Post by QPR Report on Dec 18, 2008 7:38:12 GMT
Again and again keep hearing warnings about football and fiances; so hope our owners are paying heed. Giving long contracts and high wages isn't necessarily is a suggestion that they are.
Guardian
League's boom could turn to bust, says Southgate• Serie A-style collapse could hit Premier League
• Clubs must cut huge wage bills, says Boro managerLouise Taylor
Gareth Southgate has invested heavily, and cleverly, in the property market during recent years but, unlike some fellow speculators, he always knew boom could one day turn to bust.
Wearing his principal hat as Middlesbrough's manager, Southgate also suspects that English football may be heading for an economic meltdown as potentially calamitous as the recent deflation in house prices.
"I can see a Serie A-style collapse happening in English football," said the 38-year-old, referring to the financial mess that Italian football is extricating itself from. "I think there's a danger about our game that people think it will just keep growing — but there may have to be a period when clubs change the way they do things.
"Everything goes in cycles. A few years ago Serie A was definitely the place to play. All the money was in their league and it was the place where players got paid the most. That place is now the Premier League. We have the best players at the moment but history tells us that things don't always stay that way forever."
At Middlesbrough belts have been tightened ever since Southgate succeeded Steve McClaren in 2006. Having watched Leeds United's attempt to speculate to accumulate backfire spectacularly, Boro's chairman, Steve Gibson, has decreed that his club can no longer afford to pay the big transfer fees and generous wages that characterised Bryan Robson's and McClaren's managerial tenures.
With Boro £93m in debt — although £69m of that is owed to a company owned by Gibson — Southgate has had to be prudent with the housekeeping and this summer slashed £7m off the wage bill while spending a net £500,000 on new players.
"People say, 'you can't afford to drop out of the league so you need to spend' but the way we were going I'm not sure if we could continue to afford to stay in it," said the former England defender. "You've got to be strong-minded enough to take a different view on things."
He hopes one day that Boro may be self- sufficient and no longer necessarily bank-rolled by Gibson, who does not draw any salary or dividends from the club.
"The long-term stability and survival of this club is the most important thing. Myself and the chairman have got to make sure that when we pass on the reins here it's in a healthy position for people to pick up."
Southgate is also convinced Boro are not alone in needing to cut their cloth according to reduced means. "We're quite honest about our financial situation but I think a lot of clubs are in a similar position," he said. "Clubs that are in the process of being sold, that we hear have got to move players on, have got to reduce wage bills.
"At the moment quite a few are dependent on billionaire owners. But if those people walk away you're reliant on finding someone else with those sorts of funds.
"We're all marvelling at how strong our league is but I'm not sure quite where we go after billionaire owners, especially as a lot of them are losing a lot of their money at the moment."
Southgate's solution is to view clubs as businesses rather than rich men's toys. "I don't see why the chairman should keep footing the bill here," he said. "It's my belief that we should run it as a sound business."
This involves using television income, merchandising revenues and gate money to run Boro instead of merely spending such cash on star signings. Rather than splurge repeatedly in the transfer market, Boro aim to produce homegrown players through their academy and use the profits garnered by selling some youngsters to purchase fresh blood for the first team.
Moreover such good husbandry can yield unexpected dividends. "Money doesn't guarantee success," said Southgate. "The top 10 richest clubs in our league include Newcastle and, certainly, Manchester City but, for the moment at least, the league table does not reflect that. The challenge is getting the most out of your resources."
Such often ingenious thrift may soon have to be emulated by English football's current high rollers. "We're so competitive in the Champions League at the moment because we've got four of the richest clubs in Europe," he explained. "The other clubs across Europe haven't got our finances but that can change."
Southgate's fear is that English supporters, hit by the chill winds of recession, may soon find themselves priced out of watching live football — which in turn could have a devastating effect on a game heavily dependent on TV revenues.
"I don't think we can take it for granted that people will just keep turning up and paying," he said. "What might have to happen is that the money coming in from other sources will have to be used to subsidise ticket prices to encourage supporters to fill stadiums. Without full stadiums the game doesn't have an attraction to television."
Indebted in Italy A warning from Serie A
The financial morass came to a head in August 2002 when the start of the Italian season was delayed by two weeks in a row over TV money. While the two Milanese clubs and Juventus had negotiated lucrative pay-per-view deals of their own, the smaller clubs were demanding more from the subscription broadcaster, Telepiu, for live rights. This was compounded by the failure of the league to agree a deal with RAI, the state broadcaster, for their weekly highlights show.
Fiorentina and Napoli were declared insolvent in 2002 and 2004 respectively. Between 1997 and 2000 clubs relied on television rights for 56% of their income on average and by June 2001 the Italian Football League put the total debt of Serie A teams at £427m (not counting the estimated £100m that the already doomed Fiorentina owed). They overestimated how much they would receive and spent wildly the money they had yet to receive - Lazio paid Parma £35.5m for Hernán Crespo in 2000. Italian champions two seasons earlier, Lazio had to sell their two most valuable players, Crespo and Alessandro Nesta, in the summer of 2002 just to stay afloat but still had their three subsequent summer signings annulled due to debts.
www.guardian.co.uk/football/2008/dec/17/gareth-southgate-middlebrough-credit-crunch
Guardian
League's boom could turn to bust, says Southgate• Serie A-style collapse could hit Premier League
• Clubs must cut huge wage bills, says Boro managerLouise Taylor
Gareth Southgate has invested heavily, and cleverly, in the property market during recent years but, unlike some fellow speculators, he always knew boom could one day turn to bust.
Wearing his principal hat as Middlesbrough's manager, Southgate also suspects that English football may be heading for an economic meltdown as potentially calamitous as the recent deflation in house prices.
"I can see a Serie A-style collapse happening in English football," said the 38-year-old, referring to the financial mess that Italian football is extricating itself from. "I think there's a danger about our game that people think it will just keep growing — but there may have to be a period when clubs change the way they do things.
"Everything goes in cycles. A few years ago Serie A was definitely the place to play. All the money was in their league and it was the place where players got paid the most. That place is now the Premier League. We have the best players at the moment but history tells us that things don't always stay that way forever."
At Middlesbrough belts have been tightened ever since Southgate succeeded Steve McClaren in 2006. Having watched Leeds United's attempt to speculate to accumulate backfire spectacularly, Boro's chairman, Steve Gibson, has decreed that his club can no longer afford to pay the big transfer fees and generous wages that characterised Bryan Robson's and McClaren's managerial tenures.
With Boro £93m in debt — although £69m of that is owed to a company owned by Gibson — Southgate has had to be prudent with the housekeeping and this summer slashed £7m off the wage bill while spending a net £500,000 on new players.
"People say, 'you can't afford to drop out of the league so you need to spend' but the way we were going I'm not sure if we could continue to afford to stay in it," said the former England defender. "You've got to be strong-minded enough to take a different view on things."
He hopes one day that Boro may be self- sufficient and no longer necessarily bank-rolled by Gibson, who does not draw any salary or dividends from the club.
"The long-term stability and survival of this club is the most important thing. Myself and the chairman have got to make sure that when we pass on the reins here it's in a healthy position for people to pick up."
Southgate is also convinced Boro are not alone in needing to cut their cloth according to reduced means. "We're quite honest about our financial situation but I think a lot of clubs are in a similar position," he said. "Clubs that are in the process of being sold, that we hear have got to move players on, have got to reduce wage bills.
"At the moment quite a few are dependent on billionaire owners. But if those people walk away you're reliant on finding someone else with those sorts of funds.
"We're all marvelling at how strong our league is but I'm not sure quite where we go after billionaire owners, especially as a lot of them are losing a lot of their money at the moment."
Southgate's solution is to view clubs as businesses rather than rich men's toys. "I don't see why the chairman should keep footing the bill here," he said. "It's my belief that we should run it as a sound business."
This involves using television income, merchandising revenues and gate money to run Boro instead of merely spending such cash on star signings. Rather than splurge repeatedly in the transfer market, Boro aim to produce homegrown players through their academy and use the profits garnered by selling some youngsters to purchase fresh blood for the first team.
Moreover such good husbandry can yield unexpected dividends. "Money doesn't guarantee success," said Southgate. "The top 10 richest clubs in our league include Newcastle and, certainly, Manchester City but, for the moment at least, the league table does not reflect that. The challenge is getting the most out of your resources."
Such often ingenious thrift may soon have to be emulated by English football's current high rollers. "We're so competitive in the Champions League at the moment because we've got four of the richest clubs in Europe," he explained. "The other clubs across Europe haven't got our finances but that can change."
Southgate's fear is that English supporters, hit by the chill winds of recession, may soon find themselves priced out of watching live football — which in turn could have a devastating effect on a game heavily dependent on TV revenues.
"I don't think we can take it for granted that people will just keep turning up and paying," he said. "What might have to happen is that the money coming in from other sources will have to be used to subsidise ticket prices to encourage supporters to fill stadiums. Without full stadiums the game doesn't have an attraction to television."
Indebted in Italy A warning from Serie A
The financial morass came to a head in August 2002 when the start of the Italian season was delayed by two weeks in a row over TV money. While the two Milanese clubs and Juventus had negotiated lucrative pay-per-view deals of their own, the smaller clubs were demanding more from the subscription broadcaster, Telepiu, for live rights. This was compounded by the failure of the league to agree a deal with RAI, the state broadcaster, for their weekly highlights show.
Fiorentina and Napoli were declared insolvent in 2002 and 2004 respectively. Between 1997 and 2000 clubs relied on television rights for 56% of their income on average and by June 2001 the Italian Football League put the total debt of Serie A teams at £427m (not counting the estimated £100m that the already doomed Fiorentina owed). They overestimated how much they would receive and spent wildly the money they had yet to receive - Lazio paid Parma £35.5m for Hernán Crespo in 2000. Italian champions two seasons earlier, Lazio had to sell their two most valuable players, Crespo and Alessandro Nesta, in the summer of 2002 just to stay afloat but still had their three subsequent summer signings annulled due to debts.
www.guardian.co.uk/football/2008/dec/17/gareth-southgate-middlebrough-credit-crunch