Iran's Economy Minister Ehsan Khandouzi has confirmed the transfer of ownership of the country's top two football clubs, Persepolis and Esteghlal to the private sector to continue playing in the Asian football league, IRINN reported on April 22.

This long-awaited move comes just ahead of the May 5 deadline set by the Asian Football Confederation (AFC) for clubs to secure professional licences. Resolving the clubs' joint ownership structure has been a critical aspect of this transition, necessary for compliance with AFC club licensing regulations and attracting potential investments to enhance their sporting performance.

The Iranian government expects this transfer to resolve the joint ownership issue and strengthen the financial sustainability and discipline of both clubs. Both Esteghlal and Persepolis boast massive fan bases and rank among the world’s football clubs with the highest social media followers. However, they face substantial debts and limited access to common sources of income, such as broadcasting rights, which present significant challenges for the new owners in making the clubs profitable.

Traditionally, Iranian clubs generate revenue through sponsorships or direct financial support from owners. However, the clubs have struggled in recent years due to the devaluation of the Iranian rial, reducing their purchasing power during international transfer windows.

According to officials from Iran Fara Bourse, a consortium led by the Persian Gulf Petrochemical Industries Company and its subsidiaries, including Tondgooyan Petrochemical, Bouali Petrochemical, Pars Petrochemical, and Bandar Imam Petrochemical companies, has acquired 85% of Esteghlal’s shares.

Banks lead in purchases

Similarly, a consortium of banks—Shahr Bank (30%), Bank Mellat (20%), Tejarat Bank (20%), Bank Saderat Iran (5%), Refah Bank (5%) and EnBank (5%)—has purchased an equivalent stake in Persepolis.

Esteghlal's shares were officially sold at IRR3,046 per share, with Bank of Industry and Mine Brokerage facilitating the transaction, which totalled nearly IRR28 trillion ($44.4mn). Meanwhile, Persepolis shares were traded at IRR3,580 per share, amounting to a transaction worth IRR 32 trillion ($50.7mn). Buyers are required to pay 10% of the deal's value on April 23, with the remaining 90% to be settled in six-month instalments.

The finalisation of this deal is expected to be concluded by the Minister of Sports on April 24.

Ali Asgari, CEO of PGPIC, welcomed Esteghlal into their holdings, expressing optimism about their plans to enhance the club's performance, given its status as the nation's premier football club with numerous accomplishments. Asgari emphasised their goal of ensuring stability within the club and securing the Persian Gulf Pro League title.

With Esteghlal leading the league table, closely followed by rival Persepolis, the new owners have outlined plans to settle 20% of outstanding player payments ahead of Esteghlal's upcoming match on April 23.

Blue and red, both unhappy

Fans have mainly responded pessimistically, doubting whether these deals will sufficiently address the clubs' ongoing financial challenges.

"The government made 6000 billion from the sale of Esteghlal and Persepolis. Just see how much money they have pocketed over the years while we struggled in misery and lack of facilities," wrote one fan on the social media website X. 

Another person, using the pseudonym Emaddium, wrote: "I have reliable news that Fars, the buyer of the club, only aims to use the club ownership as a cover for the biggest money laundering operation in Iran, which I think is very important. If anyone has information, please share it discreetly and safely."

The decision to privatise these clubs follows the government's offering of stakes in March 2022, where 10% of the clubs’ shares were publicly available. However, concerns over transparency and market fluctuations prevented these shares from being publicly traded.

Before the 1979 Islamic Revolution, Esteghlal (the Blues) had a private owner, while Persepolis (the Reds) underwent a similar transition, coming under the control of the Physical Education Organisation (now the Sports Ministry).

Established in 1963, Persepolis is one of Iran's most successful clubs, boasting 13 league titles. Although continental glory has eluded them, Esteghlal has secured two titles in Asia's premier club competition, along with several domestic honours.