I’m rather chuffed that this site made the financial state of football a central talking point long before it became an everyday topic of chit chat.
So it behoves me to give an update – not least because we now have a director on the edge of having to make a bid.
In this piece I cover Stan Kroenke, Rangers FC, Portsmouth, Hull, Barclays Bank, FIFA, and the usual financial cripples like Liverpool and Man U.
First thing to note about our Stan is that the story is he is not paying for his shares – at least not yet. But if he makes a bid and buys the club he will have to do exactly that.
By my reckoning at the current price it will cost him £392m to buy shares he does not own – and for that he will get a famous name and a successful team – and a club that owes the banks something like £260m (the exact figure depends on exactly how you do the calculation – but let’s agree it is a lot).
Since the whole place is mortgaged for the next 22 years or so there’s not much money left to borrow out of the club, so buying it for £392m and then trying to get that plus the original £117m already invested to get the right to take on a debt of £260m doesn’t look very cute – at least not from a man who doesn’t seem to have all that cash at present.
Personally I don’t think that’s the game – but then what do I know. I said last night’s score would be 6-1, and look what happened.
So let’s more on somewhere else…
Rangers. For us English folk they are just part of the duopoly – that nice bunch of guys who sing God Save the Queen at the end of matches and have a jolly drink in the streets of Manchester, and sing songs about famines.
I think this is the BIG ONE – much bigger than any of us Anglo-centric English supporters have realised.
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We have known for years that Manchester U have debts sitting in lots of different places so it is hard to put them all together. Rangers have debts such like that, and most of them seem to be related to a company called Murray International Holdings (MIH) which is the company of the man who owns 60% of Rangers.
MIH is built on debt. By the beginning of 2008, MIH’s debt was £759.3 million. Rangers debt is £30m – which is nothing – unless the man who normally organises and re-arranges your debt owes £759m.
MIH can’t borrow any money because no one believes they can pay it back. Also the money they have borrowed now does have to be paid back – the loans are being called in.
£432 million of the money outstanding in 2008 had been lent for just two years or less. The loans are guaranteed by property – like Rangers FC’s ground – but that property is worth only half what it was worth four years ago.
So MIH want to sell stuff – and urgently – including Rangers – but no one wants to buy a club associated (rightly or wrongly) with sectarianism, fighting in Manchester and singing God Save the Queen and songs about potatoes.
So the banks are saying, fine – you can’t pay the debts, we’ll take over Rangers, cancel all the contracts, flog off the ground, and someone can build some flats there.
You might not believe that – but that is where it has got to. The club is on the very edge of the edge of the edge of the edge.
Since 2004 Barclays have given £37m to 200 sports sites in deprived UK areas. Which is fine and good and if you run one of those sites you’ll be having a jolly time. But think on this…
Bob Diamond of Barclays had a personal income since 2004 of 3 times that amount, during which time he removed 18,000 workers from their final-salary pension scheme. When challenged about the fact that he takes out more personally that the bank gives to this cause, and he destroys the retirement of many so that they can no longer afford their season ticket at their favoured club he said,
“The Premier League sponsorship has been very successful for Barclays. It creates a positive emotional link between our brand and football fans everywhere.”
I think I would agree with that. Except I would say, the moral fit of Barclays Bank and much of football is perfect. They are both in the gutter, and neither is looking at the stars.
Here’s another corruption example. Sepp Blatter is Lord of FIFA and wants to be elected Lord High President again. His pal Mohamed bin Hammam has been re-elected to the executive committee of FIFA, so that’s another vote for Sepp, and a sign of where we are going. During the election campaign the Guardian reported that Hammam threatened to “cut the heads off” rivals, and was accused of vote buying and manipulation.
But why not? After all in 1998 Blatter said no to any inquiry into his election as Ruler of the Universe after 20 delegates were given $50,000 each. Cash. Not quite on the Barclays scale of course, but FIFA is getting there.
It makes Liverpool look like small beer. They need to find £60m this season to repay Royal Bank of Scotland part of the mega debts they owe, and they are still losing money each month. Obviously if they were with Barclays life would be easier, and I suppose if they offer to swing some votes Sepp’s way, that will help them out.
In reality if Liverpool fail to reach the knock outs this year in Europe, and fail to qualify for the Champs next year, they are dead financially, and can be picked off by any one with enough money to pay the banks. Mohamed bin Hammam perhaps.
The Tottenham case is interesting, because Tottenham with planning permission for a ground should be worth more than Tottenham without – unless anyone starts to think that maybe they won’t fill the new ground.
Arsenal proved they could fill their ground by playing for two years at Wembley in the Champs. The Totts can’t do that because… well they never get into the Champs League.
Arsenal then produced their numbers. They have 40,000 on the season ticket waiting list, which is a completely separate list from the 25,000 silver members, which is a separate list from the 70,000 red members – all of which is different from the actual 40,000 season ticket holders. You can of course get on two lists if you pay – many silver ticket members are on the season ticket waiting list.
But Tottenham don’t do it like that. You become their equivalent of a silver member, and you AUTOMATICALLY go onto the season ticket list. I have doubts about filling up that new ground, and if it doesn’t fill, then all hell breaks out, financially.
Arsenal need Champs League knock out football every four years, and an average home league gate of 50,000 to pay their mortgage and make the sort of money they made at Highbury. Everything over that is extra. And the Totts?
West Ham – Poor West Ham. An FA enquiry into 3 separate ground invasions (“not guilty” says the club), still paying Sheffield for its match fixing arrangements of using an illegal player, now having to pay out to an ex-manager who was constructively dismissed, and all this while near the bottom of the league and being owned by an Icelandic bank that is bust. I don’t know it does get worse than that, unless you count…
Portsmouth. Having wrecked Southampton Harry wrecked Portsmouth – or so that saying goes, leaving them in shreds. Then they find an Arab buyer who… oh no… is the only Arab Sheik without loads of dosh. Not to worry he sells it to another Arab Sheik, who… oh no… also turns out to have no dosh either.
On 29 Nov 2007 our Arry was arrested by police investigating financial matters. Now Peter Storrie, the Portsmouth chief executive, has been charged by City of London Police with tax evasion.
Now here’s a funny thing. Storrie has been on bail since being arrested on 29 November 2007 along with our ‘arry Redknapp on suspicion of conspiracy to defraud and false accounting. Still never mind, maybe they can find a Sheik. Except that the latest one has said that the money he gave the club was “just a loan”.
But of course all is well at Birmingham. That Karen Brady is now helping the World Cup bid for England, and there’s a new man in charge… except, oooops, oh no, its another one of those things where no one but no one knows who actually owns the club. Certainly not the guy with his eastern friends who is seen a lot at the club. Nope – the owners are … secret. Just like Leeds. And Notts C.
With Manchester IOU the story is boring. They have no money, the Ronaldododo money has gone straight to the owners’ pockets and they still can’t pay a penny of the back interest they own on all their loans – estimated at around £750m.
New on the block is Hull who simply don’t have the money to pay anyone or do anything or buy anyone or anything – even if they go down they can’t afford to survive. £27m debt, a wage bill of £40m a year, and not a chance of paying off any of it. 10 point penalty anyone?
So there we go. It was simpler in 1910 – but not totally plain sailing. Woolwich Arsenal had some very odd debts and quite why they had them, no one wanted to say. And would you believe it, Rangers were involved once again. Read the whole story in MAKING THE ARSENAL.
(C) Tony Attwood 2009
PS In earlier editions I mis-spelled our leading shareholder’s name. Sorry.