Why are American sports franchises so keen on buying English football clubs, not least the Todd Boehly-led consortium which is the preferred bidder for Chelsea?
The takeover of Chelsea by the Boehly Group would mean that US investors have stakes in half the clubs in the Premier League. Counting in Chelsea, six would be outright or majority owned, the others being Arsenal, Burnley, Crystal Palace, Liverpool and Manchester United. Four other clubs have US shareholders: Aston Villa; Leeds United; Manchester City; and West Ham United.
The short explanation is that these consortia have the readies, they have done well with sports franchises in the United States and they see upside in the UK both through capital appreciation and extracting more money from the fans by direct marketing. Given those considerations, many would argue that Chelsea is a bargain at $4 billion.
Indeed, the redevelopment of Stamford Bridge is seen as an opportunity to attract more wealthy Londoners to pay a premium price for a seat which will be as much a networking opportunity as a football game.
The Chelsea brand with its West London associations is seen as particularly attractive (ok, Fulham have a prime riverside location and Richard Osman). Fulham are, of course, an example of the multi-sport American franchise that spans two continents. Shahid Khan owns NFL's Jacksonville Jaguars and All Elite Wrestling.
Beohly has been in the blue chip sports franchise market since 2012 when he joined the record $2.15 billion purchase of the Los Angeles Dodgers baseball team. He was then involved in a $2.15 billion purchase of a 27 per cent stake in the LA Lakers basketball team.
Boehly's business partner Jonathan Goldstein, a Spurs-supporting property developer, thinks that Chelsea have a particularly attractive brand. He points out that their social media following of half a billion people around the world dwarfs that of Arsenal, Manchester United and Liverpool. The challenge is, of course, to monetise that following. Goldstein points to the media rights and the merchandising.
Just how valuable sports assets have become is illustrated by the fact that Fenway Sports Group paid close to a billion dollars to add the Pittsburgh Penguins to the Boston Red Sox and Liverpool. Ice hockey as a sport may be #1 in Canada, but in the US it is behind American football, baseball and basketball. Moreover, soccer is arguably going past hockey. Yet they had to pay twice as much for the Penguins as they paid for Liverpool in 2010.
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