The rise of stakebuilding and the consortia

Over the past year, we have seen a rise in the number of minority stakes that have been acquired in Premier League clubs. Perhaps the most high-profile minority acquisition of the past year was Daniel Křetínský's purchase of a 27 per cent stake in West Ham, which completed in November 2021. This follows J. Albert Smith’s acquisition of a 10 per cent minority stake in the club in 2017. Křetínský reportedly acquired his stake via 1890s holdings a.s and EP Investment Sarl and documents filed at Companies House reveal that a put and call agreement has been entered into between 1890s holdings a.s, EP Investment Sarl and David Sullivan, who is currently the largest shareholder of the club. This presumably means that the parties are envisaging that Křetínský (or his affiliates) may increase their shareholding in the club at a later date. The articles of association of West Ham’s controlling company, WH Holding Limited, also state that no transfer of shares in accordance with the put and call agreement may be made unless the purchaser offers to acquire shares from David Gold and WHU LLC on the same terms, which suggests that the other shareholders may also be open to selling their remaining stakes to Křetínský in the future.

Leeds United also announced in November 2021 that 49ers Enterprises had increased its stake in the club to 44 per cent, having initially acquired a 15 per cent in stake in 2018, and the Athletic have reported that 49ers Enterprises has an option to buy the club in full before a deadline of January 2024.  Elsewhere in the Premier League, John Textor is reportedly keen to increase his stake in Crystal Palace and, in October 2021, Wolverhampton Wanderers announced that Peak6, a US finance and technology firm, had acquired an undisclosed minority share in Fosun Sports, the club’s controlling company. Peak6 previously owned a 25 per cent stake in Bournemouth and has also held interests in AS Roma and the NHL franchise Minnesota Wild.

We have also seen the rise of consortia over the past year, with both Newcastle United and Southampton being acquired by groups of investors, rather than a single bidder. In relation to the Chelsea takeover, the successful bidder for the club was also a consortium, comprising Todd Boehly, Clearlake Capital, Mark Walter and Hansjörg Wyss.

Other rumoured bidders included a consortium led by ex-Liverpool chairman Sir Martin Broughton which included current Crystal Palace owners Josh Harris and Dave Blitzer, as well as Sir Lewis Hamilton and Serena Williams, and a consortium led by the Ricketts family which also included US investors Ken Griffin and Dan Gilbert. Earlier on in the process, UK property developer Nick Candy had shown interest in acquiring the club reportedly as part of a consortium that involved South Korea’s Hana Financial Group and C&P Sports Group, as had the UK-based investment firm Centricus, with a bid reportedly backed by Cheyne Capital and Talis Capital. 

Despite the financial impact of COVID-19, the valuation of football clubs appears to be continuing to rise, which perhaps best explains the increase in stakebuilding and football clubs being owned by consortia. Křetínský’s acquisition of West Ham, for instance, was reported to be between £180m and £200m and is understood to have valued the club at £700m whilst the consortium that acquired Chelsea reportedly paid £2.5bn for the shares and committed a further £1.75bn in investment in the club. As a result, it is increasingly unlikely that a single individual/family will have the necessary funds to acquire the entire issued share capital of a Premier League club, and particularly one of the “big 6”.