Billionaire Peter Lim may improve Valencia’s finances: S&P

SINGAPORE — Singapore billionaire Peter Lim’s takeover of Spanish football club Valencia may help it improve its financial standing, according to a unit of Standard & Poor’s (S&P) Ratings Services.

Mr Lim bought control of the La Liga team last year for an undisclosed price. Valencia has suffered years of financial hardship, which led the team to sell star players such as David Silva, David Villa and Juan Mata, S&P Capital IQ said in a report on Monday (July 13).

Private investors are increasingly turning to sports clubs as a way to seek returns. In May, Mr Ray Ranson, a former Manchester City defender, started an Internet-based sports finance exchange to lure asset managers into the sector. Last year, teams raised US$572.3 million (S$779.4 million) selling shares as hallmark names including Manchester United, and AS Roma sold stocks, according to data compiled by Bloomberg.

“’Following the team’ has taken on a whole new meaning as the share prices and financial standings of football clubs are increasingly monitored,” Mr Pavle Sabic, a director at S&P Capital IQ, wrote in the report. “Whether it’s a bank lending to a club or would-be investors buying a stake in clubs directly, the football industry is fast emerging as an investment sector in its own right.”

Aside from Mr Lim, Chinese billionaire Jack Ma, the founder of Alibaba Group Holding, also invested in football clubs. Last year, he bought 50 per cent of Guangzhou Evergrande Football Club, winner of the Asian football championship in 2013. In January, Mr Wang Jianlin, Asia’s richest person, bought a 20 per cent stake in Atletico Madrid through his company Dalian Wanda Group.

Valencia’s total debt compared to its revenue has been increasing over the past five years, S&P said. The club fell 12 places in S&P’s ranking of financial health for the sector this year.

Mr Lim became a billionaire through holdings in palm oil producers and a chain of Manchester United cafes in Asia. The Valencia purchase came four years after he was rebuffed in his £320million (S$682 million) bid to buy Liverpool FC. BLOOMBERG