Buying a soccer team in Europe is an extremely high risk investment. It is not like investing in an American franchise where positive returns are not only achievable, but are more likely than not. The English Premier League is a different story. The league is not structured in the same way as the American sports leagues. For instance, it does not have salary caps; and the worst three teams literally get kicked out of the league each season. There are gains to be made but there is also a huge downside risk. That said, with high risk comes high reward.
Hollywood actor Ryan Reynolds and his friend, "It's Always Sunny in Philadelphia" star Rob McElhenney, bought Wrexham Football Club in 2021 for around 2 million pounds (USD2.5m). This purchase was at a time when the club’s revenue was GBP1.15m. So the Hollywood duo paid less than 2 times revenue, a fair price for the club at that time. They each bought 50% of the club and took a big risk in doing so. They could have easily lost a million dollars each had the bet not paid off. But it did pay off, big time.
The reality is that the club has had the best run in the history of English football over the last three years. As recently as the 2020-2021 season, Wrexham was in the National League, the fifth tier of the English football (soccer) league system. After Rob McElhenney and Ryan Reynolds took over the club they have been on a remarkable journey of three consecutive promotions.
The English football league system is a hierarchical structure of interconnected leagues for men's football in England, and includes a few clubs from Wales. The key principle is that of turnover, promotion and relegation every year, allowing clubs to move up or down the pyramid based on their performance each season. The number of teams promoted and relegated can vary slightly between leagues. Playoffs add an exciting element, allowing teams finishing just outside the automatic promotion spots a chance to move up. Promotion to higher leagues often depends on meeting certain criteria related to stadium facilities and finances, in addition to on-field performance. This system theoretically allows even a small amateur club to climb all the way to the Premier League over many successful seasons. Wrexham is on this journey.
- From 2016 to 2023 Wrexham played in the National League (level 5) - Players were paid GBP3.5m by the club, 3 times the National League average - Wrexham finished first in 2022-23 season and got promoted to league 2.
- 2024 league 2 (level 4) — The club spent GBP6m on player salaries and GBP400k on transfer fees, more than any other team - The club finished second and got promoted to league 1.
- 2025 league 1 (level 3) - This year the club will finish second and will be promoted to the Championship (level 2 of English football) - to achieve this they spent GBP10.6m on player salaries - third most in the league. And they've spent nearly GBP5m on transfer fees. The only club to outspend Wrexham on both salaries and transfer fees is Birmingham City, and they're the only team that finished the season ahead of them in the table.
- 2026 The Championship (level 2) - They will spend at least GBP22m on players, possible a lot more than that, but this will not guarantee success. The Championship (level 2) consists of 24 teams. The top two teams are automatically promoted to the Premier League. Teams finishing in 3rd to 6th place enter a playoff tournament. The winner of this playoff also gains promotion to the Premier League. So, three teams are promoted in total.
Can Wrexham continue their lucky streak and be one of the three teams promoted from the Championship to the Premier League at the end of this season? It is not impossible. Wrexham's captivating journey over the last few years has become a global phenomenon, largely thanks to the docuseries "Welcome to Wrexham". Creating this TV series was a genius move by the club’s new owners. Over and above this popular show, the involvement of these two actors has brought a new level of media attention and brand partnerships. Winning consecutive promotions up the leagues has opened up new revenue streams and expanded the club’s fanbase. Wrexham’s global popularity has surged, leading to increased merchandise sales, sponsorship opportunities, and match attendance in the UK.
Since the initial purchase Reynolds and McElhenney have invested another $11m (at least) that has been used mostly to pay more for better players, along with more in outside money from new minority equity investors. Well, their strategy has worked and the club is now likely worth over USD200m if you can believe it. That is a club equity value of $2m that is now $200m in only three years, a pretty phenomenal return. Of course, one could impute a value for the opportunity cost of a celebrity’s time and the celebrity branding being applied, and say that accounts for a few tens of millions (max) of the value increase, but it does not get you to $200m. This was a team effort on the part of the new owners, management, the players and everyone else involved in marketing and production efforts. It is a pretty impressive success story.
The team’s on-field success has been equally dramatic. They are the first team in the history of English football's top five divisions to claim three successive promotions - but we cannot rule out a possible fourth. Interestingly, of the players in the current team that secured the promotion, only three of them were in the Wrexham team at the end of last season. The team is evolving as they go and as new better players are consistently added to the squad.
Despite the significant jumps in investment, Wrexham are still not paying nearly enough for players to ensure they are competitive next season. Almost every team will have better players and more money than Wrexham currently do, not just the teams that got relegated from the EPL. These relegated Premier League clubs, Ipswich, Leicester and Southampton, will receive parachute payments of GBP39m each, which means their budgets will likely dwarf Wrexham's spending power. And, consequently, those will likely be the three toughest teams to beat this upcoming season. Wrexham have made it to the Championship, but they have a good chance of being relegated back to League One at the end of the 2025-2026 season. In fact, they probably have a higher chance of being relegated than they do of being promoted again. But that won’t stop them from trying to finish at the top and gain a fourth successive promotion.
The “football experts” say that Wrexham's rapid rise will hit a wall in the Championship and their consensus is that the fairytale will end now. But, there is something these "experts" need to understand - America loves an underdog. Just like the Brits like to complain about American celebrities getting involved in Formula 1 and how that’s changed the sport because it is a distraction from what is happening on track. Well, they need to look around, because it’s not going to change. In fact it’s only going to get more intense. The fans bring the dollars and the dollars drive the sport. America is a marketing machine, they know how to grow a fan base. And there are other examples of this at work in the English Premier League.
For example, the best team in the UK right now is Liverpool, despite Arsenal’s remarkable run the Champions League. And Liverpool are going to win the Premier League this season by a wide margin. Who owns them? A consortium of American businessmen and celebrities. More about this in a later blog post.