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April 5, 2004 | by  | in Opinion |
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What To Do With A Spare $100 Million

A million dollars won’t buy you much these days in the sporting arena. But what if you had a few hundred million at your disposal? Now there’s a lot that can be done with that. These days it seems that if you’re extremely rich then the thing to do is invest in a sports team. Roman Abramovich has done it with Chelsea, Larry Ellison with Oracle, even here in New Zealand, Eric Watson has his Warriors. The range of sports open to willing buyers seems endless; there’s yachting’s America’s Cup to win, or a win in one of the many Soccer leagues in Europe, or a F1 title on the world circuit. If none of those suit, then head to the US where teams are in abundance; take your pick from ice hockey, basketball, baseball or American football. All of the leagues are filled with franchises that are more than available to the top bidder. And what better way to build up kudos with a region (and then sell them merchandise) than take a home team and turn it into a star studded dream-team that wins the championship in its sport?

“How much?” I hear you say. According Larry Ellison, “it’s cheap. I’m surprised more people don’t do it.” That’s what Ellison said about his America’s Cup campaign with Oracle in which he invested US $85 million back in 2002. That really is nothing when you compare it to John Henry’s purchase of the Boston Red Sox for US $700 million in the same year. This for a team that hasn’t won the World Series since 1918 and is supposedly cursed – from when owner, Harry Farzee, traded away Babe Ruth to finance his girlfriend’s play on Broadway.

If you ever were looking to buy a sports team, now is surely the time, with so many on the market, especially in the US. It’s an opportune time to shop around for whatever takes your fancy, with almost a third of the NHL on sale and some other teams going for bargain dollars as they face increasing losses. “In the past, when a team went for sale, it was like buying a Picasso – you knew one would only be on the market once in a while. Now if you don’t like the price, you can go down the road to another team,” says one of the leading investment bankers in the sale of sports teams. Still, don’t expect it to be in a price category that us students could afford “I don’t think you can buy an NBA franchise for less than $140 million, even the Hawks,” said the investment banker. Though, NHL team, the Ottawa Senators, sold for reportedly around US $80 million mid-last year. This is for a top team in the league which has secured its spot in the playoffs this year.

Even with all this money flying around, the big question has to be asked – whether success can actually be bought. Roman Abramovich would surely say yes considering the amount he has pumped into Chelsea. Yet Chelsea sit in second place in the English Premiership, seven points shy of the leaders, Arsenal. Last year they finished fourth but this year they are still in contention for the title with eight games left to be played. Imagine spending £17 million on one player. Obviously manager Claudio Ranieri thinks Damien Duff is good enough, but it doesn’t stop there. In the last year, another 3 players have been traded to Chelsea for £15 million or more each. It’s been tried in the past by Inter Milan, where Massimo Moratti spent well over $200 million on some of the modern game’s most outstanding talents, including Ronaldo, Christian Vieri, and Clarence Seedorf. This resulted in a couple of UEFA Cups but this can really only be considered an unsatisfactory achievement over an entire decade. Italian team Lazio also spent up large thanks to president Sergio Cragniotti. Vieri, Marcelo Salas, and Alessandro Nesta are typical of the standard of players who were to be found at Lazio only a few seasons ago. Trophies were won but success didn’t last with financial pressures seeing the talent disappear.

Where does this leave the average Joe who wants to own a team? It’s slightly harder in New Zealand where our leagues aren’t franchised like they are internationally, but if you ever settle in Europe or the US, opportunities do exist to own a bit of your favourite team. Even if you don’t make millions, it’s possible. The trick is not to aim your sights at the top, just a little lower. If Elton John is prepared to do this in owning Watford FC, then surely you can too. Fans have been known to buy the teams that they love and support, this happened to Lincoln City in 2001 when supporters contributing from £25 to £1000 purchased a majority stake in the team for £400,000. This also happened to AFC Wimbledon who are owned by non-profitmaking fan group The Dons Trust with a membership of around 3000 fans. So the chances are definitely out there to be taken. You don’t need to be a millionaire to own a sports team – it sure helps – but there are other roads. And if you ever did buy your dream team then what an experience it would be.

Good luck to all those heading down to Dunedin for the Uni Games. Sometime in the future you may be playing for one of these dream teams.

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