by Tony Attwood
I wrote over the weekend about Everton – a club with a long history and tradition, and a huge support, but who are struggling on the very edge of financial survival.
Continuing the analysis, I want to look at Rangers, but before I do let’s consider the analysis in England as a whole:
- Very profitable: Arsenal, Man U
- Immune because of benefactor: Chelsea, Man City
- Oddities: Liverpool, Tottenham
- In trouble: just about everyone else except perhaps the newly promoted teams who can keep stability if they choose not to go wild
I include Man U in the very profitable group, because as a club they are just that. Their problem is that so much of the money is then used to keep the crumbling Glazer empire running, rather than being used for football purposes. Tottenham and Liverpool are unique – Tottenham because they have a benefactor in the Virgin Islands, but he doesn’t really want to do a Chelsea, and Liverpool because the Americans are throwing money around – but none of us knows how long this will go on.
Each “in trouble” club is in trouble for different reasons. Everton because they have lost money each year since Rooney went, and the bank has said enough, Birmingham who actually made a tiny profit last year because everything about them has been murky since their takeover – money laundering allegations were just the latest thing, Fulham because the word is that Mr Al Fahed wants to sell, and without him they are dead…
I have chosen Rangers as the next example, because like Liverpool before them it seems almost impossible that such an institution could go down the river. Yet Rangers are arguably in more trouble than Liverpool were. If Rangers go, it is fair to say that the shock waves will reverberate around world football.
Those awfully nice people from Her Majesty’s Revenue and Customs are rather interested in Rangers and keep dropping by to ask if the club has any spare change for old tax payments and fines. The amount due is £4m.
Which is a lot to you and me, but in terms of what we have just seen in the transfer window in England it is nothing at all. And yet Rangers don’t have it, and can’t get it from the bank since they are being run by the bank anyway.
Rangers say they are paying it as fast as they can (if you are English and of a certain age you might imagine them as Billy Bunter expecting a postal order from his aunt). But there are some interesting snippets in this.
First they have paid some money – no one denies that – but it is under £1m. In other words they are so broke (and we are talking of a major club here who get crowds of 40,000 or more for most home games) they ain’t got the rest.
Second, some of this debt goes back several years – which is just about the best way possible to get Revenue and Customs upset.
Third part of the money owed is a penalty for not paying the previous amount of tax.
Fourth, Rangers (the current Scottish champions) are certain to be first or second each year, and so get some sort of a lob at a European competition – but so hard up are they, they can’t even invest in the talent to see them through into the group stages of Europe, which would help them pay off their debts. Now in football terms, that is debt!
There is a further problem however in that there further case going on with Revenue and Customs, over the way players have been paid in the past. If Rangers lose then the current liability will be meaningless, since this second one is much bigger. Add the two liabilities together and it will be all over.
So what happens if Rangers go down? Maybe they go into liquidation and Rangers 2011 will be formed, but that would surely mean a huge penalty and the possibility of Rangers sinking down a division. That’s not very good for them financially, but neither is it for Celtic who would lose out on their biggest matches.
At worst they could just go. We haven’t seen this happen, but we have seen clubs collapse. Leeds is an obvious comparison, since although Rangers’ importance in Scotland is mega, their actual size in terms of success at the time of collapse is less than Leeds – and yet as we know Leeds went through administration and into the third division.
Overall for Scottish football it is not looking very clever – but then nor is English football.
Sadly, the view among the chattering classes is that winning something this year means everything, but staying financially sound doesn’t when all around you are going south. I disagree – I want the club to survive while all around are collapsing. Of course it would be nice to do both – make a profit and win a trophy. But if the choice is win a trophy (like Rangers) and then collapse financially (like Rangers) I think I’d vote against that one.
Untold Arsenal on Twitter @UntoldArsenal
You could have included Aston Villa in the oddities.
The amazing thing is that Italian football is also in trouble as is Spanish football. Both have had issues with players salaries. Where is Bosman when you need him most!!!(tongue in cheek)
The players in their wisdom took on agents who in their wisdom have raped football by demanding huge pay dsys for their charges and in turn milking the uncontrolled clubs dry. The blame lies jointly with the current crop of greedy players and the ‘new mega wealthy owners’ and primarily with the Football Associations that have not maintained rules to ensure clubs could not fall into unknown hands. The Associations must accept the blame as they have punished clubs for going into administration, when the Associations have not catered for the ownership correctly.
The current system allows ownership to any corrupt individual or group of individuals without sufficient due diligence of the source of capital. Furthermore the capital is not subject to Inland Revenue checks and very little tax relative to income is actually collected. In summary, the monkeys have formed Limited companies and now run the Zoo.
The government have no real handle on the game and have let it melt into an uncontrolled money laundering haven for betting rings and greed. The legality of the officiating and allocation of contracts has not been questioned. This is a monopoly and is not healthy for the game. Is it any wonder that many of the officials are not fit for purpose in todays Premier League?
The officials are assessed by their own (in an environment where money is paramount) and not subject to any public scrutiny.
It is time for football to come back into the control of the fans. The fans should have an elected body that represents them. This body will establish a set of Rules that will:
1. govern ownership of clubs in UK
2. govern who interprets and changes Laws of the Game in UK.
3. govern officiating organisations (ensuring competition)
4. govern health and safety of fans at events
5. govern pay scales and caps for players in the UK.
6. govern transfers and incidents of tapping up
It is healthy for the game to have opinion and arguement.
We need to new article on ManU. A couple of years ago and they were posting profits far lower than the losses (i.e. interest repayments) of the parent company with the exception of when they sold highly valued assets. Now they are posting record profits that exceed these losses. What has changed behind the scenes / on the balance sheet etc?
@Marc:
I tried looking into ManU finances at one point, and it was quite interesting… I haven’t checked up on them since they moved back into “profitability,” but I’d say that it would be worth a look.
This article, titled “99 reasons to distrust Malcom Glazer” is a good starting point:
http://www.bebo.com/BlogView.jsp?MemberId=10317566424&BlogId=10329663261
Another good starting point would be to research “leveraged buy outs,” which is essentially what Glazer did to takeover ManU. Dirty business indeed.
Tony…..it really worries me to see League after League being caught out in match-fixing or having its oldest Clubs in serious financial difficulties. There seems to be an inevitable trend to all this, and that is the creation of an exclusive European Super League, either inside or outside the aegis of EUFA where their Euro Cup (equivalent to our FA cup) would become the exclusive domain of their membership. The potential membership of this ESL would be United,Chelsea,City, Liverpool and Arsenal from England, Barcelona, Real, Villarreal and Valencia from Spain, Bayern Munich and Borussia Dortmund from Germany, Lyon,Marseille,Lille and PSG from France, and Inter Milan,AC Milan, Roma and Juventus from Italy or something like that.
IF this transpires, the remaining teams and leagues will be deprived of their big ticket draws, their leagues will diminish in stature (could you imagine an EPL where Spuds and Everton fight it out for the title)and the big money TV rights will certainly be transferred to the Super League along with the FIFA and EUFA cronyism already rampant in Europe. On top of that, the world of match fixing and illegal manipulation of officials and players, as well as Clubs, will intensify, considering the potential worldwide audiences and therefore gambling revenue generated by such a League. Any chance that a local league (meaning national) will be able to attract the top players will totally disappear as every aspiring star will ,without reservation, seek to play with the big boys, or, if they do well in the local league, will be swallowed up whole by ESL teams.
Imagine every ESL team drawing between 40-60,000 spectators per game and for the really big games (the equivalent of the top 4 in the EPL) every weekend! The CL already brings in a 25M Euro prize but what would a 38 game+ ESL Cup bring in over an entire season? 100-150M Euro or even more? this is such a fascinating topic that I think I’ll write an article about all the permutations and potential consequences for Untold!
@Menace:
Very interesting points.
@Domhuaille:
Very interesting points also 🙂
@domhuaille
i would prefer to watch a european superleague too. it would be fantastic entertainment, but then i would fear it would eventually face the same concerns of all natinal leagues right now.
whether it would be closed or open to relegation? whether UEFA or FIFA have any say in it (this will be afected by how open or closed it is)? what about the Financial Fair Play rules which many believe will be an advantage to arsenal?
it would still be the same teams dominating and able to stock up on the best players. You would still have man City, Chelsea, PSG who have billionaire owners (and any other clubs who would be bought by the time ESL is introduced), barcelona and real madrid who dont worry about debt and are backed by banks who never call in loans, inter milan and ac milan who again seem to have huge debts which are never called in.
instead of facing and trying to beat 2 other teams who are financially doping… we would have to face and beat even more. you will always get teams who chase their dreams to compete with these clubs and bankrupt themselves. even if the clubs get 150m a year more, the greediest players will ask for 5m a week, one of the teams will be willing to pay, and if the other teams are to compete, they will have to increase their wages even tho they dont have a billionaire funding them.
its a very interesting idea and i think will happen sometime, but whenever money and competition is involved, ethics runs out the door.
The relationship between club and country are becoming increasingly strained, something will have to give eventually. I can see a future, on some distant horizon, with an alternaive to FIFA, or a diluted FIFA, and a two tier UEFA
http://www.telegraph.co.uk/sport/football/8743123/Leading-European-clubs-to-press-Fifa-and-Uefa-for-reduction-to-the-amount-of-international-football.html
I’d suggest you look at the finances of WBA and Wolves a bit more carefully.
Because so far as I am aware, they are not in trouble.
@ Tony
Good article. Are FIFA and UEFA required to publish accounts?
Domhuaille,
What I think you will find is that the super league will be a big hit for local fans and overseas fans for the first season or 2 then the local fans will wont to go back to their own leagues but the overseas fans will want to watch the super league as most overseas fans only support 10 – 15 clubs.
The local fans will get bored as don’t get to play against teams play for 50+ years and you can’t windup your mate at work who supports a bottom 10 club.
@Jas777,
Even simpler than that, imagine what it’s like to be the big fish in a small pond (ManUtd) dumped into a pond full of similar sized fish. Chances are you won’t win most years. Imagine what would happen to their glory-hunting fan base if they failed to win anything for six years, because an evil triumvirate of Madrid, Barcelona and Bayern kept pinching all the trophies.
I feel rather comfortable with the current situation and don’t want a European super league to be started. A domestic league and the champions/Europa league is good enough for me.
So I can have the chance of going to the Emirates on Saturday to see us playing Swansea and next Tuesday I can go to Dortmund to see us play in the Champions League. (Lucky me 😉 )
But must admit that it is tempting to see us play in a super league where there is no room for the kick them till they are down teams. Just football played at the highest level of technique and skill. No more handball teams where the throw in and the towels take up 50% of the game time… I’m starting to like it more now.
But would such a super league change anything to bring a more level playing field? Will it stop the billionaires to throw silly money around like they do at City and other places? If those cannot be stopped then it is just changing one pair of old shoes for another used pair.
If the super league would only be open for teams who act according to the real spirit of FFP then okay for me but if not they can leave it like it is.
I agree with everything Walter says. At least my head does. My heart says I want to see us playing proper football teams not violent, animalistic thugs and I hate everything that English football has become.
As football is increasingly a TV/internet global event with the live audience (or crowd as we once knew them) something akin to any other tv show audience I can see the clubs finding little problem with the games being played all over Europe.
Walter,
It’ll be billionaires vs billionaires and with the stakes that high do you really think that agro-violence and ref-shite on the pitch would actually be kept out? I think with THAT much money sloshing through and the betting driven through the hole in the ozone, that we would see at least as much in the Super League as you document in the EPL.