When you invest into a sports team as a private owner you do so because you love the team and you feel or want to make a difference. The making a profit is not always going to be the main reason for getting involved and when it does which is rare it makes the investment that much sweeter. Most football teams operate at a loss and only make the owners a profit when they sell the team.
There are many types of investments that one can get involved with and then there are some that will impact your life for what they become. I was reading an article about the owner of Macclesfield Town Football club today who purchased the once bankrupt club whilst he was drunk. These sporting true love crazy stories fascinate me and are never normal. The purchasing of the football club has changed his life giving him purpose to stop drinking. That in itself is making his investment the best purchase of his life.
In October 2020 someone mentioned that Macclesfield stadium was up for sale for $500K on an estate agents website and Rob Smethurst bought the club. Since 2021 the team has won promotion 3 times out of the 4 seasons and is one promotion away from joining the lowest league in English football. Macclesfield are currently in the sixth tier and need to get into the 5th tier to be part of the English Football League.
What makes this story interesting is there is real life stories taking place as they defeated Crystal Palace in the FA cup today who are a Premier League team. This is only the 9th occasion a non league team has beaten a Premier team in 100 years of the competition.
The Macclesfield team is similar in many ways to what path Wrexham football club have been on having been promoted 3 years in a row. Wrexham's owners are actors Ryan Reynolds and Rob McElhenney who purchased the club for $2.5 million back in 2021. Most people would think this was a crazy idea as most football teams do not make a profit.
In December last year Apollo Sports Capital purchased a 5% stake in Wrexham that now places the club valuations at $475 million. That is a 19000% growth in 4 years which is crazy money. Yes the owners of this club are connected and shirt sponsors like United Airlines would not normally come on board. The revenue has increased by 150% since the previous season and things like tv coverage in the US is paying the club $400K an hour for live broadcasting rights. Last night Wrexham defeated Nottingham Forest in the FA Cup after extra time and penalties earning the club an extra $1 million just from US television.
Owning a sports team is a different type of investment depending on who is investing. These two clubs have owners who are passionate about the sport , the club and the fan base. This is so different from the bigger clubs where the owners tend to use the club as a cash cow taking out capital whilst placing the club into more debt. The thinking is like night and day as the bigger clubs are not enjoying what they are doing and using the club as a vehicle to earn them more money. I do not think the likes of Wrexham and Macclesfield football clubs at the time of purchase thought there would be a huge return on their investments and was more about saving the team and having some fun along the way.
I do think in whatever business you invest into if you enjoy what you are doing it is far easier to get others to buy in to what you are creating. Passion is a must have ingredient and why both these clubs will succeed because of the people involved. What they have already achieved is quite remarkable because clubs do not get promoted out of leagues that quickly unless you are doing something right.
I watched the Wrexham vs Nottingham Forest game on Friday night and to be fair they are not such a bad team and are an easy team to watch with their style of play easy on the eye. 4 years ago if you had said they could be playing in the Premier League with in the next 6 years people would have laughed at you, but they have a chance of doing just that.