£1.1bn update from 49ers HQ as major changes imminent at Leeds United — Leeds United News 12/11/24

Adam Williams

After their investment in the summer, the spotlight at Elland Road as far as Leeds United’s ownership is concerned has been on Red Bull. But 49ers Enterprises are still in charge of the very biggest decisions.

The 49ers, whose president Paraag Marathe is also Leeds chairman, first invested in the West Yorkshire club back in 2018, buying a 15 per cent stake from then-owner Andrea Radrizzani.

In September last year, the investment arm of the San Francisco 49ers took full control of recently relegated Leeds in a deal that valued them at around £170m.

The 49ers have since shaken up the ownership structure again, selling an unspecified minority equity stake to the Austrian energy drinks, marketing and football investment company Red Bull.

For the 49ers, ‘soccer’ is still a relatively new market.

Leeds were the NFL titans’ first investment in the sport and remain so to this day, although there have been signals recently that suggest that might not remain the case for long.

Like any investment company, their long-term plan is to sell the club for a huge profit. Promotion back to the Premier League is central to that aim and, with a few seasons of consolidation, would guarantee an enormous return.

But the financial upside the owners of the 49ers would see from that deal would be utterly dwarfed by what they could – theoretically – bank if they sold their NFL franchise. And the latest data from a respected group of industry experts shows how sizable a windfall the Leeds owners are in line for one day really is.

While many private equity firms are increasingly attracted to football clubs because of the potential value of their IP, most investors will tell you that there are better ways spend hundreds of millions of pounds.

There is still meritocracy in the sport in financial terms, with promotion, relegation and participation in European competitions having a huge impact on a club’s bottom line.

And while the structures in English and European football in particular are, many fans argue, designed to insulate the ultra-rich from failure, the industry is still very volatile from an investor’s perspective. In the NFL, for example, costs are relatively fixed and the cooperative nature of the league’s business model all but guarantees collective financial success. It is why private equity companies have descended on the NFL en masse after the league voted to allow that ownership model in on a minority basis earlier this year.

The latest data from industry experts Brand Finance illustrates the value of the NFL as an investment prospect – and the San Francisco 49ers more than most. According to their latest research, the 49ers’s brand value alone is worth £1.1bn, an increase of 48 per cent on the previous year.

The report cites an increase in commercial and matchday revenues as well as a strengthened global profile as the reasons behind their meteoric rise.

The 49ers have outlined similar ambitions at Leeds, particularly with reference to expanding and upgrading Elland Road to maximise money through the turnstiles and commercial appeal.

The multi-club model, as Red Bull can attest, delivers a range of financial and brand-building benefits.

For many supporters, the model is seen is the antithesis of what football is about, namely the unique identities of clubs that have been built up over decades if not centuries. That is exactly why so many fans were so wary of Red Bull’s front-of-shirt deal with Leeds, despite the fact it is believed to have delivered a Championship record sum.

For investors, however, the reality is that they will almost always do what is in their own financial interests. If establishing a multi-club model helps to diversify risk, create player development pathways, and increase global exposure, that is the model they will pursue.

With Leeds technical director Gretar Steinsson set to leave for a broader role with the 49ers’ global football group, it looks as though the Whites may be due to become part of a multi-club operation.

Reports so far have suggested that this is not an immediate priority for the owners but is likely to develop into one in the coming months and years.

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