Walsall taken over – another US investor in English football

WALSALL FOOTBALL CLUB have surprisingly been taken over by US investment company Trivela Group LLC of Birmingham, Alabama. The company have acquired 51% of the club’s shares from Leigh Pomlett, who decided to end his three-year tenure as owner. Pomlett took over from Jeff Bonser and is a long-time supporter of Walsall. Only a few days earlier, Pomlett told the local media that he was still proud to be chairman and that the club was “league one and above”. He now believes Trivela are the “right group with the right vision to help take the club forward”. The sum of money involved has not been disclosed.

Not a lot is known about Trivela, although it is common knowledge they were formed in 2021 with the mission of,  “creating enduring value through the acquisition and management of association football clubs”. Their team includes Benjamin Boycott, Kenneth Polk and vice president of global football, Matt Jordan. Polk is CEO of Arlington Family Offices, a firm that manages some US$ 12 billion of capital for wealthy families.

Walsall seems to be their first investment, but reports suggest this is the start of the construction of a multi-club model. Their arrival is another example of American investors snapping-up EFL and Premier clubs. US owners are rapidly becoming the most influential segment in English football.

Trivela have, apparently, injected cash into the club for strategic investment. It remains to be seen if they will adopt the date-driven approach which seems to characterise many US football club owners.

Walsall have spent the last three seasons in League Two, finishing 16th in 2021-22. Despite a mediocre period, the club’s home attendances were over 5,000 which was an improvement on 2019-20 and 2018-19. The club has been prudent compared to many of its rivals, and although this has meant they came through the pandemic relatively unscathed, fans have accused the current regime of lacking ambition.

Nevertheless, Walsall have reported a profit for 16 consecutive seasons, including a pre-tax profit of £ 13,000 in 2020-21 and £ 25,000 in 2019-20. Their turnover was a modest £ 4.2 million, compared to £ 5.6 million in 2019-20 and £ 6.7 million in 2018-19, an understandable development given the affect of the pandemic of gate income. Walsall’s wage bill was £3.1 million, more than 10% lower than the previous season, but 74% of income versus 62% in 2019-20.

With the arrival of Trivela, Walsall fans will be hoping for fresh impetus and more resources to build a better team on the pitch. The first phase of the transaction is taking a 51% stake in the club, followed by a second phase in which a further 25% will be acquired. An important part of Trivela’s takeover will be the purchase of the Bescot stadium freehold from past owner Bonser.

Why we should care about owners

A LOT of Chelsea fans were extremely upset about the treatment of Roman Abramovich and the sanctions on his business activities, which ultimately meant the popular but enigmatic Russian was forced to put the football club up for sale.

Given what we now know about the war in Ukraine and indeed some of Abramovich’s business connections, the UK government, on this occasion, did the right thing. As far as Chelsea fans are concerned, he has been a good owner and he has certainly funded the unprecedented success the club has enjoyed since 2003. Interestingly, when he arrived at Stamford Bridge, there was an air of suspicion about Chelsea coming under Russian influence!

It is difficult to get too upset about the sale of Chelsea, especially given the dreadful and totally unacceptable events taking place elsewhere, but we should care deeply about the ownership structure of our football clubs, no matter how old they are, how devoted we may be about our obsessions and how aware we may be of geopolitics, economics and history. While we should not attempt to rewrite history, we should be aware of the consequences of past events. Football encourages myopia, but the sport is supposed to be a thing of joy, not one that has blood-stained hands or dubious secrets locked away in some dark corner.

The fact is, we all become accountable if we support any aspect of life that we know has a darker side, be it corporates, government bodies, charities, political groups and of course, football clubs.  We can bury our heads in the sand, and many do, but at some point, we all have to accept there are far more important things in life than football.

For most of us, football has become an emollient, a sport that brings people together, breaks down barriers and provides a form of global language. Its mass appeal makes it attractive to so many aspects of commercial life: TV, internet, companies, investors and so on. Go anywhere in the world and talk about football to a stranger and more often than not, you will find common ground. Football may be all about rivalry, but when the dust settles, we all understand it (unless you dig into the mechanics of VAR).

But what we are grappling with today is how our clubs are run, how they are financed and how “clean” some of the owners of our beloved football institutions around the world might be. It is naïve to claim owners from a very suspect regime make for ideal benefactors, no matter how much fancy dress and ostrich behaviour tries to obscure the fact very bad things happen. Similary, if you are aware of the history of the Soviet Union and its break-up, it is hard to feel much sympathy with oligarchs who get their assets frozen. It is unfortunate this affects something like a football club, but it would be wrong to make concessions.

This goes way beyond elite football and even extends into the non-league world. One of the overriding emotions in the game is green-eyed envy, which can manifest itself in resentment over budgets, stadium development or the presence of so-called “sugar daddies”. There’s also a lot of nonsense spoken about club wage bills and how much the local centre forward might be earning and also the source of a club’s income. There’s very little confidentiality in football, rumour becomes “fact” very quickly.

Equally, ownership at this level of the game can be equally dubious. Over the years, there have been tales of possible money laundering, property opportunism, tax evasion, shadow accountancy and gate-rigging. The latter is a practice sometimes laughed about when a cup game’s attendance is announced but looking the other way makes everyone guilty by association. League and club sponsorship should be treated with a very robust level of due diligence and subject to strict regulation.

There are also deep moral issues at stake. For example, given the hand-to-mouth existence of many clubs, the temptation to take money from the gambling industry has become a trend that has got out of hand. With clubs going to great lengths to show they are caring, sharing organisations, it does seem somewhat hypocritical to bite the hands off gambling firms knowing what the industry can do to vulnerable people chasing the hopeless dream. Just look at how many clubs have some sort of sponsorship from betting companies. Coming soon… bitcoin and non-fungible tokens.

There is a chance the Chelsea situation could have a profound influence on the future of football club ownership as much as the war in Ukraine will impact the corporate world and everyday life in the future. This may bring some inconvenience, but it could be a good thing for football because for years, the industry had become something of a wild west gold rush. It has not exactly been lawless, but it has been embroiled in politics, financial abuse and very creative accountancy. This has created a form of free market elitism that has been the catalyst for ever-widening chasms between the rich and poor clubs as well as transfer fees that are totally unrealistic and player wages that can border on the obscene.

This has all been fuelled by spiralling broadcasting contracts, sovereign state funding and those billionaire owners sitting with oversized club scarves draped around their necks. Some clubs are now heavily influenced by the money and culture of foreign countries, arguably an inevitable development in this age of globalisation. It’s still the game of the people, but they are very different, often completely detached people. For example, has anyone actually heard Mr Abramovich speak?

Token gesture – WAGMI and Crawley

CRAWLEY TOWN have entered a hopeful new era, at least that’s what many people believe. On the day they welcomed AFC Barrow to the People’s Pension Stadium, the club was also opening its doors to new ownership in the form of WAGMI United, whose principal figures are a sports gambling analyst and a trader of non-fungible tokens (NFTs).

“Hey, what’s up guys?”, said the heavily bearded Preston Johnson, WAGMI’s co-owner, in his introductory and chummy video message on social media. “Go Reds”. This, presumably, is part of the new type of leadership WAGMI (We’re all gonna make it) will bring to English football. “A conventional approach to ownership hasn’t worked,” claimed the new investors in one of the EFL’s most humble clubs. They are not wrong there.

Johnson is also known as Sports Cheetah and is a well known character in the gambling world, while his partner Eben Smith, is a trader of NFTs and was a derivatives expert. There is talk that Belorusian-American businessman Gary Vaynerchuk and YouTube personality Bryce Hall may also be involved. There’s something very “NOW” about this group of individuals.

Crawley struggle to get more than 2,500 people at their neat, functional and ultimately pleasant ground. The town has a population of 107,000 but it was identified as one of the most vulnerable during the height of the pandemic with an astonishing 56% of jobs at some sort of risk. To a certain degree, it is a miracle they have managed to sustain EFL football for 11 seasons, but they have incurred sizeable debts and support has tailed off from their early years in the league.

There’s more than a little unease about the introduction of this type of investment and let’s not forget this is their second attempt at taking over a club, Bradford City were in talks with them a few months ago. They have ticked all the right boxes (doesn’t everyone when they go through the due diligence process?), but NFTS, Crypto, blockchain – these are all part of an unregulated market that has the potential to cause chaos. Furthermore, just 14 years after the financial crisis of 2008, people are starting to dip their toes into murky waters once more. It may be innovative, but reading some of the types of asset being exchanged for NFTs, it does resemble a digital age Emperor’s New Clothes.

With football desperately trying to win credibility in all sorts of ways, attaching itself to good and sometimes debatable causes, virtue signalling at every opportunity, how does a football club really feel about an alignment with gambling and opportunism? And Crawley’s home ground, the People’s Pension Stadium –  how comfortable is the sponsor about backing a club owned by NFT advocates when trust, regulation and security are at the very heart of pension management?

The success of this venture does depend on how the public reacts. There’s no firm evidence that NFTs and football are a sure-fire winner. Liverpool, for example, failed to sell the vast majority of their LFC Heroes, and John Terry’s project saw a volatile drop in value. Dozens of clubs are now entering this field, including Paris Saint-Germain and Inter Milan as well as players like Tony Kroos and Zlatan Ibrahimovic.

One question surely has to be the market position of Crawley Town. This is a club with low levels of support (151,000 followers across the three main social media channels) and their attendances rank 91 out of 92. Only Salford City get lower crowds.

That is not to say there are genuine prospects for growth – 107,000 is a sizeable population and being just 28 miles from London and close to Gatwick Airport makes Crawley a significant town. Moreover, they have a relatively young population that may be open to new, untried methods of club ownership. But some fans are wary of their club being used as an experiment that is by no means certain to succeed. Fans will get the chance to purchase NFTs which can be interpreted as giving them some sort of stake in the club. The proceeds can be used to help fund the progress of Crawley Town. That’s a rather simplistic view, of course, but have Crawley got enough fans and enough cachet to make a real difference?

On the evidence of the game with Barrow, there’s a lot of work to be done on the field. Crawley beat a poor visiting side who were desperate for points in their relegation struggle by a single goal. The crowd was just under 2,081 – the new era hasn’t caught the imagination just yet.

Supporter-ownership is a good thing, but will this scheme genuinely lead Crawley down that path? In a market that is generally run inefficiently, there could be a danger Crawley will find their methods will be at a disadvantage compared to the accepted hand-to-mouth system most lower league clubs seem to exist by. WAGMI are looking to challenge the status quo – not a bad thing at all – so it may be a long haul. Have they got the patience given they are looking for promotion in their second season in charge?

It’s a brave move by Crawley Town, but for all the fascination with new forms of finance, there is one big nagging doubt – do we know enough about NFTs and does the football world trust an unregulated product? Football better hope this doesn’t go horribly wrong, the finances of so many clubs are very vulnerable right now and there’s little scope for error.