Does the injection of money into football clubs by foreign owners always grant success?

"QPR is a raw diamond and hopefully I can contribute into turning it into a diamond". These were the exciting and trusting words of Tony Fernandes upon his arrival at Queens Park Rangers in the summer of 2011. The then Rangers manager Neil Warnock described Fernandes' takeover as a "momentous" occasion for the west London club. QPR had achieved promotion from the Championship three months earlier, going up as champions.

From a business perspective, the takeover of QPR made complete sense for Tony Fernandes. Born in Malaysia, Fernandes was educated at the famed Epsom College for four years before graduating at the London School of Economics in 1987. Standing as the proud owner of Asia's largest low-fare airline, Air Asia, as well as the boss of the Caterham Formula One Racing Team, the deal that enabled the 48-year-old tycoon's increment of QPR seemingly pointed sharply towards a hasty ascent up the Premier League table.

All those optimistic hopes amongst the fans that the club could be transformed into a side competing for a possible Europa League spot as well as a successful run in at least one of the domestic cup competitions this season have proved strikingly contrapositive. Languishing second bottom in the table with a meagre 24 points from 33 games, and seven points away from safety, QPR are almost consigned to facing the ignominy of relegation. Under Fernandes' reign thus far, QPR have had three managers (Warnock, Mark Hughes and the current manager, Harry Redknapp), but more astonishingly, they have signed an incredible twenty-three players within the space of 21 months. Their highest earner, Christopher Samba, signed from the nouveau-riche outfit Anzhi Makhachkala for £12 million, is on an exorbitant £100k a week. These figures illustrates both the embarrassment of riches Rangers have at their disposal but also how alarming it is to find the side in the position they are deeply entrenched in. This prompts the question; does the injection of money into football clubs by foreign owners always grant success?

The case of Portsmouth Football Club suggests it is anything but good. The club had garnered tangible success in the first decade of this century, achieving promotion as winners from what was then known as the First Division (it is now known as the Championship) in, ironically, Harry Redknapp's first season in charge of the South Coast club. In their first three seasons in the Premier League, the club had accomplished finishes of 13th, 16th, and 17th.

In January 2006, Portsmouth was bought by the French-Israeli businessman, Alexandre Gaydamak from Milan Mandaric, who had saved the club from the possible threat of liquidation in 1999, when the club fell into administration. Over the next couple of years, the Fratton Park side went on to sign several England international players including: Peter Crouch, the club's record signing at £11 million, Jermain Defoe, Sol Campbell, Glen Johnson and David James. The acquisition of players of this sort of calibre was rewarded by their triumphant run in the 2008 FA Cup final which concluded in their 1-0 defeat of Cardiff at the New Wembley Stadium, and a subsequent place in the 2008-09 UEFA Cup, where amongst others, they administered a memorable 2-2 draw at home to the second most successful team in European history, Italian giants, A.C. Milan. 

Fortunes changed for 'Pompey' after Redknapp left the club to join Tottenham in October 2008. In May 2009, Gaydamak sold the club to Sulaiman Al Fahim, a big-time operator from the United Arab Emirates. The following season saw Portsmouth littered with a multitude of financial problems. Several of their key players and top earners were sold, the players went two consecutive months without pay, the club were placed into administration for eight months (leading to a deduction of nine points) and their form suffered turbulently culminating in relegation to the Championship. The decline of Portsmouth has been alarming. The two years they spent in England's second tier was met with more worries, both on and off the pitch, with contractual disputes and the team's poor form, aided by a seriously depleted squad coming to the fore. 

Portsmouth is currently positioned 22nd in League One and face a stern battle to avoid the humiliation of relegation for what would be the third time in four seasons. Their squad consists solely of players who have been loaned, or are on short-term and non-contractual terms. The club continues to decline. 

Despite this proposition, the success Chelsea has amassed due to the takeover of foreign owners, suggests that spending plenty of money on a perfectly assembled squad does have its rewards. Extravagant spending in the first years of the Roman Abramovich era was complemented with back-to-back Premier League titles, two League Cups, and an FA Cup. Between 2008 and 2011, Abramovich, expertly nullified the extensive signings made during the Mourinho era with the purchase of players for moderate transfer fees. Under Luiz Felipe Scolari in the 2008-09 season, the club had only spent £24 million with the additions of Jose Bosingwa from FC Porto for £16.2 million and the former Barcelona playmaker Deco for £8 million. In the 2009-10 season, Chelsea spent £23 million on four players and was rewarded with both the Premier League and FA Cup titles. During the close season for the following campaign, Abramovich spent a further £31million before abandoning his restriction of cautious spending in January 2011 with the British record-breaking transfer of Fernando Torres from Liverpool for £50 million and Benfica's David Luiz for £21 million. 

This reluctance to spend excessive amounts of money on players for nearly three years was surely in relation to the UEFA Financial Fair Play Rules which will finally come into effect at the start of next season, this will prevent football clubs from spending more than they earn, which in turn means they avoid the threat of financial meltdown which could affect the long term survival of the team. However, Chelsea's figures in terms of revenue and debts since the Russian billionaire carefully managed his club’s transfer budget for two-and-a half seasons have been impressive. Since 2008, the club has not been faced with any external debt, and the yearly revenues they gather through their kit sponsors, Adidas and Samsung, as well the television money they receive (rising from £39.3 million in the 2006-07 season to £59.4 million in the 2011/12 campaign), continue to improve annually. This has been combined with sustained success throughout Abramovich's tenure. Chelsea have only had three out of ten campaigns without winning any silverware (excluding community shields) since the Russian magnate has been owner of the club.

In Germany, the '50+1' ownership rule, states that a club must retain at least 51% ownership, thus prohibiting foreign businessmen from assuming outright control of any of the country's clubs. This has proved highly successful with regards to the development of numerous young German players from different Bundesliga sides, and the influence it has had on the national team's resurgence as a world force. With the exception of perhaps Bayern Munich, none of the German clubs can boast the economic clout that numerous teams around continental Europe possess. During the winter transfer window for this season, for instance, the expenditure of sides from the Bundesliga was cast at £35.6 million. This, approximately, represents an astounding £93 million windfall compared to the Premier League's staggering expenditure of £128.7 million. The money spent by clubs in Germany's top division during January also represents a £63 million deficit on what teams from Russia's Premier Liga had lavished out on, and a further £33 million in comparison to clubs from Italy's Serie A. 

Out of all the German sides that are labelled the most 'fit and proper', Borussia Dortmund stands out as the most pronounced example. In 2005, Die Schwarzgelben (The Black Yellows), as they are devotedly referred to as, had fallen into bankruptcy, resulting in a 20% pay-cut to all players. Since then, the club has gradually reduced all its debts and has adopted a policy of selling cheap tickets and limiting the clubs season tickets to ensure every one of the city of Dortmund has a chance to see the game, with the away team only allocated 10% of Die Schwarzgelben's 81,000-seater Signal Iduna Park, the largest stadium in Germany. 

An improvement off the pitch has coincided with improvements on the pitch, with Die Schwarzgelben winning two consecutive Bundesliga titles in 2010-11 and 2011-12. Much of this is in relation to the emergence of the young players who have come through the ranks. Mario Gotze, Marco Reus (who returned to Dortmund from Borussia Monchengladbach last summer), Nuri Sahin and Marcel Schmelzer were all groomed at the club and have played a fundamental role in the renaissance of Die Schwarzgelben. This achievements they have experienced at grassroots level has been interspersed with the obtainment of cheap, marquee signings, in the recent past and present. Names such as Robert Lewandowski, Shinji Kagawa, Lucas Barrios, Neven Subotic, Mats Hummels and Lukasz Piszczek, all spring to mind. 

Dortmund are now potentially 180 minutes away from reaching their first Champions League final since their historic 3-1 win over a Juventus side starring Zinedine Zidane in Munich sixteen years ago. Their resurgence as a European heavyweight should act as a constant reminder to all European clubs that progress can be made without the need for substantial investment by foreign owners. In most cases, the injection of money into football teams does benefit the clubs. The investment Abramovich has put into Chelsea and, likewise, Sheikh Mansour at Manchester City has been duly repaid with by success on the field, which is okay. The fortunes of QPR , however, has proven to be an exception to this trend.