- Brady’s investment in Birmingham FC appears to offer high reward at little risk
- He recently took a reported $30 million loss during the cryptocurrency crash
- DailyMail.com provides all the latest international sports news
Fresh off the reported $30million bath he took in the cryptocurrency crash, Tom Brady‘s foray into the world of British soccer appears a bit more promising.
By purchasing a minority stake in Birmingham City, a middling 148-year-old club, Brady is departing from the paths of American investors like Todd Boehly, who dropped a record $5.4billion on Chelsea in 2022.
Rather, Brady is getting soccer’s version of a penny stock – a minor portion of a small company that could, potentially, become a desirable asset under the right circumstances.
The exact price tag and Brady’s percentage of the team remain unclear, but Birmingham City is hardly among European soccer elite. The club has been entrenched in England’s second division for the last dozen years and the Blues are coming off a 17th-place finish in 2022-23.
What’s more, the club was valued at just $44m when Tom Wagner’s firm, Shelby Companies Limited, began its takeover at St. Andrew’s earlier this year, according to The Athletic.
But with a top-two finish, or a victory in the EFL Championship playoff final come May, Birmingham City would find itself splitting billions in profits with Premier League heavyweights. National broadcast revenues alone for each EPL team reached $127m last season.
Unsurprisingly, Brady isn’t the only American investor spending on second-division teams. Two such clubs, Swansea City and Ipswich Town, recently got US investments after wealthy Yanks spent much of the 2000s scooping up more heralded clubs like Arsenal and Manchester United.
That’s not to say Brady made a surefire bet on Birmingham. According to research from Deloitte, a financial services company, more than half of EFL Championship teams are operating at a loss.
But Brady and Birmingham City don’t have to look very far for inspiration.
Crosstown rival Aston Villa FC returned to the Premier League in 2019 shortly after billionaire investors Nassef Sawiris and Wes Edens bought 55 percent of the club for a reported $38m. Villa rewarded their investment with a win in the aforementioned EFL Championship playoff final, thereby securing a promotion valued at around $500m in annual TV deals, sponsorship and additional revenue.
Now Villa is coming off a seventh-place finish in 2022-23, and there is growing optimism around coach Unai Emery and new players Youri Tielemans and Pau Torres as they begin their season on August 12 against Newcastle.
And the club’s improving reputation is further buoyed by its qualification for the Europa Conference League – Villa’s first European competition in more than a decade.
Unfortunately for Brady and Birmingham, the climb from the EFL Championship to the EPL can be treacherous, with many clubs overspending in a fruitless attempt at promotion.
Deloitte’s annual review of football finances revealed staggering EFL losses from 2011 through 2021, when 24 teams combined to finish $507m in the red. Birmingham City reported a pre-tax loss of $30m for the 2021-22 season, and the club continues to face major repairs at its century-old stadium, St. Andrew’s.
And then there is the growing concern about player wages in the EFL Championship, where teams are torn between their first-division aspirations and second-division revenue.
‘The single biggest problem in English football from a cost control perspective is player wages,’ Sheffield Hallam University lecturer and author Dan Plumley told The Athletic. ‘It’s completely unsustainable and that’s particularly clear in the Championship.’
The good news for Brady is that his partner, Wagner, specializes in distressed debt investing, according to Bloomberg. He also has detailed plans to boost sponsorships and fan interest by focusing on stadium renovations.
According to Wagner – whose teenage son reportedly attends the same New York high school as Brady’s – Birmingham City benefits from being at the center of England’s high-speed rail system. That means around 80 percent of England’s population is within an hour of the city.
What’s more, England’s second most populous city boasts young, eclectic inhabitants and that is enticing for teams looking to build their fanbases.
There isn’t any magic bullet for Wagner, Brady and Birmingham City, whose success is anything but guaranteed. But for the first time in recent memory, there is genuine optimism in the city’s Bordesley district.
‘The club has been taken over by some very passionate and powerful people and they care deeply. They want to grow this club and make it a force,’ manager John Eustace told reporters on Thursday. ‘That’s going to be done over time, it’s not over a short period. It’s done over two, three, four or five years. Eventually it’ll be up there.’
