Southampton’s new billionaire owner swaps one football battle for another
Serbian-born media billionaire Dragan Solak is used to paying out for broadcast rights to screen Premier League matches, but with his £100m takeover of Southampton Football Club he has turned the tables.
“If you look at the inflation of the prices of elite sports rights . . . I thought if it’s going to go that crazy, then I would rather be in the sport club business than in the broadcasting business,” Solak, 57, told the Financial Times.
United Group, the European media company that Solak founded more than 20 years ago, had held the rights to screen Premier League matches in the Balkans. But his swoop on Southampton comes as United lost out on the latest rights to a government-backed rival that bid roughly 10 times what his Amsterdam-based company paid previously.
Telekom Srbija is to screen Premier League matches in the region from next season after agreeing a deal estimated to be worth €600m over six years.
Solak describes the sum as “ridiculous” and claims the transaction is part of efforts to damage United, which he says owns and broadcasts Serbia’s last remaining independent news organisations, and to support the government of President Aleksandar Vucic.
With few Serbian households having multiple cable subscriptions, football is a big draw for many to switch to Telekom Srbija — a viewership prized given the broadcaster carries little content critical of the government, Solak argues.
Vucic and the government face elections on April 3 and are widely expected to hold on to power.
“As of next year [Telekom Srbija] will have practically 100 per cent of football and other sports. They will be able to take significant amount of subscribers from [United’s] network,” Solak said. “Then [those subscribers] will not be able to follow the news any more. That’s the whole deal.”
Telekom Srbija denied it had a political motivation. It said that the company “finances its deals solely from its own financial resources and capacity” and the Premier League tie-up would “have an overall positive financial effect of well over €1bn”.
United filed a claim against Serbia last year with the International Centre for Settlement of Investment Disputes, the global arbitration body, accusing it of breaching a bilateral investment treaty with the Netherlands by reducing its market share and promoting the interests of Telekom Serbija.
Vucic’s government says that Solak and United support the opposition, and has links to Dragan Djilas, a previous mayor of Belgrade and former president of Serbia’s Democratic Party.
Solak denies any connection to Djilas or any political motivation in Serbia, noting that carrying independent news is a business consideration.
The Premier League tie-up with Telekom Srbija comes as critics question its dealings with state-backed entities after its decision to approve the Saudi Arabia-led takeover of Newcastle United. Clubs were so incensed by the deal that they forced league chair Gary Hoffman to resign.
Peter Horrocks, former director of BBC World Service and a member of the editorial board at United’s N1 news service, wrote to Premier League chief Richard Masters last year to warn that its matches were “being used” by Serbia’s government, “intent on silencing its critics and stifling media freedom”.
A person close to the Premier League said Telekom Srbija had won a competitive process and that some rights deals had jumped in value in recent years.
The league’s domestic deal with Sky, BT and Amazon remained unchanged at £5bn, but the value of its US rights almost tripled to $2.7bn over six years.
Telekom Srbija said it had “paid precisely such prices as are needed . . . in such a competitive environment”.
United, which over the past three years quadrupled earnings before interest, tax, depreciation and amortisation to €1bn on revenues of €2bn, is controlled by private equity firm BC Partners though Solak retains a minority stake of just over 33 per cent.
He said the group bid €35m a season, “an offer that I signed crying” as under its existing contract United was “paying €11m [a year and] hardly breaking even”.
Marko Milosavljevic, journalism professor at the University of Ljubljana, Slovenia, described United as the Serbian president’s “natural enemy number one”.
“Vucic is trying to achieve complete media control in Serbia,” he said. “If you . . . diminish their sports content you can limit the power of United, the only voices of the opposition,” he added.
Solak lives in Switzerland and says he avoids travelling to Serbia because of fears for his safety.
He stresses that Southampton is a “private investment” that has “nothing” to do with United or Serbian politics. Although the purchase will give him the right to attend league meetings, “I don’t want to abuse my position”, he insisted.
Solak is the lead investor in the newly established Sport Republic, which acquired an 80 per cent stake in Southampton for roughly £100m. The full valuation of £200m-£250m includes the club’s debt.
He is counting that a bet on growing competition for broadcast rights will pay off at Southampton, where the pandemic helped push revenues to £126m in the 2019/20 season, down from £144m a year earlier.
Sport Republic aims to take “high influence” stakes in more football teams and sporting assets, in a model similar to that of Premier League champions Manchester City. The investment vehicle was founded by Rasmus Ankersen, the former co-director of football at Brentford, and Henrik Kraft, a former partner at private equity firm KKR, which sold United to BC Partners.
But Solak made clear he will not be funding the sort of big-money signings that football fans crave: “I’m not the Sheikh of Abu Dhabi or the prince of Saudi Arabia,” he said in a nod to rival owners. “I cannot bring 500m to buy new players.”
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