Post by QPR Report on Mar 28, 2009 23:23:33 GMT
Unusually positive piece, given all the other articles.
Sunday Times/Jonathan Northcroft- March 29, 2009
Experts say clubs will stay onside in recession
Analysts have suggested that football is likely to fare better than most other industries during the credit crunch
BOARDED-UP goal frames and repossessed dugouts are not going to be seen just yet. Analysts are suggesting that football is likely to fare better than many industries during the recession. Deloitte, which produces the Football Money League and Annual Review of Football Finance, take a sanguine view. “The unique nature of the football industry, underpinned by loyal club fan bases and long-term broadcast and sponsor contracts secured in advance, may enable major clubs to be relatively resistant to the downturn,” it says.
Wigan chairman Dave Whelan, whose club’s debt is £15m, said last week: “I have no doubt that in the Premier League a club will go into receivership.”
Football League chairman Lord Mawhinney predicted that clubs are in for “a reality check”, with season tickets, corporate hospitality and sponsorship up for renewal as the close season approaches. Sepp Blatter, the Fifa president, warned recently: “Football has not been touched by the first wave of an economic tsunami, but the second wave will touch football, especially with sponsorship”.
Financial experts are less pessimistic. “It’s not that clubs can be complacent. Things like corporate hospitality are among the first to be squeezed, and clubs are freezing or even reducing season ticket prices for next season to keep gates level,” said Paul Rawnsley, director of Deloitte’s Sports Business Group.
“The underlying fundamentals are good for English football, however. The Premier League have just renegotiated their television deal and secured £1.8bn from Sky, while attendances are at a modern high. And clubs are more sensible now — the wages- to-turnover ratio among Premier clubs has stabilised since 2000 to an average 60-63%.
“Plenty of clubs are still going to be stretched by the credit crunch, but I wouldn’t expect to see the volume of insolvency cases the game witnessed in 2002. Then, just after ITV Digital, 10 clubs declared themselves insolvent. The following year it was six. This season it’s only happened to Darlington, and in the next year I’d be surprised if it was more than two or three.”
The biggest area of concern in the Premier League and Championship could be shirt sponsorship. It is thought a significant number of clubs may be without sponsors next season, or taking a leaf from Aston Villa’s book. After failing to get the deal they wanted, Villa put the name of a charity, Acorns Children’s Hospice, on their shirts. Manchester United have been looking for a new name on their shirts after troubled US insurance giant AIG said it would be not be renewing its £12.3m-a-year deal. Manchester City, Newcastle and Middlesbrough have shirt deals that expire this summer.
Corporate hospitality at grounds is also expected to diminish. Arsenal — whose economic model since the Emirates stadium was built demands that they mine it relentlessly for profit — may be especially concerned. Football’s recession- proof tendencies were seen in the last transfer window, when a record £160m was spent by Premier League clubs. Fistfuls of money are expected to be lavished again in the summer window, although the Professional Footballers’ Association fears clubs lower down the scale tightening their belts could result in a record number of footballers signing on as unemployed.
The game is about to get a boost, however, when the international rights deal for 2010-13 is announced. Projections are that it will be substantially better than the current one. “The crunch, by destroying advertising revenues, is hitting free-to-air commercial stations, but the subscription channels such as Sky are holding firm,” said Frank Dunne of TV Sports Markets magazine. “In recessionary times it could be people stay in and watch television more, and Premier League football is premium content. Pay TV was seen as a luxury, and normally luxuries are the first thing that go when you’re tightening your belt. The evidence now is that people see their Sky or Setanta subscription as just another utility bill.”
www.timesonline.co.uk/tol/sport/football/premier_league/article5993287.ece
Sunday Times/Jonathan Northcroft- March 29, 2009
Experts say clubs will stay onside in recession
Analysts have suggested that football is likely to fare better than most other industries during the credit crunch
BOARDED-UP goal frames and repossessed dugouts are not going to be seen just yet. Analysts are suggesting that football is likely to fare better than many industries during the recession. Deloitte, which produces the Football Money League and Annual Review of Football Finance, take a sanguine view. “The unique nature of the football industry, underpinned by loyal club fan bases and long-term broadcast and sponsor contracts secured in advance, may enable major clubs to be relatively resistant to the downturn,” it says.
Wigan chairman Dave Whelan, whose club’s debt is £15m, said last week: “I have no doubt that in the Premier League a club will go into receivership.”
Football League chairman Lord Mawhinney predicted that clubs are in for “a reality check”, with season tickets, corporate hospitality and sponsorship up for renewal as the close season approaches. Sepp Blatter, the Fifa president, warned recently: “Football has not been touched by the first wave of an economic tsunami, but the second wave will touch football, especially with sponsorship”.
Financial experts are less pessimistic. “It’s not that clubs can be complacent. Things like corporate hospitality are among the first to be squeezed, and clubs are freezing or even reducing season ticket prices for next season to keep gates level,” said Paul Rawnsley, director of Deloitte’s Sports Business Group.
“The underlying fundamentals are good for English football, however. The Premier League have just renegotiated their television deal and secured £1.8bn from Sky, while attendances are at a modern high. And clubs are more sensible now — the wages- to-turnover ratio among Premier clubs has stabilised since 2000 to an average 60-63%.
“Plenty of clubs are still going to be stretched by the credit crunch, but I wouldn’t expect to see the volume of insolvency cases the game witnessed in 2002. Then, just after ITV Digital, 10 clubs declared themselves insolvent. The following year it was six. This season it’s only happened to Darlington, and in the next year I’d be surprised if it was more than two or three.”
The biggest area of concern in the Premier League and Championship could be shirt sponsorship. It is thought a significant number of clubs may be without sponsors next season, or taking a leaf from Aston Villa’s book. After failing to get the deal they wanted, Villa put the name of a charity, Acorns Children’s Hospice, on their shirts. Manchester United have been looking for a new name on their shirts after troubled US insurance giant AIG said it would be not be renewing its £12.3m-a-year deal. Manchester City, Newcastle and Middlesbrough have shirt deals that expire this summer.
Corporate hospitality at grounds is also expected to diminish. Arsenal — whose economic model since the Emirates stadium was built demands that they mine it relentlessly for profit — may be especially concerned. Football’s recession- proof tendencies were seen in the last transfer window, when a record £160m was spent by Premier League clubs. Fistfuls of money are expected to be lavished again in the summer window, although the Professional Footballers’ Association fears clubs lower down the scale tightening their belts could result in a record number of footballers signing on as unemployed.
The game is about to get a boost, however, when the international rights deal for 2010-13 is announced. Projections are that it will be substantially better than the current one. “The crunch, by destroying advertising revenues, is hitting free-to-air commercial stations, but the subscription channels such as Sky are holding firm,” said Frank Dunne of TV Sports Markets magazine. “In recessionary times it could be people stay in and watch television more, and Premier League football is premium content. Pay TV was seen as a luxury, and normally luxuries are the first thing that go when you’re tightening your belt. The evidence now is that people see their Sky or Setanta subscription as just another utility bill.”
www.timesonline.co.uk/tol/sport/football/premier_league/article5993287.ece
