You may sometimes wonder why rich and famous people buy soccer clubs when they have many other opportunities. Is it simply because they are tired of owning mansions and luxury cars and want a giant grass field? Or do they want to showcase their impressive baller skills on the pitch?
We do not precisely know why famous and rich people want to join the soccer business. But we know that Ryan Reynolds’ soccer club, Wrexham, was recently acquired by him and Rob McElhenney for $2.5 million. Discover the intriguing business strategy behind their own and be a part of Ryan Reynolds’ remarkable soccer journey at Wrexham
From Humble Beginnings to Hollywood
Wrexham AFC is a professional association soccer club based in Wrexham, Wales. It has a long history with a strong culture as it was established in 1864. Meaning it is one of the oldest clubs in Wales and the third-oldest professional soccer team in the world.
Wrexham was just recently promoted from National League (5th division) to League Two (4th division), so it is still a long way to go until reaching the top competition in England, the Premier League (1st division).
Not too long ago, in 2020, Ryan Reynolds and Rob McElhenney invested $2.5 million in Wrexham, and they became the sole owner of the squad. It was exciting to see how this would turn out, but the fact that famous people investing in soccer clubs was not something new hype, and we saw it a couple of times.
For example, Inter Miami owner David Beckham has invested $15.3 million in the club to further improve the team’s competitiveness in 2021. Natalie Portman bought her women’s team Angel City FC. The Office star Mindy Kaling acquired shares in Swansea City.
Lower industry valuation
As an industrial overview, the world’s most valuable sports teams are mostly NBA and NFL franchises, although some soccer teams are among the wealthiest franchises. The top ten richest sports teams’ value is starting from USD 4,21 billion (Bayern Munich) to USD 5,7 billion (Dallas Cowboys).
While some substantial soccer clubs are among the most valuable sports clubs, the valuation of these teams is generally lower than NFL or NBA teams. Despite that, soccer is a global sport with more followers than NBA or NFL.
Due to the advantage of a lower valuation of soccer clubs, it is already attracted attention and many top Premier League teams have American owners and investors.
Investing in supporter relationship
In the case of Wrexham, the story is different. Given that it is a small club, Ryan Reynolds and Rob McElhenney applied a different business approach. The local supporters of the club previously owned Wrexham. After a quick online meeting with the fans, Ryan Reynolds and Rob McElhenney agreed to invest approx—$ 2,5 million for 100 percent of Wrexham.
They put a significant emphasis on the supporter relationship in the early stages. They even signed a stadium lease in Wrexham to secure the fan’s trust by not moving the soccer club to another city in the next 25 years. So, they did not buy Wrexham at a reasonable price but immediately established a positive relationship with the supporters, who are essential stakeholders in the life of a sports team.
Welcome to Wrexham
The club has experienced a massive increase in popularity given to the television show ‘Welcome to Wrexham. ‘It is like a Netflix documentary film following the life of Wrexham, similar to Sunderland ‘Til I Die.
The show, produced by American network FX which Disney owns, has been a monumental success, and insiders say that Disney made a profit of £430,000 per episode. But the biggest winner was the club itself, as the series has provided the club with a global reach and started its way to become a unique brand.
Apart from the TV show, Wrexham’s FA Cup qualifier was broadcasted on ESPN2 and ESPN+, making it available in approx. 100 million households globally. The result of the celebrity duo’s creative marketing was phenomenal and led to almost immediate effects.
Sponsorship deals
Thanks to Welcome to Wrexham’s enormous success, Wrexham secured some crucial sponsorships deals with multiple companies, including TikTok, Aviation American Gin, Vistaprint, and Expedia. These extra funds will undoubtedly become essential and can expand the fanbase of Wrexham.
Increased ticket sale
Wrexham confirmed that 6,731 season ticket holders had renewed their tickets for the 2023/24 season, a renewal rate of a remarkable 99.25%. Compared to the number of sold tickets, 2,609 in 2019, the supporter base also went through massive growth.
Booming social media
The total number of followers of Wrexham’s social media account recently reached 2,8 million, gaining thousands of followers weekly. Apart from the increasing numbers of Wrexham’s social media, the follower base of Ryan Reynolds and Rob McElhenney is also increasing.
Accordingly, this is a double win for the team and the owners. Based on the last two years, these guys know how to use their media influence.
Financials
Well, this sounds like a perfect success story on and off the pitch from a business perspective. And it is a valid statement, as Wrexham has reported record revenues during the last financial year.
The club posted a revenue of £5,9 million for 2022, with an increase of 404% from £1,4 million compared to the previous season, which is an impressive growth.
Despite the record revenue, the owners of Wrexham lost around $3,7 million combined during the 2021/22 season. Such an increase in costs resulted from the rising player wages and operating costs due to the promotion to the upper league.
However, the signed sponsorship deals and gained supporters will help improve their future profitability.
What can we learn from Ryan Reynolds’ business approach?
The story of Ryan Reynolds and Wrexham is a successful example of how you can use a new business model in an old industry based on media influence and use your experience from a separate business. Ryan Reynolds and Rob McElhenney did not acquire a squad but bought a story. Ryan Reynolds used a business model that combined media, sport, and, most importantly, personal brands almost perfectly.
Innovation only sometimes means coming up with something brand-new development. Sometimes, it is about taking existing business models and approaching them from a different angle to become successful.
Although Wrexham has yet to be profitable, Ryan Reynolds and Rob McElhenney already come out as huge winners and do a great job. Besides continuing the TV show, I expect them to further broaden Wrexham’s brand in other segments of the sports industry.
