Unlock the Editor’s Digest for free
Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
A three-way fight for promotion between a New York hedge fund, a Kazakh billionaire and two Hollywood actors has fuelled a record transfer splurge in English football’s third tier, as wealthy team owners look to get ahead of tighter financial rules taking effect this summer.
The 24 clubs in League One have spent almost €56mn this season — more than the total for the past eight seasons combined — according to figures from data website Transfermarkt.
Table-topping Birmingham City, owned since 2023 by US hedge fund Knighthead Capital, has spent more than €35mn, equivalent to about 63 per cent of the league’s total spend.
Birmingham City smashed the League One transfer record last summer to sign striker Jay Stansfield from Fulham for €17.8mn. The club is also responsible for the next two most expensive signings in the division: Christoph Klarer at €4.15mn and Willum Thór Willumsson for €4mn.
Huddersfield Town, owned by US businessman Kevin Nagle, spent more than €3mn on forward Joe Taylor from Luton in the winter transfer window, which closed on Monday night.
The record outlay in League One comes ahead of new spending rules being introduced by the English Football League, which administers divisions other than the top-tier Premier League.
From next season, clubs will be able to spend only up to 60 per cent of turnover on players, including wages, while using equity injections from owners to fund transfers will also be subject to new restrictions.
Birmingham suffered relegation from the second tier in its first season under US ownership. Knighthead, which brought in former NFL star Tom Brady as a shareholder and adviser, has made the football club the entry point for a proposed £3bn regeneration project in Britain’s second city.
Tom Wagner, the firm’s co-founder, told the Financial Times last month that his ambition was to take the club back to the Premier League, the top tier, and “remain there for a long period of time”.
Other big League One spenders include second-placed Wycombe Wanderers, which was bought by Kazakh tech billionaire Mikheil Lomtadze last May, and newly promoted Wrexham.
The Welsh club has risen from non-league football under the ownership of Hollywood actors Ryan Reynolds and Rob McElhenney, who have put the club at the centre of a hugely successful behind-the-scenes documentary, Welcome to Wrexham.
The three clubs are vying for two automatic promotion spots, although all three could ascend to the Championship, English football’s second tier, with a third space up for grabs via the end of season play-offs.
As the value of clubs in the English Premier League has surged in recent years, international investors have increasingly looked to smaller-profile teams for investment opportunities.
In League One, US investors control or have stakes in several clubs including Huddersfield Town, Cambridge United and Lincoln City, while Crawley Town is controlled by WAGMI United, a US-led crypto fund.
Clubs in the Championship, one division below the Premier League, have also spent record amounts this season totalling €365mn. Two of the sides relegated from the Premier League last season, Burnley and Leeds, lead the way in terms of total spend, although both have made significant amounts from sales to top-tier sides.
Wealthy owners in that league include Indian poultry magnates, the former chief executive of entertainment company Disney, Michael Eisner, the scion of the Louis-Dreyfus commodities trading empire, and a member of the powerful Indonesian Bakrie family.
League One clubs had average revenue of £9.8mn in 2022-23, according to figures from advisory firm Deloitte, and made an average loss of £5mn. However, neither Wrexham nor Birmingham were in the division that year, while one club — Derby County — was responsible for 30 per cent of the league’s combined losses.
