Wobbles, and What Can Man City tell us about Sports Investment?
Blain’s Morning Porridge October 6th, 2026 – Wobbles, and What Can Man City tell us about Sports Investment?
“Athletes want to be the best, and want someone to pay for it.”
The threat list to markets has suddenly expanded – plague, protests and increasing signs the AI boom is a damp squib. However, Sporting Investment remains a hot sector – which may require some tweaking as the full implications of the Man City financial scandal emerge. Durable sporting value requires sound corporate governance, managing the money to ensure competitive integrity, a growing and excited audience, and a clear flow of players from the grass-roots to the big leagues.
Key Takeaways
- Suddenly there are a lot of new threats on the board – from slowing markets, AI failing to land, Plague, and riots across Europe.
- Sport has become a thriving sector for esoteric private investment, boosted by a sports finance class selling billionaire investors vanity investments they can effectively monetise for power and profit.
- That market is developing. Sporting assets are not liquid assets, but many prestige sporting brands are said to be “quietly” up for sale.
- Sport appeals to the population because of its exceptional participants, and is marketed as the pinnacle of personal achievement, excellence and fair-play.
- There is great commercial and (for some investors) soft-power strategic value from sporting franchises.
- Some selling may be driven by scandal – and a lack of good corporate governance creating a sense some sports are not a level playing field. Advisors to the owners of Man City, the English football team, broke rules around financial fair play to win the league by hurling money at the team.
- Man City demonstrates the world’s most competitive league (The EPL) is vulnerable to financial power to build dominance – which was why rules on financial fair play were brought in by UEFA and the League.
- Supporting fair play should be a corporate governance objective.
- It’s taken 8-years for the league inquiry to get this far, and probably as long again to exhaust the appeal process. Meanwhile, strategic national interests between the UK and the owner state are also in play.
- Across the rest of the sporting sector, potential investors need to be aware of the importance of grass roots investment and media exposure to make the long-term economics, participation and support for top level sports viable.
Interesting world we live in – for now…
I feel the earth shift under my feet… this market is getting… tremulous.
Read the financial headlines and it feels like “boom” times in Equities – the Anthropic IPO is set to make Christmas very joyful for some. But… on the brutal reality of the street, it feels like “Winter is Coming” to markets. Like the housing markets, activity is stalling. Talking to my contemporaries in Private Capital Markets over the last couple of days, we’re all finding deal schedules are extending. Decisions are taking longer and longer to approve. A sense of “Bog-Snorkelling in a field of Treacle” – doing a lot of work to get nowhere fast – is being felt across the markets.
Yesterday I read the great Torsten Slock of Apollo, an economist I follow closely, write that there are no signs of AI in productivity data. You can check it out on the company website, but it confirms what we already fear we know: expectations of massive returns from the capital consuming AI infrastructure boom are proving very difficult to support when there is no sign it’s actually happening in the economic data. Sure… we all use AI, but I ain’t been paid a brass cent more in revenues… yet.
A chum told me he’s part of a team of over 30 senior leaders looking at how to rationalise AI use within his firm. (It was running out of control – everyone using it, no one profiting from it.) Every single department has at least one rep on the committee. They’re tasked with taking the decisions on what to buy and how to focus it. He thinks it’s a deliberate ploy by his CEO to slow the process down, burying it in discussion and bureaucracy.
In darkest Siberia, the Russians (oh, these Russians!) are battling with Bubonic Plague in a outbreak that looks eerily like Biological War: A Scenario – a new and scary book which I highlighted earlier this year. In the book a Russian bio-war researcher accidently releases a double-tap bio-engineered virus, dies of the plague, but not before he’s infected hundreds of people, and within a week… we are all horribly, horribly dead. This time it was a girl who dropped the test-tube – she’s dead, Irkutsk is effectively quarantined… and the Russians are trying to pretend it hasn’t happened.
And just to make it spicy – Europe is a’wobble.
- Spain faces a snap election, as the left-wing government seeks support to take on the Right-Wing which blocked housing reform. Last week Spain was brought to a halt by protests after an institutional landlord, Urbagestion, evicted an 87-year-old pensioner, Maricarmen Abascal from the rent-controlled apartment she’s lived in since 1956 when she could not afford a rent hike from €440 to €2650 per month.
- France is riven by a sudden wave of violent protest… in schools! Teenagers are burning cars, torching classrooms and demanding higher spending on education. It’s shocked the system and the populace… and is supported by the French left-wing, which an increasing number of Frenchmen see as the only hope of containing the Right-Wing in next year’s presidential elections…
Still, there must be some positive stuff to write about.
Er. Let’s talk about Sports.
Sports has become one of the most esoteric investment themes in recent years. Clever corporate financiers have collected high fees from linking fandom, socials, and stadia to monetise revenue streams, to create enticing value for billionaire owners looking for vanity investments. Only the very, very, very, rich can afford to stable the largest teams and events.
The English Premier League contains some of the most valuable sporting brands on the planet and the teams are owned by American billionaires, a smattering of very well-to-do Englishmen, and Middle East Royalty. (Only one team, Richmond FC, is owned by its fans, but it exists only on the TV hit Ted Lasso!) I am hearing on the informal Sporting Line every single UK football team from top to bottom is theoretically biddable – owners are working out whether to stick with it in the hope of returns or exit now.
Saudi Arabia owns Newcastle. In the wake of Kingdom’s economic reset and the unpleasantness in the Gulf, its already pulling funding from the lacklustre LIV Golf, and no longer considers football to be a critical factor in its sport economy. Lots of folk in sport reckon a good bid for The Toon would secure the team. (Reminds me of roadshow I led for UK bank, Northern Rock, about a million years ago. We took them to China and gave Newcastle FC shirts (emblazoned with the Northern Rock logo) as gifts. One Chinese chap handed his back and asked for a Man United one instead!!)
I am not a massive Football Fan. How could I be? The Jambos (my team, Heart of Midlothian) apparently only learnt to play last year. But they may be the exception that proves the rule. Tony Bloom (who also owns EPL team Brighton) bought the perennial 10th best team in Scotland’s 2 team league and went in with a plan to monetise data and be smart in the transfer markets. In nearly worked – they lost the SPL to Celtic on the last kick of the last game of the season…
What I do recall from my childhood was one Manchester team. They played in Red and aren’t Man City – who play in a miserable shade of light blue.
Today Man City is across the headlines after being found “guilty” by an EPL disciplinary inquiry of 115 charges of breaking multiple financial rules between 2010-2017 to disguise just how much its very deep pocketed owner was prepared to spend on the team to propel it into the top ranks. (The inquiry does not establish any criminal offence was committed.) The UEFA Financial Fair Play (“FFP”) rules, adopted by the EPL, exist to create a level playing field among all the league teams, where big money can’t simply buy success causing lesser teams to collapse into un-competitiveness and bankruptcy. The rules effectively say money spent on the team should be earned by the team.
Man City’s wealthy Middle East owners, who bought the club in 2008, were apparently persuaded by their football savvy advisors they could get around the FFP rules by inflating revenues from sponsorship (linking a sponsorship and shirt deal to the national airline (which they conveniently also own)), understating costs and expenses, misleading financial reporting, and then stalling investigations and not cooperating with subsequent investigations. False financial reporting propels the scandal from merely cheating on the economics of football pitch, to breaking the actual law – which is why there is increasing noise from Parliament for the case to properly investigated by business regulators.
However, for all the talk that Manchester City may now be expelled from the league… it feels unlikely. The original deal contained sweeteners in Manchester’s hot property market wrapped around it, supported by the Mayor of the City… who is now in Downing Street. I understand the Middle East sovereign wealth fund that made the investment was spotted making a visit just days before the results of the inquiry were made public. Wonder what they talked about?
Manchester City experience an incredible run of success after they were acquired. Over the past 15 years they’ve won the Premier League three times, dominating the league and the transfer markets. Prior to 2008… it hadn’t won anything for 32 years. 4 years later they’d won the league and spent over £1 bln in transfer fees. They have been the dominant force on the English football scene for the last 17 years.
The case against Man City will include how their fantabulous spending stopped other teams garnering similar outcomes and cost them in potential revenues from issues like participating in lucrative European championships. There are calls for the club to stripped of titles, fined, points deducted, and even that it should be thrown out the league – probably landing on the 4th rung of the English Football hierarchy, the 2nd division. (As Coach Beard would say “sure, that makes sense in England because the 1st Division is the 3rd, and the Championship is a level below the Premiership”.)
But that would not help struggling lower division teams – Man City would simply spend to get back to the EPL, take promotion spots and outcompeting the minnow teams. If they are fined – how would the money be allocated to help the teams disadvantaged by them? Stripping them of titles and awarding them retrospectively isn’t going to help anyone. It’s 8 years since the charges of illegal finance were first raised, it might take even longer for the full appeal process to be exhausted… by which time we’re talking of historical charges.
It’s thought that Man City’s owners invested over £1.3 bln into the club between 2011 and 2018. A further £831 million has been identified by the League Commission investigating the case as money misrepresented as “sponsorship” revenues. The club appears to have spent nearly £1 bln more on the team than the rules would have allowed it to do. It will be the subject of lengthy appeal and discussion.
Football is a bit of an outlier. It is the most popular team sport on the planet. There will always be talented young kids playing on street corners with the skill to play at the highest level. Other sports are different. They rely on the attractions of the sport to attract people to play and follow. In some that makes the grass root game critical.
The real reason LIV Golf failed was no younger players were interested in a competing tour – every young golfer carries the dream of playing the Open at St Andrews in their bag.
Rugby is another sport in trouble. The average age of fans at Internationals is now of pensionable age. The TV audience is fixed on the big games. The grass-roots clubs that nurture the game and provide the conveyor belt of new players is dying because fewer kids are attracted to the game – because local teams get zero coverage from media because the sponsors only care about the big stuff.
Talking to my local Ski Shop recently when I took my planks for their annual buff and sharpen, they reckon the loss of Ski Sunday, the long-running BBC ski-programme just confirms what they were already seeing… An uptick every four years during the Olympics, but otherwise nothing on the media because the UK isn’t a player and its seen as expensive… Skiing is crashing in the UK.
I suspect Man City’s travails will be… minimised because that is what happens. Big Teams, Big Money, Strategic National Interests at play… but don’t discount cause, effect, visibility and the future of the rest of the Sporting universe. After all, what are we all going to do with our time when AI has taken all our jobs…
Out of time, and back to the day job…
Bill Blain
Author of the Morning Porridge
CEO Windshift Capital
Advisor – Spitfire Strategic Capital
Meanwhile, don’t forget about my new book: The Battle for Hamble
You can read a review on the Society of Professional Economist’s website here.