Football is not Immune to the Economic Downturn
ByTrick question: What do West Ham Utd, Southampton FC, Portsmouth FC and Tottenham have in common.
Clue: Once is a mistake, twice a really bad coincidence, but more than thrice – is outright incompetence of the highest order.
The answer and common denominator here is a person revered for his ’Delboy’ approach to football business, and a person who is legendary for leaving debris wherever he goes. That’s right – we’re talking Harry Redknapp – but I’ll come to ’Api Ari’ in a minute.
If there’s one thing that has baffled me it’s the brazen and breath-taking manner that the footballing establishment has carried on with its business especially in the last 3 years in total oblivion to the economic environment around them.
As legendary institutions that have been in business from time immemorial as well as household names in banking and financed crumbled and fell around the world – the arrogance of football continued unabated.
You wouldn’t be blamed for thinking that either some good folks in dark suits who manage football know something we don’t. Either that or the powers to be in football have their heads so far up each other’s asses that no one wants to deal with the reality of life around them.
Football was always going to be vulnerable to the financial meltdown if only for the reason that the money in football comes directly from consumer pockets – whether it be stadium attending fans, merchandise buying public or subscribers to satellite and cable sports channels all over the world.
When folks are broke, they make difficult choices and this inevitably ends up in more people cutting out some forms of entertainment. And it beggars belief that football clubs think they still have a captive audience at their mercy.
So when this week you hear that Portsmouth can’t meet their payroll for the second time in as many months, you begin to wonder why Peter Storey and his management team still have a job. The distance from the heights Portsmouth reached when winning the 2008 FA Cup to the lows that they’ve hit now is truly shocking.
Shocking but not surprising because they were always living on borrowed time. Regardless of the TV revenue share from B Sky B, it’s madness for a club with a 20,000 sweater stadium to have a wage bill of £55 million at the height of their success in 2008.
This was a classic example of how to live on borrowed time.
Portsmouth aren’t the only club in this situation, West Ham Utd, Hull FC and a plethora of clubs in different divisions up and down the country are facing the abyss as they try to figure out how to get out of their quagmire.
Stockport for example, can’t even afford for their players to swop shirts with opposing players (a tradition in football) because they simply can’t afford to do this.
In more familiar surroundings of the Premiership, Liverpool and Manchester United are facing their financial demons as they deal with a very precarious position. These two world famous clubs are living on their reputation only and this will only take them so far before it kills them.
I often here misguided pundits and hacks saying that Liverpool and Manchester United will never go to the wall. They’re too huge a club for the world to see them disappear.
The thing is this though. It’s fine to say that these two clubs are worth more than the debts they have – but they’re only worth more if they actually get liquidated. With the banks calling in their loans and keeping a tight rein on their money, the lifeline of the squad which is the transfer war chest then becomes a distant fantasy.
I’m pretty sure the Glazer family are looking forward to the day Sir Alex retires, for that will be their cue to put a very tight leash on the next manager. They dare not do it with Fergie, and they’re probably happy that he’ll soon call curtains on his career.
Manchester United won’t be the same club when the devil of the financial masters come to collect their dues.
Liverpool are learning this the hard way and it’s hard to see how the situation at Anfield will be resolved in the short to medium term. Their team is already slipping and without the usual ’cheque book’ management that they’re used to, their options are very limited.
Need I say more about how lucky Arsenal are to have an economically savvy manager and a prudent board?
Wenger has been lambasted by clueless and intellectually bankrupt football commentators for ”not spending big”. That sort of arrogance and irresponsibility in dire economic times is what has led to premiership clubs like Manchester United, Liverpool, West Ham, Hull and Portsmouth facing the difficult financial situations they’re in.
For Portsmouth to have to release a statement denying that they’re heading for administration – you can’t stop but wonder why they didn’t say ”we’re not heading for administration yet”.
As for ’Api Ari’ – Daniel Levy must have learnt from his managers antics at Portsmouth and Southampton. Redknapp has form in leaving debris wherever he goes and as a media darling, he is often absolved from the responsibility of his actions that have pretty much bankrupted the clubs he has managed.
Levy has already told his manager that if he wants any new players, he’ll have to sell. You wonder whether the Tottenham Chairman is a smart guy or a scared guy.
Tue 13th September 2011; 19:45, Dortmund
We live in a “must have” society that doesn’t think about the cost until it is too late.
Pompey fans must have loved getting their team, of some great history, regain their place in the top flight, after very many years, & then win a major trophy. Now they are faced with the very real prospect of free-fall, at best, & total extinction at worst.
Would they swap what they have recently had for a comfortable existence in the Championship? I don’t know- maybe it ‘is better to have loved & lost than to never have loved at all’ but that would not be for me.
With Tottenham they have made a reasonable profit but that is largely dependent on players’ values continuing to inflate. They have done well with selling on Carrick & Berbatov in recent years but it is surely dangerous to rely on such a policy. My feeling is we shall see quite a dramatic lowering of transfer fees, apart from maybe the absolute super stars, particularly with L’pool & MU likely to be unable to match their reckless spending of the last few years. Chavski & Man Mid East can’t want everyone.
Time will tell with all manner of clubs in England, Italy & Spain but you just get a growing feeling that there will be quite a shake out of the financially exposed clubs in the next few years.
In England, we have ‘experts’ who know nothing. I have dubbed them ‘Mediocre Experts’. These are our pundits. So, whatever do you expect from ‘Mediocre Pundits’?
Harry the Red on his part truly have the Devil’s touch.
The world isn’t out of the financial crisis yet: Central Banks have put the financial industry on life support, and we absolutely have not treated the maladies that drove the patient into coma in the first place.
Such life support, though, cannot continue indefinitely as it has costs,and football clubs that are heavily in debt are likely to face serious problems with refinancing such debt, both with regards to availability of funds and interest costs. Flint is right to point to Man.U and to Liverpool as being on the watch list: Virtually all of the debt incurred by their present owners were simply for the take over, and were foisted on the clubs’ balance sheets (Unlike Arsenal, whose debt has primarily gone into the stadium, an asset that seats more and makes money.
Some other worthies, dependent quite heavily on patrons’ funds are also likely to wake up to unpleasant surprises, given the troubles besetting economies native to such patrons.
Don’t be surprised, if very soon, and barring luck on the economic front, the grand old English tradition of Aristocracy selling the family silver to keep appearances up begins.