80 per cent stake in Southampton in a bet that demand for football rights will continue to rise, as online streaming platforms compete against traditional broadcasters to screen sports around the world.

“If you look at the inflation of the prices of elite sports rights,” he told the Financial Times, “I thought if it goes crazy like this I’d rather be in the sports business than in the broadcasting business.”

The Serbian-born media tycoon says he’s been fielding calls from compilers of rich lists to ascertain his net worth ever since confirmation of the acquisition, which valued the club at around £250m including debt.

This is far from Solak’s first encounter with the Premier League, the world’s richest domestic football division. As founder of United Group, in which he retains a minority stake, he still owns the rights to screen top-flight English football matches across much of the Balkans.

Beneath the surface, the acquisition also signals Solak’s swing from buyer of media rights to the indirect recipient of TV money paid by broadcasters.

What’s gone under the radar is that United’s grip on Premier League broadcast rights ends at the end of this season, pointing to a clash between the businessman and the president of Serbia, Aleksandar Vucic, who Solak accuses of cracking down on independent media outlets.

That’s because Serbian state broadcaster Telekom Srbija last year splashed out an estimated €600m for the next six years, roughly ten times the annual price paid by United.

Solak’s theory is that TS is buying up sports screening rights in a political manoeuvre designed to lure subscribers from his independent news channels to state channels that are uncritical of the government.

TS said it did not overpay and denied it had a political motivation, adding that it “finances its deals solely from its own financial resources and capacity.”

This dispute raises uncomfortable questions for the Premier League, which was forced to part ways with former chair Gary Hoffman over its decision to approve last year’s Saudi Arabia-led takeover of Newcastle United for £305m, amid scrutiny of its dealings with state-backed entities.

A person close to the Premier League says it is not uncommon to see leaps in the value of broadcast deals.

For his part, Solak insists the Southampton takeover has nothing to do with his media interests, and pledged: “I don’t want to abuse my position now in the Premier League.”

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The Political Economy of Football V2

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