Isak’s record transfer epitomises Liverpool FC leading global sports boom: Paul J. Davies

Key topics:Liverpool breaks British transfer records with £100m+ signingsPrivate funds and billionaires increasingly invest in sports assetsPremier League revenue growth drives record spending and financing.Sign up for your early morning brew of the BizNews Insider to keep you up to speed with the content that matters. The newsletter will land in your inbox at 5:30am weekdays. Register here.Support South Africa’s bastion of independent journalism, offering balanced insights on investments, business, and the political economy, by joining BizNews Premium. Register here.If you prefer WhatsApp for updates, sign up to the BizNews channel here..By Paul J. Davies.Liverpool Football Club broke the British record for purchasing soccer players twice this summer, with the Premier League club spending well over £100 million ($134 million) each in deals for Florian Wirtz and Alexander Isak. The trades helped push spending by English clubs to more than £3 billion, the highest ever, during the summer transfer window, which closed on Monday.These mind-boggling numbers highlight a boom in sports industries globally, and the huge demand from private capital, sovereign wealth funds and the ultrarich to invest in them. Apollo Global Management Inc., for example, is planning a $5 billion dedicated sports fund. Sports financing has long been an interesting but esoteric and tiny segment relative to bank lending and broader private capital. Apollo’s planned fund is still dwarfed by the group’s total assets under management of $840 billion, but it’s a sign that this niche is becoming a more significant standalone segment. .The whirlwind of money reflects the growing reliability and scale of revenue at the biggest teams and franchises as much as it does the vanity and reputation-enhancing aspects of owning famous clubs. But these investments aren’t without risk. Thankfully, sport still involves some jeopardy even at the highest levels. Without that, it would be a dull product indeed. .Read more:.Chelsea FC’s cute profit trick? Selling its own team to itself: Matthew Brooker.Private investment firms have been putting more money into the sector, alongside sovereign wealth managers in countries such as Saudi Arabia which are keen to diversify their portfolios and while burnishing their international reputations via so-called sportswashing. There’s also growing demand from wealthy individuals, more widespread than the traditional desire to flaunt riches by owning a trophy franchise. Although some of the private capital industry’s billionaire bosses have been doing just that, too. Josh Harris, co-founder of Apollo, owns the Washington Commanders in the US National Football League, while Bennett Rosenthal, a co-founder of private credit giant Ares Management, is a leading owner of Los Angeles Football Club in Major League Soccer. That team recently broke the US transfer record when signing Son Heung-Min from England’s Tottenham Hotspur.Los Angeles-based Ares launched one of the first dedicated sports and media funds with its $3.7 billion vehicle in 2022 and is now exploring a second. Meanwhile, CVC Capital Partners Plc, the listed private equity group, is looking to refinance its collection of sports assets, which includes stakes in the Six Nations Rugby tournament and Indian Premier League Cricket, and could be worth more than $12 billion.More sports leagues and clubs are exploiting every available piece of media and source of commercial revenue all around the world. For some, that’s bringing in stunning numbers; two seasons ago, Spain’s Real Madrid became the first European football club to surpass €1 billion ($1.2 billion) in annual revenue, according to Deloitte LLP. That’s more than nearly 50 members of Europe’s Stoxx 600 share index.But when it comes to scale, England’s Premier League massively outweighs the rest of European football. The record transfer spending this summer exceeded Europe’s other big-four leagues combined. That’s partly because total revenue for English clubs is almost double those of the next biggest country, which was Germany in the most recent Deloitte survey. The top-20 English clubs are estimated to have made £6.6 billion from broadcasting rights, commercial income and matchday spending last season, according to Deloitte. That’s expected to rise to £6.9 billion this season, helped by new international media deals in Asia, the Middle East and north Africa..For private capital, greater and more reliable revenue makes lending more attractive, particularly when debt can be linked to property. Clubs are increasingly using their revenue bases to help secure funding for new stadiums or redevelopment. This season, Everton Football Club became the latest English team to move into a much bigger arena, which will further lift its income from tickets, concessions and other merchandise..Read more:.Arsenal, Liverpool, or Chelsea? I can’t pick which football team to support: Howard Chua-Eoan.English clubs are still mostly unprofitable. However, European rules meant to promote financial fair play restrict the amount of losses teams can make over time and that makes them better prospects for lenders even if it doesn’t really level the playing field between the richest clubs and the rest. Lending is the main focus of firms like Apollo and Ares, although private capital funds do take ownership stakes, too.But the thicket of financial rules in football is starting to cause problems, too, especially for groups that hold stakes in multiple clubs. England’s Crystal Palace FC has been demoted from one European competition to a lesser version this season because one of its owners, the US investor John Textor, also has a stake in a French team playing for the same cup, which is against the rules. The demotion is estimated to cost Crystal Palace about £20 million in missed revenue — significant for a team that makes about £200 million annually.Some Liverpool fans might feel uneasy at the risk of spending £125 million on a single forward in Isak — that’s more than all but eight other clubs spent in total this summer. But if the former Newcastle striker bangs in the goals and helps them win the league again, they’ll soon get over that. Plenty of football fans are growing weary of the bloated, money-focused nature of the game, and players are getting tired out by the number of games demanded by multiple domestic and regional cups even before the expanded Club World Cup that was played in the US this summer. But there have been warnings that the game is reaching saturation point for years — and still the crowds, audiences and revenues grow, and the investment keeps rolling in. These sports are global media properties — and for lenders, that’s an increasingly attractive game..© 2025 Bloomberg L.P.

Isak’s record transfer epitomises Liverpool FC leading global sports boom: Paul J. Davies

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