Not a day goes by it seems without another winding up order being placed upon a football club and yet here we are in the transfer window and all the press reports suggest another spending bonanza. The economy has had a hard time in the last 18 months yet football has appeared to have survived relatively unscathed but in truth it is a papering over the cracks exercise which in the last 6 months has come to a head. For example;
Portsmouth don’t appear to know who is owning the club, the wages are currently being paid late every month and now the Premier League are becoming shadow directors of the Club in taking television money and paying it to who they see fit. Three questions come to mind, firstly have the Premier League got the authority to do this, will they be paying out of their own funds any claims from a future administrator if it is decided that a preference has quite clearly taken place and thirdly how do the Premier League’s Fit and Proper questionnaires work when clubs are changing hands?
Hull City are in a quandary resulting in a change of Chairman and a statement suggesting that the club is running at a loss each month and is currently unsalable. When you think about some clubs you can see exactly where the money has gone to make it make a loss month in month out but with Hull the number of expensive signings is on one hand with Jimmy Bullard the largest at £5M.
West Ham have been under pressure since Iceland hit the rocks and after selling the whole squad and rebuilding back in the mid noughties appear to face a similar predicament. On top of that the owners are valuing the club at a sum which puts off interested parties or takes too much of their potential investment to allow them, having bought, to develop the playing squad to make them secure for Premier League status once more.
Liverpool’s owners have been caught out by currency movements and the credit crunch leaving them needing to sell before investing further into the playing squad. Whilst Liverpool fans have slavishly “In Rafa we trust” the rest of us has been shaking our heads over some of their signings. It now appears clear. All can play in space and technical ability of the Champions League but are they good enough to get them there from the rough and tumble of the Premier League? We all now trust in Rafa not to qualify but he’ll probably scrape home!
Manchester United are a long term bearer of debt since the Glazer takeover but this has not stopped them making several large transfer payments Unfortunately because the Glazer’s didn’t have the money that doesn’t allow them to write off debt to shares without giving away control as Chelsea have just done. We are currently waiting for the Chelsea 2009 accounts to appear at Companies House to download and explain them to you.
Arsene Wenger thinks Chelsea are cheating by capitalising this debt but of late he has shown a tendency to get upset about things both on and off the pitch. The 2012 solvency rules are what have led to the share capitalisation at Stamford Bridge and maybe Arsene sees that Arsenal along with the majority of clubs will fail them. The Champions League may therefore become a European version of the Carling Cup in the future!
Arsenal themselves have had their own renegotiations with lenders over the slow take up of the Highbury flats. Those in the know tell me it is all settled now but Mr Wenger has for some time been cautious with the Club’s money with some spectacular results as the Premier League table currently shows. Despite comments made to suggest otherwise Chelsea still trade at a loss and can only continue from the owners support. They will still need to capitalise about £30M per season to keep the 30 June 2009 balance sheet position.
That brings us to my own club Spurs – the club that nearly disappeared in 1990 after getting it all wrong. Having spent hundreds of millions trying to get the team right we have recouped some spectacular fees from the sale of our best players. The Chairman realises we need a larger ground but can we afford it? I’ve never been convinced but I understand he told the AGM that the new ground will provide income of £3M per home game against a current amount of £1M. That is extremely interesting. 20,000 extra fans and £2M extra money. That seems a disproportionate amount of revenue from the extra fans so maybe Spurs will be able to afford it as long as the fans can afford it by paying a lot more to attend games.
To me Spurs are following a well trodden path and could if it does not come off go the same way of a number of others, most spectacularly Leeds United, in trying to do too much without adequate resources. Mr Levy’s biggest decision is whether he can afford to develop the club before embarking on the stadium or whether he passes it onto someone who can. It appears he hopes that selling naming rights on the stadium will be his saving grace and I am not sure how well this is going. Overall he has been a good Chairman but his poor decisions have been real stinkers (Glenn Hoddle as Manager as an example) so I hope that he chooses wisely on this occasion.
What all this shows is that the beautiful game that we all knew has long gone and corporate money has taken over. 
But has it? Some corporate money has been invested in the game but in the main it is still individuals with a particular interest in a club.
What we have is a lot of ex players earning a living from the game as pundits without any understanding as to how business works. They tell us that every club needs to spend fortunes on new players often to get the team to mid table mediocrity and we all accept this as if we are under a Doctor Who type trance.
What we never hear is how many clubs make a loss each month. What we close our ears to is salary caps and reduced transfer fees citing human rights, restrictions of trade etc. But the basic facts are that none of our clubs can really afford the salary bill and the players are taking too much.
It’s not at certain clubs it is at every club. If you cannot pay the PAYE bill every month you are paying too much money in salaries – unless you are a football club.
The big issue is that no one knows how to deal with the problem and the owners of Chelsea (in the past) and Manchester City have done nothing but damage the game by increasing transfer sums and wages across the board. If you support these clubs I cannot deny that I would want to be where you are now rather than where you have been and stuff the consequences. After all if it is not our club they’ll buy a competitor. But we need to have some regulation brought in quickly to help out the game before the rot bites too deeply.
It is not the Premier League that needs to make the decision, but they can certainly help, it is FIFA. They should be looking to tackle this problem where the whole wealth of the game is drawn out by the players. Please don’t get me wrong I think that players should be well rewarded for the window of opportunity that they have to perform at the highest level but if they earned what the currently do in a week over a month instead would they really have a different life when they finish playing? Granted they would be poorer but how much money do they really need?
People were outraged over Fred Goodwin’s pension and for getting RBS into trouble but people don’t get as incensed over John Terry’s wages after his recent performances. Who earns more? I’ll leave you to decide. Ashley Cole gets continual stick over comments he made in a book but he only said what all the players come to feel, encouraged by agents, press speculation, former players and the entourage.
If the home players think about it they would not want to bankrupt a club on these shores. But one in another Country? Who cares? That is exactly our problem with huge numbers of players importing themselves to our shores with no in bred loyalties to our domestic game. That is the problem that should be examined before a number of our teams disintegrate and melt down before our very eyes. I’m praying it’s not my team!
