Israeli high-tech investor Teddy Sagi has been rumoured to be interested in buying the English soccer team Reading Football Club, nick-named the “Royals, ” and it is now thought he plans to build a shopping mall and a hotel on its surplus land to make it pay in what are termed “infill” developments.
The team has been struggling on the field, and a year ago it was relegated from the Premier League. Again this this season the Royals missed out on the play-offs in the final game of the season.
The team has also been struggling under the burden of very large debts, which already a year ago stood at some US$60 million – and have likely gone up since.
The current Chairman of the club, and 49% owner, Sir John Madejski can apparently no longer keep up with the needs of the club either. And the club’s 51% owner Anton Zingarevich, who only bought control of the team in 2012, has apparently not been around much for some time.
Madjeski is recently quoted as saying, “The voracious cost of running a football club is absolutely immense, ” adding “It’s absolutely critical we find somebody. The search goes on.”
According to the latest Sunday Times rich list it seems Madejski himself has gotten a good deal poorer than he once was, and is now worth “only” US$150 million, compared to over US$600 million six years ago.
He was quoted in the Daily Mail as saying recently, “I am trying to sell my hotel in the Galapagos and I am trying to find an oligarch who will buy my football club.”
This is where Sagi may step in, who is currently worth around US$2.5billion according to Forbes. If a deal were struck he could buy the club for just a buck – then paying down the club’s debt in addition. There is increasing urgency, too, as Her Majesty’s Revenue & Customs are apparently also chasing the Royals over an unpaid tax bill of over US$5 million.
Unlike some of his Russian oligarch counterparts, however, Sagi may not be just in love with football though he does have a box at Chelsea Football Club. It seems the club’s current stadium car park has plenty of room left over to squeeze in a lucrative new shopping mall at one end, with room for a hotel as well. Some new apartments might also fit on the club’s separate training ground at nearby Hogwood Park. Such “infill” development can do wonders for a leaking balance sheet if it is well defined and meets market needs.
As a sleepy dormitory town just 36 miles west of London, Reading is nevertheless also strategically located not far from London’s Heathrow airport. So, under-utilised real estate assets of a near-bankrupt football club may indeed offer Sagi some real opportunity.
Sagi was spotted flying into the Madejski Stadium last week in his helicopter for talks, leading to the current round of press rumours of a sale to him. Sagi apparently does have some competition, however, to buy the club coming from Indian businessman Mohit Burman, who has also expressed an interest in a purchase.