As Real Madrid and Borussia Dortmund prepare to battle it out in the Champions League final at Wembley this weekend, could Birmingham’s investment agents be about raise the stakes on the international stage thanks to Aston Villa qualifying for top-flight European competition for the first time since 1982?
The Champions League is the beautiful game’s great game, with a prize pot next season of €2.5bn (£2.1bn) and an estimated global audience of 450m viewers. And that global reach gives competing clubs a chance to showcase their cities, not just to potential visitors but also to international investors.
It may sound fanciful that investors could base decisions on the form of a particular club, but the data is there to suggest it plays a role.
Supporting data
Generally speaking, English football’s Champions League spots are shared between clubs in London, Manchester and Liverpool, but once in a while an outsider will break in and this has a quantifiable impact on deals volumes.
Leicester City won the Premier League in 2016 and spent the following season in the Champions League and, according to Land Registry data, the city saw a discernible spike in the number of deals in which properties were sold to overseas purchasers (see chart).
In the 2016-17 season, which saw the city’s football team advance to the quarter-final stages of the competition, volumes more than doubled to 88 deals, before dropping back to historic levels the following season.
So can Birmingham expect a similar uplift? Well, there are caveats, in that Leicester’s unexpected title win garnered much more in the way of international attention than Aston Villa’s fourth place, but the market is optimistic.
“I feel confident it’s going to have an impact,” says Damian Lloyd, principal in the capital markets group in the Birmingham office of Avison Young. “Everyone around the world knows Manchester United and if they didn’t know Manchester City they certainly do now, and what that did for Manchester can be replicated here.”
Football is often seen as part of the UK’s ‘soft power’; one of those elements that sits alongside its universities, cultural industries and the BBC to give it international influence beyond its size and economic significance. But while many of these institutions have experienced turbulence in recent years, football appears impervious to domestic politics or global events. And nowhere more so than Manchester.
The Manchester effect
Since 1996 at least one Manchester club has been in the Champions League, with three wins and numerous final appearances racked up in that time.
Tim Newns, who spent 11 years as chief executive of Manchester’s inward investment and development agency MIDAS, before starting his current role as managing director for levelling up at the Office for Investment, is in no doubt how effective the two Manchester clubs have been in attracting international investment.
Newns says: “There’s a direct correlation between profile and growth, and the fact the Champions League is by definition international puts you on the map and it gives you credibility.”
He adds that he has been involved in numerous projects that would not have come off had the overseas partners not been fans of one of the Manchester clubs.
“I have been in all types of situations in remote parts of the world and as soon as they hear you’re from Manchester they will want to talk football,” he says.
Luck of the draw
The extent to which a city can capitalise on Champions League qualification depends, to some extent, on the luck of the draw, believes Newns.
If your luck is in, you may be drawn in the same group as Bayern Munich, which gives you an opportunity to host wealthy potential investors from Bavaria.
So, Birmingham’s agents will have their eyes on that draw and will also be hoping Aston Villa can make solid progress in the competition in order to pull off the investment equivalent of “doing a Leicester”.
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