Why Sports Team Owners Are The Greatest Fools
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- Опубліковано 30 чер 2024
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In 2023, a new record was set with the $6 billion acquisition of the Washington Commanders by billionaire Josh Harris. But do these figures truly reflect the value of sports teams, or is there a 'greater fool' behind the curtains? Dive deep into the world of sports economics and discover the real game billionaires are playing.
0:00 - 2:21 Intro
2:21 - 6:01 Business model
6:02 - 8:46 Team level economics
8:47 - 11:28 Ruthless competition
11:29 - The greater fool
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#Wallstreetmillennial #football #chelsea #mavericks #commanders #nba #nfl #soccer #manchesterunited
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I don’t think billionaires buy sports teams to make a profit. To them is like buying just another toy. 😂
to make money
Yea If my net worth was 100 billion what’s 6 billion going to do and if it loses -100 million who cares
I always saw ownership of sports teams as vanity purchases.
You don't see Warren Buffet owning one, even though he can buy one easily.
@@cgasucks OK?
@@TiberianFiend He's agreeing with you lol
@@cgasucks If you aint rich, u poor - Warren Buffet
I live in Jacksonville, Florida. Our area is being ruined by the Jacksonville Jaguars owner Shad Khan. Shad has the whole city in a chokehold because he's demanding us pay to upgrade his stadium when we got sales taxed to build it initially. My area of town has substandard roads, flooding in the roads due to lack of storm water drains, and a lack of law enforcement which most of you saw the national news about the Dollar Store shooting. But the city has enough money to give Shad Khan a blank check. The downtown area where the stadium is at is also the location of the downtown jail and also homeless resources. So you get out of jail or dropped off downtown, you never leave that area. The current tropical storm hitting our area will blow away all the trash that piles up downtown due to people living on the streets because of the social programs nearby feeding, clothing and supporting them. So the city's plan which they haven't announced officially and a lot of insiders know about is to move the downtown jail over by the airport and near the county line by the "main county jail" that is on 100 acres. So watch the city will probably turn the location of the jail once its knocked down into a hotel and give the keys to Shad Khan. Keep an eye on the drama with Jacksonville, the Jacksonville Jaguars and Shad Khan. The newly elected mayor is running around "seeking community input" but we all know the deal is being made. The mayor is doing these meetings to make us think we have feedback when the ink is already dry.
The saddest part is Shad Khan sells it to us as jobs. Oh great, more low paying low skill jobs in the nearby deteriorating neighborhood where you need 2-3 jobs just to sustain your family.
Please please please do a video about local government and real estate developers/investors getting into deals with each other using your tax money to make these deals
People who intentionally vote taxes on themselves for hundred millionaires is total clownville.
@@tonycrabtree3416 For real. You reap what you sow.
I lived in Jacksonville and the corruption is historical and broad. But the St Johns River is incredibly wide, and it's sitting on the largest aquifer in the world. The flooding is never going to go away. Sports in general are for morons.
Owning a sports team is a vanity project/status to begin with, and governments seem them as community assets that lift up the profile of their cities, so they get massive amounts of tax breaks. They're not quite as foolish as it may seem.
I don't know if you saw Professor Damodaran's lecture on this recently, but he goes over exactly this. Sports aren't an investment, they're trophy assets, as he called them; fancy toys for these billionaires to play with. That's it.
How much does the tax break the owner get? I doubt it would be greater than the net loss. Still, it doesn't make sense to me. And frankly I don't really believe the 'greatest fool' theory is applied here. Team performance, and by extension their valuation, is mostly depending to the players. And the players, like most human beings, are very unrealizable investments. On the other hands, Abramovic and other billionaires and even the private equities are no fool. There must be something missing here🤔
You don't but a sports team to make money. Owning a team is the current day version of being royalty.
royalty is still the current day version of royalty
@@perfectallycromulentNowadays corporate lords have more power than remaining royals
when you mentioned fine art i assumed you were talking about masterworks and started thinking "how far do i have to skip now"
Everything I've heard about every entertainment industry from youtube to Hollywood to now sports is that despite making insanely massive revenues, the best of the best barely break even and everything mostly just opperates at a loss.
That comes mainly from two things. One is the salaries for the players and the second is transfer fees (which is very predominant in soccer)
Case in point. Lionel Messi. Wanted to go back to Barcelona but that club couldn't get the money together to pay his salary. Messi refused to go to Saudi Arabia (where they would have paid him somewhere between $300-500 million) and is now playing for Inter Miami in the MLS. His salary there? $50 million plus a cut from jersey sales and TV deal money, bringing his income to somewhere around $250 million.
But lets just take the basic income of $50 million. A club has to bring in that money in the first place. And Messi isn't the only player.
But over the past few decades, the Spanish and Italian clubs have outbid themselves regularly to get certain players. Amounts of 100-200 million Euros in transfer fees for a player became more and more the norm. Then these players earn a lot of money every year. So a club has to somehow recuperate that money through ticket sales, merchandise, tournament money and TV deals. The aforemenioned clubs accumulated massive debts.
And now we see the Saudis spend billions on players. One exmaple: Neymar
$100 million for Neymar in transfer fees that go to his former club. He got a two-year contract that nets him between 150-200 million per year(!). And he got some strange extra perks. Every time he does a social media post in which he advertises for Saudi Arabia, he gets €500,000. Winning a match: €80,000 bonus.
And then the crazy extra stuff. He gets to use a private jet if he or his family needs to travel. Eight luxury cars. A driver to be there all the time. A 25-room villa with three saunas and a 400 m² pool. Five full-time employees (paid for by the club), one of whom is a sous-chef that helps Neymar's personal cook he brought from Brazil.
I get the feeling, those last things were a kind of trolling on Neymar's part to see what the Saudi's would be willing to give and it got out of hand
Tax shields for assets that are meant to appreciate in value rather than generate profits
Yeah, nah. I’m pretty sure Jerry Jones and the Dallas Cowboys are printing money.
Until one of these guys loses a ton of money after cashing out, hard to call it stupid. All I've seen is these guys making hundreds of millions if not billions, and here we are a bunch of plebs calling them stupid. Besides, even if they didn't make a ton on the team itself, who knows how much they've made through connections or clout associated with owning the team. Long story short, I highly doubt the wealth of these billionaire owners is declining after buying these teams.
what this guy dosent understand is these billionaires arent purchasing sports franchises to turn a profit. Its a discretionary expense, its a luxury, its status and on the odd ocassion a purchase of passion 1st, business venture 2nd and a tax write off 3rd
No one should buy a football club to make money. The only rational reason to buy one is (as many of the Arab owners of Europe's football clubs do) to pump your money into something you can be proud of and have fun doing. So football ownership is simply a super expensive competitive hobby that can be somewhat profitable...maybe.
The ponzi schemer Allen Stanford bought a cricket club and seemed more interested in the players' wives and girlfriends than what was happening on the field.
International sports teams really need to look at the American professional leagues as an example of how to do it the right way. You go to a city and tell them that you would consider moving your team to their city if they would make it worth your while. You make the city to pay for absolutely everything from the sports arena to every little minor expense using tax dollars. But when it come to the revenue you get paid in full off of of anything and everything that makes any revenue what so ever before anyone else sees a single penny.
@Donkeyearsa no. They shouldnt.
All this article proves is how good billionaires are at tax evasion. Player salaries are 50% of revenue, and most teams today are playing in buildings they made tax payers pay for.
I'm so happy you made this video. For the longest time, I could not for the life of me understand why these teams are worth billions, but are struggling to break even almost every year. The valuations just didn't make sense.
he omitted some pretty important stuff though. like land how land and arena prices for many of the teams is what the bulk of the cost is for certain teams. like thats why golden state is evaluated so much higher than any team. it’s not because they’re just that much better it’s because they own their arena and the land around it right in san francisco which is a huge pricetag
If you base your knowledge of the worth of sports team off of this video then you’re either completely unintelligible or have no clue about the matter. This is one of the worse takes on sports owner ship I have ever seen. It’s not just about the value bought for, sold and spent in between. They’re much larger entities than that. I’d advise, the level of intellect the guy that makes these videos has is akin to a 19 year old college kid failing at an economics degree and having to take history instead.
Also, sports teams are artificially limited so as each league's revenue grows, the franchise value grows. It's also one of the areas where the ultra rich can flex. Having your team have success is something you can brag about at the next billionaire's party.
@@ThanhNguyen-pp2jn Correct. I find it strange that he's saying the billionaires flipping sports clubs are greater fools, yet not too long ago he was shilling that art investment fund that was sponsoring the channel.
@@Olm- Pretty sure the rise in Golden State's value can be tied directly to the team becoming a dynasty and Curry becoming one of the most popular players in the world. Their valuation shot up a lot even before they got their own arena. Besides, most teams don't own the land or stadium they play in.
You may have missed the tax haven ability that they and their systems have. Many teams, stadiums and etc. get nonprofit status in the cities or state that they are in since they are critical to tourism revenue for these locations. They were also gifted real estate and other advantages these may not be fully shown on their metrics also other corporations could take advantage of that tax haven and put certain duties on these facilities, it is not uncommon to find some of the stadiums to have retail or otherwise venues in them full-time not also counting, renting the venue out for other events.
Tax em
yeah you’re spot on
@@FuxBoiGOAT they’d just move cities
I don’t think the benefits can offset the losses made
they rent the stadium for events (tax free) a stadium many are gifted and pay no profit tax on. that stadium is also normally sponsored. Covering it maintenance. The non profit also covers most of their licensed merchandise. Which is a huge point of profit. and that's just the non money laundering done. See tax code IRC 501c (1-7) googling (PRO Sports Act, which would close a loophole that gives special tax breaks to some pro sports)@@RavarsenBlogspot
I would like to see an analysis of savvy mid table teams like Brighton. Where they are really good at scouting players for cheap and selling them at really great margins...
I remember watching something similar awhile back with Benfica as an example. One issue brought up is that teams using those models get stuck in a groudhog day loop and stay mid table. The problem arises when the players start developing and want bigger salaries, the club gets put in a Catch 22 situation. Their main source of revenue is from selling players so as a result, they cannot afford the bigger salaries and have to sell them so they always remain a mid table team.
Not if they get the local taxpayers to foot all the bills for stadiums and everything...
They go to the city and say "yeah this stadium will bring in a ton of revenue to the city, ignore the fact that it makes every other metric for quality of life worse," and the city listens
You had me in the first half not gonna lie 😂
Thought he would hit us with the masterworks ad
hahaha dont see those much anymore. masterworks will be dust within 5 years. no doubt in my mind.
This is the very reason why community ownership (like FC Barcelona, Real Madrid, Green Bay Packers) is the best when it comes to sports. Sports clubs represent community and should remain that way. They are not there to make money but as a pride for the people.
Arguably the best ownership is the local businessman who uses it for community pride, see Jack Walker at Blackburn Rovers, Sam Longson at Derby etc
Community owned teams struggle financially to keep up
@@philthornton1382 Yep easy to pull a very small sample of success stories like Barcelona if you ignore all the struggling/borderline bankrupt clubs.
@@philthornton1382Iran has a sports team owned by a tractor manufacturer. 'This team will harvest victory!' is what I imagine they could be saying.
Poor example given the financial black hole Barcelona have accrued.
@@arnoldvosloo220 isn't barcelona a bankrupt club?
how are you popping these out almost daily like a factory? the in depth research and mathematic breakdown goes on these videos rivals that of university courses.
I also wonder this. Seems like a lot of work to complete daily.
I’m pretty it’s not one man team. Like there whole team and all, as voice has changed often throughout the year
Because these videos are basic to begin with. This video alone is laughable to say the least.
it's a bunch of stories and screenshots not a big deal really
@@Invin_cibles i didn't even notice till you mentioned it but yea you're right
In terms of Saudi Arabia, I refer you to your previous video about sportswashing. For Saudi, the benefit of sportswashing could be more far reaching than the bottom line of the team’s business.
What you also fail to realize is that most teams own their own stadium which brings in wayyyyy more revenue (i.e. concerts, other 3rd party games, tours).
This perfectly encapsulates the reasons why college sports (where players don't get paid) are hugely successful and ESports (where top players can make more money becoming streamers) are failing.
Well yeah I mean why else would the south fight so hard for those slaves
The greater fool theory - I used this when buying, then selling our 26’ sailboat! Fortunately for middle class us, we were talking only $thousands, and we sold it ten years later for maybe a little more than what we paid for it, when we found a greater fool.
Sigh, 20 years later, I miss that boat, so maybe someday soon I’ll be someone else’s greater fool.
It is about keeping up with the billionaire Joneses equivalent. Ego thing. When you have a huge amount of money, what else are you going to spend it on?
Profit margins are NOT so low, you are just looking at this from their own accounting, and they are of course cooking the books, so they do not have to pay any taxes, or as little as possible.
the nba has a maximum contract. there's no highest bidder competition for the top players like you described. the top players can get the max contract on any team that they want. the league also has a salary cap
The max contract only applies to like the top 20 players, u bid for the rest, and the salary cap moves up every year anyways
If the owners were getting nothing, they wouldn't do it.
A lot of them are being subsidised by the public but raking in ownership benefits.
Thought it was just about that status. Cars don’t cut it when your a billionaire I guess. Gotta show off
Through a pure profit lens, sure.
Through a wider political and geopolitical position, it's more nuanced.
Dear WSM,
Profit is what is left after you account for expenses and sports teams ... they can come up with a WHOLE HELL OF A LOT of unnecessary expenses... They are probably way more profitable then you think. They just have to look this way so they get public money when they "need" it.
The reason Chelsea were posting losses is because Abramovich was putting his own cash in so they could buy the best players. It doesn't mean it's a complete loss maker. You could easily make it profitable, but the performances would suffer greatly. Basically it's a choice, not a natural outcome.
@wallstreetmillennial i love every single one of your videos ! They are very informative and very easily understandable. Thanks for the amazing work !! ❤❤
For Abramovic the purchase of Chelsea was commercial. It gave him entry to UK & a certain degree of protection from Putin.
IMO, billionaires aren’t buying these teams for cash flow purposes but for asset growth purposes and to park billions of dollars…it’s akin to billionaires buying $100MM homes in NYC and never living in it…Same difference.
Professional sports are some of the closest example of perfect competition. A lot of undifferentiated firms bidding for limited talent therefore all the rents accrue to the players not the capital and profit margins are practically zero or negative
Man, you're good! I've always said this, but couldn't explain why I felt these valuations were off.
Ok, it's also foolish to buy a Chiron or a Gemera...but what else are you going to do with several billion dollars? These are trophy assets. They have no actual utility or necessary benefits to their owners or customers. Of course they don't make sense...
I see what you are saying in here, however what is the other perspective you do not take is money laundering. Football teams have been in the past and continue to be one of the best ways to do money laundering. Even if you do an analysis of the owners of teams you will see the origins of these owners, are many teams the least to say questionable.
Indeed, buying a sports team is merely about status, but I guess we should have known that in the first place. Thanks for the video
"Soccer, or Football as they call it" - Bruh, almost the entire world calls it Football. Only 3 out of 195 countries even use the word "Soccer"...
Bruh, before 1990, soccer and football were used interchangeably in English speaking countries. Then it suddenly became frowned upon to say soccer.
@AZee112 Tbf, its just because people like hating other people.
And everyone is confused on what the "Great Filter" is.
Jerry Jones bought the Cowboys for $150M in 1989. Today: $7.4B valuation. 12% annual return. Not too shabby
Sports teams are billionaires Toys. no different than a Yacht, Car, or Mansion. Also everyone is getting paid in the Revenue side. Net Profit matters, but the teams also give this Guys Clout in the cities and across the country. You make lose money. But The value of people kissing your ass all day is priceless.
I wonder if some people do this because they enjoy the idea of owning another person or group of people and that it might make them look saintly to people who are similar to them, thought of as "everyone" by them. It is much more appropriate than trafficking, though.
Buying a sports team isn’t about money. For many it’s about status. For some it’s about sportwashing, and for a few, they actually care about the club and want it to see it do well.
They’re not fools man, otherwise they wouldn’t be rich, they’re just spending money on a hobby, they don’t expect to make a profit, would you be considered a fool if you were rich and decided to buy a Ferrari or rolls Royce
You do not have to be especially smart or talented to be rich. Most people who are, according to the Forbes richest people list, inherit their wealth. And Lol, yes, you would be a fool in most cases buying a Rolls or a Ferrari. Almost all cars lose value once you drive them off the lot. The only difference with the extremely wealthy is that they have rare editions/productions of expensive cars that actually retain value available to them. Mind you, those special editions are only available for purchase to people who have purchased other more common varieties of the Brand’s cars. Us normies do not, even if the car has a high price ticket or good name.
He talked about how it is not about making money for them. It is foolish from a monetary perspective.
@@killersberg1some people can only read or listen to any information at face value. They are clearly not fools but you, me, and most other logical people knew that already
@@michaellawilson3491 Not all non-rare edition cars will lose value, it also depends on the person who owned the car, for example if Messi or micheal Jordan or Lebron James bought a Toyota Camry back in 2008 for 25,000 and decided to sell it today and the public knew the car was owned by one of the people I mentioned, the car could fetch 100s of thousands and even millions at auction. For example Obama sold his 2004 Chrysler sedan for 2 million dollars
That's not entirely true. There are plenty of owners that are accused of being cheapskates. Heck, pretty much all of MLB is focused on profit.
Regarding the sky high valuations, is there any similarity between how much a sports team is worth vs. some tech company that seemed crazily overvalued, like say, WeWork?
I mean look at PSG and Qatar. Looks how they hosted the world cup and now everyone knows their name. I increases their credibility and awareness around the world.
Sports teams are a vanity business operating with a level of exclusivity other businesses do not enjoy. More comparable to a yacht or a work of art. Anyone can start a hot dog stand, convenience store or doohickey manufacturer with capital. Sports teams, like Picasso's are in limited supply.when an asset like this only comes up for sale a couple times a decade, and there's dozens of people wanting to get in, the valuation skyrockets over the actual value based on revenue and assets. People who buy these teams aren't sinking their fortune into them. They're multi-billionaires investing 10%- 20% of their billions. They'll be fine if it's a loss. It also has the benefit of offering exposure. Mark Cuban purchased the Mavericks for 285 million. Who heard of Mark Cuban before that? How much of his current worth can be attributed to the fame he got being the mavericks owner?
Two things here:
1. Company valuation sounds so dubious these days. Look at Nikola, FTX and Theranos who have high valuation, but we all know what actually happened behind them.
Not saying sports team are like that, no no. I only say that their valuation might not represent everything we need to know about them.
2. There are non financial benefits from having soccer teams. Some leagues might lose fame if certain teams/clubs don't participate, even some matches are so famous that a rematch is desired.
And of course, entertainment benefits. People loves watching sports.
I don't deny the loss from maintaining sports teams/clubs obviously. Maybe the loss would be covered by profit from other "sources", who knows?.
Another great video!
They seem to cash out pretty well.
It's a prestige item that gets your name in the news. Of course people overpay.
Exactly. Owning a sports team is like buying an expensive car. Of course it is overpriced.
Rich people do not buy these teams for business - they do this for ego, fun or marketing reasons. When you are rich, you cannot go around and yell "I am rich". Instead, you have to slap your name onto things in order to prove your wealth.
You're assuming there is ultimately profit in mind. Many of these rich guys are literally buying themselves a job on their favorite sports team, and that makes them happy. Like how that Israeli billionaire literally bought himself a job on the space station by funding the companies that needed the experiments done@@ForcefighterX2
Dude who is to say they ain't just fans?
Hi there, I was wondering if you could do a follow up on this with a analysis of some football teams that do make profits and are self sufficient. Just look at Ajax Amsterdam in the last X years. It is really interesting to see a club that doesn’t play in a highly televised league (sans European championships Europa league or champions league). It’s quite interesting in the scope of this video.
Also money is one thing but that curve about Chelsea has to include championships. In the football world it seems championships come first. It’s not about being elite alone, it’s about winning.
A big part for the "smaller" clubs making money is 'growing/developing' talent. For example this summer alone Brighton and Hove Albion (small market team in the EPL) have made over 100m pounds profit on transfer fees. In fact for the last few years they have become known for their recruitment of relatively unknowns and developing them into (in wall street term) 5 and 10 xers.
Jude Bellingham who started at Birmingham City for free was then transferred by Birmingham for 25m pounds to Borrusia Dortmund who then transferred him to Real Madrid for 103m Euro.
Ajax is well known and regarded as having an excellent academy where it develops youngsters, they then sign these youngsters to their books, in the hopes these players get noticed by the big boys and thus command a hefty transfer fee.
By far the most famous and most gifted home grown export Ajax had was Johan Cruyff who became one of the most gifted players of all time and was transferred to Barcelona for a then world record fee, but from an economic standpoint the golden generation of the 90's probably netted them the most cash. Ajax is well run club who know how to find/nurture talent and then know how to benefit both from performance and economically.
Dan Snyder bought the Red skins for $800 million in 1999. Recently He sold same franchise for $6Billion. We should ALL be that "Foolish"!!!
thank you for the video
So thats how they do it, the next buy out will be worth more then paid originally, excellent breakdown
What do you have on the baseball team the Oakland A's? Back in 2007 they were big on cutting slaries.
very informative video.
You should've highlighted Michael Jordan buying low on the Hornets then selling for over 3 5 Billion
It seems like an Arab billionaire prince is always the mark of those awaiting the "greater fool"
Wall Street Millennial Land Crabs let's gooooooooo🦀🦀🦀🦀
Nicely done.
What? They get free money from the taxpayers to build their expensive and luxurious stadium.
This is an excellent channel. We’ll done.
This is only applicable in United States not in euporean union wherein these sports team are super lucrative . The media sponsor ship itself is more then twice covers for individual team spend
This is like it companies actually paid people what they’re worth based on the income of the company and not just the lowest they can pay before no one applies for the job.
i would say sports teams are like yachts, even though they are highly impractical if you can get one great business deal its worth it. Imagine the net work opportunities and it starts to make sense the cultural impact of sport and having power over that culture allows you to have dinner with some of the most powerful people in the world
The owners make real money when they sell them, if they bought it for 1,theyll sell it for 2 billion.. Uncle steve Cohen bought the Mets and he's no dummy..
What you called as "breakup fee", is called "transfer fee" i football. And yes, it is called football because it is played solely with foot by the outfield players.
I sure love living in a time where everything is in a bubble. Thanks wall street and world governments
Assuming billionaires need to be financially sound in what they do, or do things for reasons beside "because I can".
I can tell you know very little about NBA contracts. There's no real bidding war between teams as the collective bargaining agreement allows incumbent teams to offer their top players ten of millions more than any other team and it allows them to offer longer contracts than others. The player mobility in the league has more to do with the top players trying to optimize their chances of success.
It's a large leap to claim that 2018/2019 are more representative than 2022/2023.
I'm sure there is some tax evasion scheme with owning a sports team
There’s an old joke:
How do you make a small fortune?
Start with a large fortune and buy a sports team. Pretty soon you’ll be down to a small fortune.
It's the greater fool theory. The intelligence of the business world is vastly overestimated.
if "billionaire" is code for a member of a family of an oil teocracy, then yes you are correct.
WELL DONE
It’s the same reason why people buy luxury items
Just have to chuckle you used fine art analogy as a greater fool and unsustaible business model when you kept pushing Masterw0rks the past 2Y hehehe. Good vid though
I don't think owners of sports teams buy teams for the money. They just like the team.
So sports organisations are basically a speculative asset like crypto. You can't sustain a profit as hyper competition ensures player salaries erode any revenue gains and if you buy them with a profit motive you do so hoping that someone else will decide it's worth more than you paid. Owning a sports team has some very unique and impressive perks but it also comes with a pretty hefty negative cashflow for the privilege.
The same thing can be said of the stock market.
is there a name for the type of graph on 7:17?
waterfall graph
Billionaires buy sports teams not for profit but for prestige. One book on football says that what every successful football team needs is a “sugar daddy” who will splurge on the team. 😊
its supply and demand that causes these exorbitant prices
How have the baseball team the Oakland A's done? The reason I ask is that they were famous years ago for cutting salaries and using statistics.
Wall Street millennial been going hardcore lately
Clearlake has the Saudi Government as an investor.
Mark Cuban enters the chat
In the world of soccer they owners are ripping out the transfer cash as in most cases the law says you cant take profit.
I just don't think you understand English football or the most popular sport in the world. Our game is about GLORY. English football/soccer is very different to American sports. Billionaire owners who purchase soccer teams often do so to increase their profile with the British and European establishment, plus influence with UEFA/FIFA and experience the glory of success at almost any price. It's simply not about investment and return. It started with billionaires like Abramovich buying Chelsea (a mid-sized club) and pumping billions of dollars into the squad and making Chelsea a top team of champions. In the 1990s Manchester United became a soccer superpower that experienced incredible sporting success in part due to a slick commercial marketing and sponsorship department that generated incredible revenue subsequently reinvested into the squad. Manchester United are legitimately massive and glorious. Chelsea prior to Roman Abramovich was a cup team. They signed slightly past their best Italian superstars and former World Cup winners in the 1990s but we're not competing for the biggest prizes and had only a medium sized fan base. Chelsea under Abramovich was the first real example of sporting doping. A club of Chelsea's modest size and status bought unparalleled success because of a generous owner willing to use money to buy glory. Now nation states like Qatar (Paris St-Germain), Saudi Arabia (Newcastle United FC) and United Arab Emirates (Manchester City) own football club as a form of soft power that includes financial doping as standard. It's an ugly situation but again, the soccer game is about glory, not money. Money is just the price you pay for experiencing success, sports-washing and/or raising on Oligarch or dodgy nation state's international profile. When Man City or PSG win a trophy or championship it should have a note next to the accomplishment signalling it couldn't have happened without the resources of a nation state being deployed for sporting or geopolitical purposes. Man City shouldn't be winning trebles, they should be battling bankruptcy. Chelsea should not be European Champions, they should struggle to fill their stadium with fans.
I admire the organisation of American sports. I admire the presentation and the level of skill and athleticism. But American sport is definitely configured for profit and commerce, more so than soccer.
Ted lasso is a documentary about this
This is an overly simplistic view of how sports teams operate. You use Abramovic at Chelsea as an example but the Glazers at Man Utd, FSG at Liverpool have all made enormous personal financial gains whilst the team lost money. Boehly thinks the Premier League is not maximising it's revenue, so he's bought the club and will expect to make big returns after a few years of ownership. The Saudi PIF will exponentially increase the value of these teams in a relative short period of time. The Glazers may be trying to pull out of the Man Utd sale because of this.
Does The Greater Fool Theory apply to Tesla stocks?
You could have touched on that most football(soccer) teams are not businesses but rather cultural institutions. Their endgoal is not to make money but to compete, so they dont have to worry about pleasing investors. They also dont really have to worry about going bankrupt since they are culturally so important so in case of bankruptcy the goverment will bail them out. And in order to compete with fan owned teams privately owned teams can't really be profitable.(Also the cultural significance of these clubs is the reason why they are bought my middle eastern goverments)
what about the team bought by ryan reynolds?
i have no proof but i believe they also make money from betting companies. I think lots of game results are fixed. In my opinion sports is like WWE wrestling, just fake predetermined outcome entertainment. They pocket lots of money from gambling fools.
Just buy them and sell them, it's an asset even if it costs a lot in 'maintenance'
Edit: owning a team also helps you form very useful connections ;))
pent up demand?? more like the team has improved over the years.