May 31, 2007 / 6:29 AM / 12 years ago

New football club owners seen trying U.S. ideas

LONDON (Reuters) - Top-tier English football clubs are likely to improve their marketing and expand sales outlets to boost profitability as a fresh crop of owners targets growth in a league quickly becoming wealthier than its European rivals.

Liverpool's owners Tom Hicks (R) and George Gillett (L) of the U.S. smile before their Champions League semi-final, second leg match against Chelsea at Anfield May 1, 2007. REUTERS/Phil Noble (BRITAIN)

The game will transform into more of a longer, family activity with food, drink and shopping outlets located inside new stadiums, sport bankers and analysts said.

Meanwhile advertisers and sponsors will aim to strengthen their relationship with clubs by using popular team brands to sell more products.

These advertising deals, along with a new television contract, will help double the Premiership’s operating profit next season to 260 million pounds, according to a report by accountancy firm Deloitte, released on Thursday.

The industry is attracting billionaires from around the world, including the United States, who are likely to continue buying English clubs over the summer.

Manchester United and Liverpool are already owned by U.S. tycoons Malcolm Glazer, and George Gillett and Tom Hicks, respectively, while former Thai Prime Minister Thaksin Shinawatra has made a formal bid for Manchester City.

“Football teams aren’t trophy assets, they’re real businesses,” said Ken Goldsbrough, European head of the media, communications and entertainment unit at GE Commercial Finance, a General Electric unit expanding in the European soccer market as a lender.

Seeking a return on their investments, the new owners are expected to import some ideas from abroad.

“The more American and American-influenced owners in the UK and in Europe, the more potential for American ideas being implemented, particularly from the National Football League,” said Lawrence Schechter, a director at Schechter & Co., an investment bank that has raised debt for soccer clubs.

American leagues do not force out the worst performers each year the way British soccer does and some, including the NFL, distribute TV revenue equally among teams, regardless of size.

CAPITALISM VS. SOCIALISM

“I am a devout capitalist, more right-wing than Attila the Hun, but the NFL is a perfect example of socialism working in a capitalist market,” Schechter said. “Certain elements will be brought, others won’t work.”

The new investors aren’t expected to introduce changes that affect how the game is played on the field, however, said Dan Jones, head of Deloitte’s Sports Business Group.

“I see the Premiership becoming more commercial. That’s not a bad thing, but excessively commercial would be a bad thing,” he said.

Stadium food and drink outlets are seen expanding and improving, while deals with commercial sponsors are likely to go beyond just showing a brand on a shirt, Jones said.

“Small, little ideas can influence the sport in a way, without changing the game on the pitch, to make it more enjoyable for the fans and at the same time, maximizing revenues,” Schechter said.

At Manchester United, the Glazer family, which was pilloried by some fans in the immediate aftermath of buying the club, “have completely avoided any interference on the pitch beyond giving the manager their unequivocal support,” a spokesman said.

The difference between the English league and those in Europe, will only expand because of soaring TV and commercial revenue, Deloitte said.

Malcolm Glazer (C), owner of Manchester United, chats with Jeffrey Lurie (L) owner of the Philadelphia Eagles, and an unidentified woman in the hallway of the Ritz Carlton Hotel after leaving the Finance Committee meeting at the National Football League Spring League Meetings in Washington, May 24, 2005. REUTERS/Lisa Nipp

Premiership sales are expected to rise to 2.5 billion euros (1.7 billion pounds) next season, about 1 billion euros above the next highest earning league, the report said.

The Premiership generated 1.4 billion pounds in revenue last year, ahead of Italy’s 1 billion pounds, Germany and Spain’s 800 million and the 600 million in France, the report said.

“Football is played in front of more people, bigger sponsors and bigger stadiums, but the essence remains the same and that’s where the value is,” Jones said. “I can’t do what Ronaldinho does, but it’s the same game that I played as a child and that my children play now.”

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