March 15, 2017 3:50 pm JST

Leicester City's European odyssey a lesson for soccer's Asian investors

Sevilla success marks turnaround after firing of popular manager

SIMON ROUGHNEEN, Asia regional correspondent

A dramatic recent return to form for the Thai-owned Leicester City will see the English soccer champions join some of Europe's most illustrious teams in the closing stages of the Champions League, the continent's most prestigious tournament. 

Last night's success is the latest twist in what has been a turbulent roller-coaster ride for fans and investors alike, highlighting both the potential bonanzas and pitfalls awaiting Asian investors into Europe's prestigious and lucrative soccer leagues, which are wildly popular across Asia.

On March 14, Leicester City's 2-0 win at the King Power stadium -- named after the team's Thai owners -- was enough for Leicester to knock Spain's Sevilla out of the tournament and see the English midlands team advance to the quarter-final stage of the Europe-wide Champions League. It signified a new phase since the moment in 2016 when the team shocked the sporting world by winning England's league championship ahead of wealthier and more established rivals.

Awaiting Leicester City in the quarter-finals are teams such as Barcelona, Bayern Munich, Juventus and Real Madrid -- historically among the most successful in Europe. The enticing but daunting prospect of a possible glamor quarter-final against such teams will do much to sustain the Leicester City brand across Asia, and offer Thailand's King Power another high-profile return on its substantial investment after the team's internal problems following its 2016 success.

Internal divisions

The victory over Sevilla will come as welcome relief for King Power founder and team owner Vichai Srivaddhanaprabha, as the 2016 triumph in England was followed by an on-field collapse that saw popular coach Claudio Ranieri was fired earlier this year, just two weeks after the team's initial 2-1 defeat in Seville.

It all marked precipitous drop in standards from the previous year, when the Italian coach was named the world's best manager by FIFA, world soccer's governing body. Leicester had plummeted to 17th position in the league. Its failure to win a single match in the 2017 calendar year mired the team in a struggle against demotion to a lower grade of competition. 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 television revenues.

The club's fightback strategy began with the promotion of Ranieri's former assistant, Craig Shakespeare, to Ranieri's old job on a temporary basis. With that, the team appears to have rediscovered some of the form that helped it win England's league championship against all the odds in 2016, with last night's win over Sevilla preceded by consecutive victories over Hull City and Liverpool.

Big in Asia

The revival of Leicester City's fortunes  will now be seen as a vindication of Vichai's initially unpopular decision to fire Ranieri -- a move that was chiefly driven by the threat of relegation from English football's top strata.

The English Premier League (EPL) 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 professional services firm Deloitte, with the EPL accounting for almost a fifth of the total.

For Asian business, huge TV audiences for Europe's leagues offer prestigious sponsorship and marketing possibilities. For the same reasons, Leicester's regional cachet would be greatly diminished if the team was dropped from the English Premier League.

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. The Thai tycoon and his King Power empire will be even more relieved than Leicester's diehard fans 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 field

Leicester's revival will also relieve some of the ill-will caused by some of King Power's efforts to re-brand the team. 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 the Thai 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. Temporary coach Shakespeare, Ranieri's former assistant, could be given the job on a longer term contract after the season ends in May.

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 its 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 the team's recent 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 for Shakespeare and for Vichai, the team now has enticing prospect of a meeting with superstars such as Lionel Messi or Cristiano Ronaldo in the next state of the Champions League.

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.

But the prospect of Leicester City emulating that feat even once appears even more unlikely than the 2016 EPL victory, despite the turnaround against Sevilla last night. 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.

It is worth remembering that before Roman Abramovich's funding of Chelsea's successful run from 2003, Chelsea was also faltering, 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.

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