We are reaching the end of the era of big investment in clubs

by Tony Attwood

The failure of  Bill Kenwright, the chairman of Everton, to find anyone to buy his club, is either one of football’s oddities, or it is a sign that football is changing.

If you wanted to buy a club that was established in the EPL and had some history behind it, Everton would certainly be on your list of possibles.

The club loses money every year, true, and as such has not the slightest hope of playing in a European competition, but it has a solid support and a spot of history.   And the near neighbours look to be approaching terminal chaos.

Bill Kenwright has said, “The truth is Everton do need a billionaire. Of course that’s a stock phrase, but we do need major investment.”

Quite amusingly a while back he said, “It’s hard when you get bombarded, as I have been in the last three AGMs, with questions like ‘Why can’t we have what Newcastle have? West Ham? Portsmouth?’

Ah yes, relegation, financial ruin and a narrow escape, and administration.

The fact is that, like the catastrophists at Arsenal, the catastrophists at Everton are fed up with not winning stuff, and look around with envy at the high spending elsewhere, without looking at the consequences of that high spending.

But there aren’t any more buyers.

Kenwright again:  “Am I hopeful? I’ve been hopeful before, and nothing’s come of anything. But I will find that investment. Keith Harris from Seymour Pierce is probably the top football investment broker. He has been, alongside others, looking for us. Every name you see that has been out there looking for football clubs, we’ve spoken to them. We’ve had people in the Far East, America, Switzerland, Japan…”

He has also had to put up with the failure of the £400million Tesco-backed Kirkby project although some of that failure was self-inflicted after the club built a new training ground, then tried to sell the old one for property development, and then when planning permission was turned down, allowed directors to attack the local council and indeed the whole notion of local democracy.  And that was just before the same people were about to vote for the new ground.  A bit silly really.

So, why does no one want to buy Everton?

The possible answer are

1.  Buyers expect profit

That is certainly the case at Man IOU and Liverpool Insolvency.  You can buy a team because you always loved the team and want to be in the boardroom hobnobbing with the players and the memories, but unless you have deep pockets your team will sink.  If you want profit, how do you do it?  Apart from being a con artist (see below) no one except Arsene Wenger seems to know.

2.  Owners are aware of leveraged buy outs

In fact you would have to be managing the Sea of Tranquility Reserves on the Moon not to be aware of leveraged buy outs.   So sellers of clubs have become cautious.  Mr Kenwright may have had offers, but he is obviously not wanting to see the club he has nurtured and paid for, wrecked.

3.  People are more aware of crooks and con artists

Apart from the Glazers et al who do operate within the law, (and as far as I know the Glazers made it quite clear what they were going to do before they bought Man IOU) there are the crooks and conmen hovering at every corner.

And some of them, amazingly, don’t even have the money they said they had.  Ridsdale at Cardiff proclaimed “there are no debts”.  Birmingham was going to spend £40m on players, but couldn’t pay a £2m bank fee.  Portsmouth had four owners who seemed to have no money.  At Notts County the owners didn’t even exist.

4. The new rules are now too close

While the media had little interest in UEFA’s new financial rules, and there was (and in many cases still is) a feeling that “the big clubs will find a way around them”, I believe that quite a few potential owners took one look at the new Financial Doping Regs and said, “that’s it then” and decided to go into camel racing or Formula 1.

If you own a club now, there is still time to pour money in, buy a team and set up a vibrant youth academy.  But the idea of buying a club, and getting to the Champs League final in a year or two is now over.  There’s too much competition, and too many rules.

Even in a two team league in which the teams get to keep all the TV money, and the banks will bankroll you to infinity, Real Mad can’t guarantee to win the league.  And I think it must have shocked the owners of the KGB in Fulham, and Man arab to the core to find that they couldn’t just buy the best players in the world, control them and then win everything.

The failure of Man Arab even to get into the Champs league before the Financial Doping Regs come in, must be a worry.  Everyone assumed Chelsea could buy their way to endless success.  It turned out not to be true.

5. Become a laughing stock

Worse, it is possible to get involved in all this football stuff and become a laughing stock as you fail to make it happen.  David Gold might be able to walk down the streets of West Ham and be safe, but West Ham is not really a fully civilised area (note the match v Millwall for example).  I doubt that the owners of Liverpool and Man C would get a good reception.  And although there is good will towards the owners of Man C locally, in the wider football world they are a laughing stock….

“…here’s one we paid £30m for him, can’t remember his name, he’s in Brazil now – he’s yours if you want him.  And we got that Adebayor bloke, can’t quite remember why, but Arsenal thought he was good so we took him.  Not really that good…. oh and here’s one, I think he’s one of ours…

6.  So which clubs are available?

There is, in fact a shortage of supply.  Chelsea and Man C are not for sale.  Man U apparently is not for sale because their owners now live on Pluto and are putting together a plan to fly to Alpha Centuri.  Liverpool is for sale, but before you even think about doing anything you need to clear all the debts, invest £300m in a new stadium and £200m in a new team.   Tottenham – who knows, because their benefactor is living half way around the world in a tax haven.

And when we get down to clubs that might be for sale we find that like Aston V, Everton, Bolton, Blackburn etc, they can’t qualify for Europe, and time is now running out.  Some are for sale, most not.

And now…

If any club is going to be sold, it really ought to be Everton.  They have an owner who wants to sell, they have fans that would like the club sold, the potential fan base is high, the rivals are in terminal decline (unless some crook or idiot really does come and buy them out), and they have become so used to years without Europe, that another ten as the owner puts the billions in and then lets it mature, won’t really look any different.

But it just seems no one wants to play any more.

Maybe its because people like the Tottenham owner are reported to have lost getting on for a billion pounds in the stock market crash following the banking crash.  Maybe everyone wants to buy into camel racing.

Whatever the reason I suspect we are approaching the end of the era of big buying of clubs.


Temporary editor’s note: As Tony is going away for a few days to get a well deserved rest,  I have agreed to take over the operation of the site during his time away .  If you have something that cant wait to be published you can send it to this  email address  walterbroeckx@hotmail.com.


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A nice statement

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20 Replies to “We are reaching the end of the era of big investment in clubs”

  1. hmm….75% of article resembles to swiss ramble…anyway, u have ur own conclusion…

  2. Critic, and that conclusion is:
    Arsenal is better prepared for the future than the rest of our competitors. We may have even evolved the template for transiting into that future and we’ve been at it for 3-5years before the Euro-announcement. That is worth trumpeting and giving kudos to Arsenal management, especially, Arsene Wenger, for.
    AW may be a terrible coach whose touch for picking players that can win trophies for us may have disappeared but in this one situation, we ought not to hesitate to give praise where praise is due.

  3. I dont think Everton are an attractive prospect apart from the liverpool area I cant see them having a wide support base. Till this day I dont understand why Roman Abramovic would invest 700 million into a club a for the majority of time he has been unhappy with the way they play.

    my biggest fear is that football clubs are going to think damn I need more money and find away to increase Tv revenue which means these cost will be passed onto the average joe, the tv companies are screwing us as it is

    the business models do have to change I think the answer is to start with player wagers I heard west Ham had £40 million wage bill.costs either need to come down or revenue needs to go up. once clubs can show a profit the investors will be back, not many people want a toy even at chelsea I think he is a little fed up and wants them to become self sustainable

    the sad thing i find is as a product the premier league has been losing some of its best assets, that is why they were talking of a 39th game it is all about money. Cutting out some of the agents fees and intermediaries would help the business of football

  4. Liverpool’s value has just doubled. They’ve sacked, sorry come to a mutual agreement with Benitez. Apparently the favourite to replace him is an immature 9 year old who is dead good at Championship Manager. The financial markets are probably correct in thinking that he will not waste as much money on transfers as Benitez.

  5. Gooner80, I think that the EPL needs to discourage rubbish career ending tackles. The FA needs to take a stronger stance as discourages world class footballers from other leagues to play here.

    I have always thought the hammers had delusions of granduer, they really should try and be a bit more like Wolves. I am suprised no one wants Everton, after the Man Citeh, QPR and Notts County purchases, I thought anything was a takeover target. I personally think David Moyes is a really good manager.

  6. To me Everton are in in very similar position to what Arsenal were in during those 2 or so seasons before Arsene Wenger took over. Granted Everton are losing a bit of money but that is mainly down to the player wages costs of today. They have a really good core to their team with some excellent players, but are falling short of the big boys (as Arsenal found themselves to be after GG went and Rioch came in). It just shows what a brilliant manager AW is that he came in, and in making one or two shrewd additions to the team and changing the playing style and training methods (in those first seasons – he has done much more since of course), that he turned Arsenal into the force they are now. I would even argue that without Wenger arriving, then Arsenal may well be in exactly the same position today as Everton are in. (afterall they have similar histories in the top flight and Goodison and Highbury are similar in size etc)
    Moyes is a good manager and has built a decent squad with the resources he has had but, he just lacks that ability (or could it be philosophy) to really push the club forward in the way AW did with Arsenal.
    My view for Everton is that they must try and get something going with a new stadium again and try to fund it in the way Arsenal did with the Ems. They have got the history and they have got the fan base to put at least 50,000 people in a stadium every home game. I hope they can sort it somehow. But I have a soft spot for Everton as I can still remember that great team of the mid 80’s that Howard Kendall managed. They played some great football and were a breath of fresh air to the Liverpool dominance of the time.

  7. Something to think about is that the world’s best talent comes from the world’s poorest countries. And, the worst complacency comes from the world’s richest countries. Of course one can always prove this wrong by nit picking. But, on the whole look at Brazil, Argentina, Ivory Coast. You can see that money comes into play rarely into the development of great talent. So in my opinion Arsenal have got it right. Build the youth program with hungry love for the game players and you will succeed.

  8. I think you’re wrong Tony, in the long term, but in the next 3-5 years you may be right.

    The only way that clubs can become self-sustaining is by controlling player wages.

    Once that becomes set in stone, real owners will return. Because then they can turn a 5 – 15% profit depending on how well they run the club. They might choose to be a mutual and retain surpluses within the club also.

    We had a silly decade, where player wages spiralled, owners lost fortunes and fans got shafted.

    In Germany, they had a decade where they built new stadia, kept ticket prices low and controlled player wages. And they had a set of rules for the League.

    So it’s not the whole football world which went mad, you know. Just large swathes of it.

    If I had the money right now, I’d buy a football club. As a 15-20 year labour of joy. But one which would be run on a self-sustaining model. I’d be absolutely open with fans about it, be clear with players as to their responsibilities and treat greedy agents like shit. Whilst working happily with agents who do a good job for their clients whilst treating clubs respectfully. I’d tell fans that if they expect to win the EPL in the next three years to go support Chelsea, Arsenal, Man Arab et al. But I’d want to get into the EPL within 5-7 years, sooner if the club were ready for it. And then kick on from there.

    I must say, I’d probably be buying Brighton, Plymouth, Derby, Cardiff or Bristol City rather than a top EPL club. Clubs with potential, a good catchment area but with more realistic fans. Clubs where you can build steadily and reward managers for long-term success. Clubs where the price of entry is in the tens of millions, not hundreds.

    Why Merseyside didn’t emulate the North East and build new stadia 20 years ago is beyond me. Dodgy councils and two decades of success blinding them to the winds of change, I guess.

    Perhaps a successful bid for 2018 will finally see that change, eh?

  9. Rhys, one key difference with the German model is that the big stadiums eg Borussia Dortmunds, Bayern Munichs etc are not owned by the clubs – they didnt have to pay anything to build them, and instead rent them. i’d be intrigued to see a breakdown of income for some of the german clubs and how much comes from matchday income.

  10. To Aaron GSI

    How can you compare Arsenal pre wenger with everton!!! even then we were the third most successul english club with 10 league titles and numerous facups cup winners cup. Arsenal had to move because we have huge waiting lists for season tickets, I dont think everton have that problem. Everton Have been in the league along time, but because they havent been that successful. There is no other club you can compare Arsenal with, because we havent been as successful as Liverpool or Man u but been much more successful than all the rest.

    Arsenal are now one of the richest, come from a trendy area and we are much more televised than everton, everton are far behind the competition, i cant see anyone from London really supporting them. They dont really have a star name there; even back before Wenger we had Wright and Bergkamp they could sell shirts, children playing on the play ground werent saying I am going to be Kevin campbell they had wayne rooney but they sold very quickly. They are a good established team just not very marketable IMO. The only way they are going to sell if they can start making profits, cut costs develop youth and try and win something, lets face it people from the far east, around the world and even england are glory hunters and the only way you increase following is to win trophies.

    I think footballers will have to earn more money off the field, sponsorships, etc. i think it should lean towards more performance related pay, Play well get paid well. footballers have lost all touch with the average football supporter

  11. @Christianjimmy,

    You are very largely correct that German clubs do not own their own stadium, but Bayern Munich are an exception. They are still paying off outstanding loans, but the debt is coming down rapidly following payments from Allianz (for naming rights) and investments by club sponsors Addidas and Audi.

    An interesting statistic for you: despite earning only half the matchday income that Arsenal generate at the Emirates, Bayern’s total revenue is still £20m higher than Arsenal’s. Reason for this is not, as you might expect, television deals, but an incredible commercial machine, which generates £135m a year. To put that into context, it’s almost triple Arsenal’s £48m.

    If you want to read a comprehensive analysis on Bayern’s financials (and the German model), could I point you towards:


  12. @the swiss rambler – another fantastic article. answering my questions, even before I’d asked them.
    fascinating to see the differences in TV money, and commercial income. Kudos to you sir!

  13. ChristianJimmy – you’re right about building stadiums in Germany, in fact it’s the same at Man City, where they pay rent to the City Council. One hopes that the rent will go up if they get in the Champions League??!!

    It may also become the case with West Ham if they become resident at the 2012 Olympic Stadium.

    There’s almost a case for asking if the athletics stadium in Sheffield could be turned into a football ground or not and getting Wednesday out of Hillsbrough to a more modern place?

    Sounds from France winning Euro 2016 that they’ll be following the Germans down the same route this decade.

  14. Rhys, your first comments made some good points, but it just got daft when you cited Cardiff in the same sentence as “run the club well”. How would you propose to kick on to the Premier League with debts like theirs? If you trade down the squad, you don’t get in the PL, but if you keep the squad, you are playing financial roulette – failure tog et promoted would surely equal administration.

    Maybe I’m nitpicking criticising one of four choices, but it just seemed a quite daft example to cite.

  15. Phil

    You only buy Cardiff if you can rent the Millennium stadium down the line.

    That’s why G+S thought about it. Apart from the fact that the Porn King was born in Penarth.

    You buy Cardiff and pay debts off buying it. Debts aren’t huge if you got to the EPL. They’re huge for the Championship.

  16. Like most clubs, if you can pay off the debts and remove the interest then yes they are a decent prospect. But looking at how poorly they’re run (I daresay they have an astronomical ratyio of wages to points gained) I’d certainly steer clear of them if I were investing.

    They’re a bit of a basketcase but you’ve made me sufficiently curious that I’ll have a nost through their accounts some time.

  17. @ SwissRambler. Good shout. You just can’t beat that German efficiency can you?

    An in Munich of all places! Next thing they’ll be dominating Europe just like another Munich team from the 1930s.

  18. The Glazer family didn,t authorise all those huge spending sprees ,Cristiano Ronaldo,Berbatov ,Rooney etc. and those huge weekly pay packets ,only one person did Sir so and so,no more excuses please ?

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