Why The World's Richest Football Club Is In Crisis

which football club do you suppose has the richest owners India's king of Steel Lakshmi metal worth an estimated 16.6 billion dollars is in fact a minority shareholder at Queen's Park Rangers meanwhile 31 year old Mark Mike shitz owner of all five Red Bull football franchises after inheriting his late father's 49 stake in Red Bull following his death in 2022 can go one better than that or about 23 billion better than that in fact estimated to be worth a staggering 39.5 billion dollars that's enough to make Mark the world's richest Millennial and the 30th richest person in the world of any age being the only child of the co-founder of a multi-billion dollar energy drink company will do that for you In fairness if you're thinking that the richest owner of a football club can't possibly be a single private individual though then you would be absolutely spot on PSG are owned by Qatar Sports Investments which is a subsidiary of the Qatar Investments Authority qatar's Sovereign wealth fund founded in 2005 which has an estimated 450 billion dollars in assets under management Manchester City are owned by the Abu Dhabi United Group which claims to be owned by emirati Royal shaped mansorbin Ziad al-nayan though leaks of internal documents show that the company is actually managed by the Abu Dhabi government I mean really whoever would have thought it Mansour has an estimated net worth of 16.8 billion dollars meanwhile the Abu Dhabi Investments Authority has an eye-watering 853 billion dollars worth of assets under management if you choose to take that Abu Dhabi and I to group's word for it though and really why wouldn't you they all seem like such standout guys the situation is much more clear cut at Newcastle United where Saudi Arabia's Sovereign wealth fund with their estimated 620 billion dollars in assets under management owns 80 percent of the club so there you have it then the richest donors in World football can be found at Paris saint-german Manchester City and Newcastle United what a boring and terribly short video or perhaps things aren't quite that straightforward according to action for Albion a pressure group of West Bromwich Albion supporters unhappy with how their Club is being run following extensive research the baggies largest individual shareholder is none other than the People's Republic of China a nation with an economy 18 times larger than Saudi Arabia's and a sovereign wealth fund with twice the assets 1.35 trillion dollars under management yet whilst Newcastle United just broke into the Champions League in their first last full season under Saudi ownership and Manchester City just completed only English football's second ever Continental travel West Bromwich Albion are a clubbing crisis dodgy loans mounting debt and the loss of Premier League parachute payments LED an order to the baggies most recent accounts to conclude that there was material uncertainty surrounding the future of the club it is a perilous situation at arguably the world's richest football club owned by a more powerful State than any other football club on the planet so just what on Earth is going on well today that's what we're going to try and figure out so sit back and relax unless you are a West Brom fan of course and join me on a journey to a former Boom Town of the Industrial Revolution on the outskirts of Birmingham as we take a look at West Bromwich albion's murky ownership structure financial mismanagement and potentially treacherous future from the outside looking in things don't seem that bad at West Brom since the club's Takeover in the summer of 2016 the baggies have been relegated from the Premier League in 2018 promoted in 2020 and relegated again in 2021. over the last two seasons they have finished 9th and 10th in the championship missing out on the playoffs by just three points this season after Carlos Corbin recovered what was a Dreadful start to the season under manager Steve Bruce Perhaps it is for that reason then with budget slashed at local and National newspapers and an Ever more concentrated Focus within football coverage on the Premier League's big six where so much of the ab revenue is that there has been so little coverage of West brom's plight behind the scenes it is worth noting that 10th and 9th Place finishes in the championship whilst hardly cataclysmic still represent West brom's two Worst season turns in more than 20 years of the preceding 14 years before West Brom required by an opaque Chinese Consortium in the summer of 2016. the baggies had spent 10 of them in the Premier League and they were promoted from the championship in three out of the other four in short there was only one season in the preceding 14 years in which West Brom hadn't either been in or won promotion to the Premier League and in the sole exception the 200607 season they finished fourth in the championship and were losing playoff finalists it was a level of success and consistency achieved without West Brom ever spending beyond their means unlike so many of their Premier League relegation and Championship promotion Rivals shrewd appointments like Gary megson Tony mowbray and Roy Hodgson twined with the smart recruitment of first team stalwarts like Gareth McCauley James Morrison and Chris brunt gave West Brom a sense of stability that was sorely lacking from almost all of those around them whilst being a yo-yo club would have been a fine achievement given the way in which West Brom will run they were a little bit more than that prior to relegation in 2018 the baggies had spent eight successive seasons in the Premier League finishing as high as eight under Steve Clark and 10th under both Roy Hodgson and Tony pulis it's hard to believe that the West Brom of 2023 is the same Club the person who oversaw West brom's astute day-to-day running throughout this period was a local businessman Jeremy peace who became West brom's chairman in 2002 and majority shareholder in 2005 when he took the company private in June 2016 peace accepted an undisclosed offer wider reported as having been between 190 and 200 million pounds from Yun Yi gaikai Shanghai Sports Development limited for West Bromwich Albion Holdings Limited a holding company which owns 88 of West Bromwich Albion group limited the parent company of West Bromwich Albion football club the remaining 12 is owned by West bromfans collectively known as the shareholders for Albion I hope that you are still with me because it gets much more confusing than this towards the end as well as West Brom will run and despite their six successive top light campaigns at that stage the roughly 200 million pounds that peace received for his 88 ownership stake in West Brom was widely perceived as being an outstanding deal for him it was roughly the same amount that Manchester city was sold for to Abu Dhabi in 2008 much more than Farhad mashiri paid for a majority ownership stake in Everton at roughly the same time and it valued West Brom at just 72 million pounds less than Saudi Arabia paid to acquire Newcastle United in two thousand 21 by which stage Premier League finances heard witnessed a significance increase the size of the deal was most likely only possible because the buyers were Chinese during the mid-2010s under the direct instructions of Xi Jinping and the CCP China set about investing an absolute fortune in football both at home and abroad as well as buying West Brom in 2016 the Chinese State businesses and billionaires acquired Inter Milan bit 800 million pounds for Liverpool and the Chinese Super League started to rival the Premier League in terms of transfer expenditure in the West Midlands alone West Brom wolves and Aston Villa were all acquired by Chinese businesses or businessmen though Villa cost less than half as much as West Brom and wolves not even a quarter as much meanwhile Birmingham city were owned by Hong Kong businessmancos and young up until 2014. things got off to a rocky start for West Brom under their mysterious new Chinese ownership regime as manager Tony pulis publicly voiced his displeasure with the club's summer transfer dealers nonetheless West Brom finished the season in 10th place in the Premier League a solid debut campaign albeit only five points separated them from Watford in 17th West Brom lost seven and failed to win any of their last nine games of the Season though in a sign of what was to come the following summer was chaotic over 40 million pounds was invested in new arrivals but it wasn't spent wisely at all the buggies only Midfield reinforcements on a permanent basis was a 36 year old Gareth Barry meanwhile Oliver Burke signed for 13.5 million pounds from RB Leipzig scored zero goals in 16 Games The Following season and Chinese International Zhang Yoon ning brought to the club for 6.5 million pounds from the test never made a first steam appearance at West Brom one suspects that Zhang wasn't top of Tony pulis's list of transfer targets don't ask me why it is just a hunch the 2017-18 season wound up being a comedy of errors at West Brom and a fairly pathetic end to eight seasons in English football's Top Flight the buggies were 17th when Tony pulis was dismissed in November but had won just four of their last 22 Premier League games with Alan paju almost a year after getting sacked by Crystal Palace appointed as his successor to say that there was no new manager bounce at West Brom would be a pretty hefty understatement given that paju failed to win any of his first eight games in charge of the club and just one of his first 19. in response West brom's owners sacked both the club's chairman John Williams and their CEO Martin Goodman in one Fell Swoop in February 2018. despite the fact that both were their own appointments and the January transfer window had already slammed shut meaning there was very little that their successes would be able to do that season regardless West Brom pitted all of their January survival hopes and budget on the loan signing of Daniel Sturridge who played Just 116 minutes of football Each of which cost West Brom more than 50 000 pounds and didn't score a single goal during his short spell at the Hawthorns West Brom ended up finishing bottom of the league but they managed to keep hold of the bulk of their squad in the championship and within two seasons they were back in the Premier League of slight concern perhaps to West Brom fans even then might have been the fact that the club's Starman during their promotion campaign Mateus Pereira was reportedly signed at the behest of manager slaven Village rather than the club's own much Milan recruitment team who made a total hash of things once again the following summer as West Brom were immediately relegated from the Premier League just before that season began Mark Jenkins who West from appointed as CEO in February 2018 despite themselves having sacked him in December 2016 was sacked for a second time and shoe K who is the sole director of the West Bromwich Albion group was parachuted into the job this time around West Brom didn't have the bones of a championship promotion winning Squad nor did they recruit well enough to create one over the summer despite receiving 18 million euros for Mateus Pereira West Brom didn't spend a single penny on transfer fees nonetheless at the beginning of February when West Brom sacked Valerian Ishmael and replaced him with Steve Bruce they were sixth in the championship inside the playoff places when the season finished they were all the way down in Bruce was appointed based upon his proven track record of winning promotion from the championship which is inarguable but he hadn't actually won promotion in six years when West Brom appointed him and he arrived battered bruised and visibly still reeling it seemed from a brutal speller Newcastle United Bruce's surprise in a press conference when he was informed by journalists the clubs were allowed to make five substitutes in the upcoming campaign didn't exactly Inspire confidence players were apparently unimpressed with his lack of attention to detail compared to his predecessor and and this was unusual for Bruce he struggled to command the respects of his players that brings us to the season just gone which started out as an unmitigated disaster for West Brom the baggies secured their primary summer targets Jed Wallace and John Swift on free transfers from reading and millwall both of whom are excellent Championship players but from that point on it was chaos Bruce spoke of having to wait until Premier League teams had already conducted their summer business before West Brom were able to act but on transfer deadline day they ended up missing out on both Josh onamar and Stephen alzarte deals that they had banked on getting done in the end Martin Kelly who had barely kicked the ball in Anger for the previous two seasons was the only deadline deal that the club could get over the line that meant that West Brom started this season with just 16 fit senior Outfield players though those players were still of a sufficient caliber that the buggies ought not have been 22nd in the championship inside of the relegation Zone when Bruce was finally sacked in October as far as some West Brom fans were concerned Bruce was sacked far too late as for the rest of them they didn't think that he ever should have been appointed in the first place Bruce's successor Carlos Corbin turned West brom's fortunes around last season and quite spectacular fashion taking the team from 22nd to ninth by the end of the season and but for three defeats from their last four games they would have made the playoffs though it isn't remotely core Brand's fault for West Brom that simply wasn't enough the reality of this situation is that West Brom required by a little-known Chinese Consortium headed by gaochan Lai at a time when China was throwing hundreds of millions of pounds at anything remotely related to football as we know China's investments in football was as brief as it was spectacular and the fall was even more rapid than the rise within a couple of years of West Brom being one of many football clubs to come under Chinese ownership she and the CCP had implemented salary caps in the Chinese Super League was privately encouraging those who had bought overseas clubs to sell them and effectively banned any Chinese companies and individuals from buying more foreign clubs it was a rapid U-turn and the end result is that the Chinese Super League is on its knees former title winning clubs no longer even exist and West Brom are one of the last few European clubs who still have Chinese owners along with their West Midlands Rivals wolves it should be said who have enjoyed rather different fortunes under their more reputable and transparent Chinese owners the reason West Brom still have Chinese owners is most likely because of the inflated price that yunyi goikoi Shanghai Sports Development limited paid for their 88 stake in the club seven years ago West Brom were never worth over 200 million pounds but they aren't worth even a fraction of that amount as a championship Club mired in financial trouble the only way that GAO chanelai could sell West Brom therefore assuming that he is still the one calling the shots which is another dilemma that we are about to come to is by selling the club for far less than the Consortium that he controls pay to acquire it which he or they are clearly reluctant to do that's why West Brom basically needed a free promotion last season which briefly seemed possible under Carlos corbaran to allay the club's immediate financial trouble and massively increase their valuation so as to make a sale possible West brom's owners still probably wouldn't have regained the 200 million pounds that they paid for the club but they at least would have recouped something respectable if you're wondering why a team that spent eight successive seasons in the Premier League got relegated one promotion again and then got relegated again and has been in receipt of parachute payments every single season since is in such dire financial trouble at all then you are not alone a fan protest last season of which there have been many especially since action for Albion were formed in November 2022 one of the most frequently sung chances where's the money gone and it is not an unreasonable question the obvious answer is on wages West Brom have one of the highest wage bills in the championship and that inevitably accounts for most of it but there are some other more atypical shall we say expenses that you will find in West brom's accounts in June 2022 for example almost exactly a year ago when West brom's accounts for the 2020-21 season were published they showed that West Brom had paid a loan of 4.95 million pounds to wisdom smart Corporation limited a company which is controlled by none other than GAO Channel I lie stated that the loan had been solely to help another one of his businesses through a short-term cash flow problem during the covid-19 pandemic and that it would be repaid by September 2021 with interest a self-imposed deadline which surprise surprise wasn't met and appeared nowhere in the club's owner cats the next deadline set for New Year's Eve 2022 was also missed West brom's official website issued This Club statement on the day which read the directors of West Bromwich Albion football club remain in dialogue with controlling shareholder and chairman gauchan Lai regarding an outstanding loan out to the club by his related party wisdom smart Corporation limited the 4.95 million pound loan is due for repayments with interest today Saturday December 31st 2022 and lye has assured the club's board of directors the repayment will now be made early in the new year end quote to be clear that is the directors of West Brom remaining in dialogue with the controlling shareholder of West Brom it is an absurd situation which would be far more amusing if it wasn't for the fact that the future of one of the football league's founding members is on the line a third deadline was set then for early 2023 and there are no prizes for guessing what happened in early 2023 that's right absolutely nothing and in March 2023 West Brom wrote off the loan signaling that they don't expect to ever get that money back ly didn't issue any comments on the matter nor has he commented on much at West Brom over the last five years during which time he has only attended one match after loaning 5 million pounds to a company controlled by the same person who supposedly controls the club themselves West Brom then took out a 20 million pound Loan in December 2022 to cover their day-to-day running of the club that loan is from MSD Holdings which is the American billionaire and founder of Dell Technologies Michael Dell's UK business MSD Holdings have established themselves as a force within English footballing Finance having provided loans to Derby County and Southampton as well as facilitating burnley's leverage Takeover in 2021 however whilst West Broms alone supplies wisdom smart Corporation limited charged interest of just 50 000 pounds an effective interest rate of only one percent had it ever been repaid which it obviously wasn't the loan that they took from MSD Holdings was charged at commercial rates namely Sonia which just reflects the average of the interest rates that Banks pay to borrow Sterling overnight from other financial institutions and other institutional investors plus 9.75 resulting in an effective rate of 13.93 so whilst West Brom loaned money out to their quasi owner who never paid it back charging interest of just 50 000 pounds in total they took out a 20 million pound commercial loan with interest payments costing them seven thousand six hundred pounds every day if you think that sounds bad it really is but bizarrely it's not the worst loan that West Brom have taken out no that would be the two million pounds borrowed from warm front Holdings revealed in the club's most recent set of accounts which includes interest payments of five percent I know what some of you will be banking five percent that doesn't sound too bad in the current climate well yes except that's not five percent per annum it's five percent a month with compound interest therefore that works out at just shy of eighty percent interest annually and Rising you will be shocked to discover I would imagine that warm front Holdings is another company controlled by you guessed it our old friend gauch and lie so just to be clear West Brom lent out five million pounds to one of Lies companies which they've never got back with just one percent interest whilst borrowing two million pounds from another one of his companies with 79.6 annual interest now I'm not an accountant but that doesn't seem like the best deal for West Brom themselves what's more that 20 million pounds that West Brom borrowed to cover their operating expenses six months ago well there are reports that they've burnt through all of that cash and given that they didn't win promotion it's not clear exactly how they plan on repaying it or indeed covering their future operating expenses as well as if that wasn't enough next season will be the first in over 20 years in which West Brom haven't either been competing in the Premier League or been in receipt of Premier League parachute payments thus slashing their revenue next season compared to the one just gone the only option other than promotion which would surely require further investment to be achievable is through player sales and it's not clear exactly how much even that would raise the baggies do still have some valuable assets most notably perhaps Dara O'Shea John Swift and Daryl Dyke but even a fire sale of all of those players wouldn't clear their debts uncover their operating expenses meanwhile it could potentially turn them into a relegation candidates next season unless they were able to pull several rabbits out of the Hat on free transfers and lone deals to replace them given the club's track record in terms of recruitments in recent Years you'll forgive West Brom fans for not holding out too much hope on that front that is why the Auditors of West brom's most recent set of financial accounts cited material uncertainty about the future of the club and why baggies fans and how desperate for some kind of intervention it all begs the question who is gauchen Lai and who actually owns West Bromwich Albion neither a straightforward questions which in of itself is surely a concern and you can't help but wonder whether an owners and directors test that lets such an opaque ownership structure through its net is itself fit and proper when the West Brom takeover happened in 2016 most baggies fans were under the impression that our Channel I had basically bought the club himself and yunyi gaokai Shanghai Sports Development limited was basically the holding company through which he had done it the statement published by The Club at the time spoke extensively of Lies lover football his business Acumen and track record and the ties between West Brom and China beginning with the club's 1978 pre-season tour of Asia the statements had lie very closely to a company called Palm full name Palm Eco Town Development Company Limited even citing Palms 0.5 billion pound annual revenue in 2015 and 1.8 billion pound market capitalization on the Shenzhen Stock Exchange if you weren't reading with a scrupulously critical eye you could be forgiven for being left with the impression the lie also owned Palm or was the company's largest individual shareholder but that wasn't the case either ly was apparently the general manager of pom for 20 years during which time the company Grew From a plant nursery into one of China's largest and most successful landscape developments and construction companies a closer look also reveals that lie was never described as owning yunyi gaikai Shanghai Sports Development limited but merely of controlling the little known Enterprise that had just acquired 88 of a Premier League club the paragraph which read the buyer is a new company focused on the sports industry formed for the purpose of completing the acquisition it is controlled by gaochan Lai who has provided the underlying equity for the acquisition together with palm and funds introduced by yunyi investment a regulated asset management company which led the negotiations on behalf of the buyer end quote left more questions than answers if anything seven years on it remains unclear exactly what lies role is how much money he's got and what he thinks if indeed he thinks anything at all about the current situation or future fate of West Bromwich Albion research by action for Al being concluded that West brom's chairman Lee Pio who is a longtime associate of Lies owns 12 percent of the club Lao Lan and Wang kin no jokes please that is the man's name each shown 9.85 the oversea Chinese banking corporation a multinational Singaporean Bank better known as ocbc bank owned 9.5 percent and two Chinese businessmen namely Wu gai Chang who is the former chairman of palm and Shay xinjiang who is the billionaire founder of one of China's largest Furniture companies owned one percent and 0.67 respectively Shin Shang who owns 0.67 of West Brom would be the seventh richest owner in the championship all on his own yet the baggies are currently staring down the financial barrel and taking two million pound loans with 80 annual interest rates that adds up all of that combined to 42.87 between those five individuals none of whom you will note are GAO Channel I and then a Singaporean Bank a further 25.49 and therefore the largest individual shareholding and I use that word a little bit Loosely is owned by none other than the People's Republic of China I said I use the word individual Loosely because that's 25.49 is made up of four different state-owned entities though ultimately all are still the Chinese State the mathematicians among you will have noticed that even when you factor in the additional 12 owned by the shareholders for Albion that still only brings us to 80.36 leaving a 19.64 stake in the club still unaccounted for that's because despite their best efforts action for Albion could only assess the facts that are publicly available or at least discoverable and that remaining 19.64 percent is not it could be that lye owns the remainder which would make him the largest shareholder other than the People's Republic of China but that is pure speculation the championship is a league of insane finances Reckless spending and all too often unscrupulous owners but even within that wider context The Case of West Bromwich Albion is particularly egregious West Brom is an institution which is 145 years old and for most of my lifetime and the lifetimes of most of you watching this they have either been in the Premier League or fighting and typically fighting successfully to get back there whilst being very well run now the club is deep in crisis no one is exactly sure who owns them it appears to be a mixture of little-known Chinese businessmen and the Chinese government they are saddled with debt and it's unclear exactly how they are going to be able to pay it off and drag themselves out of the Maya throughout it all there has been next to no communication between the West Brom owners whoever they are Xi Jinping I suppose or hierarchy and the fans shoe K who left his role as CEO in February 2022 but remains a director recently refused to answer 38 pressing questions from West brom's minority stakeholders shareholders for Albany million and there has been next to nothing out of the club since then there was a time when communication from Lai would have been invaluable now any communication from him would likely be just as unhelpful Wes from fans desperately want new owners West brom's Web of owners probably want out but for a totally unrealistic fee that will never be achieved and that's why we should all want new ownership structures in English football and far better regulation for West Brom fans that may come too late if indeed it comes at all that is it for today's video but thank you all very much as ever for watching I hope that you enjoyed it I imagine if you were or are a West Brom fan that wasn't the case but hopefully you are pleased to see someone covering it because as far as I have seen asmen that much coverage of it anyway hit the like button if that was the case apparently it helps somehow with the YouTube algorithm let me know your thoughts Down Below in the comments and of course make sure that you are subscribed to both this Channel and to my second Channel both of which should be on your screens or be about to appear on your screens now along with a couple of videos that you might want to watch after this one you could also find me on Twitter or on Instagram via the username at hrtc sevens on both should you wish to do so

Channel: HITC Sevens

Views: 358,562

Keywords: HITC Sevens, Football, Soccer, Richest, Crisis, Club, West Brom, West Bromwich Albion, Documentary, China, Chinese, Owners, Ownership, Man City, Premier League, Championship, Manchester City, PSG, Newcastle, Newcastle United, Guochuan, Lai, What On Earth, Is Going On, Finance

Id: warUziXQ3QI

Length: 32min 33sec (1953 seconds)

Published: Wed Jun 14 2023