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MLSE explores notion of buying into top league

Apr 24, 2008 04:30 AM
Rick Westhead
Sports business columnist

Maple Leaf Sports & Entertainment is exploring the idea of purchasing a soccer club in England's fabled Premier League.

The Toronto sports holding company has retained consultants Deloitte & Touche to advise on soccer investment opportunities in the U.K., a senior sports industry executive told the Star.

Richard Peddie, president and chief executive of MLSE, confirmed he and chief financial officer Ian Clarke recently returned from a week-long trip to the U.K., where they visited six English soccer stadiums, met various team executives and investors, and attended a one-day soccer-industry conference.

Dan Jones, the head of Deloitte's soccer consultancy, confirmed MLSE is a client of the firm but declined to elaborate.

England's Premier League is considered the top soccer league in the world. In recent years it has attracted interest from foreign investors anxious to enhance the fortunes of teams with global followings.

In 1997, Fulham became the first Premier team to be bought by a non-British citizen when Harrods owner Mohamed al-Fayed snapped up the club. Since 2003, Chelsea, Manchester United, Portsmouth and Aston Villa have also been bought by foreign interests. Derby was bought by American Andrew Appleby, and former Thailand PM Thaksin Shinawatra grabbed Manchester City last year.

Other NHL owners are getting in on the action. Montreal Canadiens owner George Gillett and Dallas Stars owner Tom Hicks last year agreed to pay about $441 million to buy Liverpool FC, although their relationship has since soured with both calling for the other to sell.

MLSE is said to be worth upwards of $1.75 billion. .

Peddie said he visited White Hart Lane, home to Tottenham Hotspur, and Reading's Madejski Stadium. Clarke also visited Stamford Bridge, where Chelsea plays its home games. He also visited Southampton's St. Mary's Stadium.

"We came away with a lot of ideas on how to maximize revenues," Peddie said.

A sports banking executive who specializes in European soccer said three English Premier teams would probably merit interest from the likes of MLSE: Everton, Newcastle United and Tottenham Hotspur.

Tottenham might be the most attractive. Based in one of London's most multicultural boroughs, Spurs fans are recognized as rabid supporters. It also needs a new stadium. White Hart Lane opened in 1899 – some 32 years before Maple Leaf Gardens opened for business (although, like many of the oldest stadiums in England, it has undergone extensive renovations).

A common recipe for success in the sports industry is buying a franchise that plays in a decrepit arena or stadium, building a new one and realizing newfound revenue from the sale of personal seat licences and increases in prices for season tickets and sponsorships.


Unlike MLSE, which is a privately traded company, Tottenham's shares are traded on the London Stock Exchange. Last year, it generated an operating profit of $21.4 million on sales of $208 million.

Everton's home stadium is even older than White Hart Lane. It opened in 1892, the same year Newcastle began playing at St. James' Park.

If MLSE decides to move forward with an English soccer investment, it may make more sense for the company to eye a team in The Championship, England's second-tier pro league. The three teams that finish with the worst records in the Premier League are relegated at the end of each season to the Championship. That league's three top clubs are promoted to the Premiership. A team in the Championship would cost less money, with the potential to be worth more.

Peddie and Clarke also visited Southampton's St. Mary's Stadium, in the Championship league.
 
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