Who really are Crystal Palace’s new backers?
It was announced this month that Crystal Palace had finalised an agreement with two American investors to cede 36% of the club’s shares. In return the pair will reportedly look to invest around £50m into predominantly redeveloping Selhurst Park, under what has been described as a “general partnership structure”. Crystal Palace have gone some way to distance themselves from suggestions that this investment forms part of a wider takeover (full statement can be read here), but instead have chosen to underline their continued efforts to firmly establish the south London club as a major Premier League force.
The working relationship of the new triumvirate is anyone’s guess. In the modern corporate world the divorce between ownership and control is often impossible to discern, and football just seeks to underline this fact.
With that in mind, we take a closer look at Palace’s new financiers.
Joshua Harris is an American private equity investor and co-founder of Apollo Global Management (AGM), one of the countries largest alternative investment firms. Born and raised in Maryland, Harris spent much of his early life on the east coast of America, completing his formal education by completing an MBA at the prestigious Harvard Business School.
Harris’ business career centres on well-calculated risk; the American has a track record for turning around failing business and successfully turning a profit. With $113bn worth of assets controlled under AGM, employing more than 350,00 staff within over 40 companies it would suggest Harris has got more than a fair share of his decisions right.
Harris’ US ventures interestingly extend into the sporting sphere, with controlling interests in both the New Jersey Devils (Ice Hockey) and Philadelphia 76ers (Basketball), the latter perhaps provides the more interesting insight into the American’s business management. Employing a variation of the infamous ‘Moneyball’ approach, Harris has used analytics to build a franchise that has gained a perceived value for money from many of their draft picks.
On the court the 76ers have remained a laughing stock, but from a pure financial perspective a doubling of the franchise’s value would suggest the takeover has represented a major success. It would be wrong to suggest this approach would invariably be adopted at Selhurst Park, whilst Parish retains some semblance of control it is unlikely that Harris would have the power, but that aside the method is still an interesting one.
David Blitzer is another notable American private equity investor who is currently the Senior Managing Director and Head of Tactical Opportunities at Blackstone Group in New York. Blitzer graduated ‘magna cum laude’ from the Wharton School at the University of Pennsylvania. Since joining Blackstone Group in 1991, Blitzer has overseen the execution of investments in a wide range of companies; he now holds notable Directorships in United Biscuits and Jack Wolfskin.
Blitzer was also part of Harris’ acquisition of both the New Jersey Devils and Philadelphia 76ers. The latter has seen a value increase of $43m since acquisition according to Forbes underlining the success of the pair’s eye for an opportunity.
Interestingly Forbes see the investment in Palace as being nothing more than ‘testing the water’ in London, with an eye on acquiring an NFL expansion franchise in the near future. The intention reportedly being to flip their stake in the 76ers in order to gain a controlling share in any prospective London based NFL franchise. This is largely an aside for Palace, with any injection of funds crucial in achieving their aims of expanding Selhurst. The long terms ambitions of Blitzer and Harris outside of the south London club is largely an irrelevance.