3 Yr Ago: Premiership-Record Income, Losses, Debts

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Bump 3 Years ago...Before we started Our Premiership spending!


Guardian/David Conn

Record income but record losses for Premier League

In his annual analysis of Premier League finances our award-winning writer looks into the game's black hole

The Premier League's 20 clubs collectively lost close to half a billion pounds last year despite making record income, a Guardian analysis of their most recent accounts has revealed. In the 2009-10 financial year, the clubs currently in the Premier League made total revenues of �2.1bn, principally from their billion-pound TV deals and the world's most expensive tickets. Yet 16 of the 20 clubs made losses, totalling a record �484m, and the same number relied on funding from their wealthy owners.

Since the owners took over their clubs, they have put in a staggering �2.3bn, by way of loans or for shares, mostly to pay ever-escalating players' wages and transfer fees. The Premier League's total wage bill in 2009-10 was �1.4bn, an average �70m per club, accounting for an average 68% of the clubs' income, once Arsenal's exceptional profit from selling flats in the old Highbury stadium is discounted.

This picture of Premier League clubs making fortunes in the gilded bubble of national and worldwide popularity, but failing to control players' wages, making huge losses and relying on owners, poses a major question about whether they can reform in time to meet Uefa's financial fair-play rules. Clubs will be permitted to record losses of only �45m (�39.7m) altogether over the three seasons from 2011-12 to 2013-14, and cannot rely on owners' subsidies, if Uefa is to sanction their participation in European competitions.

All the clubs in the top seven made substantial losses except Arsenal, whose record income of �382m, and �56m profit, were swollen by �156m made from the Highbury development. By far the biggest loss was at Manchester City, where Sheikh Mansour of Abu Dhabi put his dynastic oil millions into bankrolling a �121m deficit from signing and paying the galactic wages of players who could lead City to trophies. Across Manchester, United made �286m turnover, more than any other club if Arsenal's property income is discounted � yet the costs and interest on the debts the Glazer family have loaded on to the club, pushed United into a losing �79m.

Double winners in 2009-10, Chelsea, whose owner Roman Abramovich is always cited as a supporter of financial fair play, made the next biggest loss, �78m. Tottenham's successful push for Champions League qualification was achieved with a �7m loss and �15m investment from the owners, principally Bahamas-based currency speculator, Joe Lewis. Aston Villa lost �38m as the club's US owner, Randy Lerner, struggles to compete with clubs whose commercial income and potential is much greater than Villa's. Liverpool made revenues of �185m, more than double that of Villa, yet lost �20m, in the last full season owned by Tom Hicks and George Gillett, who had borrowed �200m to buy Liverpool then made the club responsible for paying their interest.

Even among the four clubs which avoided making losses, only one, Wolverhampton Wanderers, did so by making a substantial, convincing
profit. Arsenal's remarkable-looking �56m profit was hugely boosted by the club's �156m income from the Highbury apartment sales, and Arsenal moved into making a �6m loss in the six months from May to November last year.

Of the other non loss-making clubs, Birmingham City's profit was very small, and the club is now considered the Premier League's major financial headache, struggling with a cash shortfall which could tip into crisis if Birmingham fall into relegation this weekend. West Bromwich Albion, considered a soundly-run club resigned to a habitual yo-yo existence, made a small �500,000 profit in 2009-10, when they were in the Championship, not the Premier League.

Wolves' �9m profit stands out among all 20 clubs, yet it was made in the first season up from the Championship with new Premier League TV income pouring into Molineux. The Wolves owner, Steve Morgan, believes he can crack the challenge of establishing the club in the Premier League while not taking excessive financial risks.

Yet the overall losses on this scale, �484m in total, and net debts of �2.5bn, �400m more than the clubs' total turnover, do not in fact mean the 20 clubs are mostly in financial difficulties. Most of the losses are soaked up by huge financial contributions from club owners whose wealth looks more stable than has been true of the Premier League in the recent past.

The four clubs not bankrolled by owners were Arsenal, whose shareholders last month pocketed a combined �243m selling to Stan Kroenke, but never put a penny into the club itself, West Bromwich Albion, Everton and Manchester United. The Glazer family's ownership has cost United around �350m in interest, fees, loans to the family themselves and bank charges since 2005, and they have never put money into the club. In the year to June 30 2010, United paid �42m interest on the �500m loans the Glazer family originally took out to buy the club in the first place, and just refinancing that debt, replacing the loans with a bond, cost United an eyewatering �65m, cash.

The Glazers, though, are the exceptions in causing money to be taken out of their club, particularly with Hicks and Gillett, the other US "leveraged buyout" practitioners, forced out of Anfield. Most owners have put huge finance in, yet one of the most extraordinary aspects of this subsidy is how small a proportion of it has financed anything permanent, whether stadium-building or other club infrastructure. Almost all the stadiums were already built or refurbished when the current generation of owners bought the clubs. So the overwhelming proportion of the �2.3bn the owners have contributed has gone on paying transfer fees, superstar wages and other expenses, beyond what the clubs could otherwise afford.

At Manchester City, the prime example, Sheikh Mansour's investment is up to �493m in less than three years. City have improved the Carrington training ground, built a new office block and made other relatively inexpensive improvements, but the Eastlands stadium was already built, with �132m public and lottery money, well before Mansour bought the club. Most of Mansour's half a billion has been spent paying the transfer fees and near �10m-a-year wages each for players such as Carlos Tevez, Yaya Tour�, David Silva and the others City would never have been able to afford without Mansour's patronage.

While Mansour, Abramovich, Lerner and Fulham's Mohamed Al Fayed, whose loans to Fulham increased to �187m, are high-profile figures, subsidies from less prominent owners are nevertheless huge. Peter Coates' family, who own online gambling company bet365, have invested �43m in Stoke City, US private equity investor Ellis Short �47m in Sunderland and the little-known, Isle of Man-based Edwin Davies has taken to �85m his financial ballast of Bolton Wanderers, whose loss last year was �35m.

The figures illustrate the multiple challenges facing Premier League clubs to comply with financial fair play. Clubs must not only stop paying players and their agents continually inflating wages which were already incomprehensible years ago to most of the world's population. Fans are concerned, particularly in England, that Uefa's sensible principle that clubs should rely on income, not owners, will have the unintended consequence of leading to increased ticket prices.

That has already happened at Arsenal, and this week Liverpool, owned by John Henry's Fenway Sports Group, announced 6.5% ticket price rises, to the club's loyal, generally not wealthy fanbase who must live in the real world, where there is a recession going on.

www.guardian.co.uk/football/2011/may/19/premier-league-finances-black-hole

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And Club by club Summary of Income/Expenses/Debt

image.guardian.co.uk/sys-files/Guardian/documents/2011/05/18/sportscribddoc.pdf?intcmp=239

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Guardian/Stuart James

Wolves' Steve Morgan rails at big spenders and calls for common sense

The Wolves chairman believes his club is providing a template to others who are committing 'financial hara-kiri'

Steve Morgan, the Wolverhampton Wanderers chairman, has severely criticised the culture of excessive spending and high borrowing in the Premier League and accused some of the club's owners of "ludicrous" short-term thinking and committing "financial hara-kiri".

In what amounted to a damning indictment of the way many Premier League clubs operate, Morgan accused owners of "throwing money down the drain" to cover interest payments on debt and questioned how some of those competing in Europe would be able to conform to Uefa's financial fair-play rules, which will be in place from next season.

Morgan, who took over at Molineux in 2007, called for football to embrace a period of "fiscal common sense" and highlighted Wolves as an example of a club that is run as a "proper business" and should provide a template for others to follow. Wolves posted a £9m pre-tax profit in their accounts for the year to 31 May 2010 – they were one of only four Premier League clubs not in the red – and they have no debt. Their wage bill is only 49% of turnover and their accounts also showed £25m in the bank.

"We were one of the few Premier League clubs that were profitable last year," said Morgan. "We don't have any borrowings, we have cash in the bank and we have put the money aside to do the redevelopment [work at Molineux] so it's not as if we are going into debt to do this [work at the stadium]. We have tried to manage this as a proper business and I wish other clubs would do the same.

"We're not paying huge sums of interest like many other clubs are doing. Lots of clubs are throwing money down the drain because they've got such high borrowings, and with the cost of capital for football clubs now that's just dead money. The money that other clubs are spending on interest we have actually put aside over the last two to three years for the [stadium]."

Morgan said that he had grave reservations about those clubs that have little regard for their balance sheets. "I wonder how the hell they're going to conform to the Uefa [financial] fair-play rules if they're doing some of the things they're doing. We have seen what happened with Portsmouth – they went out on a spending spree, won the FA Cup but then almost went into oblivion. This short-term mentality in football, I think, is ludicrous.

"I just think we are on a journey to get to fiscal common sense. The Uefa [financial] fair-play rules are a step in that direction but we have got more to do. I think more of the people that control other Premier League clubs need to follow Wolves' example. Blackpool have done it this year by controlling their wages. They may well go down and we may well go down yet, but there just needs to be more common sense come into the game."

Although Wolves' net transfer spend last summer was £18m – the third-highest in the Premier League – Morgan will not countenance paying out huge wages. He also insists that there is a clause in every player's contract stipulating that salaries will be reduced in the event of relegation. "Our revenue would drop by getting on for £30m if we went down so who the hell is going to pick that up?" he said. "You have to cut the cloth when you go down. It's up to everybody else if they want to commit financial hara-kiri."

Wolves go into their final game of the season, against Blackburn Rovers at home on Sunday, knowing that anything less than three points will leave them relying on results elsewhere. One of those fixtures involves Manchester United taking on Blackpool at Old Trafford, where Sir Alex Ferguson is expected to pick a weakened team ahead of their Champions League final. When Mick McCarthy did likewise in a Premier League game at Old Trafford last season, Wolves were given a suspended fine.

"It'd be pretty hypocritical if [United] weren't [fined]," said Morgan. "But United are a very professional football club and they're not going to want to lose on the last day of the season, the day they get presented with the Premier League trophy. The only thing we can do is get on and try and win our game and whatever happens elsewhere is of no more than passing interest to us."

www.guardian.co.uk/football/2011/may/18/steve-morgan-wolves-chairman

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Telegraph/Hernry Winter

Wolves chairman Steve Morgan calls for salary cap as Premier League debt crisis grows

]Steve Morgan, the Wolves chairman and one of the most respected businessmen in the country, believes that Premier League clubs are committing “financial hara-kiri” by bankrolling bloated squads through debt or owners’ largesse.

Wolves chairman Steve Morgan calls for salary cap as Premier League debt crisis grows

Morgan wants some financial sanity in the English game, starting with a salary cap.

Morgan adopts a long-term strategy with Wolverhampton Wanderers, continuing to invest in the academy that boasts a handful of real prospects, and on Wednesday talking to schoolchildren about impressive plans to upgrade Molineux.

Whatever fate befalls Mick McCarthy’s side in their fight against relegation on Sunday, and victory over Blackburn Rovers guarantees survival, demolition begins on Monday on the North Stand which will eventually see capacity rise to 36,000. Life goes on.

“Wolves fans are noisy anyway and this will help create the cauldron,’’ Morgan said. “We have to bring Wolves into the 21st century. It’s about the long-term.’’ Sensible housekeeping is the name of the game for one of the nation’s leading house-builders.

Wolves’ most recent accounts revealed a £9 million profit on £61 million turnover, including £39 million from broadcast revenue, a reminder of the vital importance of staying up.

“We expect to be positive again this year,’’ Morgan said. “We were one of the few Premier League clubs that were profitable last year, we don’t have any borrowings, we have cash in the bank. We have tried to manage this as a proper business and I wish other clubs would do the same.”

He looks at leveraged clubs like Manchester United and particularly those that rely on wealthy patrons like Chelsea and Manchester City and fears for the future.

“I wonder how the hell they’re going to conform to the Uefa financial fair play rules if they’re doing some of the things they’re doing,’’ Morgan said. “We have seen what happened with Portsmouth — they went out on a spending spree, brought loads of players, won the FA Cup but then almost went into oblivion. The graveyard is full of them. I have no intention of Wolves being one of them.

“Lots of clubs are throwing money down the drain because they’ve got such high borrowings. The money that other clubs are spending on interest we have actually put aside over the last two to three years on the stand.

“This short-term mentality in football is ludicrous. People have to start thinking. We have invested a lot of money in our academy. The fans love nothing better than to see home-grown players come through the system.

"But we were the third-highest net spenders in the Premier League last summer with £18 million, so it’s not as if we’re not spending on players. And Mick will have money to spend again this summer. It’s all about balance.

“A salary cap would be a sensible step in the right direction as a percentage of revenue. Is it too much of an ask that clubs are run fiscally correct? I do shake my head sometimes when I hear what certain chairmen and directors say should happen in football with salary control and look at what they do? The opposite.

“More of the people that control other Premier League clubs need to follow Wolves’ example. Blackpool have done it this year by controlling their wages. They may well go down and we may well go down yet, but there just needs to be more common sense come into the game.”

Unlike clubs like West Ham, Wolves players are on wages that shrink if they go down. “Everybody at this club does and I know that is not true at a lot of clubs, where they’ve got certain players who are on the same whatever happens. It’s financial suicide. Our revenue would drop by getting on for £30 million if we went down so who is going to pick that up? You have to cut the cloth when you go down.”

Morgan admitted that Wolves had lost out on “one or two” players because the club insisted on division-related deals. Others haven’t. “If they want to commit financial hara-kiri that’s up to them.”

He questions the bulk-buying of some clubs. “If you start bringing in seven or eight players, as Manchester City have shown — Christ, they’ve spent hundreds of millions of pounds on players – but did they all bed in? A lot are lent out, in the reserves. Bringing in loads is not a magic wand.”

A good manager is vital. He will stick by McCarthy whatever Sunday brings.

“Mick has been here for five years and I don’t believe you get any progress at all by chopping and changing. That’s happened in other clubs and what good has it done?

“If you go to the dressing room before a game you’ll see the rapport between Mick and the players. There’s a proper team spirit, a real bond. There are no splits in the camp, no arguing. We’re together as a club.

"Look at our performances: we’ve beaten Manchester United, Chelsea, City, Liverpool, Albion, Villa. Our players are good players and good people. You see our players going into hospitals, making community visits, and they don’t need to be asked to go.”

After having a glass of wine “to calm the nerves” before kick-off against Blackburn, Morgan will nip down to the dressing-room for a brief rallying call. “The lads do not need me to tell them how important it is, but it’s important for them to know we’re all together and myself and the other directors are kicking every ball with them. I’ll be outwardly calm, inwardly nervous, but I feel we’ll do it.”

www.telegraph.co.uk/sport/football/teams/wolverhampton-wanderers/8522258/Wolves-chairman-Steve-Morgan-calls-for-salary-cap-as-Premier-League-debt-crisis-grows.html

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Guardian/David Conn

FA told to end 'financial craziness' of Premier League and curb excess

• Paul Farrelly: Premier League finances are 'precarious'
• Select committee to deliver its report by end of June

The Football Association has been urged to take the lead in ending the "financial craziness" that led the 20 Premier League clubs to make record losses last year despite record income of £2.1bn.

The Guardian revealed on Thursday that 16 of the 20 clubs in the world's richest league made a loss in 2009-10, £484m altogether, and paid wages of £1.4bn, £70m on average for each club, 68% of their overall turnover. Analysis of the clubs' accounts showed that the same number, 16 out of 20, were funded by owners, who have put in £2.3bn since they took over, mostly to fund the increased players' wages and transfer fees.

Commenting on that financial picture, Paul Farrelly, a key MP on the culture, media and sport select committee inquiring into football's governance, said the FA must assert itself as the game's governing body. "These latest figures show how precarious the finances of the Premier League are," Farrelly said. "The danger is that in the summer yet more money will be thrown at even higher player wages, setting off a spiral of wage demands which will percolate right down into the lower leagues, and widen the gap still further between the elite clubs and the rest.

"This financial craziness affects everybody, and it is high time Uefa's financial fair-play rules [which require clubs to move towards breaking even by 2014] are introduced for the whole Premier League and Football League, not just top clubs involved in European competitions.

"On the committee we were impressed by the willingness of other FAs, in Germany for example, to set financial rules. We believe our FA should not only follow that principle, but be up there in the lead."

Farrelly's comments and the persistent line of questioning by other MPs on the committee suggest very strongly that the committee will recommend the FA must reform itself and then take a pre-eminent role in shaping the game more responsibly. The MPs are thought not to have been impressed by the Premier League chief executive, Richard Scudamore, telling them in his evidence session that the FA is "an association of interests".

Hugh Robertson, the sports minister, said he is awaiting the select committee's report before deciding what steps to take in relation to football, which he has described as "the worst governed sport in the country". Robertson said he expects the committee to make recommendations on the financial running of the game, and suggested supporters should not be charged higher ticket prices to pay for ever-escalating players' wages. "The Premier League has tightened up its financial rules in the last couple of years and deserves credit for that but there is more that can still be done," Robertson said. "Club owners must ensure they do not jeopardise the long-term future of their clubs and run them in a sustainable way. They must also not take the fans for granted as they are the bedrock of the club they follow."

The Premier League issued a characteristically robust response to the revelation that 80% of its clubs were making losses, paying high wage bills and relying on funding from owners. A spokesman said the league is encouraging "sound financial management" by introducing a "sustainability test", requiring clubs to present their accounts and future budgets to the league, to demonstrate how they will fund themselves next season.

"Clubs must, however, be free to make their own choices about how to invest across their business," the spokesman said. He added that some clubs had "sought to spend heavily on their squads prior to the full implementation of Uefa's financial fair-play regulations, resulting in some significant transfer spending in recent transfer windows".

The select committee has completed its evidence sessions, which heard from Scudamore, the FA's chairman, David Bernstein, Greg Clarke, the chairman of the Football League, other senior football administrators and supporters' groups. The committee's report is now in the drafting process and is expected to be completed by the end of June.

The FA declined to comment on the Premier League clubs' financial figures and their £484m losses. However, Bernstein did tell the select committee that he believed the financial fair-play rules should be extended widely in professional football.

www.guardian.co.uk/football/2011/may/19/fa-financial-craziness-premier-league

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Guardian

Next Previous Blog home Premier League players are in dream world where casino always pays outThe authority of managers has been corroded while supporters benignly accept status quo

The Premier League's great party trick has been to create a 20-year aspirational bubble in which astronomical player wages and expensive seats in nice stadiums created a consumer boom we could all feel part of, so long as we ignored the vast transfer of wealth from fans to the new super-rich on the pitch.

On an economic reading the top end of football exists as a conduit to move money from owners, supporters, sponsors and television companies to players and their agents, who live in a dream world where the casino is always obliged to pay out.

Take Carlos Tevez, who established a foothold in England with West Ham, moved to Manchester United on a two‑year rental deal then spoke to Chelsea and Manchester City before relocating to Eastlands in a change that may have earned his "owners" as much as £47m. Now Spain and Italy are tempting City's most influential player. It will be jam all round when Tevez Incorporated shifts again.

Or take the Newcastle United player who is on £90,000 a week, and who stayed at St James' Park when his team were relegated to the Championship, presumably because he knew no Premier League club would match that salary. Or Freddie Ljungberg, who, according to reports, received a pay rise to move from Arsenal to West Ham United, even though he was clearly in his sunset years. We all remember Lucas Neill rejecting Liverpool because the lolly at Upton Park was better.

These examples point to a game within the game: a wage inflation spiral that has transferred not only capital but power to the performers. The authority of managers – and therefore clubs – has been corroded in all but a few exceptional cases by the multimillionaire status of players and agents, who have a vested interest in moving clients around (Tevez being the poster boy for restlessness). The return, to us, is entertainment and, in mitigation, there is plenty of that.

We approach the end of a season in which it required the personal intervention of the Glazers to persuade Wayne Rooney to drop his threat to leave Manchester United. He did so only after his employers broke their wage structure to keep him. In the light of the Rooney ambush, David Gill, United's chief executive, will need all his diplomatic skill to keep the club's wage bill at 46% of turnover as others chase their own pay rise.

As David Conn's club-by-club study shows, the 20 Premier League institutions are handing on average 68% of their turnover to players. Seventeen directed more than 50% of income to playing staff. Blackpool lavished 144%, Man City 106%, Wigan 91%, Newcastle 90%, Aston Villa 88% and Chelsea 82%. Only three of the 20 come in under 50%: Wolves 49%, Man Utd 46% and Arsenal 29%, although the latter figure is distorted by income from Highbury.

And yet the opiate still works. At any football ground on any given Saturday you will hear fans say – "I don't blame the players, good luck to them if they can get it" – even as they are contemplating a 6.5% ticket price rise, or grumbling about Sky subscription rates and replica kit costs.

The players certainly "can get it": this, we know, because the alternative is not to get the player in the first place, or buy him but then lose him to a bigger club. But what the Guardian's survey demonstrates is that clubs are paying way beyond their means to compete – or just survive – and are increasingly trying to head off Uefa's financial fair play rules by screwing more "revenue" out of fans, mainly through increased ticket prices.

This market-driven model is rooted in pre-recession times, before the international banking crisis exposed the unregulated borrow-to-spend free-for-all as a disaster waiting to happen; but of course football is stuck with one awkward truth: wage expectations among players and agents are now insanely high, conditioned, as they are, by the knowledge that Yaya Touré can earn as much as £200,000 a week at Man City if all his bonus clauses are activated.

In this Darwinian world, there can be no collective effort to end the contagion of endless wage increases, so each club is left to grapple with its own figures. Good management, as ever, is the salvation. West Bromwich Albion funnel 82% of their income to players but have Roy Hodgson in charge: hence, no relegation. West Ham pay 75% and went down under Avram Grant, who claims his job was offered to six other managers around the turn of the year.

So the wage bills are grotesque but they can be borne, by the best‑run clubs. The Premier League is immensely fortunate that a disconnect exists among fans between the 68% wage‑to‑income ratio and the money pouring out of their own pockets to pay for it all. Grandstand indignation is miraculously low.

www.guardian.co.uk/football/blog/2011/may/19/premier-league-players-wages

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What a grotesque analysis.

How are the 'investors' 'contributions' SOAKING UP the losses. Their loans are the CAUSE of the losses. Indeed, the loans and share purchases, which must be funded by the Clubs sooner or later, ARE the losses.

If these rich characters were 'soaking up' the losses, those losses would appear in THEIR accounts, not the Clubs'. And the Clubs wouldn't be making losses at all.

Interesting how Arsenal's much vaunted profitability and 'controlled' wages doesn't quite add up. If they made a profit of £56 million, but that was down to a one-off £156 million injection from their property sale, it does rather suggest that the Club's usual activities achieved a loss of £100 million. Not the enormous profits we keep on hearing about.

Like the illusion of their 'big' ground which is smaller than those of the leading rivals and hasn't seen them win a single major title since they moved there, the Arsenal miracle looks more like wishful thinking on the part of their supporters, and a very selective analysis by the Board.

The real menace is the spurious concept of 'investment' in the Clubs. And the misleading way it is understood and talked about, with the Clubs referred to as businesses when it is impossible, because of the way the game works, for them to behave like businesses at all.

Few businesses must compete in an environment where there are rules which specify that only one of them can win. And in business, competitiveness is subjective. If a business thinks it's doing all right, no-one else's opinion matters.

But in football, you aren't a winner if you think you're the bees knees. You must win, and ensure all the others lose. It is objective, and fills the game with losers year in and year out.

Fine if only the successful Club is 'investing' in its own success by spending the profits from its triumphs. But in football, all the - inevitable - losers do so as well. Imagining future glories, they spend real money on the prolonged fantasy that the Premier League will make them rich, successful and a big player on the global football stage.

There is no sense of reality about the game, so we are fed endless hype, which moneylender investors must resort to push up the value of their shareholding.

They can't depend on their reputation for success, because none of them has such a reputation. Nor can they depend on their talent and know-how either, because none of them has that either.

So they just blow away as much money as they can squeeze out of the Clubs as fast as they can squander it. And despite the pretence, these loans are not the investors' money. When you spend borrowed money, you're spending your own cash, not the lender's. His money is safe, because he owns the debt.

They don't believe in the golden future they're so quick to promote. If they did, why the loans? Why ensure your money will be safe even if everything goes wrong? Because they think it won't? Or because they're sure it will, but they'll be long gone before it does.

Once the initial surge from the overspending has abated, the Clubs slide back to their true level. But with the addition of tens of millions, or hundreds of millions of debt. And nothing worthwhile to show for it.

Facing up to failure is what the game is all about. You try to win, you do your best to win, but you don't ASSUME you'll win and spend the proceeds in advance. Not that there are any proceeds. So few Clubs have the talent to find and make money from their own talent, that success loses them more money when they're up than when they were down.

But the Clubs are tied to this treadmill. The supporters' expectations must be kept high because they are the people who will pay for it all in increased ticket prices.

So the spending spree must go on. If a Club like QPR is told that it can't lose £20 million in a single season - and run up two or three times that in overall debt, if not more - how will it manage?

TV money? Will the football world be clamouring to watch their exploits on TV if the domestic game returns to the sort of aimless hoofing and thumping that characterises the tiresome England team, and represents the best we could achieve WITHOUT the imported foreign talent.

But why would the imports stay if the Clubs won't run up big losses to keep them?

Filling a league with talent doesn't make the Clubs more successful. Success is the difference in talent between one Club and all the others.

But the modern spendthrift lunacy pours money down the drain on the overpaid underperforming losers who now fill the Premier League with their wage demands.

While Ferguson and the few who make it to Old Trafford take all the trophies.

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Guardian/David Lacey

Reckless spending stokes the fear of Premier League relegation

Clubs who keep their heads can survive relegation but the forfeiting of millions can have a devastating effect, preying on teams' thinking

It is mopping-up time in the Premier League. Time to dry away the tears of disappointment while indulging those shed in sheer relief. Relegation used to be an inconvenience. Now it is a financial disaster that can threaten a club's existence or at least raise the spectre of administration.

Five teams will be struggling for survival on Sunday but the life raft can take only three. Blackpool and Wigan Athletic, lying 18th and 19th respectively, must be favourites to go down with West Ham United but Blackburn Rovers, Wolverhampton Wanderers and Birmingham City know that one mistake, by a player or referee, may cost them dear.

Every season the price of relegation gets higher. Parachute payments of £48m over four years may ease the burden of going down, but they hardly compensate for the loss of up to £40m a season that membership of the Premier League promises. In any case some clubs have already mortgaged future income in a desperate bid to stay up.

This week Steve Morgan, the chairman of Wolves, savaged the reckless spending and borrowing that saw the Premier League clubs lose half a billion pounds last year despite record receipts. He was speaking from a position of strength, given Molineux's sane business approach, but his criticisms will doubtless go unheeded.

The English leagues are not leagues in the mutual sense but a collection of fiefdoms, each one jealous of its preserves. The plutocratic nature of the Premier League means that at least two-thirds of its members enter a season thinking not so much about what they could win as what they may lose. There are in effect two relegation struggles, one to stay out of the bottom three and avoid dropping into the Championship and the other to stay in the top four and ensure a continued interest in the Champions League. In each case fear of forfeiting millions is the motivating factor.

Even now, losing Premier League status need not be a mortal financial blow. From what Morgan says, Wolves would survive the drop better than most. Similarly West Bromwich Albion have more than once bounced back without bouncing cheques. Clearly the Black Country knows better than many how to stay in the black.

Yet no amount of fiscal nous will save clubs with a death wish. Blackburn plunged into the relegation struggle after their new owners sacked Sam Allardyce, a manager likely to keep them up, while West Ham's demise appeared inevitable once they decided to retain Avram Grant, one likely to take them down.

The most urgent problem for a relegated club is holding on to enough of their better players to stand a good chance of a quick return. A team used to be able to retain what was good and dispense with some of the lesser talents, but with Premier League wages ludicrously inflated by whichever club happens to attract the eye of a passing sheikh or oligarch, the pressure to let the high earners go is enormous. And players want to stay where the big money is anyway.

Sixteen left Upton Park the last time West Ham were relegated, in 2003, and Scott Parker is expected to lead a similar exodus now as the club strive to reduce their debts. Blackpool, already enriched by a season in the Premier League whether or not they go down, are still set to lose the inspirational Charlie Adam and others may follow, which would be the result of a sensible wages policy at Bloomfield Road.

The underlying fear of those relegated on Sunday will be finding themselves still stuck in the Championship after the parachute payments run dry. It is all too easy to tumble through the divisions like a man falling down several flights of stairs. Bradford City, promoted to the Premier League in 1999 and relegated in 2001, have just finished in the lower half of League Two, which used to be called the Fourth Division. Next season the Sheffields, Wednesday and United, will be meeting in the old Third.

The return of Queens Park Rangers and Norwich City to the Premier League is to be welcomed given the good footballing traditions of both clubs, and QPR appear to have the financial clout to make a go of it. But even Loftus Road will start next season thinking more about getting 40 points rather than setting England and Europe on fire, as Dave Sexton's side did in the mid-70s. On second thoughts, better make that 42.
www.guardian.co.uk/football/blog/2011/may/20/premier-league-relegation

[Macmoish]

Bump...
Wonder what the QPR Finances look like!

[Macmoish]

Bump...Two years ago...
Glad every club, including QPR, learned its lessons!

[ingham]

Yeah. The League is no longer able to reconcile the shortage of things to win, the scarcity of talent, and the overproduction of fake 'ambition' which proclaims the opposite of what is true, merely to line the pockets of people incapable of realising it.

To bridge the gap between reality and fantasy - especially at Clubs like QPR - we are encouraged to fantasise.

While the owners, players and managers pocket real money without ever bringing the Clubs the rewards they promise.

When did all these useless clowns - and I don't just mean the present squad, the rest weren't worth a fraction of what they were paid either - when DID all these useless clowns ever deliver anything approaching even the most limited level of sustained improvement.

Their only strategy is to pump the money out of the Clubs as fast as they can, relying on the massive increase in SPENDING to create an illusion of progress.

The beauty of this charade from their point of view is that the collapse of each illusion increases the demand for another one. To fail doesn't mean we can't improve. But to fail losing millions or tens of millions in the 'attempt' not only minimises our chance of improving the following season - because the Club's real potential, financial and otherwise, is further diminished year by year - it makes it imperative!

Each failed - 'squad' is too flattering a term - each failed bunch of losers effectively remains on the payroll, years, even decades, after the players that constituted that squad departed.

Each clueless 'investor', every witless signing, all the pathetic mistakes. The Club is paying not just for last season's overhanging 4-year contracts. The cost of signing players who don't earn enough to pay their way is simply added on to the losses, making every bad judgement a liability and a noose around the Club's neck for all time.

These people are draining off the Club's resources for its future. When it arrives, the money will be long gone, into the pockets of the relegation zone marvels we've produced in the last decade. While the 'investors' pass it on, each one to the next, so the money the Club DOES earn - £80 million or so in the past two seasons - must be supplemented by more and more losses.

Yet none of them puts a penny into the Club to wipe the losses out. And why would they? Like Ecclestone, they're here to pump tens of millions OUT OF the Club. And as the Club doesn't have tens of millions to spend on them, the only way to put money in their pockets, and in the pockets of the other hangers-on, is to borrow, and spend it anyway.

If they were putting money in there wouldn't BE any debt.

Unfortunateky, talent doesn't inflate simply because some nobody says all will be well. The lack of available and affordable talent - as we've found in the last two years - creates an even greater need for fantasy, since the corresponding reality doesn't, and cannot exist, without that talent.

So we sign players who are no good, in fact, who are the worst in the entire League. But we PAY them vast sums, to maintain the illusion that spending the Club's money is realising the potential of the billionaires seeking to profit by those losses.

The players' provenance may look authentic, or be presented as such by puppet journalists, but, as we so often find, it is faked.

And so the delusion continues. Unprecedented demand. Naturally. Clubs are gagging to stay IN the Premiership, even though they experience unprecedented demand when they drop OUT of it.

I wonder if I believe that. I wonder if anyone believes that. Or whether they're all simply waiting for the concatenation of financial and footballing disasters to reach its climax, when the reality the match-by-match unmanageability of the game simply flushes them away like any other waste product.

(1) the Champions League, (2) there is no debt, (3) a 45,000 stadium (4) unprecedented demand for tickets.

And as we know, things don't always go as swimmingly as you think. Just look at Arsenal.

This is a Club which couldn't fill its ground when it was top of the League. But now proposes to fill one almost three times the size when it is bottom.

Is the presence of so much self-deception in the game a sign that we're OK? Or are the QPR-sized Clubs, give or take 10,000 either way, getting themselves more and more stranded with every season, as more and more wannabes pack the Leagues, and the likelihood of 'doing a QPR' as the Charlton boss says, becomes less and less possible.

The more money there is from TV, the higher ticket prices soar. With QPR leading the way. The worst team, and proportionally, at least, what must be the highest prices. The richest owner, or damn near, but no corresponding spending spree on winning anything.

Just the usual pathetic shuffling from one foot to the other, and agonising over a £10 million debt the Club has been carrying since Richard Thompson.

Though that's up to £15 million now, isn't it, as the investors take care to pay themselves off even over such a relatively small sum.

Well, assuming that they haven't ADDED it to the existing ABC-Amulya loan.

It isn't that disaster beckons. I'm not saying that. The catastrophe hit the Club years ago. It is getting worse and worse, with every season, but the Club has a great deal of resilience, because it is has, and because the supporters are generally willing to pay, and pay, more and more and more.

We're keep the Club going DESPITE all the losers who've attached themselves to the Club, one after another, and their increasing demands for money, for the Ground, to use the Club as a tame Tenant, pouring the supporters money into their own pockets, even when they are long gone.

Like the players.

That's the catastrophe.

[Macmoish]

That reminded me, I saw David Conn/The Guardian

Tottenham must beat Arsenal to Champions League to close wealth gap
Tottenham's income is dwarfed by Arsenal's and they will struggle to sustain their elite status unless they make top four


inShare

David Conn
The Guardian, Friday 17 May 2013 16.12 EDT

Should Arsène Wenger lose his formidable record of 15 straight seasons in the Champions League and be beaten to the fourth qualifying spot by Arsenal's north London rivals Tottenham Hotspur on Sunday , the hit will be tougher in football terms than financially.

For André Villas-Boas's side, if they beat Sunderland at home and Arsenal fail to beat Newcastle away, a return to the Champions League will make a greater financial difference. Extraordinary as it seems, Spurs make fully £100m less income than the club with whom their fans most closely wish to compare themselves. The booming cash from the Emirates Stadium's 60,000 seats and executive plushness, including the Champions League ties themselves, pushed Arsenal's matchday income to £95m in 2011-12, more than three times that of Spurs at still 36,534-capacity old White Hart Lane. Arsenal made £245m last year, including £85m from TV and broadcasting, which includes Champions League income. Spurs made £144m altogether, a huge gap.

Last season Uefa harvested a total £1.1bn from the worldwide broadcasting rights of this most seductive club competition, and from selling its platform of sponsorships to Adidas, Ford, Gazprom, Mastercard and the other corporations.

Uefa distributed £865m of that Champions League money to the participating clubs, 55% in fixed amounts for those in the tournament from the group stage. The other 45% is paid in proportion to the size of a club's national television market – how much their broadcasters contributed to the overall TV total. England is one of the biggest markets, so our clubs do well from this "pool" payment.

Arsenal qualified from the Champions League play-offs last season and made it to the round of 16, where they lost 4-3 to Milan on aggregate, having lost 4-0 away at San Siro. Their share of the Uefa Champions League income was £28m, less than half the £60m Chelsea earned from winning the trophy.

The five home matches played earned the Gunners healthy income on top of that, although the club's accounts do not break down how much they make from each match. So although as a proportion of the overall £245m income Arsenal would survive decently enough without Champions League participation, it would be a serious blow.

Spurs' Champions League run to quarter-final defeat in 2010-11 was a landmark boost to the club's football pride, and a financial one, too. They made £25m more from Uefa distributions that season than in 2011-12, when they played in the far less lucrative Europa League. Overall last year Spurs' income dropped 12% to £19m, from £163m to £144m.

This season Uefa estimated its gross Champions League income is £1.34bn, of which 75%, £1bn, will be shared among the clubs. With Arsenal and Manchester United knocked out in the round of 16, and Chelsea and Manchester City gone in the group stage, no English club will have earned dramatically this year as Chelsea did in 2011-12.

So, as Uefa itself argues, the financial benefits of playing in the competition can be exaggerated. As it accounts for around 10-15% of a Premier League club's income, that means 85%-90% of the rich clubs' earnings are made in domestic football, and that percentage will be even higher next season given the projected increase in the Premier League's own TV deals.

Nevertheless, the Champions League earnings are still significant, helping to take the top four clubs into a tier financially above those outside European competition. Spurs will have difficulty sustaining top-four status until they can make more money consistently, with the long-proposed new stadium integral to that plan. Arsenal's commercial success and filling of the Emirates has been based to some extent on their continuous qualification for the Champions League.

It raises a club's status, and its ability to keep its stars such as Gareth Bale and Jack Wilshere, when players are competing in the most prestigious of tournaments, and broadcasts their virtues around the world. For all these reasons, not just the money, they all very much want to be in it.


www.guardian.co.uk/football/2013/may/17/tottenham-arsenal-champions-league-finance

[ingham]

And they're still trying to edge in front of Spurs on the last day of the season? When money talks? And Arsenal earn three times what Spurs earn?

Something is seriously wrong at the new 'Highbury'. Seems they demolished the old Arsenal, instead of the old Ground. Now it's just a restaurant complex.

But it is 'plush'. And that's something.

Instead of George Graham winning the title twice, with a cobbled-together team with no-one particularly brilliant in the squad, they now have, well, not the BIGGEST ground, of course, they didn't think of that.

But one that is bigger than the Clubs who are better and more successful than they are (Chelsea, City)

And that, too, is something.

[Macmoish]

Bump another year. Do people learn?