Foreign Ownership in the English Premier League Essay

Submitted By renefaria
Words: 3014
Pages: 13

How FOREIGN OWNERSHIP has affected the performance and revenues of teams in the English Premier League
Prof. Callan
EC 275

INTRODUCTION

In this project I will be exploring if foreign ownership has affected the performance and revenues of teams in the English Premier League (EPL) looking at statistical performances of x10 teams (Arsenal, Aston Villa, Chelsea, Everton, Liverpool, Manchester City, Manchester United, Newcastle United, Tottenham Hotspur and West Ham United) from 2002 to 2012.
My decision to choose this topic was based on my affinity on the EPL which I follow religiously as my favorite soccer team is Chelsea Football Club which plays in this league. Because of this, I follow closely the league and know how it behaves and how it has been changing since I started watching it in 2004. I believe because of this I will give a good assessment of the teams’ performances.
The EPL is the most watched soccer league in the world, televised in 212 territories with a potential audience of 4.7 billion people. This are numbers that have attracted the attention of foreign owners to the league who has invested in the teams in the EPL, currently 11 of the 20 teams in the EPL are foreign owned; this was a rarity 10 years ago. This trend has been going since 2003 when Russian billionaire Roman Abramovich acquired Chelsea Football Club, a club with a good base but always falling short to achieve good results in a league dominated mostly by Liverpool, Arsenal and Manchester United.
Since this acquisition Roman Abramovich has transformed Chelsea from a middle-top of the table club to a European soccer powerhouse. The club has won since Abramovich’s takeover 3 EPL championships, 4 Football Association Cups (FA Cup), the premier knockout tournament of England, 2 Football League cup, the second tier knockout tournament of England, 1 UEFA Europa League (UEL) and 1 UEFA Champions League (UCL), the most prestigious tournament in Europe where every year the best teams of every league in Europe face each other for the cup; Chelsea has performed highly in the Champions League, constantly reaching the semifinals and knockout stages of the UCL.
The success that Roman Abramovich brought to Chelsea made the EPL a hotspot for soccer team acquisitions. Starting in 2005 most of the top teams where acquired by foreign owners. Manchester United by the Glazer family, Liverpool acquired by George Gillette and Tom Hicks in 2007 and subsequently bought by John W. Henry in 2010. However, these new owners did not invest as heavily in these teams as Roman Abramovich did until the acquisition of Manchester City FC in 2008 by the deputy prime minister of the United Arab Emirates Sheikh Mansour bin Zayed Al Nahyan, another high roller billionaire like Abramovich. It took 3 years of high spending in new players for Manchester City to win the EPL, however they jumped from a mid-table team, and sometimes facing relegation to a title contender team in a year thanks to the heavy investment in the club.
I plan to investigate how the total earned point percentage is linked with the foreign ownership of the teams. To do this I will be looking at the total points earned by teams, goals scored for, goals scored against and using a dummy variable to take into account the foreign ownership over time how it has impacted the performances of the teams. I plan to look at an overall view of the league as well as looking at specific teams and assess their total revenues, how and if they are affected by being owned by foreign owners. For the impact on foreign ownership in finances I plan to look into five teams (Arsenal, Chelsea, Liverpool, Manchester United and Manchester City) that have their revenues analyzed by Deloitte and where the only financial statements I could find. I plan to look on how the revenues have been affected by foreign ownership.

RELEVANT LITERATURE REVIEW
Nauright and Ramfjord (2010) examine the American and foreign owner influences in the EPL by…