March 12, 2017 11:00 am JST

Leicester's lessons for European soccer's Asian investors

Thai billionaire owner in high-stakes gamble with English 'giant killers'

SIMON ROUGHNEEN, Asia regional correspondent

JAKARTA -- If Claudio Ranieri was in front of a television when English Premier League soccer champions Leicester City hosted five-times European club champions Liverpool on Feb. 27, the mild-mannered Italian might have been tempted into an uncharacteristic show of anger.

The 65-year-old had been sacked as team manager three days previously by Leicester City's billionaire Thai owner and chairman Vichai Srivaddhanaprabha, founder of the King Power Group chain of duty-free shops. After a series of tepid losses, the team had been dragged into a struggle with a half dozen rivals desperate to stave off relegation from the premier league to the less high-profile English Championship, where Leicester City had languished for a decade prior to 2014.

But with Ranieri gone, the team rediscovered the verve that brought them success the previous year. Ranieri's ex-charges followed their comfortable 3-1 win over Liverpool with a March 4 victory over Hull City by the same margin.

Leicester's rollercoaster ride has highlighted some of the potential pitfalls awaiting the Asian investors who have been increasingly moving into European soccer, home of the sport's most lucrative clubs. With relegation and a consequent sharp loss of revenue in sight for Leicester, the Thai owner's handling of the club's crisis will be closely watched across Asia.

This time last year, the "Foxes," to use the team's nickname, were on their way to one of the most unexpected success stories in European football history -- winning the English Premier League ahead of vastly richer and more successful clubs. But Ranieri's final weeks in charge were marred by a precipitous drop in standards from the previous year, when the Italian was named the world's best manager by FIFA, world soccer's governing body.

Before Ranieri's ousting, Leicester had plummeted to 17th position in the league, and a failure to win a single match in the 2017 calendar year had mired the team in a struggle against demotion. No reigning champions have been relegated from England's highest soccer tier since 1938, and in the increasingly money-driven sport, that outcome could cost the club the equivalent of around $150 million in TV revenues.

Despite the club's struggles this season, sacking the architect of its earlier success is a gamble for the owner. Explaining the decision to fire Ranieri, vice-chairman (and son of the owner) Aiyawatt Srivaddhanaprabha said "long-term interests" had been put above "personal sentiment, no matter how strong that might be."

Popular across Asia

The English Premier League and other European leagues, particularly those in Germany, Spain and Italy, are wildly popular across Asia. Revenues from TV deals and weekly crowds in the tens of thousands mean that European club soccer generates total revenues set to exceed 25 billion euros ($26.5 billion) this year, according to Deloitte, with the EPL accounting for almost a fifth of the total.

In Asia, huge TV audiences for Europe's leagues offer prestigious sponsorship and marketing possibilities for Asian businesses, and Leicester's regional cachet would be diminished if the team dropped out of the EPL.

In recent years Asian businesses have spent heavily on Europe's soccer clubs, acquiring shirt sponsorship deals and in some cases buying teams. Chinese and Indonesian investors have taken over at Italy's AC Milan and Inter Milan, two of Europe's most storied teams, and China's Dalian Wanda has acquired a stake in Atletico Madrid, the 2014 champions of Spain.

Vichai, listed by Forbes as Thailand's seventh-richest man, was among Asia's early movers. In 2010 he parlayed an initial shirt sponsorship deal into full ownership of Leicester City.

Vichai and King Power would have been as relieved as anyone by the team's post-Ranieri revival. Had the manager's ousting been followed by the same poor results as before, then the team's supporters -- angered by the sacking -- might have turned on the owners.

Supporters had already taken to Leicester's streets to protest against the sacking. One, an 11-year-old named Jack Stephens, addressed Vichai on BBC News, grumbling that "as a chairman I think you need to show more loyalty to your manager."

Gary Lineker -- top scorer at the 1986 World Cup when representing England's national team and arguably Leicester City's best-known former player -- told his 5.6 million Twitter followers that "after all that Claudio Ranieri has done for Leicester City, to sack him now is inexplicable, unforgivable and gut-wrenchingly sad."

Ranieri's former competitors proffered rhetorical shoulders to cry on. "Champion of England and FIFA manager of the year. Sacked," wrote Manchester United manager Jose Mourinho, who was himself fired by Chelsea, the London team owned by Russian billionaire Roman Abramovich, the year after winning the EPL in 2015.

Even Leicester's subsequent victory over Liverpool did not immediately appease fans, with some retrospectively accusing the players of deliberately underperforming to ensure Ranieri was removed. The mutiny charges were denied by senior players such as Jamie Vardy, but echoed what happened with the 2015 champions Chelsea. The team struggled in 2016, leading to the firing of manager Mourinho. But now Chelsea look certain to succeed Leicester City as champions, with the same set of players now unrecognizable under the fiery Italian manager Antonio Conte.

Struggles on and off the field

Even before the sacking, King Power had raised eyebrows in England by trying to re-brand Leicester City as "The Siamese Foxes." The Times' football writer Henry Winter described a coffee-table book produced by King Power about the club's success as "part hagiography to the owners." He also took issue with the apparent elevation of the team's Thai supporters -- "the 12th player of the Siamese Foxes" -- above those in Leicester.

Most top-level teams in Europe were founded in the late 19th or early 20th centuries. Despite the growing commercialization and internationalization of the sport, supporters -- especially those from the team's hometown -- hold fast to tradition and typically resent any attempt to appropriate it.

But the sacking had its backers, with some fans believing that Ranieri had "lost the dressing room" and that last year's success was no reason for him to retain his position -- an echo of Aiyawatt Srivaddhanaprabha's rationale for firing Ranieri. Others rounded on the Italian for failing to improve the team after last year. An outlay of almost 100 million euros on several additional players since the title win delivered a poor return, with most of the new faces struggling on the field.

The next crucial decision facing Vichai will be to find the right candidate to replace Ranieri. Craig Shakespeare, Ranieri's former assistant, was on the touchline for the two games following the Italian's exit. The team's return to winning form has put Shakespeare in a good position to get the gig.

But King Power might favor a high-profile coach with a track record of success, which would appease supporters. Before Ranieri, Leicester City's most successful coach in recent times was Martin O'Neill, who remains popular in the city. However, O'Neill is currently managing the Irish national team and quickly ruled himself out of a return to Leicester.

Others mentioned include Roy Hodgson, who saw success managing the Switzerland and later Inter Milan. But Hodgson's reputation was damaged by his tenure in charge of England's national team, which culminated in an unthinkable loss to Iceland at the 2016 European Championships. Roberto Mancini, another Italian, is also touted as a likely contender. So, surprisingly, is Ranieri's predecessor Nigel Pearson, who lost the job after three players, Pearson's son included, were recorded making racist slurs about a Thai prostitute during an orgy in Bangkok.

Some observers argue that the best way for Leicester City -- and for the Thai owners -- to move on is for the team to keep winning, regardless of who is manager. Lineker, now a BBC TV presenter, joked to this effect during that 3-1 win over Liverpool, tweeting: "Vardy scores. Leicester lead. Never rated Ranieri." Clearly, the former coach's own post-sacking lament, that his "dream has died," will soon be forgotten if the team pulls clear of the league's bottom three places from which clubs face end-of-season relegation.

European prospects

While staving off relegation to a lower league is the main priority, the team has the enticing prospect of progress in Europe's elite competition, the Champions League. Ranieri's last game in charge was a 2-1 defeat on Feb. 23 to Sevilla in the first leg match ahead of the quarter finals. The narrow loss made Ranieri's sacking all the more surprising, as Leicester City can still advance to the quarter finals with just a 1-0 win in the return leg against Sevilla, which will be played on March 14 in Leicester.

Before Leicester City's 2016 success, the last time an unheralded team won England's top football league was in the late 1970s when Nottingham Forest emerged from obscurity. Forest topped that off by winning the European Cup -- equivalent to today's Champions League -- twice in the following years.

The prospect of Leicester City emulating that feat even once appears even more unlikely than the 2016 EPL victory. Leicester's prestige and finances are a fraction of England's marquee teams. Its 2015/16 revenues were 128.7 million pounds ($156.5 million), dwarfed by Manchester United's 515 million pounds, leading many to contend that Leicester's 2016 glory run was a one-off from a franchise -- and team -- that punched above its weight.

But prior to Roman Abramovich's funding of Chelsea's run of successes from 2003, Chelsea were also-rans, a mid-tier team at best. Other Asian investors in European football will be watching to see how the post-Ranieri era unfolds at Leicester -- and whether Vichai's abrupt sacking of his manager has helped avert disaster.

Progress against Sevilla and a subsequent glamor quarter-final with the likes of Barcelona, Bayern Munich or Real Madrid would do much to revive the Leicester City brand across Asia -- and offer Thailand's King Power a high- profile return on its substantial investment.

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