The Premiership, Will it boom or bust ?

[Loki]

Was going to include this in the weekend spoilers thread but I think it's worth a discussion on it's own merits. What next for the Premiership or more importantly the teams within it. I really think that over the course of the next 2-3 years we are going to see a team like Liverpool or United fall on their sword along the lines of Leeds United.

An interesting article today's times giving a basic but nonetheless possibly accurate commentary of the finances of Liverpool http://www.timesonline.co.uk/tol/sport/football/premier_league/liverpool/article6991136.ece, the £100m that Hicks and Gillette are after is nothing more than a bit if breathing space.

Then when you look at the finances of how United are being run with the Glazers raping and pillaging the club for every cent it can do. essentially financing the purchase of the club against it's own value or to put it bluntly, put in a few bob and turn most of the value of the club into debt and cream any profits. Amazing that two clubs who hate each other so much have and continue to have so much in common both now and in the past.

I also think with the huge injections of cash at places like City and Chelsea serves to inflate the prices of ordinary players without offering any extra value. I think £5m 10 years ago would have got you a hell of a lot more player than it would do in this day. How much would a Roy Keane or an Ian Wright cost these days if they were doing the same transfers now ?

Of course you expect that overtime prices will always go up but is the finances in football at such a point that the only way for them to go is financial meltdown and do we see The Premiership following the trend of Serie A where it can't attract THE best players because the money simply isn't there. Who would have thought that a club as great as Milan were literally forced into selling it's prize asset in Kaka to remain financially viable.

It's already happened with Portsmouth and Gadymak(sp?) saying thanks but no thanks and politely walking away. What would happen to Chelsea and City if Abrahmovic and Shiekh Mansur respectively decided to walk.

A rather disorganised rant/observation if you will but what's your thoughts.

 

[Youstolemyname]

I think the article talks a lot of bobbins and is sensationalist. The same squad Liverpool has now finished second in the league last year so the £140 Million quoted to make them competitive is nonsense. In addition his point about Arsenal being worth £800 Million so buying Liverpool for the same amount is 'not good value' is also a load of twoddle.

But that isn't the point of the thread...

It is true that Liverpool and maybe even United are dangerously close to being in serious financial trouble. It's akin to the whole housing market- Clubs have overborrowed and are now feeling the pinch. But their backers aren't stupid and know that both clubs are long term cash cows. I honestly cannot see either club being forced to sell assets (players) by the banks as they know that they are both pots of gold when profitable.

The biggest risk I see at the moment is football globally becoming a bore fest and priced out of the average person's budget. It almost is now in the Premier League. There is a group of clubs, with the biggest bankroll I might add, that contest for the trophies each year. A gang of clubs exist in mid table mediocrity and three come up who are desparate to stay up but invevitably do not. There is no real contest or excitement any more, Ipswich or Norwich are never going to play Man U and get a result at Old Trafford. Upsets in the league are few and far between and fans are getting turned off. Just look at some of the attendance figures for games this year.

Granted, the FA Cup offers some of the romance it used to but again, how long is it since a non top flight side won it? The Champions league is becoming boring too; the same sides year on year end up in the last 8 and all the other games along the way become a bit predictable.

It is sad really as if you watch Championship football, they are much more closely contested games and the desire to win is apparent in the players. Premier League stars have become complacent, knowing that no matter the result they are going to bank a minimum of £30k that week.

Ticket prices are getting silly now too. To take your child to a Liverpool match would cost in excess of £100 for the pair of you for the day- including transport costs and the inevitable souvenir/drink the kiddy would want. How many families can afford to do that week in week out? £50 a month gets you the Sky subscription and that, in most cases is enough.

Maybe the European league is an answer to spice things up from a competitive perspective, but then you have the whole travelling support issue and the prices soar. But whatever happens, things need to change as our top flight league is fast stopping to be a competition between 20 clubs and simply a 16 game round robin tournament between the top four.

 

[TurbotH]

Interesting article. It's had its boom. Now it's time for a few clubs to go bust. A European 'super league' would make the difference between the best and the rest even bigger. The champs league is enough imo. Although i support a carp team

 

[BaZ87]

How much did the Emirates development cost, and how much was recouped through the development of Highbury into housing? When those figures has been established, how would they translate if the whole thing was mirrored with Liverpool (of course land values are different, and so forth). The redevelopment of the old venue obviously helps fund the new development, in a sense... so the £400m figure is stupid, no? It just massively oversimplifies the whole situation :\.

It also ignores the fact that the club are likely to sell the naming rights to the stadium. It's already being suggested that the club expect to beat the current record naming rights deal which stands at ~£240m over 20 years.

 

[drunkenmaster]

It also ignores the fact that the club are likely to sell the naming rights to the stadium. It's already being suggested that the club expect to beat the current record naming rights deal which stands at ~£240m over 20 years.

However when you take into account the interest on a 400million loan and the £240mil over 20 years(which I doubt Liverpol will beat) thats not even the interest payment on the loan every year. Interest on a loan that big would massively increase the actual end figure for a stadium. Redeveloping land can create decent cash, but you still need the actual figure for building the new stadium IN PLACE aswell as cash IN PLACE to build the redevelopement to start with. You can't simply borrow 200mil, and say we've got 200mil coming in 4 years we'll use to pay the rest. YOu need 400mil for the stadium and likely 150mil for the redevelopement.

The problem with building say flats, as Arsenal did is, they are making a profit but its not huge, they might sell all the flats for, I dunno 200mil, but they would have cost £150 to build, theres profit and its worthwhile but it in no way came close to funding the stadium, and they needed all £550million in place and ready to go(with backup funds for projects coming in late and overbudget, which they already do.


The big issue in all of this is, since when is it bad for a bad business to go bust, big business go bad all the time. IN the past 50 years I'm sure dozens of clubs have come and gone, several bigger ones and lots of little ones. Doesn't every single industry have boom and bust waves, its nothing new and its rather unsurprising.

Liverpool and Utd aren't in serious danger, Pompie could be, but I think largely because a certain previous owner decided to almost strip the club bare and load it up with debt secured against future profits, which I wonder just how clear was made to the new owners.

The biggest danger, as it seems to be right now, is clubs who get managers who insist they can bring success, manage to persaude stupid owners to borrow money to buy players based on the idea that future success will allow them to pay off the debt. So basically Redknapp plus bad owners above him who buy into his BS. Clubs like Everton who refuse point blank to be drawn into spending on the potential of improved success seem to be doing it right. City and Chelsea with the backing they have can do what they want, and I've seen absolutely no increase in prices of players.

Theres still LOADS of absolutely killer deals done every single transfer window, bad managers buying overpriced players when there are better alternatives is NOTHING NEW at all. Theres only so many players City and Chelsea need, no one seems to mention that Chelsea in the past few years have barely spent, because once you replace a squad or build it, theres very little need to strip it and rebuild every year. Anelka and Ivanovic were both fantastically priced players who offered huge value for their prices and those have been pretty much their biggest buys, a 3.5mil to possibly 7 mil striker aswell. They are hardly pushing prices up every single window and haven't been for the best part of 3 years. City will for another year-18 months, they will slow down hugely.

I also find it funny people pick on Chelsea and City, when Barca maybe made the most ridiculous swap + cash deal in the history of football this year, while Real spent like a maniac without the same sugar daddy that City and Chelsea have. Complaining about those two as they've gone up when it seems this year is the most open its been in a decade, when we've had many previous decades with near total dominance of a select few teams. I see a repeating pattern and not much else.

I bring up bad managers, because it would seem in the case of say Johnson, that agents talking up who else is interested in their man, can increase their price easily. Mention Chelsea and Pompie want more and Benitez offers 17 mil on a player worth 1/2 that at best.

Daft managers massively over spending isn't the same as players values being inflated by certain clubs. Considering Chelsea's buying habits in the past 3 years, and the fact they had 3 world class right backs you'd have to be a bit of a mug to believe they'd ***** 17million on Johnson when they spent, similar amount on Anelka.

 

[BaZ87]

However when you take into account the interest on a 400million loan and the £240mil over 20 years(which I doubt Liverpol will beat) thats not even the interest payment on the loan every year. Interest on a loan that big would massively increase the actual end figure for a stadium. Redeveloping land can create decent cash, but you still need the actual figure for building the new stadium IN PLACE aswell as cash IN PLACE to build the redevelopement to start with. You can't simply borrow 200mil, and say we've got 200mil coming in 4 years we'll use to pay the rest. YOu need 400mil for the stadium and likely 150mil for the redevelopement.

Yes, I realised there'd be interest money borrowed. I was simply adding to Moses's point that the stadium will pay for itself, which it will. The increased revenue, naming rights (which I'd be shocked if we didn't get £12m+ per year) etc will be more than service a £400m loan.

I'm not sure what you're going on about regarding how the club will borrow the money. Once the sponsorship deal is in place they'd go to the bank and they'll use that as a guarantee for the loan, along with future season ticket sales etc like Arsenal did.

And as you keep going on about Johnson's transfer, just like you used to go on about Riise earning £90k per week (even after his pay slip was leaked and showed he only earned £30k), Peter Storrie confirmed that Portsmouth had accepted 2 offers from CL clubs for Johnson. Johnson also all but confirmed it was Chelsea in his press-conference (answering questions on why he didn't go back to Chelsea etc). And for what it's worth, it was widely reported at the time that it was Chelsea that matched Liverpool's offer and not Liverpool that increased their bid because of Chelsea (or whoever that 2nd CL club was).

 

[Visionary]

Newcastle will be alright at least. We have a manager on 250k a year, we don't spend over £1m on players (that's the plan anyway, we spend nowt at the moment) and don't offer over 20k a week in wages. Combine this with good attendances and we're in a good position.

That's one way of looking at it anyway...

 

[Tunney]

It all goes to show what an excellent job Randy Lerner has done at Aston Villa. Always willing to spend money but never getting the club into serious debt.

To be fair to him, Roman Abramovich has also done a good job at Chelsea. Whilst he invested large sums at the beginning of his reign, the club is now profitable. If he pulled out tomorrow, the club wouldn't become another Leeds.

The Manchester United and Liverpool situations are difficult though. I don't think that the Premier League should have allowed such dodgy business practices. With such high profiles and such high turnover, I doubt either club will go bust but they will obviously be constrained in their purchasing power for some time. Just look at how that Ronaldo money has disappeared.

There is no real contest or excitement any more, Ipswich or Norwich are never going to play Man U and get a result at Old Trafford. Upsets in the league are few and far between and fans are getting turned off. Just look at some of the attendance figures for games this year.

Ipswich or Norwich are never going to get a result at Old Trafford? What about Leeds? Do they have a chance?

Manchester United have been beaten five times in the Premiership alone this season. They lost four times in total last season. The Premier League is starting to get more exciting, in my opinion.

 

[jakeke]

This years prem is the most open in years. It's anything but boring, nobody could really predict anything with any merit at this stage which is strange, we don't know who'll get relegated (apart from Portsmouth probably), win the league, get into Europe etc.