For Peter Lim, owning Valencia CF, one of Spain’s most successful football clubs, has been “incredibly good at networking”, allowing the billionaire investor to rise to the top of the rankings in the world’s favorite sport. .
“After we have had dinner, all [club] owners, at one of the Champions League finals, ”Lone Lim told the Financial Times in a rare interview. “You have sheikhs, kings, mafiosi, blacks, whites and yellows. And we were arguing, “Why did you buy this player so far?” We were like children. . . this game can equalize everything. “
One of Singapore’s richest people with a fortune of $ 2.7 billion, according to ForbesLim describes Valencia as a “trophy asset”, which allows him to rub shoulders with star footballers such as David Beckham and Cristiano Ronaldo. Although the 67-year-old has no plans to sell Valencia, he believes it is worth far more than the € 100million he spent in 2014 to acquire a controlling stake in the club.
This impartial attitude may be shared by other club owners but infuriates Valencia’s fan base, who accuse them of using the team for personal enrichment at the expense of results on the pitch. This disconnect is shared in football, with a growing gulf between supporters who see their club primarily as a local institution and investors drawn to financial opportunities to exploit the global sport audience.
English Arsenal and Manchester United fans launched protests against their billionaire American owners, triggered by their lack effort to start a money spinning mill European Super League. Valencia, historically one of the best clubs in Spain, was not considered big enough to be invited to participate in the breakaway contest.
Supporters protest against US owner of Liverpool John Henry and the Fenway Sports Group over now defunct Super League plans © Oli Scarff / AFP via Getty
“You watch the Super League, it’s just purely [for big clubs to] survive, he doesn’t care about the fans, ”Lim said. “Why? Because… You have a broadcast audience of 100 million fans in Asia… Have [the Super League club owners] Have you ever thought about local derbies, the inconvenience of watching Wednesday because I have to work the next day? They don’t care.
Lim, however, argues that fans need to understand that the soccer business model is broken.
Strained finances
Insufficient income caused by the pandemic exposed the growing debt in top clubs such as Spanish FC Barcelona and Italian Inter Milan, which for years have spent a lot on gamers in the pursuit of silverware.
The same problem exists in Valencia, who under Lim made a pre-tax profit in just one of his seven years of debt support of around € 200million. At the same time, the team’s payroll increased from 58.2 million euros in 2014 to 116.4 million euros in 2020, according to the consulting firm KPMG.
To stop the trend, Lim authorized a fiery sale of players at the start of this season, saying Valencia relied instead on promoting young players from their academy.
Valencia supporters accuse Lim of being a poor keeper, leading the club to mediocrity. Head coach Javi Gracia was sacked last week with the team in 14th place in La Liga, Spain’s top division, closer to relegation than qualifying for lucrative European competitions.
Gracia is the eighth coach to leave Valencia under Lim. Among the shorter appointments was that of Gary Neville, the former Manchester United player who had little coaching experience and only lasted four months. Lim is a investor at Salford City, a small English club owned by Neville and other former United players.
“The supporters have all lost confidence in him,” said Marcos Colomer, a member of Libertad VCF, a group of Valencia supporters who helped organize a protest against Lim’s property over the weekend. “It only remains to be seen when exactly he finds the opportunity to make more money by selling to the highest bidder.”
The son of a fishmonger, Lim was a stockbroker before an early bet on Singapore-based palm oil company Wilmar paid off. He would sell his stake in what became one of the world’s largest agribusiness companies for $ 1.5 billion in 2010. Beyond football, his investments include hospitals, an architectural firm and immovable.
In the same year, an offer to buy from Liverpool failed. The effort prompted several clubs to seek him out as a potential buyer, including Valencia, who were in financial difficulty.
In the early 2000s, Valencia played and lost in two Champions League finals. Determined to win Europe’s most coveted trophy, club leaders have spent a lot on the players. They also started building a new stadium, funded by a plan to sell Mestalla, its existing land, to property developers.
The 2008 financial crisis interrupted construction. Valencia’s debts have left it on the verge of collapse. “I don’t want to run [the club] low, but. . .[Valencia]is 102 years old, ”Lim said. “He never won the Champions League and [the past leaders] wanted to win it at all costs? You have stones in your head.
Valencia supporters had hailed Lim’s arrival as a benefactor in the vein of Chelsea’s Roman Abramovich or Sheikh Mansour of Manchester City, believing he would tap into big pockets to fund the team’s rise.
The reality has been more erratic. Under Lim’s tenure, the club has qualified for the Champions League in three seasons, and two years ago won the Spanish Cup in the Copa del Rey. These ups were interspersed with inconsistencies and poor results.
Valencia’s unfinished stadium remains an empty shell. Construction finance efforts failed early this season. “The debt we would have to incur is just not sustainable,” Lim said, although he hopes to find a “solution” to complete the project.
Gaspar Romero, a longtime fan whose grandfather was once the club’s accountant, is skeptical: “He’s leading the team in a way that Valencia are further removed from the Champions League each time. Every year the debt grows and he has to sell the players.
Lim dismisses criticism of his leadership as “trying to make sure I don’t sell the club to someone other than them.” These people are arguing “because we are from Valencia, we know the club”. But under the Valencians, the club went bankrupt, right?
Under review
Fans are denouncing Lim’s penchant for player trading and his close ties to Jorge Mendes, the Portuguese super agent who has made numerous player deals for Valencia. Lim defends the relationship, saying many of Mendes’ clients, such as João Cancelo and André Gomes, were subsequently sold for a profit.
The 2008 financial crisis halted construction of the new stadium in Valencia and funding remains elusive © Xisco Navarro / SOPA Images / Sipa via Reuters
Prior to buying Valencia, however, Lim was involved in ‘third party ownership’, acquiring a player’s economic rights and getting a return on future transfers. The practice was banned by FIFA, the governing body of international football, a year after Lim bought Valencia through his Hong Kong-based investment vehicle Meriton.
Meriton’s past collaboration in the TPO deals has come under scrutiny by Fifa, but Lim still denies being involved in any such deals. According to the club’s accounts, Meriton loaned the club around € 50million, debt secured against future sales of eight first-team players.
Lim described the arrangement as a “lien” which secures Meriton a higher rank than other creditors in the event of Valencia defaulting. Spanish lender Bankia also owes around 150 million euros. After Meriton’s loan was paid off, Lim insisted that all business profits would stay with the club.
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Unconvinced by such responses, Libertad VCF wants to convince thousands of individual shareholders in Valencia to join forces with a combined 5% stake. At this threshold, under Spanish law, the group may acquire a greater capacity to control club operations, such as access to contracts and even the appointment of a member of the board of directors.
But Lim says the accusations that he is using Valencia to speculate on player trading or to profit from the club in some other way are broadly valid.
“I can do 101 things to make money and money that I think I can better control,” he said. “It’s something pretty cool. I wake up, I own a football club and I see what happens next. It is nothing more.
“And I have compassion for [fans], but among ourselves, among friends, we say that the smallest things give you the biggest headaches.
