Being the change - The Square Ball 30/12/22

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Written by: Moxcowhite • Daniel Chapman

A point in favour of Andrea Radrizzani, chairman and majority owner of Leeds United as well as loads of other things he wants bigging up (next time, he told Marcus Luer of The Sports Entrepreneurs Podcast, ‘ask me about my new businesses in tech and financing’) is consistency. His message, since buying Leeds United in 2017, has stayed pretty much the same.

“I am giving a maximum of five years to be in the Premier League,” Radrizzani said during his first summer after taking over from Massimo Cellino. “If I try and I am not able then it is probably best for someone else to try, maybe with more resources than me.”

Speaking to The Athletic this summer, he said he believed he could achieve European football with Leeds, but knew breaking consistently into the Premier League top six would be beyond him. “I’m happy. I dream to bring this club to play in Europe and then I’m happy to leave — so still some work to do here.”

Now, speaking to Andrea Rinaldi of Corriere della Sera in Italy, he’s on the same theme again. He can go so far, but no more than that.

“Yes, maybe Leeds can grow further,” Radrizzani said, “but in the future they will need more resources to be able to reach higher levels and compete with the best clubs in the Premier League, so I believe that, because of the history of the club and the respect I have for their fans, it is right to let those who can invest more than me go ahead and take it to the glory of the past. There is also a planning aspect: this is my sixth year, change is healthy.”

The question of ‘now’ is a thorny one, since Jesse Marsch was asked about these comments in the press conference after the defeat to Manchester City. “He [Radrizzani] told me that that interview was done a couple of months ago, and that was just recently released and it becomes a talking point,” said Marsch. The interview for The Sports Entrepreneurs Podcast, that was linked to from Leeds United’s official Twitter account three days before Christmas, was recorded some time ago and released on November 25th. The interview with Corriere della Sera — the one that has provided the ‘talking point’ — was published on Boxing Day, and ended with a question about the World Cup that ran from 20th November to 18th December — ‘You have just returned from the World Cup in Qatar where you were present with your company Hellodi in stadium advertising. How did it go?’ — suggesting this interview was conducted much more recently than ‘a couple of months ago’. (For the record, Radrizzani answered that he was impressed by the freshly built modern city he saw in Doha; “Unfortunately, the European media had a negative campaign about this World Cup,” he said. When pressed on the deaths of migrant workers who built the city, Radrizzani said, “The problem exists and it is huge. It is an evil that exists, and not only in Qatar, and it must be fought.”)

The detail of which interview Marsch thinks was a couple of months ago and when these conversations were actually had can be set aside, as the larger themes were the same as usual, especially when it comes to Leeds United. Radrizzani is proud of his work at Leeds, but recognises he has limits. We knew all that. The change from 2017 is that, this time, his dream is not going to come true. Back then he gave himself five years to achieve promotion and that focus helped Leeds do it in three. Now, unless Jesse Marsch can pull something remarkable from the second half of this season, either with or without investment in transfers in January, Radrizzani will not achieve European football at Leeds before the date he gave for his exit. “We [Aser Ventures, Radrizzani’s investment vehicle] are happy with Leeds,” he told Corriere della Sera, “but we are evaluating other investments and the potential exit will be in 2024 together with the San Francisco 49ers.”

I’m often intrigued by this aspect of Radrizzani’s character. His passions and tempers often get the better of him. Either in his antagonism on Twitter or by letting his son design United’s third kit, he allows his enthusiasm to veer into amateurism. But he is still able to let business snip his dreams. Promotion with Leeds, he has said, was the proudest moment of his career, a day when he didn’t think of business at all, only happiness for himself and the fans. But he would not have waited more than five years for it, because it would have cost too much. The dream of European football now looks beyond him, so he’s willing to miss out on the pleasure it might bring, and move on. Radrizzani is like Icarus, crafting his fine gravity-defying wings, feeling the heat of the distant sun and thinking, actually, I don’t think I’ll risk it.

As such there’s nothing really new in the Corriere della Sera interview except a gradual definition around dates, 2024 being the significant year, as it has been since The Athletic reported that 49ers Enterprises have an agreement to buy full control of Leeds by January that year. Radrizzani pushed back at this, and always seems to imply that January 2024 is when exit discussions begin. “They have as you know an option to go majority in 2024,” he told The Athletic this summer, “so maybe before, or that moment or after, something will be discussed. In this moment we are super-happy and everything is stable and balanced.” Either way, when people wonder why 49ers Enterprises haven’t pushed for the extra few per cent that would give them 51% control, this might be why — everybody’s mind has been on 2024 for a long time now. The price and the date and the process have been agreed since 2021, meaning inertia should anyone want to try changing those terms. It’s easier to stick to the plan, right? In the meantime, United’s Premier League status is being left to fate, since the board wrested control of it from God.

One new note is about Radrizzani’s relationship with 49ers Enterprises after Leeds, and it’s actually an old note, that was previously buried in this summer’s interview with The Athletic. “We are very good friends with the Niners,” he said, “They are a solid partner. They let me work in peace, and they’re supportive, so we have become honestly very good friends. We are in touch continuously. I think even in the going in Leeds, or even with other clubs in Europe, we will do probably together.”

That hint of working with the Niners again after Leeds is echoed in Boxing Day’s Corriere della Sera interview, when Radrizzani talks about failing with an offer, some time ago, to buy Serie A side Salernitana.

“Now we’re looking around. We are considering investment opportunities in some Italian teams, with the 49ers and other important partners. As partners in Leeds with the 49ers, we have reached the end of the cycle, and we have shown that we can create value. Now a new phase is opening with new targets, accompanied by the interest of family offices and private equity that want to invest with us.”

Radrizzani sums this plan up as, “I want to operate as private equity in sport”, and it’s how he has always worked. Speaking to Marcus Luer, he recalled selling broadcasting rights to a major investor, early in his career. Instead of taking cash from them, he asked them to become investment partners to help him open a Far East office and sell more broadcasting rights, a deal that meant more profit for them both. Recently, selling his Eleven Sports business to DAZN, he is reported to have taken stock and a job rather than cash, telling Corriere della Sera, “with Eleven partnering with Dazn we will help it grow, in three to five years we have to build value then we will evaluate a possible IPO.” If that works, it will be worth much more to both Radrizzani and DAZN than a straight cash takeover. All his business life, Radrizzani has used his ability to operate within his limited budgets to impress investors who have greater means to support him the rest of the way.

That explains 49ers Enterprises at Leeds. Radrizzani put the club on an even keel post-Cellino, investing — as he often says — £100m to buy-back the stadium, re-fill the Thorp Arch pool. Then he convinced the 49ers to settle his bill and ride along for the rest of the journey, towards greater profit for them both. He seems to be suggesting to Corriere della Sera that he and 49ers Enterprises believe he can repeat the feat, in Italy or elsewhere, of Radrizzani going in and turning an ailing club around, then adding investment from 49ers Enterprises to grow it for a profitable sale: “Private equity in sport”.

Which brings us to the other difference in this interview. It may be down to a figure of speech, but this is the first time I can recall Radrizzani making it sound like he and the 49ers might leave Leeds together. “The potential exit will be in 2024 together with the San Francisco 49ers … As partners in Leeds with the 49ers, we have reached the end of the cycle.” ‘Together with’ — ‘assieme ai’ — could mean ‘both exiting together’, or ‘one exiting by doing a deal with the other’. ‘The end of the cycle’ could be reached by the 49ers and Radrizzani both together, or could mean that Radrizzani’s role of partner has reached the end of its cycle, and he will leave the 49ers to continue.

The latter has long been understood as the plan, and The Athletic’s Phil Hay reports it still is — he expects 49ers Enterprises to assume full control and run the club. But while Radrizzani’s interviews have always been consistent on the big picture — he’ll work to his limit, then leave — they have also consistently created ambiguity in the detail. When The Athletic report the 49ers Enterprises deal is ‘by 2024’, Radrizzani says ‘in 2024’, and we’re none the wiser. Likewise, The Athletic report 49ers Enterprises will be taking over the club, but Radrizzani’s manner of speaking here — and his idea to go together with the 49ers in the future to find new clubs to invest in together, grow, and sell, “to operate as private equity in sport” — at least raises the question of whether they will be selling their stakes in Leeds at the same time, a question few people were asking until Radrizzani created the ‘talking point’. Going back to Radrizzani’s interview with The Athletic in the summer, when he’s speaking about how Leeds have managed to be one of the top-investing clubs outside the “state-controlled clubs or multi-billionaire clubs”, by being smart instead of being rich, he drops in his usual detail about not having the raw funding to compete with those clubs. But this time it’s not just him. “In this moment, neither myself or the 49ers have the capacity or the intention to put [in] that level of money to compete in the top six … in theory we are far from the capacity of these state-controlled clubs or multi-billionaire clubs — in theory. In reality, we are investing smartly and we are investing more than many other clubs.”

Radrizzani and 49ers Enterprises selling out instead of to each other could make sense. The deal The Athletic reported for 49ers Enterprises to buy Radrizzani out included ‘A fixed purchase in excess of £400 million … Some sources have told The Athletic that the deal could be worth as much as £475 million’. That would be more than the £350-400m that changed hands for Newcastle United, a price Mike Ashley had been seeking since 2017. But this season Manchester United have gone up for sale, seeking £6bn or £7bn, and Fenway Sports Group are inviting offers for part or all of Liverpool on a valuation around £3.5bn, both apparently inspired by the auction that ended with Chelsea sold for £2.5bn in May. That auction could only have one winner, and the Chelsea process brought to light a number of groups willing to pay enormous sums for a Premier League club. It ended with the money staying in the unsuccessful bidders’ accounts, their itch to buy unscratched, and in a World Cup year of boom, too (Gianni Infantino said Fifa made $7.5bn from the World Cup cycle, $1bn more than expected, while predicting $11bn to come from the next one). Why should Radrizzani take £400m from the 49ers when a wealthy new buyer, either frustrated by or attracted by the sale of Chelsea, could come in for their near 50/50 and make them both much richer? Radrizzani and 49ers Enterprises would then have a stronger base for future investments together in Italy, without one side still bearing the weight of running Leeds solo.

Who knows whether that’s the plan, or not. We’re trying to parse phrases out of Italian interviews, second guess at circumstances that might have changed rapidly since they were first mapped out, could change rapidly again before 2024 begins. The Athletic first reported the 2024/£400m deal in early December 2021, before Russia’s invasion of Ukraine forced Roman Abramovich into selling Chelsea, setting a mouthwatering new price for Premier League clubs and revealing a host of buyers with the cash. Whether they’ll pay much above £400m for a lower-half Premier League club with an old stadium is another question, let alone one in the Championship, but what Radrizzani and the 49ers can charge a premium for at Leeds is what private equity funds thirst for: potential for growth. If 49ers Enterprises do stick around, that will be what they’re sticking around for: the upsides of upgrades, to rebuild Elland Road and increase United’s commercial revenue, and profit from the income and sale of those things being done, rather than being possible. But if someone is willing to buy them out now and take on those projects in their stead, what’s a return-on-investment worth in the bank, compared to a long term commitment to complicated planning regulations and expensive building projects, while the spectre of relegation threatens the foundations every year?

What fans are left with now, despite Radrizzani’s consistent talk about letting his limits dictate his future, is the same guesswork as ever about when he’ll think those limits are reached and what will happen next. In the meantime, United feels like a club deflating without the momentum it had six months before the 2024 deal was reported.

Back in summer 2021, with Covid restrictions lifted a little so 8,000 fans could watch Leeds beat West Brom and Ellie Goulding could attend the end of season awards, Westfield billionaire and 49ers Enterprises’ bauble-in-chief Pete Lowy flew in from California to wax garrulous on the awards show couch, reminiscing about listening to Leeds games on the radio as a teenager in 1970s Australia, an entrepreneur and showman — he has a sideline as a stand-up comic — looking relaxed and ready to enjoy getting hands on with his new investment. Since then he has only appeared, silent and withdrawn, for the sacking of Bielsa, and October’s near defenestration of Marsch. The club didn’t dare repeat an end of season awards do last summer, and the mood has scarcely lightened since. Good players were found in the summer transfer window, but the star names — De Ketelaere, Gakpo — went elsewhere. Leeds beat Chelsea and Liverpool, but there were eight joyless games lost or drawn between those. Ellie Goulding seems to have better things to do, Roc-Nation haven’t been seen since their Kalvin Phillips’ mural on The Calls, the latest Amazon documentary was underwhelming. All anyone wants now is the boring stuff — more money for better players, an improved stadium built yesterday — and Radrizzani is trying to get people to ask about the new fintech companies he’s excited about, given there’s not a lot to say about Leeds still hoping for results to take them mid-table. “This is my sixth year, change is healthy,” Radrizzani says. But what is change deferred?