What's interesting is that Clearlake's thesis about the business of football is actually not shared by very many other people right now.
Even in the PL, the only financially healthy league, the owners of United, Liverpool, Spurs, and Everton - four of the biggest club brands in the English game - are trying to sell whole or partial stakes. So far, the evidence is that there isn't exactly a horde of would-be buyers lining up either.
Lots of other people - including some very savvy investors like John Henry and Joe Lewis - seem to think that the low-hanging fruit has been picked over the last 10-15 years in terms of driving revenues and asset valuation and want to get out or reduce their stake. Boehly/Clearlake, on the other hand, think we're heading for a huge bonanza in which revenues and asset valuations of big clubs will double over the next 5-10 years.
Who is right? We will have to see.
For me, a big question is whether Boehly/Clearlake have really come to grips with the ways that the regulatory structure of football - at both national and European level - limits the revenue growth potential of clubs. They are used to sports where teams have huge control over their own revenue streams, including broadcast and digital, and where owners collectively call all the shots in terms of the league's financial strategy, with Commissioners just doing their bidding. But that's not how football works - you don't get to sell the rights to broadcast or stream your own games, you don't even get to indirectly control the negotiations over those rights. You can't get together with other owners, come up with strategies for growing the pie, and then give the Commissioner his marching orders to put those strategies into place. Instead, you hope that entities like the Premier League, the FA, and UEFA do smart things but in all of those situations you're actually outvoted by smaller clubs (or national associations) that have different interests and are very wary of you. An ownership group like FSG was bullish on football right up to the point where their gambits to wrest more control over revenue streams and the regulation of the game - in the form of both the Super League and Project Big Picture - failed. As soon as those initiatives blew up, they decided to get out.
Yes, but Clearlake’s ability to control alternate revenue streams is different and much more comprehensive than Fenways. Fenway is a “moneyball” organization based off the ideology of Billie Beane; use analytics to avoid spending huge amounts of money.
Clearlake will have looked specifically at what the technical margins of merchandising, digital rights, and things like that are. You don’t have to broadcast games to create content, for instance.
The two primary differences with Fenway and Clearlake are:
1. Clearlake only has to create FFP compliance. They HAVE the money already. They do not mind losing 500m or so a year or more on a development project … much less breaking even. Fenway makes their money through sports, and are downright paupers by comparison.
2. And the people on here completely laughed at me when I said this in Summer: Clearlake will aim to raise the financial profile of the entire league and have the means and connections to do so. Clearlake is the pool of sporting investment. There are completely different investment funds, controlled by the same players, that control the entities paying out things like broadcast rights. The modern economy is SO much different. PL fans keep harping on TV deals, game day sales, jersey sales, jersey sponsors… like it’s written in stone those are the only ways to make money. And I keep pointing out two guys on YouTube make twice as much per year as a United’s teamviewer deal just making videos of themselves playing a kids game.
I could create an extremely cool looking Chelsea blue lion as “buy only” pet in adopt me and make more than a shirt sponsor deal in a month if it’s a top 3 pet for that period.
This is literally just spitballing, but where there is creativity and resources there is a way.
Clearlake doesn’t have to beg entities to create these avenues, through various other funds and entities they own or control most of them. They control everything from Rolling Stone, to Fortnite, to TV channels.
Worth reiterating: Clearlake is just the money grouped together for sports, and those teams will provide marquee IP platforms from which all the IF’s can create many different revenue options, which can then be shared back in to the teams as needed, all while growing the long term value of the vehicle itself.
Until the Chelsea purchase, the insanely quoted “values” of many of these teams was purely hypothetical, and driven more by the following and passion and the “could be” than the reality of what teams actually bring in.
The PL’s broadcast rights contract is like 5b domestic, and maybe 13b total? The NFLs recent broadcast rights package was 110b … There is just a drastic chasm, but the demand is there, and the whole league is a desperately undervalued asset.
It gets a lot more complicated than that, especially when you get into the misguided attempts to create this artificially with the Superleague : where you had the owners of the two most important English teams being relatively poor and greedy, combined with the belief that certain “historic” teams, needing to be saved from their dying leagues, had to be included for real growth to happen. But none of that is necessarily true. The PL can make many of those leaps on its own. The other leagues need to get out of their own way, and are laying in beds they made over the last 4 decades. Big money doesn’t want to go to places like La Liga for a reason.
But, to take your team and the whole league to a new level you need an additional aspect which Eghbali covered in his Q and A: you need to be a winning flagship of the brand; multiple recent titles going into negotiations, yearly threat for European glory, etc.
They think, invest, and plan in terms of 7, 15, and 25 year periods.
Doing whatever necessary to create the elite team and structure they want is just the first phase, 7 year period of that plan.
Fenway and the Glazers don’t have financial ability to think and plan on that scale on European football. They wanted faster turn arounds and results to fund the things they care more about. Clearlake doesn’t look at it that way. And worth pointing out …. Again…. many of the main financial players in Clearlake are European, not American.
For whatever it’s worth, for Arsenal fans, the younger Kroenke (the one with more access to Walton money than his hanger-on dad) is very on board for this economic vision for the PL.