49'ers Is this their moment? - Athletic Article

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For a long time now, 49ers Enterprises has been working on learning the ropes at Leeds United. Employees of the Yorkshire football club are used to seeing crews from California on the ground at Elland Road, many of them there to audit departments and operations and make sure Leeds’ US-based minority shareholder knows the business inside out.

The day was always going to come when 49ers Enterprises — the investment arm of NFL team the San Francisco 49ers — took control of the boardroom at Leeds and in anticipation of that, the group wanted to be ready. Four and a half years on from taking a first investment in the club, many people are asking if the time for that takeover is finally nigh.

The organisation has never been more committed to its plan for ownership, or closer to realising it, and the upsides of a transition of control have never been more apparent either.

Andrea Radrizzani said before Christmas that the equity partnership between him and 49ers Enterprises was running its course and the club are looking for the final step — the green light confirming the buy-out is happening.

The proposed sale by Radrizzani, Leeds’ chairman and majority shareholder since 2017, to 49ers Enterprises has been telegraphed for many months, an open secret the 48-year-old Italian has started to speak about publicly recently.

The Athletic revealed in 2021 that 49ers Enterprises held an option to acquire the Premier League club in January 2024 — a natural step for it after a series of investments at Elland Road, but few anticipate that a takeover is going to wait until this time next year. Figures familiar with the deal and the discussions around it believe it will proceed by this summer, if not sooner.

That Leeds, now into their third season back in English football’s top division, would benefit from a change of ownership is not in dispute at any level.

It was Radrizzani who said in an interview with Italian outlet Corriere Della Sera on December 26, that they required “more resources to reach higher levels and compete with the best clubs in the Premier League”; and on the pitch, the past 18 months have shown Leeds are some way short of being able to fight at that level.

Yet in this period of competitive stagnation over the last year and a half, the movement of shares at boardroom level has been limited, raising the question of why 49ers Enterprises had not stepped in to buy out Radrizzani already and take charge of a club it has studied and analysed at length. As the team stalled in pure footballing terms, the US takeover hovered in the ether too — remaining a pending purchase despite the sense that a new direction was necessary.

The first investment of cash by 49ers Enterprises in Leeds, roughly £10million, came in 2018, and it was another three years before its involvement became more serious and strategic.

Two large injections of money took the size of the stake in the club that the 49ers owned to more than 40 per cent — a very clear hint about the ambitions from California of full ownership — and in that same year, the option with Radrizzani was negotiated and put in place.


Leeds are set to become the latest Premier League club run from the USA (Photo: Visionhaus/Getty Images)
At the time, The Athletic was told the overall price of a takeover would be £475million ($580m), but that figure was disputed by some involved in the deal. It is, though, in the region of half a billion pounds, representing a 10-fold increase on the price Radrizzani paid to acquire the then-Championship side from countryman Massimo Cellino nearly six years ago.

With that option in the background, there has been no credible suggestion of control of Leeds passing to anyone other than 49ers Enterprises.

Media reports last week linked Qatar Sports Investments (QSI), owners of star-stuffed French champions Paris Saint-Germain, with a possible purchase of shares at Elland Road but those stories were denied by all involved, including QSI — whose chairman, Nasser Al-Khelaifi is a close personal friend of Radrizzani.

Nonetheless, the timing of Radrizzani’s exit was always unpredictable.

He has not been rushing to walk away from Leeds, and his aim after delivering the top-flight promotion Leeds had been chasing for 16 years in 2020 was to relinquish his shares once the club qualified for European competition again through a high finish in the Premier League. Getting out of the EFL had been his first target and a return to the UEFA stage was his second.

Though a European place looks beyond him and his spending power based on the past two and a half seasons, those around him say that at points he has shown a reluctance to go — almost a realisation that once he steps out of Elland Road, that part of his career is over.

Radrizzani has been looking at investing in clubs back in Italy and would have the finance to do so after selling Leeds but none of the sides he could feasibly acquire in his homeland have the profile or the global appeal of Leeds.

That profile was also part of the draw for 49ers Enterprises, which is set to further increase the number of Premier League clubs under US majority or full ownership to nine of the current 20.

The group has been deliberately respectful in trying not to hurry Radrizzani out of the door, even though the close division of shares between them can make boardroom decisions complicated and cause occasional tensions.

Even last week, 49ers Enterprises was mooting the idea of Radrizzani flying to the US to be a guest for the 49ers’ home win over the Seattle Seahawks in the NFL play-offs on Saturday. A statement from Leeds given to The Athletic said the relationship between Radrizzani and 49ers Enterprises “remains strong and positive”.

In raising its stake in Leeds to over 40 per cent, 49ers Enterprises has already paid a sizeable chunk of the money it would owe Radrizzani for a full buy-out. The remainder of the funding has been pulled together via different parties, most of them also based in the States.

Though the venture-capital fund is an extension of the 49ers and controlled by the York family, who run the NFL team, 49ers Enterprises is not the NFL team itself. It is more akin to a consortium in which investors are coming together to finance the complete purchase of Leeds.

Paraag Marathe, already a board member at Elland Road, is the face of 49ers Enterprises. He is also executive vice-president of football operations for the 49ers team.


The 49ers’ Paraag Marathe is on the board at Leeds (Photo: Michael Zagaris/San Francisco 49ers/Getty Images)
Others to have openly declared their involvement include Peter Lowy, the Australian businessman who is co-CEO of the Westfield chain of shopping malls, YouTube co-founder Chad Hurley and English-born Zappos.com retail entrepreneur Nick Swinmurn.

Expressions of interest in contributing to the takeover are said to have been numerous, to the point of 49ers Enterprises being oversubscribed. One of them has come from the US political scene.

At this stage, 49ers Enterprises has the necessary cash in place. One of the first questions when the deal with Radrizzani goes through will be about where, precisely, the money is coming from and who will now have influence in the running of Leeds.

With 18 of this season’s 38 league games played, Leeds are in a position where retaining Premier League status for 2023-24 is far from guaranteed — they are in 14th, only two points clear of the relegation zone, but have a game in hand on the six teams below them.

Relegation is a threat and would significantly change the lie of the land, though 49ers Enterprises has not ruled out taking on the club even if they did go down. The option held by the group to purchase Leeds by next January, however, does not include a different price to be applied in the event that the club are no longer in the Premier League. As it stands, there is no agreement on what would happen in that scenario or how their valuation would change. The original deal would be contingent on Leeds staying up.



The absence of certainty about remaining in the top flight has not aided the takeover process and in the meantime, the financial landscape at Leeds is ever-changing. 49ers Enterprises is conscious of monitoring future costs, and changes to the accounts prompt conversations about possible adjustments to the overall purchase price.

The club have a sizeable turnover, with the largest percentage of that money coming from central Premier League distributions.

Returning to the division for the 2020-21 season took their annual revenues from £54million to £171million, and the huge gap between those two numbers would have been greater without the impact of the COVID-19 pandemic.

That promotion triumph helped Leeds swing from a pre-tax loss of more than £60m in 2020 to a profit of £25m the following year, with the club’s coffers receiving £133m of Premier League media income (they made only £9m from that source in the 2019-20 Championship season).

Their earnings for their second season back in the domestic elite, 2021-22, will not be known until those figures are posted at Companies House later this year but if they follow the standard pattern for promoted sides in year two in the top flight, the cost of competing in the Premier League will have erased most or all of that profit.

The bottom line is they are reliant on shareholders for transfer funds — as they were when signing Georginio Rutter for a record fee from German club Hoffenheim on Saturday. Rutter could cost £35million if all incentives in the deal are met but Leeds invariably stagger payments for their new arrivals, paying transfer fees over the course of the player’s contract (in Rutter’s case, he has been signed until the summer of 2028).

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The reality is that if 49ers Enterprises buys the club in the next six months, it will fall to it to meet most of the cost of the 20-year-old French forward’s transfer.

Increasingly, the transfer deals Leeds do require that conversation — who in the boardroom is responsible for financing what, and how that expenditure alters the takeover agreement.

In this respect, the numbers are a constantly moveable feast. At one stage, Leeds considered taking Rutter on an initial loan and putting in place an obligation to take him permanently in the summer but the willingness of 49ers Enterprises to back a full transfer in this January window and accept future liabilities was a sign of its commitment to taking charge at Elland Road. The value of Rutter as a long-term asset outweighed any concerns about the price or the structure of the deal.

After it was announced, a photo emerged of director of football Victor Orta wearing a San Francisco 49ers hoodie as he presented the newcomer with a framed Leeds shirt.

What is being said more and more is that Leeds can only operate in these circumstances for so long.

The presence of two major shareholders in the boardroom is almost the equivalent of having two owners rather than one definitive voice. The setup can complicate recruitment and it is plain that development of Elland Road itself, the plans to raise the stadium’s capacity to around 60,000, will not move forward until 49ers Enterprises’ takeover is complete.

The group is keenly involved in major decision-making and has been for some time but, as long as it’s still a minority shareholder, it lacks the authority to make the club its own. Leeds, in effect, are in a holding pattern, waiting for this sale to be signed off.

Radrizzani’s ambition has long been to bow out of Leeds with a positive legacy, and people around him are telling him he can have it.

As their owner, he returned a meandering Championship side to the Premier League after a near-two-decade absence and for all that the past 18 months have been extremely challenging, selling to the 49ers outright would secure meaningful follow-up investment — in principle, a transition of ownership that gives Leeds a chance of consolidating in the top flight and moving to the next level in terms of competing for trophies and European qualification.

It is, realistically, a deal that has to happen and has to happen soon.

Leeds, Radrizzani and 49ers Enterprises were approached about the precise status of the takeover but declined to comment.