In his fortnightly exclusive column for CaughtOffside, Jon Smith, one of football’s first-ever agents and a man who was an integral figure in the forming of the Premier League, discusses how Saudi Arabia and AI will change the footballing landscape, why Sheikh Jassim is likely to be the new owner of Man United, a creative deal for Lionel Messi and why Arsenal’s move for Declan Rice is taken time.
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Saudi player grab is a very clever move – and not anything like the Chinese Super League project
I think the aggressive buying tactics we’re seeing from the Saudi Pro League is a very clever play by a region hitherto regarded as an errant state. They’ve seen what the UAE have done and also the masterplan of the City Group, both financial and influential, and wanted to be a part of that. Suddenly you’ve got a country which was considered a pariah owning golf. Football is an obvious place to target because their message gets through to literally billions of people every weekend, and they’ve got the money to reshape the game.
There are going to be some real fragmented changes in the football broadcast market soon too. If you speak to the guys who are at Sky Sports at the moment, some of them are a bit concerned that the best days are actually behind them, and if a major state like Qatar really wanted to get behind their broadcast partners at beIN, they could buy up all the television rights from the change in their back pocket. Not to mention fan TV audiences which can regularly get hits of over 100 million a month.
UEFA are going to want to expand the influence of the Champions League and the various European competitions now. FIFA president, Gianni Infantino, has relocated from his very nice home in Switzerland down to Qatar, which I know is probably a very nice place to be but is it a lifestyle choice or is it the fact that he needs to have huge money behind him to expand? FIFA also has to manufacture their Club World Cup rights into a meaningful tournament and then sell those at a value.
You can begin to see how that whole broadcast rights area is beginning to move and shake around a bit. It’s not going to be too traditional. The markets are huge, but there’s only so much money that the firms will put behind it. For some years now various rights owners including FIFA and UEFA have looked at the riches of the Premier League broadcast rights and have wanted some of that feast. There is only so many global broadcast dollars to go round.
If I want to watch everything it costs me £100 a month and that’s quite a lot of money for people these days. So things like IPTV are springing up, which circumvents those costs, and will also contribute to this whole market changing dramatically in the next five years. You can begin to see Saudi are just positioning themselves to be a rights owner, a potential carrier of the product around the world which is going to have Saudi’s name all over it. They’ve also bought themselves huge political influence through this very clever move.
If you look back at the Chinese Super League it was President Xi who was making a big play for eternal presidency. One of the things he was beginning to talk about was he’s a football fan. This encouraged many participants in the football industry to join the party. That players should all pile in because China had lots of money, and so that’s what happened. It became a bun fest of ‘let’s all play in China’ or ‘let’s get Chinese money out, buying clubs in and around Europe and various other places around the world,’ when actually, the political system is very, very different from Saudi. The political influence Xi was hoping for on the back of the ‘gold rush’ never arrived.
I was involved in a takeover of a Premier League club with the 12th biggest insurance company in China during that period. They’d already put £12m into the UK as a holding deposit and then fell out with whoever the paymasters were that week, that month, that year, at the top of the Chinese system, and they couldn’t get any any more money out so they kind of lost that £12m.
Unless you were with the supreme power brokers – and you never quite knew who they were from one week to the next – it was a very difficult market. Then you began to see the movement of currency was too much one way and was, I think, just a sort of market reaction. The Chinese Super League was an oil well, where everyone thought ‘let’s go mining,’ whereas Saudi Arabia is a completely different model. It’s an autocratic state, loaded with petro dollars, wanting to buy influence around the world.
I’m not comfortable with PIF funds being controlled by Chelsea’s owners
Clearlake Capital managing funds for the Saudi Public Investment Fund (PIF) concerns me. We knew that the Saudis were ‘in the back office’ at Clearlake, and I always felt a little queasy that they owned Newcastle. It’s very convoluted with Chelsea. PSG are owned by Qatar and Qatar owns various sporting enterprises around the world as well as various competitions. Abu Dhabi own Man City and a bundle of other clubs around the world now, and they sit in positions of influence around the sporting hierarchy of football.
PIF is owned by the Saudis so it’s the same thing, just a different vehicle. Everyone knows PIF is Saudi Arabia, it’s just their corporate arm and I don’t think it’s a bad thing. I think they’re looking at it from a football point of view. There are many convoluted paths to multi ownership but I think the Clearlake one crosses the line. That’s the one that makes me feel a bit uncomfortable.
AI is the biggest threat to match day attendances in the near future
I was one of the people with Rupert Murdoch, David Dein, Sir Philip Carter et al that actually started the Premier League and I love the fact that it’s become so big, so popular, and it’s such a wonderful investable platform. It’s the best entertainment on the planet, but nations like Saudi and Qatar can financially blow everyone out of the water, so I think we’ve got to be careful.
Careful that somebody can’t just come in and buy it, because at the moment the huge amount of dollars being held in in the Middle East can potentially see them ‘buying football,’ and I think that’s something we should protect against. I think the average football fan will have some animosity towards causes that they think they’re contributing to but don’t support because they don’t quite agree with the ownership’s politics, but football remains tribal. Although if Yevgeny Prigozhin of the Wagner group – for example – bought a football club, a lot of people would feel a bit queasy about supporting it.
I think as much as that is an emotion, the biggest worry for me is talking about crowd attendance and the potential success of Apple’s AI vision glasses. You can have the real experience of a football match sitting at home and you don’t have to have the crush of the crowds and everything else. It’s a few years off yet, but we are only talking a few years. Don’t get me wrong, some people love being there, love the atmosphere and that’s great, but if you can experience that, without having to sit on a train and pay excessive amounts for beer and hot dogs, you know that’s going to take away a chunk of the audience. That’s a bigger threat for me, than not wanting to support the team because perhaps the politics aren’t what you would agree with.
I honestly do think that the Premier League and its member clubs are close to negotiating their own broadcast deals. I’ve mentioned to the some people that Sky’s best days are behind them. I love the support that Sky have given the game, I love the broadcast features and they’ve taken it a long, long way, but if I’m sitting there and I’m the Chief Executive of the Premier League, in my head has to be ‘we can do this ourselves, we can own everything.’ Now they’ve actually got the money with the Saudis and everyone else in UAE behind to actually do it themselves, whereas previously, very rich owners would go okay, but if it doesn’t work, my very rich won’t be quite as very rich. Now, if you’ve got a state behind you, you have that financial value that Saudi Arabia et al can bring. It’s likely that it’s going to happen – it is already happening in MLS.
Lionel Messi’s Inter Miami transfer is just the start of some creative deals
Lionel Messi’s transfer to Inter Miami was interesting timing because I went to a memorial service for my dear friend, Alberto Vermi, recently and in attendance was Messi’s business partner, someone in the corporate world who was one of the people behind this transaction. It’s fertile territory where clubs could absolutely look at creating funding opportunities through corporate sponsorship. Don’t forget that they’ve been doing this in MLS for a few years now, so it’s taking that model and expanding it. I think that it’s a model that will be enhanced over the coming years.
Sheikh Jassim or bust for Man United
I can’t see beyond Sheikh Jassim. I mean, if he really wants Man United, he can have it. I don’t think in reality, the Glazer family really want to be part of Sir Jim Ratcliffe’s bid. Once you’re out, you’re out. You move on. Though I think it’s a really good negotiating tactic. Ratcliffe would quite possibly be a more creative ownership but I just think if it’s about if the deal is about the money as well as the passion for Manchester United, there’s certainly a big capital P with passion that follows that club, I think, ultimately Qatar can have it if they want to.
It’s a bit of a misnomer that the Glazers want to hang on but let’s be clear too, a deal of that size isn’t ever going to be done and dusted in five minutes. There’s so many moving parts. To be honest, there’s a lot of ground to cover in the United deal. Not only football, there’s real estate to consider. I mean, that ground and the training ground is is a sizeable drain on whoever comes in. You’ve got a schedule of dilapidations on Old Trafford and you’ve got to redesign the training ground.
You’ve you’ve got a lot of ancillary factors around any of these deals, including the personalities who are sizeably difficult in many cases, and quite emotional about it. It’s really not like selling a building unless you’ve owned the building for 100 years, because real estate doesn’t argue back.
You’ve got a lot of moving parts in a deal like this. I’d be surprised if something didn’t happen during late summer or the early part of autumn. There’s just tidying up the emotional bits now, which will also have substantive financial meaning. In my experience, they’ve probably got another couple of months to go.
Supporters can’t expect Declan Rice to Arsenal deal to be done quickly
These transactions (eg Declan Rice) do not walk in a straight line. The footballer who’s on £100k a week is probably on a basic of £60k and then there’s added bonuses for either appearances, goals or England caps and so on. Gross all of that up, he plays every game and scores for fun – only then will he get his £100k a week.
So it’ll be similar with this Rice deal. £100m is a lot of money, even today. I wouldn’t just be writing out the cheque, I’d be wanting to cash flow it. I’d be wanting it over the five years, three years, whatever term I would want, and then David Sullivan would obviously want it on his terms. Then you ask the question is it really £100m or is it £80m? If he plays 30 games, there’s another £20m and so on and so on. Bear in mind every movement in this saga isn’t like you and me arguing over a car. I offer £30k and you want £33k – it’s not quite as simple as that because these are big sums and every movement of that decimal point is 10s of millions of pounds difference. That’s why it takes a little bit of time.
There are two players in this anyway, and if I’m David Sullivan I’m sitting there going well, right, thanks very much. I’ll wait for City and so on. My personal view is he will probably go to Arsenal because of the security of regularly playing first-team football and I think he quite likes being in London.
Do Arsenal need him? If you look at Arsenal last year they were great. They were fun, but we always knew they were fragile in as much as if you put it up them they didn’t like it. Premier League coaching staff are very clever, some of the best in the world, and they would have picked up on this over time. You can see they began to stymie Arsenal’s play, and Man City in particular pushed them up high with balls over the top – a fairly simple anti-Arsenal play. Now, Arteta will be working on it. Last season was the first year that his team really worked and they were young.
When it goes wrong for you and you’re young you’ve still got the energy but you haven’t quite got the confidence. They probably need another two years. This year they’ll be there or thereabouts and I think if they get the players they’re being linked with they could fly – but the club have got to integrate them to make it work. I think this year will be another great year for Arsenal but 24/25 is probably the season that they could perform really well and win something.