English football club attracts Arab buyer; one by one, England's most famous soccer clubs are being bought by foreign owners and now an Abu Dhabi investment group has entered the fray.
IN 1992, ENGLISH soccer underwent a dramatic transformation. Until then, while its fast pace and imposing physicality endeared it to fans around the world, it remained the relatively poor and unglamorous relation of its Italian and Spanish counterparts.
But then in 1992, clubs that formed the top, first division of English football, broke away and formed their own association--the FA Premier League. With this came lucrative television deals and the financial independence these top flight teams had craved.
The English Premier League (EPL) became the most aggressively and successfully marketed soccer league in the world and, by the turn of the century, the richest, and most powerful. Its rehabilitation from the dark days of the 1970s-80s crumbling stadiums and hooliganism was complete.
Despite a few notable exceptions, the most talented international soccer stars had previously chosen to play in either Spain or Italy, where clubs offered the most lucrative deals. But as the wages on offer increased, the world's biggest stars began to choose England as a place to show off their skills.
And the League knew how to sell itself like no other. With marketing diamonds like David Beckham at its disposal, it established itself as the dominant force in the south-east Asian and North American markets; revenue from worldwide television rights ran into billions of dollars.
And it was the lure of those all important television rights that gave rise to a new phenomenon in English football: foreign ownership.
The clubs which make up the EPL are extremely powerful in having the power to negotiate their own media and sponsorship deals independently of a governing body. And with the global success of what is increasingly called 'The Brand', whatever it costs to buy a club in the EPL is considered a safe bet to make huge sums of money in the longer term.
The first high-profile foreign takeover was by Russian oligarch, Roman Abramovich, at Chelsea, although the acquisition was less an investment than the realisation of a very rich man's dream.
There followed the US buy-outs of two more of England's biggest clubs: Manchester United and Liverpool. These were business deals and the solely money-making aspect of the takeovers served to alienate the new owners from the majority of the fans. The first murmurings of disquiet began as yet more foreign businessmen bought control of famous clubs and talk of the EPL games being played abroad was met with strenuous opposition.
Manchester City was another team to be sold to a foreign owner. In their case it was the former Thai prime minister, Thaksin Shinawatra. Things looked up for a while for the club, but when Mr Shinawatra had his assets frozen amid accusations of corruption, he sold the club on to the Abu Dhabi United Group (ADUG) owned by Sheikh Mansour bin Zayed Al Nahyan.
At a single stroke, Manchester City became the richest club in the history of sport.
Sheikh Mansour, son of late UAE president, Sheikh Zayed bin Sultan Al Nahyan, and brother of the current president, is his country's Minister of Presidential Affairs. With a number of independent business and charity interests, Sheikh Mansour also heads ADUG, part of the vast sovereign investment arm of Abu Dhabi's ruling family, the Abu Dhabi Investment Authority, which enjoys an estimated $850bn worth of assets.
Within 24 hours of its takeover of Manchester City, ADUG spelled out its commitment by securing the services of Brazilian striker, Robinho, from Real Madrid for a British record fee of $47m.
The deal signalled a dramatic shift in power in world football, since even Chelsea's billionaire owner Abramovich, was unable to top Sheikh Mansour's offer for Robinho, an addition to the London team he had coveted all summer.
Comparisons with Chelsea are interesting. Even when Abramovich bought them and began an epic spending spree for the world's best players, the club was already successful: regular qualifiers for the prestigious European Champions League, winners of multiple trophies in recent times and with a squad of star players. It was therefore a small step from being one of the best teams in England to one of the best in Europe.
Manchester City, on the other hand, unlike their fierce rivals Manchester United, last won a major trophy in 1976. They are not currently involved in any European competitions and languish in the bottom half of the EPL after a run of indifferent form and disciplinary problems regarding Robinho.
It will be more difficult for them to attract the very best players to their Eastlands stadium because anyone committing their future to City must forego top-level football for at least two seasons which, in a short career, is a sacrifice not many will be willing to make.
In a bid to kick-start their plans to be one of world soccer's elite by 2011, Manchester City, in January, offered the Italian club, AC Milan, approximately $150m for their Brazilian midfielder, Kaka, which, had it been ultimately successful, would have broken the previous record of around $85m that Real Madrid paid Juventus for Zinedine Zidane in 2001.
Reports in the press were that the player himself was being offered over $700,000 per week, plus bonuses, to sign a contract; but after a weekend of talks with the player and his father, the deal came to nothing.
It is likely the 26-year-old was reluctant to spend the peak playing years of his career outside the Champions League, which--even with him in the team--would have been at least two, maybe three, seasons away.
Had Kaka signed, others might have followed; but having failed to secure his services, Manchester City remain a less than attractive proposition to the cream of the world's soccer talent.
It is this vicious circle which ADUG must break if they are to lift the club from its relative obscurity on the world stage.
There is little prospect of the hundreds of millions of dollars spent on City being recovered in the short term, making the acquisition of the club more a matter of prestige than business, which immediately sets ADUG apart from the American 'money men' owners of Liverpool, Manchester United and Aston Villa, and gives Manchester City one advantage in the player market and also with the fans.
Middle Eastern money, plentiful after years of inflated oil prices, and backed, in some cases, by national wealth, is likely to lure more clubs in England into foreign ownership. Clubs like Newcastle United, whose owner, Mike Ashley, has suffered heavy losses in the global financial crisis, are ready to be sold.
However, whether or not limitless money can really buy sporting success remains to be seen.