Last month, the president of FIFA, soccer’s world governing body, urged a significant tightening of the rules regarding foreign investment in European soccer clubs. “Ideally a way should be found for clubs to be financed by local investors,” said Sepp Blatter, expressing concern that a former Thai prime minister was able to sell a team “like you would sell a shirt.” It was a direct shot at the English Premier League (EPL), home to Manchester City, the club recently bought and sold by ex-Thai premier Thaksin Shinawatra, who is now facing corruption charges in his home country.

There’s no question that Manchester City supporters may have been irked by Thaksin’s erratic behavior. But EPL fans are used to watching world-class players, and it’s doubtful that many fans want to block foreign billionaires from investing in their favorite clubs. Blatter may be “alarmed” by the massive injections of foreign cash into EPL sides, but fans want their teams to attract top talent. Bringing Brazilian star Robinho to Manchester City from Real Madrid cost nearly $50 million; bringing Ivorian star Didier Drogba to Chelsea from Marseille cost more than $36 million. It is exceedingly unlikely that either purchase could have been completed without the foreign capital provided by Manchester City owner Sulaiman al-Fahim, an Emirati, and Chelsea owner Roman Abramovich, a Russian.

English Premier League fans are used to watching world-class players, and it’s doubtful that many fans want to block foreign billionaires from investing in their favorite clubs.

Indeed, the recent surge of foreign capital into English soccer has turned the EPL into the most prestigious league in the world. Seven out of the 20 EPL teams now have non-English owners. Four of the ten most expensive transfers in soccer history have brought world-class players (such as Michael Ballack of Germany and Fernando Torres of Spain) to EPL clubs. The EPL is among the world’s richest sporting leagues; it is also the most watched. During the 2007-08 season, EPL teams brought in roughly $3 billion in revenue and inked $4 billion worth of media deals. As the league has acquired more foreign capital, it has also acquired more talented players and more TV viewers and generated more revenue, just as we would expect.

To be sure, there are downsides to increased foreign ownership of EPL teams. The ability of rich clubs to buy up talent at any price puts significant pressure on smaller clubs to overload with debt in order to stay competitive. Last month, the chairman of England’s Football Association, David Triesman, estimated that the total amount of debt plaguing English soccer could be around $4.5 billion. This debt is owned by financial institutions—some of which, Triesman says, are “themselves in serious problems.”

Triesman considers it possible that one or more EPL clubs could go bankrupt. Many debt-ridden clubs may find it difficult to survive an economic recession that will drive down ticket sales and corporate financial support. A prime example might be Newcastle United: Though the club is owned by a billionaire—an English billionaire, as it happens—named Mike Ashley, who promised annual funding of $30 million, as of 2007 Newcastle’s books showed a net debt of more than $105 million, and the club was asking for major sponsorship payments in advance. It was recently dubbed “the biggest train wreck in English football” by Times of London columnist Martin Samuel. 

As soccer analyst Vinay Bedi of investment management firm Brewin Dolphin has noted, “You really have to be a multi-billionaire to buy a Premier League club these days—for the purchase, clearing the debts, and moving the club forward.” Whereas Sepp Blatter worries about the ability of foreign-born billionaires to buy and sell European soccer teams like “shirts,” Triesman seems more concerned with the background checks currently employed by the EPL (known as “fit and proper” tests). He has said that “whether [owners] are foreign or British, there needs to be a wider judgment than whether someone is inside or outside the law.” 

Such a broadening of the rules might have prevented Manchester City from being purchased by Thaksin. But it would have allowed other, more upstanding foreign investors to continue pouring their money into English soccer, which seems to be what most EPL fans want. The FIFA president should listen to Triesman and focus on tweaking the EPL’s ownership guidelines rather than on curbing all foreign investment.

Mark Strong lives in Virginia and is an avid Liverpool fan.

Image by Darren Wamboldt/The Bergman Group.