Who are Sunderland’s new investors?
It might seem mental, but it’s true: Sunderland are in the process of being bought - in part, at least - by the men behind a multi-billionaire’s private investment firm.
John Phelan, Glen Fuhrman and Rob Platek are all senior partners at MSD Capital - the private investment firm of Michael Dell, the Founder and CEO of Dell Technologies. It’s interesting to note that Phelan and Fuhrman are billionaires in their own right - they aren’t just front men.
These are the four men behind the potential ‘takeover’ at Sunderland which will hopefully see them take up a majority stake in the club, alongside current owners Stewart Donald and Charlie Methven who will continue to manage the club on a day to day basis.
And it was Methven’s connection in US soccer that brought the foursome to the table, with the group seriously considering the possibility of taking ownership of a football club for some time.
Phelan, Fuhrman and Platek will - if it goes through - be controlling shareholders, three partners who will be supported by Michael Dell - who will also be an equity investor and will also take a shareholding.
Whilst Dell won’t be especially hands on, him being a significant shareholder indicates that financially he will be just as involved as his business partners.
And whilst this isn’t necessarily the work of MSD Capital per se, it’s interesting to note that it’s stated on their website, “MSD Capital is a private investment firm established in 1998 to exclusively manage the assets of Michael Dell and his family. MSD Capital engages in a broad range of investment activities and has the flexibility to invest in a wide variety of asset classes.”
Essentially, the firm who these men belong to invest in companies that they believe can be successful through “experienced investment, risk management and infrastructure personnel with extensive depth and breadth across asset classes.”
Phelan, Fuhrman, Platek and Dell will, all going well, invest in the club for the long-term and the money behind them will allow them to play a long game here. Furthermore, their global network and team of investors will stand the club in good stead moving forward.
MSD’s website notes:
The purpose of MSD Capital is to make investments that consistently generate superior absolute risk-adjusted returns over the long-term. We evaluate investment opportunities by utilizing multi-disciplinary frameworks of analysis to generate thoughtful and robust investment theses. We are motivated by an intense curiosity to grasp the underlying truths that govern financial markets and economic behavior.
We note that these truths may be contrary to the consensus view, but we believe that our discipline as independent thinkers will allow us to identify these truths and secure long-term success. Throughout the organization, we share a common desire to be the best at what we do, and we believe this never-ending pursuit of excellence has intrinsic value independent of any economic benefit that we may receive. Finally and most importantly, we conduct all business with the highest level of integrity, honesty and discipline.
So what does this mean for the club?
Well, it’s early days yet, but you can imagine that a takeover by the MSD partners means significant investment. The group clearly like the proposition of investing in an English club with the aim of eventually being successful; that being said, make no mistakes, we aren’t being bought as a rich man’s plaything. The group will invest with an aim of establishing Sunderland as a top ten club, thus generating a significant gain in capital value.
The allure of being a successful Premier League club is obviously the attractive proposition they are aiming for. As such, clubs like Sunderland with their infrastructure, track record of developing talent, and passionate fanbase are an attractive proposition - especially when they’re available for a reduced price. With clever investment and a long-term strategy, getting Sunderland back into the Premier League will be the firm’s goal.
If you can successfully establish a side in the Premier League and have a smart backroom staff capable of effective transfer dealings the returns on a significant investment could be immense. Clever acquisitions not only boost the club’s bank account, but also provide the money required for further investment if efficient management is in place to ensure income and expenditure is monitored wisely.
That careful, progressive approach to managing big companies capable of producing serious profit is something MSD specialises in. MSD hold the equity of several public companies including PVH Corp. who own Calvin Klein and Tommy Hilfiger. They also helped finance WME | IMG in their acquisition of the UFC. This firm deals with some of the world’s biggest brands - that experience and know how could well open a lot of doors for the club.
I know what you’re thinking: American billionaire investors? Promise of a new dawn? Sounds like the Short era all over again. However, hopefully that turbulent period in our club’s history can act as a stark reality check for our new owners.
The key thing they need to understand is that football clubs in England require intelligent management from top to bottom. Stewart Donald, Charlie Methven, Tony Davison and co. have been effective in their cost-cutting and streamlining of the club - moving forward we will need further smart back-room acquisitions, experienced in the world of football, to ensure the club develops and grows in the right direction.
The group of MSD partners can’t simply throw a host of executives into the SoL and expect financial returns. Getting out of League One has been tricky enough; getting out of the Championship will be even trickier... and also pretty costly.
Furthermore, they will need to develop and deliver a long-term, sustainable plan that stands Sunderland apart from other teams. Throwing money hand over fist in the hopes of finding profits simply doesn’t work - this new approach needs to be intelligent, calculated, and effective.
It’s the beginning of a potentially amazing new era on Wearside. Hopefully time will prove this takeover to be the start of a successful future.