Sports money

Originally written for eVent! [ep] magazine on 11/02/06.

The purchase of Chelsea Football Club, one of the most historic teams in the English Premier League, by Russian oil billionaire Roman Abramovich in the summer of 2003 sent shockwaves through England's top soccer league. The purchase saw the club, which had been a mainstay of English soccer since 1905, go from being a mid-level English side to one of the most successful teams in the world. With Abramovich's money they won the Premier League Championship in 2005 ending 50 years of drought. Since buying the club for 60 million pounds (about 130 million dollars Canadian) Abramovich has spent over 100 million pounds (about 217 million dollars Canadian) on buying up the best players in the world, and altering the landscape of English football.

Football for Abramovich is a hobby, and he has clearly stated that he has no real interest in Chelsea as an investment. The soonest the club might begin to be profitable is 2010, and that probably won't include the vast amounts that Abramovich pours into the club to buy up players. It has made it impossible for teams who are either owned by owners not as interested in loosing millions of dollars, or owned by shareholders and traded on the stock market, to compete. Even Manchester United, one of the most successful teams in the history of professional sports, has failed to compete.

Manchester United in fact have gone from a team in excellent financial health to a team wracked with debt when foreign investors also bought them out. United's purchaser however wasn't an oil rich sugar daddy looking for a reason to hang around England on the weekends but a wheeling and dealing American looking to make money. Malcom Glazer already owned the National Football League's Tampa Bay Buccaneers when he bought Man U, and because he did not have the cash just lying around his house the way Abramovich did he had to borrow heavily. The debt from his borrowing was put on the club and Manchester United, which previously had no debts, now owes the bank more than 660 million pounds (about 1.4 billion dollars Canadian). Rather than being hailed as a savior, like Abramovich had in Chelsea, Glazer was burned in effigy by fans and is still one of the most hated owners in English football.

While Abramovich's takeover of Chelsea is undoubtedly good for Chelsea, at least as long as he's content to pump millions of pounds into the club, but is it good for football or sports? The question of course is whether sports is a business or a pastime. Remember Peter Pocklington in the 1980s? The Edmonton Oilers were his play thing every bit as much as Chelsea is Abramovich's. They were his way of showing the world how rich he was, the most visible part of his business empire. The trouble for Oilers fans came when Pocklington's other businesses, the ones that were expected to fund the Oilers, stopped being quite so profitable and the rich Albertan started to try to squeeze money from the club.

Gretzky left the Oilers in exchange for cash, and later Pocklington would sell the team. The Oilers were no longer the most exciting and talented club in hockey, no longer a dynasty, and fans were lucky that the club did not close or get moved like Winnipeg and Quebec City. They're now running on a much tighter budget, and because of this and their teams tend to be younger and established stars are traded for up and coming talent. This managed to work last season when the Oilers got to the Stanley Cup Final, but it's a long way down from the Dynasty that dominated the 1980s.

People have a very powerful connection to their favorite sports teams. It's a connection that can survive nearly anything, and is often passed down through generations. This is why it's always hard to look at spots teams as businesses, because they're so much more to so many people. While we'd probably all love a Roman Abramovich type owner to buy the Vancouver Canucks and turn the team into the most powerful force in the NHL, in the long run it probably would not be a good thing because when the money faucet dried up the fans would still be there, but the high priced players would be moving on, they would leave as quickly as the money did.