Post by QPR Report on Dec 30, 2008 1:03:33 GMT
The Times
Credit crunch will hit Premier League clubs
Kevin Eason forecasts the battening down of boardroom hatches as financial reality hits the game at all levelsKevin Eason, Sports News Correspondent
As Christmas messages go, it hardly added to the seasonal cheer. Cards sent out by John Madejski, the multimillionaire Reading chairman, to club staff smacked more of a gloomy Mystic Meg than Santa. They simply depicted a Christmas tree, stripped of any vestige of twinkling lights and with not a parcel in sight under its bare, brown branches.
The warning was clear: if you think Christmas is bad, just wait until the new year dawns. As shops up and down Britain’s high streets put down their shutters for the last time, football is starting to wonder out loud whether the January sales will be as much of a damp spending squib as those in the stores.
The January transfer window is traditionally the time to panic-buy. For teams at the top of the Barclays Premier League it is the time to strengthen squads buckling under the weight of European fixtures crammed on top of cup-ties and demanding league games; for teams at the bottom it is the chance to spend quickly and hope that new players can save them from relegation and the catastrophic loss of income that goes with it.
Related Links
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Report tips credit crunch to hit small sports
January transfer spending in the Premier League and Football League has soared in recent years, from £33 million in 2003 to £175 million last January. But that was when the good times rolled, when credit was easy and players’ agents could name their price.
Now the only word associated with credit is crunch and even football’s sugar daddies are squealing that enough is enough. If moneybags Chelsea, with Roman Abramovich, their Russian billionaire benefactor, have called a temporary halt to signings while they cut staff and shave spending, what chance have the rest?
Manchester United look as though they will limit themselves to investing £15 million in their future by taking on two Serbs, Zoran Tosic, aged 21, and Adem Ljajic, 17, but it is not clear whether these deals will go through next month. Rumours swirl that Arsenal will bid a club-record fee to woo Carlos Tévez from United, while Liverpool have been associated with many big-name players.
Arsenal, at least, have money in the bank, but what happens when Rafael Benítez goes to George Gillett Jr and Tom Hicks, the Liverpool owners, with his price list? The Liverpool manager is likely to leave the room with his ears ringing from a lecture about economics, which may include how the pair plan to refinance the £350 million loan they used to buy the club, which is due for renegotiation while the transfer window is open wide.
That leaves Tottenham Hotspur, one of the few profitable clubs in football, who have spied the promised land of the “Big Four” under Harry Redknapp, their new manager, and could release funds for two or three significant signings. The only big spending will come from the coffers of Manchester City’s Arab owners, whose pile of petro-dollars remains untouched by the financial meltdown.
If Mark Hughes, the City manager, spends all of his budget, it is unlikely to come anywhere near to sending January’s total near to last year’s record mark. Premier League clubs such as Middlesbrough have battened down the financial hatches to the extent that they cannot buy unless they sell. And a club such as Middlesbrough do not want to sell an asset as valuable as Stewart Downing, their England winger who has been targeted by Tottenham, even if Redknapp comes calling with an offer of £15 million.
Shopping for bargains from abroad is also out in the new austerity era. Sterling’s fall means that players from the Continent are 20 per cent more expensive this January than they were last, according to the foreign exchange trading company Currencies Direct.
That will not stop Manchester City’s owners in Abu Dhabi opening their gilded chequebook. But City, and a lucky (or desperate) few aside, football’s coffers are looking increasingly bare. For some of the 72 Football League clubs and the dozens of teams in the Blue Square Premier and lower leagues, Santa brought little but big bills and final demands this Christmas.
Many are cushioned because they pre-sold their season tickets nine months to a year ago and the money is banked. But the shock is still to come.
The sales fever that swept the high street in the past few days has reached the turnstiles, with clubs slashing ticket prices, and Lord Mawhinney, the Football League chairman, has warned that season tickets for 2009-10 will be harder to shift than for years, to the extent that he plans to visit Football League clubs in March to check for any signs of looming problems.
“Things look calm now,” he said. “But the crunch comes in the run-up to next season. Crowd numbers have held up so far, but they won’t as things go on. The next three years are going to be terrible and football is not immune to the problems in the wider economy.”
As a high-ranking member of the governments of Margaret Thatcher and John Major, both of which wrestled with deep economic problems, Mawhinney has a better insight than most into what is coming. He started warning Football League clubs seven months ago to cut costs and prepare for the worst.
Related Links
Credit crunch is rough on golf's greenkeepers
Subaru joins the exodus amid credit crunch
Report tips credit crunch to hit small sports
“Clubs will have to slim down,” he said. “The sensible club chairmen will have put downward pressure on their costs. The big problem is player contracts, which have to be honoured. We have seen the result of soaring wages in the Premiership having the effect of dragging up pay in all the other leagues, right down to the Conference [Blue Square Premier].”
Mawhinney has suggested a salary cap, an idea that split the Coca-Cola Championship clubs down the middle. But even the top clubs could be forced to address the new reality, with the Premier League wage bill bursting through the £1 billion mark last year.
Unfortunately, the new reality has already arrived in the wooden corridors of the poorest clubs. A week before Christmas players at Worcester City, the Blue Square South club, agreed to a pay cut, following in the footsteps of Eastleigh and Fisher Athletic. Players at Grays Athletic survived having their pay cut in half only after making it into the first round of the FA Cup in November.
Even a well-run and relatively wealthy club such as Stevenage Borough, the FA Trophy winners last year, are suffering. Phil Wallace, the Blue Square Premier club’s chairman, warned fans that year-end profits to May 2008 had been transformed into staggering losses.
“In September, October, November and the first half of December income fell off a cliff and we have lost more in those three or four months than we made in the previous two years,” he said.
“Anyone supporting lower-league clubs should be concerned. If we don’t change, the chances of surviving what I expect to happen in 2009 and 2010 will be greatly reduced.”
They are words of warning that should echo in the boardrooms the length and breadth of English football, not only in the tiny clubs struggling for survival, and may convince the high and mighty of the Premier League to think twice this January before they are tempted to spend, spend, spend again.
www.timesonline.co.uk/tol/sport/football/premier_league/article5415599.ece
Credit crunch will hit Premier League clubs
Kevin Eason forecasts the battening down of boardroom hatches as financial reality hits the game at all levelsKevin Eason, Sports News Correspondent
As Christmas messages go, it hardly added to the seasonal cheer. Cards sent out by John Madejski, the multimillionaire Reading chairman, to club staff smacked more of a gloomy Mystic Meg than Santa. They simply depicted a Christmas tree, stripped of any vestige of twinkling lights and with not a parcel in sight under its bare, brown branches.
The warning was clear: if you think Christmas is bad, just wait until the new year dawns. As shops up and down Britain’s high streets put down their shutters for the last time, football is starting to wonder out loud whether the January sales will be as much of a damp spending squib as those in the stores.
The January transfer window is traditionally the time to panic-buy. For teams at the top of the Barclays Premier League it is the time to strengthen squads buckling under the weight of European fixtures crammed on top of cup-ties and demanding league games; for teams at the bottom it is the chance to spend quickly and hope that new players can save them from relegation and the catastrophic loss of income that goes with it.
Related Links
Credit crunch is rough on golf's greenkeepers
Subaru joins the exodus amid credit crunch
Report tips credit crunch to hit small sports
January transfer spending in the Premier League and Football League has soared in recent years, from £33 million in 2003 to £175 million last January. But that was when the good times rolled, when credit was easy and players’ agents could name their price.
Now the only word associated with credit is crunch and even football’s sugar daddies are squealing that enough is enough. If moneybags Chelsea, with Roman Abramovich, their Russian billionaire benefactor, have called a temporary halt to signings while they cut staff and shave spending, what chance have the rest?
Manchester United look as though they will limit themselves to investing £15 million in their future by taking on two Serbs, Zoran Tosic, aged 21, and Adem Ljajic, 17, but it is not clear whether these deals will go through next month. Rumours swirl that Arsenal will bid a club-record fee to woo Carlos Tévez from United, while Liverpool have been associated with many big-name players.
Arsenal, at least, have money in the bank, but what happens when Rafael Benítez goes to George Gillett Jr and Tom Hicks, the Liverpool owners, with his price list? The Liverpool manager is likely to leave the room with his ears ringing from a lecture about economics, which may include how the pair plan to refinance the £350 million loan they used to buy the club, which is due for renegotiation while the transfer window is open wide.
That leaves Tottenham Hotspur, one of the few profitable clubs in football, who have spied the promised land of the “Big Four” under Harry Redknapp, their new manager, and could release funds for two or three significant signings. The only big spending will come from the coffers of Manchester City’s Arab owners, whose pile of petro-dollars remains untouched by the financial meltdown.
If Mark Hughes, the City manager, spends all of his budget, it is unlikely to come anywhere near to sending January’s total near to last year’s record mark. Premier League clubs such as Middlesbrough have battened down the financial hatches to the extent that they cannot buy unless they sell. And a club such as Middlesbrough do not want to sell an asset as valuable as Stewart Downing, their England winger who has been targeted by Tottenham, even if Redknapp comes calling with an offer of £15 million.
Shopping for bargains from abroad is also out in the new austerity era. Sterling’s fall means that players from the Continent are 20 per cent more expensive this January than they were last, according to the foreign exchange trading company Currencies Direct.
That will not stop Manchester City’s owners in Abu Dhabi opening their gilded chequebook. But City, and a lucky (or desperate) few aside, football’s coffers are looking increasingly bare. For some of the 72 Football League clubs and the dozens of teams in the Blue Square Premier and lower leagues, Santa brought little but big bills and final demands this Christmas.
Many are cushioned because they pre-sold their season tickets nine months to a year ago and the money is banked. But the shock is still to come.
The sales fever that swept the high street in the past few days has reached the turnstiles, with clubs slashing ticket prices, and Lord Mawhinney, the Football League chairman, has warned that season tickets for 2009-10 will be harder to shift than for years, to the extent that he plans to visit Football League clubs in March to check for any signs of looming problems.
“Things look calm now,” he said. “But the crunch comes in the run-up to next season. Crowd numbers have held up so far, but they won’t as things go on. The next three years are going to be terrible and football is not immune to the problems in the wider economy.”
As a high-ranking member of the governments of Margaret Thatcher and John Major, both of which wrestled with deep economic problems, Mawhinney has a better insight than most into what is coming. He started warning Football League clubs seven months ago to cut costs and prepare for the worst.
Related Links
Credit crunch is rough on golf's greenkeepers
Subaru joins the exodus amid credit crunch
Report tips credit crunch to hit small sports
“Clubs will have to slim down,” he said. “The sensible club chairmen will have put downward pressure on their costs. The big problem is player contracts, which have to be honoured. We have seen the result of soaring wages in the Premiership having the effect of dragging up pay in all the other leagues, right down to the Conference [Blue Square Premier].”
Mawhinney has suggested a salary cap, an idea that split the Coca-Cola Championship clubs down the middle. But even the top clubs could be forced to address the new reality, with the Premier League wage bill bursting through the £1 billion mark last year.
Unfortunately, the new reality has already arrived in the wooden corridors of the poorest clubs. A week before Christmas players at Worcester City, the Blue Square South club, agreed to a pay cut, following in the footsteps of Eastleigh and Fisher Athletic. Players at Grays Athletic survived having their pay cut in half only after making it into the first round of the FA Cup in November.
Even a well-run and relatively wealthy club such as Stevenage Borough, the FA Trophy winners last year, are suffering. Phil Wallace, the Blue Square Premier club’s chairman, warned fans that year-end profits to May 2008 had been transformed into staggering losses.
“In September, October, November and the first half of December income fell off a cliff and we have lost more in those three or four months than we made in the previous two years,” he said.
“Anyone supporting lower-league clubs should be concerned. If we don’t change, the chances of surviving what I expect to happen in 2009 and 2010 will be greatly reduced.”
They are words of warning that should echo in the boardrooms the length and breadth of English football, not only in the tiny clubs struggling for survival, and may convince the high and mighty of the Premier League to think twice this January before they are tempted to spend, spend, spend again.
www.timesonline.co.uk/tol/sport/football/premier_league/article5415599.ece