For a while there, it looked like North American sports teams owners were going to take over European Soccer. The biggest Premiere League names were getting bought up. Then a funny thing happened. The US Dollar turned upside down against major currencies making deals that once looked tenable, all of the sudden seem very, very expensive.
But as is the nature of currency exchange, for every Yin, there is a Yang, or in this case an Abramovich or any number of wealthy Europeans or Russians who are coming to the US in search of bargains. Of course there are also the exploding number of Chinese Billionaires with global aspirations as well.
A quick trip to NYC to shop for currency induced bargains need not stop on 5th or Madison Ave. It is just a matter of time, and maybe not much of it, before we start to see our sports teams gobbled up. With the international
flavor of both the NHL and NBA, is there a better way to "mainstream" a person, product or service into the US than through the purchase of a sports franchise ?
With the lack of Salary Cap of MLB, why couldn't or wouldn't an ultra Wealthy (as in guys or girls who make me look poor) Sports Fan take advantage of the fall in the value of the dollar and come in and buy an Iconic or even mid market franchise and spend spend spend ?
With the price of NFL franchises now past a billion dollars with half the Dolphins apparently selling for more than 550mm, how many individuals in this country that don't already own a franchise actually afford to buy an NFL team ? Compared to those who count their wealth in Euros , for whom the price of NFL franchises in their local currency has actually declined ?
I bring this up not only because its an interesting question about the impact of globalization in business, but because it could raise some fascinating cultural questions as well.
It's going to happen. The money will be too big for a current owner to say no to. The potential thrill of a free spending owner Will be too much for the fan base to say no to, particularly in baseball.
Then what ?
When Will Foreign Ownership of US Sports Teams Start ?
Reader Comments
(Page 2)22. The Expos have been foreign-owned for nearly 40 years, if I'm not mistaken.
Posted at 4:03PM on Mar 1st 2008 by Harl Delos
23. It`s only inevitable if the U.S. does not exercise some form of protectionism, which would be terrible for this economy. We need those foreign dollars to come back. Congress has already blocked the Chinese government from buying General Motors. What ever happened to Laissez Faire economics? Isn`t that what made this country great?
Posted at 4:07PM on Mar 1st 2008 by goedkoop lenen
25. Insightful comments. I always enjoy reading your take,
On the subject of a poor US dollar, if it continues to decline, what about American NBA players taking off to make better money in Europe? Is that at all possible?
What about European basketball players that would rather make big money in Europe and not have to deal with US tax laws?
An extremely weak US dollar will change the NBA. Why would a Spaniard go play in some backwater US city when they could play in a top flight city like Barcelona, assuming the money is equal?
Posted at 2:22AM on Mar 2nd 2008 by Mike
26. It will never happen because the owners group (at least for NLB and NFL anyway) will never let it happen. Case in point: Boston Red Sox. MLB awarded the team to John Henry's group despite the fact that the group lead by Chuck Dolan was willing to pay upwards of $100mm more for the Red Sox. Why? Because MLB does not want to risk an ownership group coming in an upsetting the apple cart as it were. Hate to say it Mark, but its the same reason why there is no chance in hell that MLB will ever let you buy the Cubs--even if you were willing to pay 10's of millions more for the team. Bottom line: the good old boy MLB and NFL network will never accept an ownership group--no matter how much money is on the line--that they deem a threat to their business model.
Posted at 1:18PM on Mar 2nd 2008 by Joe Ogrady
27. I think that Foreign Ownership of US Sports Teams is likely happen for professional baseball and basketball teams. Football is a possibility too.
Posted at 2:29PM on Mar 2nd 2008 by Laura
28. I think foreign ownership is a natural progression in professional sports using the premier league as an example. With the influx in foreign players that came to the league the quality of the league improved and then foreign ownership came along with it. Chelsea is the most recent example where they bought players creating a roster where often the third choice player could start for many other clubs. Although it did work for Chelsea in winning titles they still had a core of talented English players and the top clubs like Manchester United and Arsenal continue to have a solid mix of talent from home and abroad. I also think that the premier league now has a distinct heirachy where only a few teams can realistically compete for a title due to financial reasons. Part of the interest this year is that there seem to be several contenders for the NBA title, and no clear cut favourites and so I wouldn't want that dynamic to be upset. I think it is a logical step with the current state of the dollar however the NBA's possible European and global expansion may hinder those aspiring buyers who may wait to purchase a club in their home country. Without salary caps the NFL may be the most intriguing option but with the failure of NFL Europe I'm unsure of true interest from back home in Europe. I think Barclays Bank's purchase of the Nets Stadium in Brooklyn is a sign of foreign investment to come but I think there has to be more than money behind the decision to buy for it to be a success.
Posted at 3:46PM on Mar 2nd 2008 by Nick
29. I think foreign ownership is a natural progression in professional
sports using the premier league as an example. With the influx in
foreign players that came to the league the quality of the league
improved and then foreign ownership came along with it. Chelsea is
the most recent example where they bought players creating a roster
where often the third choice player could start for many other clubs.
Although it did work for Chelsea in winning titles they still had a
core of talented English players and the top clubs like Manchester
United and Arsenal continue to have a solid mix of talent from home
and abroad. I also think that the premier league now has a distinct
heirachy where only a few teams can realistically compete for a title
due to financial reasons. Part of the interest this year is that there
seem to be several contenders for the NBA title, and no clear cut
favourites and so I wouldn't want that dynamic to be upset. I think
it is a logical step with the current state of the dollar however the
NBA's possible European and global expansion may hinder those aspiring
buyers who may wait to purchase a club in their home country. Without
salary caps MLB may be the most intriguing option but a collection of individual talent with the Yankees doesnt seem to be working. With the failure of NFL Europe I'm unsure of true interest from back home in Europe. I think Barclays Bank's purchase of the Nets Stadium in
Brooklyn is a sign of foreign investment to come but I think there has to be more than money behind the decision to buy for it to be a success both as a business and as a team.
Posted at 3:51PM on Mar 2nd 2008 by Nick
31. I think in the new world economy we will see the boundaries of ownership moving along with the rise and fall of economies. When you see the wealth, especially overseas like dubai and abu dabi. They could easily pay any price for a team and I would actually welcome the open business....as long as their markets are always open to us. I think as with everything there will be pockets of resistance here in the US with certain sports franchises.
Love your blog.
Posted at 11:53PM on Mar 2nd 2008 by Mark Ferguson
32. Mark, how funny ? Premiership league and European Club Cup contender Liverpool's fans are trying to launch a member share scheme to buy their club...
http://in.reuters.com/article/soccer/idINL3111236020080131
33. If the MLB ownership group would block YOU from buying the Cubs, I'm sure they would block a freewheeling oil sheak (or whatever) as well.
Posted at 11:18AM on Mar 3rd 2008 by Brad Russell
34. Hey, capitalizm rulez. If other people want to buy our sports teams, maybe they can do more to put money into the local economy too. No more subsidized stadiums. Maybe they'll work harder to attract fans and not be so arrogent. My 2 cents. Fred
Posted at 12:45PM on Mar 3rd 2008 by Fred Malek
35. It's probably inevitable though the rules are a lot different here than in Europe. The EPL has no salary cap and with the exception of baseball, the wealthiest teams don't always win in the US as they do in the rest of the world. A guy like Abramovich can't come in and think he's just going to throw tons of money into his team and watch it succeed.
Still, it will happen and like anything else, some will succeed and others will fail miserably. Where I think you'll see the change though, is in European soccer. You may ultimately see salary caps, a level playing field for all the teams and the elimination of the lower divisions -- all thanks to their owners becoming more 'Americanized' and thinking in terms of luxury suites, corporate sponsorships and catering mainly to the wealthy.
That frankly is the part of American sports that really sucks nowadays.
Posted at 2:34PM on Mar 3rd 2008 by scotbo
38. I think that in todays day and age, everything is fair game when it comes to ownership of franchises in sports. While baseball ownership is still a closed society, the NFL is slightly more open now and will have to be in the future due to the shear size and scope an investor have. And, well, the NBA has proved to be the least controlling of all the ownership groups for various reasons.
You can see with the current situations with various teams, from the Grizzlies to the Hornets (both in Charlotte and New Orleans) and now to the current situation with the Sonics, either NBA management decided to be less controlling or due to circumstances has to be more open. The pure fact that the NBA has set precedent to allow teams to move fairly freely when cities aren't accomodating to management needs. The Hornets and Sonics prove that its the wild wild west when it comes to the NBA.
It is a shame that its come to this - teams vs. fans vs. cities. It really detracts from the product.
Posted at 10:56PM on Mar 3rd 2008 by David
39. If a wealthy Chinese national wants to put an NBA franchise back in Vancouver, I'm all for it.
PS Do you say "all of the sudden"? I always thought it was "all of a sudden".
Posted at 1:27AM on Mar 4th 2008 by GM
40. Great entry Mark! On HD.net Dan Rather interviewed Gary Schilling who was a cheif economist for Merrill Lynch who was fired twice for forecasting recessions. He said that we are generally the first country into a recession, and the other countries follow because their growth is tied to our economy. He said the UK is looking like they are going into a recession, and the rest of Europe and Japan will follow. So by using that logic, it's the right time to buy when their money is worth more than ours.
Posted at 2:56PM on Mar 4th 2008 by Matt Steinmetz
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21. Given the substantial investments made by government sovereign funds like the Abu Dhabi Investment Authority in US companies like Citigroup, foreign ownership of sports teams is inevitable. And maybe its not such a bad thing. Look at some of the idiots (David Glass) that own baseball teams. I think the foreign ownership might be smarter owners.
Which leads me to my plea to MLB to allow you to buy the Cubs. That unrepentant piece of jackal slime known as Sam Zell is going to ruin the team!
Posted at 3:17PM on Mar 1st 2008 by Mike Boland