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Why U.S. investors are jumping at EPL clubs
January 29th, 2008 6:30AM

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TAGS:  england

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Paul Kennedy on the EPL's U.S. owners
Less startling than the news that yet another American group is buying an English Premier League club is the club it's buying. With only seven points in its first 23 games, Derby County is doomed for relegation, yet Detroit-based sports management firm General Sports Entertainment purchased the Rams in a deal reported to be in the range of $100 million.

That's a fraction of the $1.4 billion takeover of Manchester United by Malcolm Glazer in 2005 or the $340 million George Gillett and Tom Hicks paid to acquire Liverpool (just last week they completed a refinancing deal valued at $700 million that will allow them to go ahead with their plans to construct a new stadium). American billionaire Randy Lerner completed his takeover of Aston Villa last September for a more reasonable $122.5 million.

GSE was founded in 1998 by Andy Appleby, a former executive in the Palace Sports & Entertainment sports empire that includes the NBA's Detroit Pistons and the Palace of Auburn Hills.

The group taking control of Derby is headed by Appleby, who will serve as co-chairman of Derby, and includes two other executives with backgrounds in the NBA: Tom Glick, a former executive New Jersey Nets and New Orleans Hornets in their launch in Oklahoma City who will be joining Derby as its new president and chief executive officer, and Tim Hinchey, the former Charlotte Bobcats vice president who will be executive vice president.

Derby-born Roger Faulkner's involvement in Detroit soccer dates back more than 30 years and includes stints as a general partner of the NASL's Detroit Express of the North American Soccer League in 1977 and president of the 1994 World Cup Detroit Host Committee. Faulkner joins GSE as its vice president of soccer

GSE intends to make Derby, which includes Americans Eddie Lewis and Benny Feilhaber in its first team, a long-term investment and a make it a stable EPL club.

"This is a wonderful opportunity for us and the community because we have resources and relationships that go beyond money," Appleby said Monday. "It's more than just throwing money at players, it's about building an entire organization and a strong foundation. If we do that, we will create additional revenue streams to build a better club."

But $100 million for a last-place team?

Television and real estate explain why English soccer clubs are attractive to foreign investors, and Derby County is no exception.

Derby will earn $60 million this season under the terms of the new EPL TV deal, and if it's relegated, the Rams will receive $23 million for each of the next two seasons in the League Championship as a sort of golden parachute.

Pride Park, which replaced the old Baseball Ground as the home of Derby County, is worth at estimated $120 million, and Derby has plans in the works for a $40 million development of Pride Plaza, the area surrounding the stadium.

 



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