Thread by @JoePompliano

Hollywood stars Ryan Reynolds and Rob McElhenney are teaming up to buy Wrexham AFC, a 156-year old Welch soccer club.

The craziest part?

They're doing it for a documentary.

Time for a thread 👇👇👇

1) First, let's set the stage.

From John Henry with Liverpool to Stan Kroenke at Arsenal, and a bunch of mid-level teams in between, European soccer has seen a massive influx of cash from American investors over the last two decades.

Why?

Opportunity, of course.

2) The opportunity revolves around a few things:

— Compared to US professional sports leagues, broadcast rights have a lot of room to grow.

— With a promotion & relegation structure, there's increased financial upside.

— US sports teams are attractive, but rarely change hands.

3) In total, 6 out of 20 Premier League teams are partially or wholly owned by American investors (@business).

But with increased competition, and attractive investments drying up, investors are getting creative.

What am I talking about?

Enter Ryan Reynolds & Rob McElhenney.

4) Ryan Reynolds & Rob McElhenney are working to buy Wrexham, a Welsh soccer club.

The interesting part?

Wrexham is currently in 14th place in the 5th tier of English football, meaning they aren't good and don't have much upside.

So what's their plan?

Let's run through it...

5) First up — how does it work?

As a fan-controlled team since 2011, Wrexham AFC has a two-part bidding process.

Ryan Reynolds & Rob McElhenney submitted an initial “vote of interest," which Wrexham Supporters Trust voted 97.5% in favor of hearing a bid from the Hollywood duo.

6) Next up — the presentation.

After being selected to present their case for ownership, Ryan Reynolds and Rob McElhenney held a video call with the 2,000+ members of Wrexham’s ownership group to discuss their financial offer.

So what's the offer?

Let's take a look...

7) Here are the details:

— They'll invest ~$2.6M in the club’s players and facilities.

— They'll sign a 25-yr stadium lease for ~$150k annually.

The best part?

Since Wrexham is fan-owned, they can acquire them with no cash upfront.

Even better, what they plan to do after…

8) Reynolds and McElhenney plan to create a “Netflix-style” documentary series which tracks their purchase, investment in the club, and the teams journey back to prominence.

Think they’re kidding?

They’re not — they even filmed the presentation in case their offer is accepted.

9) So what do the potential economics for a deal with Netflix or Amazon look like?

— They'll get ~$400k per hour of content

— For an 8-part series, they'll make ~$3.2M

— At 25% margins, they'll have ~$800k in profit.

$800k in profit would instantly make Wrexham profitable.

10) Not only would the revenue from a streaming deal with Netflix or Amazon instantly make Wrexham profitable, but it would increase revenue for other facets of the club.

From merchandise to sponsorships and ticket sales, celebrity exposure will only help drive revenue higher.

11) In the end, does buying a soccer club to make a documentary series make sense?

There's not much history to go off, but don't forget...

Ryan Reynolds sold “Aviation Gin” for $610M, meaning if anyone understands the power of celebrity audience and distribution — it’s him.

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The majority of this info—specifically the financials—was pulled from @atbwebb fantastic breakdown for Bloomberg.

If you want a deeper dive, check it out 👇

bloomberg.com/opinion/articl…