Comment: Manchester City deal makes sense as top flight football goes digital
TIME was when the quickest way to become a millionaire was to start off as a billionaire then buy a football club.
Now, with the titans of the Premier League, not so much. Since Roman Abramovich stunned Ken Bates with his £140 million cheque for ailing Chelsea in 2003, valuations have outpaced almost any other investment.
When Silver Lake sniffed around Chelsea last year, it was offering more than £2 billion. Having been rebuffed, it’s now investing in Manchester City with a $4.8 billion deal valuation.
Gossip in the Square Mile for months has been of similar sales, but Silver Lake’s specialism in technology will surely spur the one that has Manchester United fighting off bids from Silicon Valley investors including PayPal co-founder Peter Thiel.
Why are California tech dollars hunting football clubs? Because they see huge money to be made in the way big clubs deploy digital technology in the coming years. Primarily that’s around the live streaming of games and other personalised features to fans’ phones anywhere around the world. The most global brands hold the biggest promise.
Current Premiership rights mostly prevent it. But the sport’s gatekeepers will eventually catch up with the potentials of the tech.
Following the business models of US sports franchises, top teams like City have invested heavily into grounds, training infrastructure, hotels and statistical analysis of players.
They’ve been professionalised beyond compare from Bates’s sweary days at Stamford Bridge. Wise investors are right to pile in.
