Two Guys, A Welsh Football Team and A Hollywood Dream
Why Ryan Reynolds & Rob McElhenney Took Over Wrexham AFC
Why did two of the most charming men in Hollywood buy a football team in a small Welsh town…? For boundless opportunity.
In November 2020, Ryan Reynolds and Rob McElhenney officially became owners of Wrexham A.F.C., a fifth-division English football team from Wales. Wrexham is the third oldest professional football team in the world and the town of Wrexham itself has a population of 136,000 people.
Thanks for reading Venn Diagrams! Subscribe for free to receive new posts and support my work.
Ryan Reynolds is one of the biggest movie stars on the planet—best known for starring in Deadpool and owning the company Aviation Gin. Rob McElhenney plays Mac from the hit series It’s Always Sunny in Philadelphia and co-created the Apple TV+ show Mythic Quest.
The pair have brought glamour and a strong global brand to an obscure football team in Wales. So what’s next?
Wrexham has entered a whole new realm of commercial partnerships under the stewardship of Ryan and Rob. TikTok has become the official shirt sponsor of Wrexham, and shirt sales are at an all-time high.
Wrexham now accesses any of the other business ventures loosely affiliated with Ryan and Rob. For example, Ryan’s company Aviation Gin has already launched a limited edition Wrexham version of their gin. Wrexham has a new partnership with EA Sports and became the very first non-league team to be featured in the FIFA 22 game. There’s a new docuseries called Welcome to Wrexham highlighting the story of Wrexham’s recent ownership change coming out in August of this year.
And the quality of the team’s content continues to increase. Ryan and Rob have aggressively taken to TikTok to promote Wrexham.
Enable 3rd party cookies or use another browser
With two lovable actors as the face of Wrexham, the team is quickly becoming a worldwide cult favorite. As Ryan said in one of the team’s promotional videos, “You may have never heard of Wrexham, the Racecourse Ground or (sponsor) Ifor Williams, but you will.”
It’s also a smart recruitment tactic. The best players have a reason to come to Wrexham that competitors can’t match. Imagine Ryan Reynolds being pulled into an intense player negotiation in order to convince someone to join Wrexham. Imagine a player who’s a die-hard It’s Always Sunny fan jumping at the opportunity to transfer to Wrexham and hang out with ‘Mac.’
As the new owners, the pair have also refreshed the fan membership scheme, refurbished Wrexham’s stadium, and changed the team’s management. This new membership program received signups from 18,226 people across 76 different countries. Fans across the world are buying into a new story.
None of this would’ve happened without the star power of Ryan and Rob. The team’s new owners are world class marketers with a deep understanding of media. ALSO - let’s not forget that Wrexham is a very compelling investment opportunity.
The Bull Case for Wrexham A.F.C.
Buying Wrexham was essentially a private equity-style takeover. Ryan and Rob are buying an asset in the form of a football team to revamp the management & operations to be more effective and then grow the value of the asset.
Why? The most optimistic growth scenario is that Wrexham eventually makes it to the Premier League, the top flight of English football where teams like Manchester United, Liverpool, and Chelsea play. English football leagues operate as a tiered system that allows teams to move up and down leagues based on their record. If Wrexham can keep winning games, they will get promoted into higher leagues and then eventually into the Premier League.
Each Premier League team then gets an equal share of the billions of pounds of broadcast rights, in addition to revenue streams that include facility fees and merit payments. The most successful teams generally earn the most, but even the worst Premier League teams have a lucrative deal.
The lowest placing team in the last season of the Premier League, Norwich City, made £98.6 Million. So even if Wrexham gets to the Premier League and ends the season at the bottom of the table, they could stand to make about £100 Million in revenue.
How much did Rob and Ryan pay for Wrexham? £2 Million. If they can get to the Premier League within ten years, they should be making £100 Million a year. I would call this a conservative estimate, considering how the value of broadcast rights continues to grow, football’s global footprint is still getting bigger, and Wrexham’s owners have unique star power for leverage in sponsorship negotiations.
It’s reasonable to think Wrexham would be worth just over £100 Million if they reach the Premier League, and that’s assuming that the club’s market value will be trading at a highly conservative 1x revenue multiple. Even in that case, that’s a 5000% increase in the value of Ryan and Rob’s initial investment. And beyond the money, Wrexham would go down in history as one of football’s most compelling cinderella stories.
So yes, it’s a great investment if the pair can pull this off. And even if Wrexham FC never makes it to the Premier League, it’s a good investment in their careers and personal brand. Wrexham is essentially now a media platform for Ryan Reynolds and Rob McIlhenney.
Investing in Undervalued Sports Teams: Has This Happened Before?
There has been a lot of fervent M&A in the Premier League recently. In May of this year, Chelsea F.C. was bought for £4.25 Billion by American Todd Boehly. Last year, Saudi Arabia’s Public Investment Fund bought Newscastle United for £305 Million. However, some people are aware of opportunities at the lower end of football.
Matthew Benham took over third-division Brentford FC in 2012 and brought the club to the Premier League in 2021. Benham was a childhood fan of Brentford who pursued a career in finance and eventually sports betting. When Brentford was facing financial struggles in 2007, he gave the team a loan of $700K and then became outright owner in 2012.
Over the course of a decade, Benham pioneered a data-driven approach to recruiting players and managing the team, similar to how Billy Beane famously pioneered 'the ‘Moneyball’ approach with the Oakland Athletics MLB team. After about a decade of ownership, Benham took Brentford to the Premier League for the first time in 74 years.
The return on Benham’s initial investment of $700K is massive. Brentford made £120 Million in Premier League revenue last year. Depending on the sources, some estimate that Brentford could sell for a valuation close to £1 Billion. Brentford is STILL in the Premier League, finishing 13th place out of 20 last season. And each year Brentford remains in the league or increases their standing, their value should grow.
Brentford has been a fantastic investment for Matthew Benham and others are trying to replicate this, particularly with leaders from the Web3 community.
The League Two team Crawley Town was bought by a Web3 consortium WAGMI United that includes Gary Vaynerchuk and promises to encourage more fan participation through technology like NFTs. Bitcoin influencer Peter McCormack bought the Spartan South Midlands Football League team Bedford FC by rallying a group of Bitcoiners from around the world.
In A More Globalized Media World, Sports Become A More Appealing Investment
Fans of Manchester United who live in Kenya can post TikToks that get served to fans in California. A Liverpool fan podcast created in the Philippines can be listened to by fans in Germany. As much as we talk about the economic pushback of globalization, the globalization coming from media, sports, and culture is bigger than ever.
Sports is the great global equalizer. In a world that feels increasingly divided, I have the noble belief that a Real Madrid fan from Malaysia and a Real Madrid fan from Boston would be able to overcome ethnic, political, or socio-economic differences for the sake of sport. Call me crazy—but sports might be one of the best tools we have to resolve international conflict.
Putting that aside, the increasing global reach of sports has led to more investment in media. A recent New York Times article titled ‘Drive to Survive’ Made Americans Fall in Love With Formula 1 examines how the popular Netflix series ‘Drive to Survive’ helped reinvent Formula One for a younger generation, particularly within America. Critically, Netflix took a sport that seemed ‘very European’ and made it more palatable for lucrative American fanbases.
French football club Paris Saint-Germain (PSG) was bought by state-owned Qatar Sports Investments in 2011. A key part of revitalizing the team came from fashion collaborations and enlisting groups of American celebrities like Kylie Jenner and Jay-Z to come support PSG. The modern playbook of a sports team goes beyond just winning games to also becoming a global entertainment brand.
‘Soccer,’ as the sport is known to Americans, has been growing massively. The valuation of Major League Soccer teams is growing rapidly and celebrities (like Ryan and Rob) are making investments in teams. Angel City FC, from the US National Women’s Soccer League, has celebrity investors including Christina Aguilera, Will Ferrell, and Lebron James. The award-winning Apple TV+ series Ted Lasso, the story of an earnest American coach in the Premier League, has impacted the American love of soccer.
Ryan and Rob didn’t start that wave of American interest in European soccer, but they can definitely ride that wave. Part of the genius of this takeover moves comes from the specific selection of Wrexham. They could have bought a sports team in a small town in Ohio but they chose a small town in Wales. The looked beyond America to discover a global opportunity. They were thinking globally from day one.
Entertainment is converging, which I have written about before, and Ryan and Rob know exactly what they are doing. The commercialization of sports and the globalization of fan culture presents new opportunities. Now an Indonesian fan of Ryan Reynolds may now have a reason to support a Welsh football team. A British fan of It’s Always Sunny in Philadelphia might start buying Wrexham merchandise.
Let’s see what happens as Hollywood collides with European Football.
Thanks for reading Venn Diagrams! Subscribe for free to receive new posts.