Post by QPR Report on Dec 6, 2008 9:22:48 GMT
Those poor (millionaire) Premiership players 
Telegraph/Paul Kelso
Footballers and their Wags cut back on spending amid downturn
Premier League footballers and their wives and girlfriends are having to cut back on spending to dig themselves out of disastrous investments amid the economic downturn.
A leading banker has warned that even for sport's multi-millionaires the days of excess could be over as many have been hit by bad investments in property and the stock market.
Earlier this week Active Asset Management, a property investment fund backed by Manchester United manager Sir Alex Ferguson and Premier League players Alan Smith and Garth Barry, went into administration, and it seems that footballers' personal investments are also vulnerable.
The average Premier League wage last season was £1.1m with players such as England captain John Terry earning as much as £130,000 a week, but it seems ill-advised investments in the property market and stocks have left some of Britain's richest sportsmen scrambling to reign in spending in the wake of the banking crisis.
According to Mark Pannes, head of the sports practice at HSBC Private Bank which counts Premier League stars, golfers and Formula 1 drivers among its clients, a number of athletes have seen their investments fall into "critical condition" in recent months and face a spending squeeze to dig themselves out of trouble.
With property prices plummeting and the cost of credit soaring some Premier League stars are facing vast negative equity on property portfolios, and have also seen the value of their stock market investments plummeting.
The only recourse in those circumstances is to cancel the order for a new Baby Bentley, lay off the Mulberry handbags and divert some of their enviable weekly pay packets towards clearing debt.
"The current financial climate makes it very clear which professional sportsmen have been well advised and who has not," said Pannes. "From what we see it's clear that a lot of athletes have had bad advice and people have taken advantage of their wealth by selling them bad investments.
"Property has always been a favourite of athletes, but in times of crisis like this the love affair is problematic. A lot of them have bought property at 90-95% loan-to-value, and with prices falling suddenly we are seeing sportsmen who were over-leveraged in the rising market now in a critical condition in a falling market, with most of their investments at the waterline or below it."
"The good news is that they tend to have very strong cash flows courtesy of their wages, though they tend to have very high personal expenditure. The cash gives them the ability to dig themselves out of the perilous position quite quickly, but they do have to ratchet down the spending."
The current squeeze on Premier League players is a far cry from the wise investments made by stars such as former Liverpool striker Robbie Fowler, whose personal fortune is valued at £30m courtesy of a property empire in the north-west that runs to more than 100 houses. His former team-mate, Newcastle's Michael Owen, has invested much of his £100,000-a-week wages in a racing stables and string of horses.
www.telegraph.co.uk/sport/football/wagshire/3567707/Footballers-and-their-Wags-cut-back-on-spending-amid-downturn.html
Telegraph/Paul Kelso
Footballers and their Wags cut back on spending amid downturn
Premier League footballers and their wives and girlfriends are having to cut back on spending to dig themselves out of disastrous investments amid the economic downturn.
A leading banker has warned that even for sport's multi-millionaires the days of excess could be over as many have been hit by bad investments in property and the stock market.
Earlier this week Active Asset Management, a property investment fund backed by Manchester United manager Sir Alex Ferguson and Premier League players Alan Smith and Garth Barry, went into administration, and it seems that footballers' personal investments are also vulnerable.
The average Premier League wage last season was £1.1m with players such as England captain John Terry earning as much as £130,000 a week, but it seems ill-advised investments in the property market and stocks have left some of Britain's richest sportsmen scrambling to reign in spending in the wake of the banking crisis.
According to Mark Pannes, head of the sports practice at HSBC Private Bank which counts Premier League stars, golfers and Formula 1 drivers among its clients, a number of athletes have seen their investments fall into "critical condition" in recent months and face a spending squeeze to dig themselves out of trouble.
With property prices plummeting and the cost of credit soaring some Premier League stars are facing vast negative equity on property portfolios, and have also seen the value of their stock market investments plummeting.
The only recourse in those circumstances is to cancel the order for a new Baby Bentley, lay off the Mulberry handbags and divert some of their enviable weekly pay packets towards clearing debt.
"The current financial climate makes it very clear which professional sportsmen have been well advised and who has not," said Pannes. "From what we see it's clear that a lot of athletes have had bad advice and people have taken advantage of their wealth by selling them bad investments.
"Property has always been a favourite of athletes, but in times of crisis like this the love affair is problematic. A lot of them have bought property at 90-95% loan-to-value, and with prices falling suddenly we are seeing sportsmen who were over-leveraged in the rising market now in a critical condition in a falling market, with most of their investments at the waterline or below it."
"The good news is that they tend to have very strong cash flows courtesy of their wages, though they tend to have very high personal expenditure. The cash gives them the ability to dig themselves out of the perilous position quite quickly, but they do have to ratchet down the spending."
The current squeeze on Premier League players is a far cry from the wise investments made by stars such as former Liverpool striker Robbie Fowler, whose personal fortune is valued at £30m courtesy of a property empire in the north-west that runs to more than 100 houses. His former team-mate, Newcastle's Michael Owen, has invested much of his £100,000-a-week wages in a racing stables and string of horses.
www.telegraph.co.uk/sport/football/wagshire/3567707/Footballers-and-their-Wags-cut-back-on-spending-amid-downturn.html