It has been seven years since the 49ers first pitched up at Elland Road, initially as a minority partner. They gradually increased their stake, accelerating the process when the club reached the Premier League. A long-awaited full takeover from Andrea Radrizzani was finalised in July 2023, after relegation.
Now – as you might be aware – Leeds United are back. And while fans have already had two seasons to get to grips with Paraag Marathe’s style, the San Francisco-based regime will reveal what kind of ownership they really want to be now that the Whites are in the top flight again.
The admission of Red Bull into the capital base last year was seen by some supporters as a sign that the 49ers have distinctly commercial ambitions. Water is wet – as indeed are energy drinks. Marathe and his deputies aren’t in the sports ownership racket for altruistic purposes. They want to make money.
That’s why they reportedly considered sacking Daniel Farke despite the fact that he had just achieved promotion with a points tally that only six Championship sides in history have ever bested. Ultimately, they held fire, but the saga was emblematic of just how ruthless the owners have the capacity to be.
When that ruthlessness aligns with the club’s interests on the pitch and, imperatively, what matters to fans, great. But, as with nearly every club under American ownership, there will be times when the 49ers overstep the mark and need to be held to account.
Ticket prices, the future of Elland Road, protecting the club’s identity – unlike in the NFL where the 49ers made their fortune, these are protected characteristics in West Yorkshire.
That’s the dance of being a fan in the modern era. Increasingly, if you want the goods in the transfer market, you’re asked to accept the naked commercialisation of your club.
For the 49ers and Leeds fans alike, it’s a question of finding the right balance.
The imminent independent regulator for English football – which, incidentally, former CEO Angus Kinnear once likened to Maoism – will hopefully help the two sides of the club meet in the middle.
In any case, with Leeds gearing up for their return to the Premier League promised land, the current focus is understandably on the short term, with a £100m-plus net outlay on new signings likely.
But what about the 49ers long-term, grand vision for the club?
Paraag Marathe is in it for the long haul at Leeds; this is no private equity rip-and-run
49ers Enterprises might loosely be described as a sports-focused private equity firm in that they buy private companies with the aim of optimising costs, increasing asset value and eventually flipping the asset for a profit. That appears to be the plan at Leeds, just as it is with their latest takeover, Rangers.
Elsewhere, the 49ers have just sold a six per cent stake in their NFL franchise at a world-record valuation. That is further evidence that theirs is a game of capital appreciation – buy low, sell high.
Like a private equity firm, the 49ers also have myriad limited partners. Will Ferrell, Russell Crowe, and Michael Phelps are the most prominent examples here, but the full stable of partners includes dozens of extraordinarily wealthy private investors.
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“The traditional private equity model is to look for a return in three to five years,” University of Liverpool football finance lecturer Kieran Maguire told LUN when asked about the 49ers’ long-term vision for Leeds and how it coalesces with the interest of their investors.
“But what we are seeing now is that PE is broadening its horizons and is looking at longer term investments, including investments which complement rather than substitute the other assets.
“Normally, on day one in PE you identify the problems. On day two, you’re looking for an exit route. But I think the 49ers realise that football is a much longer-term project than that.
“If it’s part of your PE portfolio, a club like Leeds has got the resources coming from elsewhere in the group that allows it to develop and mature. The downside is that it will be taking a PE perspective in terms of infrastructure capital expenditure and talent recruitment. It will be going through a long list of checks and balances before it pulls the trigger. That slows down the process, especially in football where we have just two transfer windows per year.”
Even in the Championship, Leeds had some of the strongest core financial metrics in English football.
Outside the so-called ‘Big Six’, whose revenues are in another universe, the club’s matchday and commercial categories are right up there.
With extra exposure in the Premier League, sponsorship receipts will rise, as will ticketing revenue. The target, as far as the 49ers are concerned, is to become the best of the rest. Then, they can start to think about looking higher.
That’s going to take some patience, however. As Maguire points out, that means Marathe and his 49ers colleagues will be in LS11 for some time yet.
“Given that I’ve spoken to Paraag Marathe and he was first interested in Leeds in 2008, he clearly has had a long-term interest. He feels it’s an undervalued and underappreciated part of the football industry. He thinks the potential, if they get it right, will blow you away.
“It’s taken a long time to get to the point where they have been able to make the investment, so I think they are willing to take a long-term view in respect of the increase in value of the business, through the expansion of the stadium and the establishment of themselves as a disruptor club like Newcastle and Aston Villa.”
The vision for even greater Elland Road expansion as 49ers have ‘options’ to buy more land
The other big issue of the day is, of course, the plans to expand Elland Road.
We’re all familiar with at least a rough idea of the blueprints to take capacity at the stadium itself to just less than 53,000, but Marathe has now said he has big ideas for the surrounding site too.
In a recent interview with the Financial Times, the 48-year-old said that the 49ers have “acquired options” on several plots of land close to the stadium.
“There’s totally an opportunity to develop [the area] because as the crow flies, Elland Road is really close to the city centre,” he continued, “but it’s complicated to get to – that’s why there’s been a two-decade long effort to get light rail out there and so we’re still trying to fast track that as well.”
The idea of a ‘sports city’ or ‘sports complex’ is, again, a very American phenomenon. Arsenal owner Stan Kroenke has executed this perfectly with the SoFi Stadium, home to the NFL’s LA Rams
The 49ers themselves meanwhile have built Levi’s Stadium in San Francisco (sometimes known as the Field of Jeans) at the centre of a sports and commercial district. Close to home, Birmingham City’s Tom Wagner has plans for a similar stadium project, as do Manchester United.
Is the same achievable at Elland Road? And just how lucrative could it be for the club?
“Leeds is a very successful business city,” Maguire tells LUN.
“From a financial perspective, it’s probably the third-biggest in the country after London and Manchester. There are commercial opportunities. There is a well-heeled, professional element to the city that you could buy into with the hospitality development and so on.
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“Football is a really dumb business in the sense that your stadium is only open to business 20-25 days per year. If you’re looking at a significant infrastructure spend, the return on investment is poor unless you start to leverage the asset in a variety of ways.
“We have seen how Spurs have done that. I’ve been fortunate enough to be on the Spurs campus on non-matchdays and you see that they see everything through a commercial lens. A development like this, especially with good transport links, could work well. You do have to have good control over your costs, however.“
