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Wednesday, February 06, 2008

QPR and "The World's Richest People - The Soccer Billionaires"

Forbes/Andrew Farrell -The World's Richest People - The Soccer Billionaires

Fans of Liverpool Football Club were understandably upset after the team's wealthy American owners took out a massive loan in the team's name. The club will have to play well on the pitch to pay off hefty annual interest payments estimated at £30.0 million ($59.3 million).
Liverpool supporters say owners George Gillett and Tom Hicks are placing a dangerous burden on the team's future. Now they're banding together to launch a fan-funded buyout offer for the heavily indebted club. But devotees of other teams with wealthy ownership shouldn't automatically buck their owners. Teams with billionaire owners that are willing to spend can be a potent combination.
The most prominent example: Chelsea and owner Roman Abramovich. Including his 2003 purchase of the team, the Russian commodities magnate lavished over $1 billion on the club. He's spent generously to bring in elite talent, constructed a world-class training facility, and allowed the team slip far into the red in an effort to climb in the standings.
It's worked. In 2005, the London-based football club won the Premier League for the first time since 1955. It duplicated the feat in 2006 and is threatening to do it again this year. Through 25 games this season, Chelsea holds third place.
What separates Abramovich from Gillett and Hicks? For one, the Liverpool owners are wealthy, but the Chelsea owner is mega-wealthy. When we last valued the fortunes of the world's billionaires in March 2007, we found Abramovich was worth a staggering $18.7 billion, making him the 16th richest person in the world. Hicks and Gillett's total assets only tally a fraction of that.
Second is the willingness to spend. Abramovich is a bona fide fan and a frequent fixture in Chelsea's stands. He's passionately obsessed with building a winning franchise first. A profitable franchise will come later.
Gillett and Hicks, on the other hand, are veteran sports team owners with a history of ringing out money from their teams. In 2006, Gillett leveraged the arena of his pro-hockey franchise to pay himself a $72 million dividend.
The winning formula of a well-heeled ownership that is eager for trophies could repeat itself at another London-based club. Last year, the world's fifth richest person, Lakshmi Mittal, bought a stake in the Queen's Park Rangers, a team that plays in England's second highest league. He joined a fellow billionaire and Formula One racing tycoon Bernard Ecclestone as owner. Combined, the pair has a net worth of a whopping $54.6 billion. The wealthy ownership group has lofty goals. Another owner Flavio Briatore, who also made a fortune in racing, told a British newspaper "Our program is to reach the Premier League within three years. I want to be in Europe [the Champion's League] within four years." Moneyed owners will soon show their strength in the U.S.'s Major League Soccer. At least five of the franchises are controlled by billionaires. Philip Anschutz's AEG (other-otc: AEGXY.PK - news - people ) group controls the Los Angeles Galaxy and Houston Dynamo. Real estate developer Stan Kroenke owns the Colorado Rapids. Robert Kraft, owner of the NFL's Patriots, owns the New England Revolution. Microsoft (nasdaq: MSFT - news - people ) alumni Paul Allen will take control of a new Seattle franchise in 2009.
Previously, a low salary cap prevented these owners from flexing their checkbook muscle. That changed in 2007 when the league instituted its so-called "Beckham rule," which allows a club to carry one player with only a fraction of his salary counting against the cap. The rule allowed Anschutz to bring mega-star David Beckham to the Los Angeles Galaxy with a five-year, $250 million contract.
The aging Beckham isn't going to win L.A. a championship single-handedly, but the well-financed club isn't stopping with him. AEG has lobbied for teams to receive extra cap exemptions, and a Portuguese newspaper said last month the entertainment group was in talks with former world player of the year Luis Figo. Forbes

In Pictures: The 10 Richest Billionaire Soccer Club Owners
Lakshmi Mittal
Net Worth: $51.0 billion
Team: Queen's Park Rangers
The chief executive of steel giant Arcelor-Mittal bought a stake in the London-based club in 2007. He joins Formula One tycoons Flavio Briatore and Bernie Ecclestone as owners. The club currently plays in the Championship League, England's second highest division, but the wealthy ownership group is aiming higher. "Our program is to reach the Premier League within three years. I want to be in Europe [the Champion's League] within four years," Briatore told a British paper. Forbes

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