BrandDunk

Branding the World of Sports

Rich fans should not buy sports teams

Posted by ZA on June 1, 2009

The owner of one of the England’s top soccer clubs is selling the team in a fire sale to recoup some of the money he’s lost.  Mike Ashley is the billionaire owner of sportswear chain, Sports Direct, who bought then EPL team Newcastle United in 2007.  Ashley paid over $200 million dollars for the football club at the time, but now is asking a mere $155 million just to rid himself of the club.

Ashley said his decision to buy Newcastle has been “catastrophic for everyone” and claims to put over $180 million dollars to square their books.  So if he is able to find a buyer at his current asking price, then his total loss will be close to a quarter of a billion dollars.  That’s what happens when a rich fan has the means to buy their favorite club; they make their decisions like a fan would and wind up paying $100 million plus per year to rent the team.

During Ashley’s time as owner, Newcastle fans have revolted at the decision to fire a popular team manager and now they have to watch as their squad gets relegated from the EPL to the lower division.  That relegation removes tens of millions of dollars off the value of the club and punishes the fan base who will now have to hope their team can soon return to the top English soccer league.

So what is Ashley’s reason for why these huge issues have befallen his club?  Ashley said he did “regret” buying the team.  He went on to say that, “I was just a fan…I never said I was an expert in football clubs.

Ashley went on to lament about how much money he has lost in this situation.  But Ashley made the decision to buy Newcastle and the mistakes that cost him that money, so he had choices in this matter.  The other, less wealthy, fans of Newcastle didn’t have a choice in this situation.  They watched a rich guy buy their favorite club, turn it inside out to the point it is now relegated; and now they have to watch him try to sell it off to whomever is willing to buy it.  Who knows what they’ll get with the next owner…things might not get better quickly.

That is why fans should not buy their favorite teams.  They will be prone to act on emotion, rather than make the sound business decisions that the team needs to stay successful.

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