Looks like the owner of the Philadelphia 76ers, New Jersey Devils and Claire’s accessories is about to become the latest American to buy an EPL club.
Reports suggest that Josh Harris is getting close to purchasing Crystal Palace. That’ll mean that six EPL clubs have American owners – only two fewer than the number controlled by British-born owners. Harris will join Stan Kroenke (Arsenal), Randy Lerner (Aston Villa), John W. Henry (Liverpool), the Glazers (Manchester United), and Ellis Short (Sunderland).
He co-founded Apollo Global Management, a huge, New York-based private equity firm with fingers in many pies, including Claire’s, the mall-based jewelry and accessory stores beloved of teenaged girls. A Julian Speroni-inspired lip balm range is surely inevitable at this point.
Apollo also invested heavily in the group behind Caesar’s Palace, so at least they know something about gambling. That’s helpful considering the risks involved in taking over a small or medium-sized EPL team. It’s the business equivalent of roulette.
It’s hard to figure out why Harris wants to buy Palace, unless he’s going on gut instinct? They’re nicknamed the Eagles. He’s an American. Americans like eagles.
For English football makes plenty of smart businessmen look dumb. It makes plenty of rich businessmen poor – such as former Palace owner Mark Goldberg, who burned through about $70 million in less than a year.
When Jacksonville Jaguars owner Shahid Khan bought Fulham 15 months ago, the club had just finished 12th in the EPL and was about to start its 13th successive top-level season. Today? They’re 20th in the Championship, three points above the relegation zone, and looking far more likely to be relegated into the third tier than return to the EPL. They’re as bad as the Jaguars, but unlike in the NFL, there’s no limit to how far a team can sink. And with no draft picks, there’s absolutely nothing good that can come from being bad. No salary cap to rein in spending.
As long as a club’s in the Premier League it’s likely receiving in excess of $100 million in prize and television money. But relegation can quickly lead to a financial and footballing tailspin. Five of the current bottom six in the Championship are clubs recently relegated from the EPL.
For a while, Wolverhampton Wanderers, a team comparable to Palace in size, looked like it might be able to stabilize into a solid Premier League club. But they got relegated in their third successive top-division season. And got relegated again the next year.
Palace can probably be had for about $100 million – the same price as the former Chivas USA. And the club has its own stadium. And some fans. And the whole $100 million a year in free money thing, as mentioned above. Plus, they’re in London, the biggest and arguably most appealing capital city in Europe, which is said to be why Harris prefers them to Aston Villa.
Then again, so are five other EPL teams, including the unassailable Chelsea, Arsenal and Tottenham. Much of that $100 million will be eaten up by ludicrously inflated wages and transfer fees. There’s very limited growth potential, unless he wants to spend $200 million on players. And he probably doesn’t, since he’s in this to make money. Also, this isn’t the parity-loving, revenue-sharing, closed-shop, socialist-capitalist marriage of American sports.
Palace are known as a yo-yo club for good reason. They’ve been relegated or promoted eight times since the Premier League started in 1992-93. West Brom have basically the same stadium size, average attendance, reputation and potential as Palace. They’re now in their fifth straight EPL season, but almost went down last summer and have been relegated or promoted seven times since 2002.
Inherent instability makes it virtually impossible to keep a club of Palace’s size and limited means in the EPL for more than a couple of years. Great signings and a great manager can keep you there for a while; but that very success will inevitably see them move on to bigger things. The skill to making a club like Palace profitable, or at least limiting losses, is disaster preparedness: having a solid plan to get the club quickly back to the top flight so it doesn’t flop like a beached whale when it’s relegated.