Pro/rel fueling American investment in English soccer teams

Florida-based businessman Tom Piatak recently became the latest American to invest in an English professional soccer club. The CEO of Magellan Transport Logistics officially took control of Carlisle United through the Castle Sports Group back in November.

Upon completing the purchase, Piatak proclaimed that he “wanted a club with considerable commercial upside.” This was even though the Cumbrians hail from a small town in the extreme northwest corner of England. Carlisle has only ever played one Premier League season and currently competes in the third-tiered League One.

Nevertheless, Piatak, like many other American investors, sees a rare opportunity in English soccer. Rather than spend astronomical amounts of money on a team already at the top, the businessman hopes to grow Carlisle through the promotion process.

Americans are involved in 37% of all English pro soccer clubs

The Floridian touched on the concept of advancing in the English soccer system following the acquisition of the club. “I love promotion and relegation and the traditional aspects of the English game,” Piatak previously stated. “We have the opportunity to move up the leagues, which is so important.”

Investors looking to create a new Major League Soccer team have to pay a massive fee. The current expansion price to gain a new North American club is reportedly around $500 million. Established Premier League teams are even more expensive. A recent study claimed that the average English top-flight club was valued at about $1.5 billion.

As a result, many American investors are turning to smaller British teams. With Piatak’s latest move, 37% of all clubs in the English professional soccer system have some form of American ownership.

Not only do these businessmen see an opportunity for their clubs to grow due to potential promotion, but English soccer is a way to get international recognition as well.

“U.S. sports in general are ahead of European sports and leagues in terms of commercialization and monetization of various assets; however, the majority of them do not have the international reach of football,” explained Sasha Ryazantsev, Burnley‘s new financial advisor.

Earning promotion in English soccer is tough, but American investment embraces risk

While reasons for investing in lower-level English clubs are fairly obvious, there are also some significant risks. For instance, Championship team owners tend to spend more money than they earn. Businessmen see the Premier League as the goal of their investment. Earning a place in the lucrative top flight is the finish line and they are in the home stretch of the race.

To put the Premier League’s financial dominance into perspective, two relegation clubs in the division earn more broadcasting revenue than all MLS teams combined. Getting to the pinnacle of the sport in England after potentially spending just eight figures on a small club is incredible business.

However, like many other things in life, this path is not exactly guaranteed. Previous American owners at clubs such as Aston Villa and Sunderland suffered huge losses before selling to new investors. U.S. businessman John Textor has also recently come under fire from fans of Crystal Palace and Belgian side RWD Molenbeek.

Nevertheless, Americans will continue to invest in foreign soccer teams. For many, the risk is worth the possible reward.

PHOTOS: IMAGO.