Ipswich Town have achieved two promotions in three years under American ownership group Gamechanger 20 Ltd. In part three of this interview, Stuart Watson spoke to majority shareholder Ed Schwartz about how long their investment will last.
Eyebrows were raised when a pension pot invested in Ipswich Town.
Was it a gamble for the Arizona Public Safety Personnel Retirement System (PSPRS) to commit sizeable funds to an English third-tier football club? You bet it was. The best way to make a small fortune in this industry is to start with a large one, as the joke goes. Just ask previous owner Marcus Evans, who ended up losing £100m+ over his 14-year custodianship.
With risk comes reward though. Gamechanger Ltd 20 spotted 'hidden value' in a 'sleeping giant' and now two quickfire promotions has unlocked the riches of the world-famous Premier League.
“There’s no question that we’re ahead of schedule," admits majority shareholder Ed Schwartz. "I don’t think anyone in our projections thought that three years from when we closed we would be in the Premier League.
“But in some ways, looking back, it’s not surprising. While it isn’t easy, everyone’s trying to do it, this management team had a plan and they stuck to it. They’re very, very focused, very disciplined, incredibly hard working. So from that perspective maybe it isn't surprising.
"It certainly wasn’t anyone’s expectation that we would be this successful this fast though."
Gamechanger 20 Ltd purchased Ipswich Town for a reported £40m back in April 2021. They sold a 40% stake to a US-based private equity firm in March this year for £105m. Even accounting for the millions invested in infrastructure, staff and players, that's a huge profit made in the space of three years.
I ask Schwartz, who co-founded ORG Portfolio Management back in 1999, where this ranks for him personally in terms of size and speed of return on investment.
“There are a lot of numbers that fly around, but the reality is we bought a club that really had been stripped and needed a lot of investment. Some of it was one-time investment in facilities, some of it was to beef up staffing," he explains.
“So some of the numbers could be a little bit misleading, but certainly we’ve invested a lot of money into the club and it’s been worth it. The club certainly is worth more now."
Back in November 2021, just a few months on from the takeover, I asked Schwartz if there was a timeframe he had in mind for the investment. He replied: "It's at least seven to 10 years that we've talked about. In year three or four if we see things going a certain way we may re-evaluate that and extend it. But certainly it's a long time. It's not a few years."
So, fast forward almost three years, and given the rapid rise to the Premier League, has there been a re-evaluation?
“I would say the timeframe hasn’t really changed," he says. "As I sit here today, we’ve got a trajectory of another 5-7 years where, at that point, we would re-evaluate and see where things stand. There’s no discussions or no intentions of selling in any way."
But cashing in the chips at the right moment is ultimately the name of the game?
“There’s no question about that," agrees Schwartz. "But I've got to tell you that as we sit here today there’s no thought about that.
"We have aspirations to grow the investment even further because there’s great potential in UK football. It’s such a global brand and we think there’s real potential for a growth in media rights.
"In terms of Ipswich itself, we think we’ve just scratched the surface on the potential here as well. Look at the attendances we’ve had, both in League One and Championship. Now we’re in the Premier League. The potential is huge. The supporters have come out and bought kits and all the merchandise. We’ve been setting records. It’s been incredible. So we feel very comfortable about this investment for the long haul.
“We've invested in the stadium and the training ground. That's not going to pay-off straight away, so that is another indication of our long-term commitment. We have no intention of looking for an exit."
Given that PSPRS has a fund of around $13 billion - and $700m in cash - why did Gamechanger 20 Ltd feel the need to bring in fresh investment this year?
“There’s really two things," replies Schwartz. "I think it’s important to note that PSPRS certainly has sufficient capital to have funded it on their own. We could have gotten that accomplished.
“But bringing new investors to the table wasn’t just about money. It was about bringing in people with certain expertise who could help us get to the next level.
“It was important for us to bring the right people in who have values consistent with ours. There were people who wanted to invest that we said really weren’t the right fit. The ones we have brought in we could not be more excited about because they are going to help us achieve even greater heights than what we’ve achieved so far.
“Bright Path have incredible expertise in sports, media and entertainment. They are certainly going to help us with their connections. Sam Simon is an incredible individual and I’m sure the local people are going to enjoy getting to know him more. He’s really a special person who has built an incredible business from nothing. He truly epitomises the American dream. He’s an incredible family man and really understands the role that the ownership here is playing. We’re providing capital and strategic advice, but we’re not meddling."
Asked if there was potential for further new investment further down the line, Schwartz replied: “There’s not really a need for additional capital. There may be an opportunity, if someone comes up on a strategic basis, to be added to the group. That is a possibility. But it really won’t be with a thought that we’re needing any more money. It will only be for strategic purposes, for some level of expertise that they may bring to continue to help us achieve our goals."
Last summer, after promotion to the Championship was secured, Schwartz declared ‘this is just the beginning of an incredible journey’. Following another step up the pyramid, does he still feel the same way?
“I do," he says with a smile. "Without being specific, I don’t think this is the top. I don’t think this is the end. I really do think this is still the beginning.
"We’ve built such an incredible foundation, the fans have been incredible and we want to continue to make progress and just get better every day. With this management team and this fanbase I wouldn’t put any ceiling on what we can do here.
"We would like to be a long-term successful Premier League club. That’s certainly our goal. And we certainly feel we have the right group, the right management, to achieve that.
"As ownership we just need to provide, as (chief executive) Mark (Ashton) likes to say, the oxygen to allow them to complete the plans. Our job is to make sure we have sufficient capital. We’ll be sensible, we’ll be smart and hopefully that will continue to translate into great success."
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