(Bloomberg Opinion) — It is a universally accepted truth that an American businessman who owns a good fortune must be in the absence of an English football team. Houston-based billionaire Dan Friedkin is the latest to join the Premier League owners club, prompting fellow American John Textor to agree a taking over Everton FC. Wish him luck: He'll need it.
Friedkin enters a crowded field where half of the Premier League's 20 clubs already have American owners, including Arsenal, Liverpool and Chelsea. The sustained enthusiasm of American investors for English football is quite a phenomenon, considering the low status of the sport in its homeland, which ranks far behind American football, baseball and basketball in popularity.
The Premier League is the world's most-watched domestic soccer competition, and revenues and ratings have soared over the past two decades as overseas investment poured in from the US, the Middle East, China and elsewhere. That's all right – if you don't like the profits too: Clubs in the top flight have posted overall pre-tax losses for the past five years totaling more than £3bn ($4bn) combined.
For Everton, Friedkin's arrival is all sweet. The club, based in the north-west port city of Liverpool, has a large fan base and a storied past but has not won a trophy since 1995. Its fortunes have fallen under the ownership of British-Iranian businessman Farhad Moshiri, who invested first in 2016, and the club are bottom of the 20-team league five games into the new season. The deal ends a years-long search for a buyer that left Everton at risk of having to seek creditor protection. A proposed acquisition by 777 Partners LLC collapsed earlier this year after the Miami-based investment firm called in restructuring specialists amid legal battles with creditors.
Friedkin is a far more solid prospect than 777, whose chances of completing the Everton takeover always looked slim. He has a net worth of $11.4 billion, according to the Bloomberg Rich List, which stems from a family company that has been in business for more than five decades. The close-knit Friedkin group had $13.3 billion in revenue last year, according to the Houston Chronicle, with most of that revenue coming from Gulf States Toyota, which distributes the Japanese company's vehicles to dealers in five US states.
The businessman's achievements suggest a taste for challenge and adventure. They include co-founding a film and television studio and being a stunt pilot (like his father, Tom, who started the Toyota distribution business). He even has a record of success in football, having bought Italy's AS Roma in 2020 and overseen their progress two years later to a first European trophy since the early 1960s. This is a man who landed a Spitfire in a beach in Christopher Nolan's film Dunkirk. How hard can it be to leave the Everton ground again?
For the wider football industry, which contributes more than £8 billion a year to the UK economy, the Everton deal stands as evidence that the Premier League still has appeal for some American investors. This was not to be taken for granted – especially given the example of another US-owned team that, like Everton, also plays in blue: Chelsea. Businessman Todd Boehly and California-based private equity firm Clearlake Capital agreed to pay £2.5 billion to buy the London club from sanctioned Russian billionaire Roman Abramovich in 2022. They have struggled to break even since, despite spent more than £1 billion on players (sometimes paying high prices for unproven recruits who subsequently failed to live up to their billing).
The influx of private equity money into English football was in part a bet that the game's unsustainable cost structure would improve with regulatory restrictions, while revenues would continue to rise as technology offered more ways to monetize the global base of the fans. With Chelsea spending like it's still the gold rush years – even as the era of free money ended and media rights values began to rise – a more financially sustainable future still seems some way off. There is a spending arms race turned off some potential investors.
Boehly has said there is “nothing irrational” about Chelsea's approach and that the club is laying a long-term foundation. But the news that the Chelsea partners are evaluating whether they can buy each other out comes amid a deterioration in relations between Boehly and Clearlake co-founder Behdad Eghbali, according to Bloomberg News' David Hellier and Giles Turner. reported This month has been taken as an excuse by those who consider the club's strategy chaotic and unfocused.
This is the environment that Friedkin will enter. Everton are clearly a very different proposition to Chelsea: a weaker club than an elite club, with a new stadium nearing completion and plenty of potential. It will still need careful steering: Clubs are community assets, and fans can quickly turn against owners perceived to be out of touch with local culture, such as Friedkin. already discovering it with the Roma. At least Everton will know they have an experienced pilot at the controls.
More from Bloomberg Opinion:
Want more from Bloomberg Opinion? Opina
To contact the author of this story:
Matthew Brooker at (email protected)