Todd Boehly and other US investors in football: A bet, or rather a story of bets

We suspect that if Todd Boehly and his partners were able to commit to investing close to five billion euros in Chelsea, it was not because they had always had a boundless passion for the Blues.

Their motivation was exactly the same as that of the Glazer family at Manchester United, Stan Kroenke at Arsenal, JW Henry and the Fenway Sports Group at Liverpool, as well as those American investment funds that multiply club takeovers at all levels of European professional football for some years now. Their motivation was, is, and always will be money – and nothing else.

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Why did Boehly buy Chelsea?

We can be offended by this on principle. We can highlight the risk of even more pronounced homogenization of a sport which, until not so long ago, drew much of its attractiveness from the fact that it brought together strong national or regional cultures, both complementary and contradictory. We can condemn this ‘colonization’ of a sport which we imagine – wrongly, but that’s another story – that it completely escapes the colonizers in terms of its essence and its meaning. These reservations are valid, and widely shared.

Todd Boehly

Credit: Getty Images

The question we must ask ourselves is however quite different: why?

Why are businessmen (because they are almost exclusively men) whose first look is for the profit column in their ledgers suddenly ready to put billions into entities most of which are losing millions by the tens? or hundreds almost every season? Chelsea, for example, announced a loss of more than 170 million euros for the 2020-21 season. What Frank Zappa could say about cocaine – that it was “thehe way are used God to tell you that you had too much money” – could just as well apply to football.

Nope ?

No. Because these new American investors are not that kind of drug addicts. It is not pride or vanity that drives them, and it is not political or geopolitical ambitions either. Boehly is neither Abramovich, nor Berlusconi, nor Sheikh Tamim al-Thani. It’s the prospect of realizing returns on investment that are unimaginable elsewhere in the sports world.

The NFL generates twice as much revenue as the Premier League

The economic analysts who have studied the question and tried to understand how football could have become so attractive to American investors have all highlighted the conviction shared by these investors that, despite the explosion of TV rights and the inflation of wages, transfers and club prices, the true value of this European football remained largely underestimated.

Otherwise, how could it be that the NFL, whose audience is almost exclusively American, generates revenues twice as high as those of the richest championship in the world, the Premier League, which is nevertheless popular throughout the world?

Jack Grealish (Manchester City) and Mason Mount (Chelsea)

Credit: Getty Images

It was better than a sign. It was proof that this football had unparalleled growth potential in the sports business, provided it was operated with the same skill and imagination as American sports were. In the field of streaming, for example, but not only; in that of fan engagement, too. English is used here on purpose.

In this regard, Boehly could put forward as an illustration of possible advances the way in which he had revolutionized the audiovisual landscape of baseball by signing a 7.5 billion dollar contract between the LA Dodgers – in which he now holds a part of the capital – and the Time Warner Group in 2013. What he did with the Dodgers, why wouldn’t he do it again with Chelsea?

The Sea Serpent of Individual TV Rights Negotiations

It is therefore to be expected that the sea serpent of the individual negotiation of broadcasting rights for each club will resurface regularly in the future, especially since Boehly has strong allies within the Premier League. – namely his compatriots, who control all or part of nine of his twenty clubs

.

But that is obvious. It is the surface. It is not tomorrow, or even the day after tomorrow, that Chelsea will be able to negotiate or directly sell the rights to broadcast their team’s matches, whether in England or in Europe. The Premier League cannot take any such decision without the agreement of at least fourteen of its twenty shareholders, and UEFA certainly has no intention of withdrawing from the audiovisual game, the source of almost all of its income.

Nor are Boehly and his co-investors one of those ‘vultures’ who buy troubled companies cheap and sell them as quickly as possible after perking them up. They are there on and for the long term, while hoping to generate substantial profits as quickly as possible. And it won’t be by organizing a Premier League ‘All Star Game’, as Boehly suggested in September.

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He was made fun of at the time in England. Hahaha!, these Americans are priceless! They definitely don’t understand football! These comments were not only openly xenophobic; they also denoted an almost total misunderstanding of the nature of Boehly’s project, when it would have been enough to open your ears a little better and not stop at a slightly (but not completely) far-fetched suggestion to realize that this project, if carried out, would have a much more significant impact than the holding of a gala match, after all, not so different from the Community Shield

which serves as a curtain raiser to the English season.Just this sentence, for example, dropped at the bend of the SALT conference in New York, in September. Asked about the growth of the Chelsea ‘brand’, he replied: “I believe that there are several countries in which there are advantages to owning a club

“. In other words: Expect Chelsea to follow in the footsteps of City Football Group and QSI, and move into multi-club ownership.

.The real answer: betsOr this other comment, heard in another VIP conference, in Berlin, in June, when he was asked a similar question and his answer was in two words: ”

the bets

“.

Boehly knows what he’s talking about on the matter, as he’s a leading figure in DraftKings, one of America’s sports betting giants, an industry that was illegal in most US states until a few years ago. little, and which is experiencing a veritable Big Bang across the Atlantic.

Its economic potential is colossal: the United Nations estimates the volume of transactions in the global sports betting market at 2.7 trillion dollars per year.

, which industry experts say is most likely an underestimate. The cake is so huge that even a modest slice will satisfy the most greedy.
DraftKings, which is worth $7.5 billion on Wall Street, will be ready. In 2020, DraftKings acquired the Bulgarian company SBTech, a European leader in online betting technology, via a ‘reverse takeover’ which led to an investigation by the US regulator at the federal level.

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Bloomberg has also just revealed that DraftKings was currently in talks with the ESPN network to establish a partnership around sports betting, the details of which remain secret, which did not prevent DraftKings shares from climbing by 8.8%. in a single day when the first rumors of this agreement spread in the microcosm.

It should also be noted that in September 2021, Boehly himself, through the company Eldridge Industries, invested $120 million in SportRadar AG, one of the largest data collection companies on the planet, including football data. , all compiled and distributed in real time, are essential to the operation of online bookmakers. These cannot be mere coincidences: sports betting is at the heart of the strategy of Boehly and its associates, just as they are also at the heart of the overall strategy of these American investors who intend to make the most of the spin-offs of the opening of the US market, which will amount to billions.Also, when we talk about ‘bets’, it is not about those made by these investors, Boehly the first, by buying European clubs, that we should be talking about, but about those they hear that we, supporters and consumers , were doing when they sat down at the dealers’ table.
Arsenal, Aston Villa, Chelsea, Crystal Palace, Fulham, Leeds, Liverpool, Manchester City (the Silver Lake fund holds 10% of the capital) and Manchester United
.

Besides Manchester City, the City Football Group now controls ten clubs, while the Qataris are present in four (PSG, Cultura Leonesa, KAS Eupen and Braga)

.

Or the equivalent of the annual GNP of all the nations of Scandinavia taken together

.

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