Pitch Fever

American investors spend it like Beckham — and borrow heavily, too — to buy UK soccer teams. The big lure: global branding.

Among British soccer fans, the gaffe was as shocking as a player accidentally heading a ball into his own goal. At a February press conference announcing the planned takeover of Liverpool Football Club, one soon-to-be owner, Thomas Hicks, responded to a reporter’s query by referring to the team as “the Liverpool Reds.”

It was a seemingly minor faux pas — it’s either Liverpool or the Reds, not both — and perhaps understandable, coming from a man who has lived most of his life in Texas. In fact, he owns the Texas Rangers baseball club. But Hicks and partner George Gillett were royally skewered on chat boards, reflecting the mistrust that British football fans have for Yank poachers of their beloved teams.

The list of poachers is growing fast. Lured by the vast global potential of the game, U.S. businessmen have been on a two-year trans-Atlantic buying spree. Along with Liverpool, Americans have acquired rival English Premier League (EPL) clubs Aston Villa FC and Manchester United FC. Then, this April, Stan Kroenke, co-owner of the St. Louis Rams (who play that other kind of football) paid $143 million to acquire a 12.2 percent stake in Arsenal Football Club, seen by many as the prelude to a $1.2 billion hostile takeover bid.

These brash American acquirers are going for the gold standard: “Man U,” acquired in 2005 by Tampa Bay Buccaneers owner Malcolm Glazer, rivals the New York Yankees as the most recognizable sports brand in the world. Arsenal and Liverpool are not far behind.

While some in Britain seem pleased to have their clubs score wealthy backers, no matter their nationality, critics decry the vulnerability of publicly listed English clubs. In a letter to the Guardian, a former football regulatory official and several members of Parliament railed: “The status of football clubs as publicly traded companies has led to people buying into them who have no interest whatsoever in the game.” Even owners seem worried that Americans will trample revered traditions in pursuit of profit. In a recent interview, Arsenal team chairman Peter Hill-Wood observed: “We would be horrified to see ownership of the club go across the Atlantic.”

Chauvinism aside, British football fans are worried about the U.S. raiders for a solid financial reason: they’re overleveraging to finance the deals. That approach could lead the buyers to spend so much on servicing debt that there would be little cash left over for the team.

Says Gareth Moore, UK director of Sport + Markt, a Cologne-based sports marketing consultancy, “This has the potential to get ugly if the money goes to paying debt rather than players on the pitch.”

The ugliness has already started. During the hostile takeover of Man U, Glazer was burned in effigy by fans outside the club’s Old Trafford stadium, while others threatened to harm him and his family. Glazer, who made much of his fortune in the rough-and-tumble property-development world, eventually secured enough shares to take the team private.

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