Sir Stanley Thomas hopes his investment in Merthyr Tydfil's rugby club will help revive his hometown's image.
The multi-millionaire said he was depressed and hurt after watching the Skint television documentary about life on the breadline in Merthyr.
Thomas has since funded the redevelopment of Merthyr RFC's ground and several signings, including Wales international Andy Powell.
"Merthyr's a great town and I want to put something back into it," he said.
Thomas wants his investment to be "for all sporting organisations in Merthyr".
He added: "That programme not only hurt me, but it hurt everybody in the town.
"I just want to encourage the youngsters and youth to come and participate in sport and have a different thought of how your life is going to go ahead."
Controversial Channel 4 documentary Skint's latest series was filmed in Merthyr and followed people through their daily lives.
Many local residents claimed the series gave the town a bad name, and some critics described the programme as "poverty porn".
Thomas, who along with his brother Peter was 10th on a list of the richest people in Wales in April 2015, is expecting to spend "close to a million pounds" on the project over two years.
"I've already begun and £250,000 has already been spent," he said.
"The rest will be over the next 18 months."
The aim for 2015-16 is to see the club promoted to the semi-professional Welsh Premiership and Thomas hopes Merthyr can produce players for its region, Cardiff Blues.
As well as improving the squad and the Championship club's ground, Thomas hopes to build an indoor training facility that will be used by the local community and sports clubs.
He also plans to replace the pitch at the Wern with an artificial one similar to that used by Cardiff Blues at the Arms Park.
Thomas hopes this will attract the Wales Women's rugby side to train and play in Merthyr.
He said: "Perhaps if we've got the facilities here the Welsh Rugby Union might consider Merthyr for women's internationals."