Concern about finances – how the top teams think

By Tony Attwood

During the days when every rag bag of anti-Wengerians could raise a banner and get a back page headline in the degenerate press, the notion was simple: anything is better than Wenger, anything is better than Kronke.

I am not too sure that feeling is one that holds sway in the realms of Old Trafford.  Or even in other quarters.   Indeed when I suggested once on these pages that Everton was a well-run club, there was a mountain of protest from Evertonians.  Liverpool may be feeling positive at the moment, but they weren’t just a while ago when they paid such a monumental fee for Carroll only to find he wasn’t actually very good.

And now, even the champions are looking at the future and wondering.  For yes, there are even some Manchester United fans who are suggesting that not everything is quite as they want it to be at the Old Trafford emporium.

The general feeling seems to be that the Glazers will continue to keep as much of the cash generated by Man U, via its massive sponsorship deals and its commercial income, as they can.  They use it of course to pay off some of their own shopping mall debt and some of the debt of the club – currently residing in the region of £389.2m.

But it is worse than that at Man U, for any thought of paying off debt comes after first paying £70m a year in interest. 

That they can do it at all is a testimony to those who went long before them and set up Man U’s worldwide marketing system, something which few clubs (Real Madrid is an obvious example) can achieve. 

In the past it didn’t matter too much because a) the manager could bully out of the owners any sum he wanted and b) only one or two teams could generate more money through any source. 

But now the list of monied rivals is getting longer and includes: Manchester City, Chelsea, Real Madrid, Barcelona, Bayern Munich, Monaco, paris Saint-Germain and a whole raft of Russian clubs.  Man U need all the money they can get, but they are not going to get the money the Glazers also need.

Manchester United may be edging their way up the table, and curiously the poor start gives David Moyes a weapon in his fight with the owners.  But should they really have a slip up this season and no money emerges from the Champions League next season there will be a real problem since they don’t have the reserves of finance Arsenal have.  Each year’s money is already accounted for.

To overcome such problems it looks likely than Man U will, early next year, contemplate selling another load of shares – providing of course the club does a bit better in the January transfer window than it did in the summer.   The Glazers need cash; United (it could be argued) need a few more players.

And that means that sometime soon – maybe in the summer the Glazers will sell Man U.  And that is why it was worth pondering if anyone could  be worse than the Glazers.

This notion of “nothing could be worse than this” was the whole problem with the anti-Arsenal movement.  What is needed is the identification not only of a better manager and/or a better owner, but rather a better manager and/or owner who is going to want to come into the club.

Finding an owner, given the number of football crazy Russian billionaires there are around, is not that tough.  Finding one who is going to respect the club and do the right thing, is tougher.

A look at the current situation of the top club in the light of this therefore gets more interesting.

Arsenal have more money to spend, but as always take their time.  They have the stadium already built, and the new sponsorship deals are coming in.  As a vehicle for sponsorship they look good – a club untainted by scandal or bad financial practice, the only thing that stops people investing in Arsenal are the AAA and their propaganda that the club is badly run.  A further campaign from them could lead to a drop, rather than a rise, in sponsorship money.

Otherwise the future is looking bright – if the club can do this well with half a dozen first team injuries what is it going to be like with everyone back?  What’s more, despite all the stories about Kronke selling, he seems to be true to his word.

Chelsea have money to burn, and the only thing that holds them back is the small outmoded stadium and the threat of FFP.   I truly believe that the owner thought he could buy endless success, plus any planning permission he wanted for a new ground, and he has been surprised and annoyed that this is not so.

The youth project that was so grandly announced is not producing a constant stream of brilliant young players (Arsenal have two brilliant finds this year in Zelalem and Gnabry, with another – Eisfeld – just on the edge) so buying players is the only thing they can do.  Having so many managers to pay off hasn’t helped the books either.  Only when Uefa show their hand over FFP will we really know.

Liverpool don’t have the cash, and don’t have the stadium although they have now moved out most of the local residents and are ready to rebuild.  But that money has to come from somewhere, and the owners don’t look ready to invest at the sort of level required.  Banks are nervous, having so recently owned the club themselves, so borrowing is harder than in other places.

Nor does the club want to buy top price players any more.  One proved to be far less valuable than his price tag suggested and is now at WHU, (having been sold for a huge loss), while the other is better than his price tag but is a moral disaster area which does the club’s image no good each time he bites or trots home.  One more Suarez misfire and there might be trouble ahead.

Man City look to be ready to fight the FFP battle.  They have a nice stadium, a superb team, and can buy anyone.  Only Uefa can stop them and the question is simply, will they, or will they agree that all the loop holes Man City say they have found are enough, and FFP is dead.   The lack of sponsorship money and gate money to match Man U is neither here nor there.   True, the sponsors might pull out once they have had the World Cup in their neighbourhood and their publicity aim has been achieved, but that is years away yet.

Man U as noted above have the Glazers who want out with a profit.  Any slip on the field of play would be a financial disaster for them, which the owners cannot afford.   There really is a battle being played out at Old Trafford – although Man U would undoubtedly survive any blip in the long term and rebound.

Tottenham… are a more curious case.  If the story is true that the owner will personally pay for the new stadium then they could compete with Arsenal when it is built – and it could be built within four years.  On the field they bought a lot of players at once, and that always is a difficult thing to do, but they were mostly paid for by Bale.  If they could integrate the players they could make the breakthrough to the big league, but even so, they would do so in a small stadium without the huge income that Arsenal’s club level brings.  Also they will always play second best to Arsenal in the marketing world until they have a better stadium and Champions League football.

The problem for Tottenham is waiting for someone to drop out of the top four.   Their thought was it would be Arsenal, but now that looks far less certain.   It couldn’t be Man U could it?

When looked at this way, everything pretty much comes down to FFP.  If Uefa do not take on Chelsea, Man C, PSG and Monaco then their credibility, already hanging by a thread, will be dead.   If they do take on the big spenders, then the war is likely to last for years, and football will quietly be forgotten.   There is also a version of FFP for the Premier League which the clubs agreed to last year – but that is further away.

One thing is certain though – Tottenham and Liverpool can’t both get a Champs League spot, and if either do, someone big is going to have to slip up.

The books…

The sites from the same team…

24 Replies to “Concern about finances – how the top teams think”

  1. Definition of ‘Too Big To Fail’
    The idea that a business has become so large and ingrained in the economy that a government will provide assistance to prevent its failure. “Too big to fail” describes the belief that if an enormous company fails, it will have a disastrous ripple effect throughout the economy.

    Investopedia explains ‘Too Big To Fail’
    Large companies generally do business with many other companies for supplies and services. If a large company fails, the companies that rely on it for portions of their income might be brought down as well, not to mention the number jobs that would be eliminated. Therefore, if the cost of a bailout is less than the cost of the failure to the economy, a government may decide that a bailout is the most cost-effective solution.

    From ..

  2. Since we are on the subject of milking…..

    The Milking Gear

    A farmer ordered a high-tech milking machine. Since the equipment arrived when his wife was out of town, he decided to test it on himself first.

    So, he inserted his “manhood” into the equipment, turned on the switch and everything else was automatic.

    Soon, he realized that the equipment provided him with much more pleasure than his wife did. When the fun was over, though, he quickly realized that he couldn’t remove the instrument from his ‘member’.

    He read the manual but didn’t find any useful information on how to disengage himself. He tried every button on the instrument, but still without success. Finally, he decided to call the supplier’s Customer Service hot line with his cell phone (Thank god for cell phones!).

    “Hello, I just bought a milking machine from your company. It works fantastic, but how do I remove it from the cow’s udder?”

    “Don’t worry,” replied the customer service rep, “The machine will release automatically once it’s collected two gallons. Have a nice day!”

  3. Brickfields,

    When people say too big to fail, do they mean such as Enron or were they considered to be ‘too big to be too big to fail?’ 😉

  4. @ Stuart – Most fell due to their belief ( or hype )that they had covered their bases and done their homework ; but ignored the simple but deadly Murphy’s Law !

  5. Brickfields, let me do the math. It will takes 378,5 days to get released from the machine.
    So I think the customer service gave a wrong a statement here. He should said “Have a nice year!”.

  6. PJ – Nice , but it appears that you have too much time on your hands ; now ,get back to work !

    Just wanted to post this which I found in The book of Quotes.
    ” Things come apart so easily when they have been held together with lies .”
    Dorothy Allison

  7. Tony. An interesting review of the financial situation of football in England.

    I wasn’t surprised that manure’s former manager supported the Glaziers and what they were doing to the club. He was there for himself and only for himself. A simple example of this was telling his international players that if they continued to play international matches they would not be suitable to play for the club.

    The player was faced with playing for his country and risk being transferred and being on a lower salary and of course not winning silverware or staying at the club but losing the right to play for his country. What other manager has ever done that to his players?

    But back to the Glaziers, the former manager could get the money he wanted for transfers – at first. He is on record as saying ‘I don’t have problem with money for transfer fees with the Glaziers. I ask for the money I want for a player and I get it. In fact its easier now than it was before.’

    That may have been so at first but clearly not so easy now. ‘What happened to the 80 million Madrid paid to them?’ some fans asked.

    The top priority use for the money coming into the club is for Glaziers United not manure untied.

    Spuds is an interesting situation having lost Lord Sugar the seem to have got themselves a ‘sugar daddy’.

    After spuds defeat to wet spam last Sunday many fans were/are crying for the head of AVB who they previously had been hailing as the ‘New Saviour’.(The second Portuguese one at that.) These fickle expert fans ignore the fact that their team had a 2500 journey to play a league/cup match and another 2 500 mile return journey to London arriving at the earliest late Friday and having experienced a 3 hour different time zone twice. Where as wet spam had had a normal training week.

    How will spuds fair this season? It is too early to say. The fact that they are up with the top runners, suggests to me that after the international break and we get a regular run of matches then the new players could gel into a strong team with a good chance of making a Champions League place their own.

    To all those anti Arsene fans of Arsenal I say this.

    Arsenal could be in the same mess as manure or the same mess as spuds or for that matter Portsmouth now languishing in division 2 but for Arsene Wenger.

    Arsene has not just transformed Arsenal football he has transformed Arsenal the club and made it the strongest Football club in Europe.

    Anti Arsene fans, please tell us of a club that is strong than Arsenal.

  8. If our friends on the extreme of the AAA who are completely suckered in by what is clearly a wider agenda against this club had their way, we would have failed to qualify for the CL the last two seasons, and we would not have Ozil in our ranks. Such things could lead to circumstances whereby they really would have things to complain about. Worth remembering that next time we get a bad result and they start coming back on here quoting Einstein and bigging up the spuds. What is this wider agenda…well…the Gala president was speaking yesterday saying the big boys have agreed in principle to a top flight European league by 2018. Of course he may be wrong, and not exactly news anyway. But he also said this league would be a closed shop. IF he is correct, as things stand, we will be invited in this league as a certainty, but a couple media darlings and Arsenal rivals might not. One of these is a huge team with much to lose if they don’t get in. Makes you wonder why those two are dithering over new and upgraded stadiums! it is also possible an established giant may fall by then and not get in, so many good reasons to have an agenda against the best run club in the league. Have no idea how this all fits in with FFP unless platini capitulates or these big boys break away. Heard about this claim on the radio yesterday, surprised it has not been more widely reported, unless of course it is all a load of pony

  9. Tony,
    If I had to select the most significant part of your interesting post, it would be “all the loop holes Man City say they have found…….and the FFP is dead”.
    City’s lawyers are no better qualified than those of other clubs and it is sad to reflect that before the cleansing powers of the Regulations can really bite, steps are already being prepared to circumvent them.
    A very worrying outlook indeed as I’m sure City haven’t the monopoly of loop holes.

  10. Brickfields. I enjoy your quotes. Could please consult your book of quotes for the author of these two.

    1) As time goes by I am not so quick’
    To censure others as before.
    Wisdom has taught me many things.
    And folly more.

    2) O wounder of human sight
    That leaps beyond our earthly prison bars
    To wander through the pathway of the stars
    In the lone labyrinth of the night

    I have known these quotes for years but have no idea of their source.

  11. Wait for it Colario, I can hear them coming and chanting : “it’s not about being strong, it’s about trophies and only trophies. Next year doesn’t matter because we’ll have trophies!”

  12. Stuart, we are playing inside the biggest trophy in the world, Emirates Stadium. This is the big tree that grow for 8 years and will live for next 50+ years. The harvest time is near. They say that the fruits will be sweeter when we pick them in May.

    @Brickfields : I left my hand on right position.

  13. @mandy, so what happens to these 20 super league teams when one or two of them implode dramatically or their benefactor takes his toys and go home? what happens if the standards of some of the teams fall off dramatically? are they still super? sounds like a recipe for oops!

  14. Mike.
    We already have the situation where the ‘big and or rich clubs play each in a league for this is basically what happens at the moment in the knock out part of the Champions League.

    If a straight forward league of say `18 teams was put in place then I would think answers to the questions you raise would have been settled. However to some questions there is not a fixed answer so some solutions wont please everyone.

    I think this league format is on the way. Personally I would hate to see a ‘closed shop’ where there is no relegation from the league and promotion to the league.

  15. @Mike in Atlanta – what happens if a team does poorly…they finish last and try to do better next year…just like the NFL. Or, if they go bankrupt, the ‘franchise’ gets sold and perhaps moved to another city…like the NFL.

    Personally, I don’t care much for the Champions League format right now. It seems like a hybrid between the closed shop format of North America and a cup competition but it is better than the closed shop format which would stop smaller clubs from even dreaming of a place in Europe.

  16. The EC wouldn’t allow this closed league to happen. One of the things they are insisting on is a “pyramid system of achievement”.

    The ECA have a lot to answer for, in driving this forward. It is not in the interests of the game as a whole. It is individually motivated by the greed of the usually, Euro-qualifying clubs.

  17. I mentioned on another thread about the “collective bargaining” exemption allowed by football for TV deals, the exemptions are allowed only in certain conditions, and I believe that should the big clubs breakaway and form a European closed league system then this exemption would be removed, and would result in a free-for-all, and end up having disastrous effects on those left out of the closed system. The money would be concentrated even further.

  18. Don’t know mike, the whole thing raises many more questions then answers, for a start, if only competing in this league, many sides would go from winning annual trophies to winning nothing. This could redefine their terms of success in supporters any maybe owners eyes.

  19. So if a team goes bankrupt in Spain for instance, how do they decide how to replace them? Will it be the next “name brand” team in line or will they be smart enough to choose a team that’s financially stable? there are going to be unintended consequences that will spin the heads of the geniuses currently running the “name brand” teams toward financial ruin. Of course football on a whole will lose, but it will make for entertaining copy at the very least.

  20. colario @ 11th. Oct 10:47 am – Sorry am not able to find those quotes /poems . Like most I find them on the internet and don’t own a book of quotes !
    They are very nice and will be saving them .Thanks .

  21. btw do comments here get moderated b4 they show up? i lit up a cigarette and spoke from the heart just now and instead of seeing paragraph upon glorious paragraph i see nothing and wonder if i’ve already gone and upset the apple cart here with my last marathon post. c’est la vie… indeed, if comments are moderated b4 showing up then plz delete this one…

    or, well, if i’ve been blocked/banned/etc then just let me know and i’ll continue on reading the site cuz comments are merely the proverbial icing on the cake. i love the thoughtfully written pieces on this site and the comments are always a good show. it’s no coincidence to me that this blog often features top top quality writing/commenting, as nowadays it’s so much easier to slag off other clubs as opposed to eloquently talking about your own. c’est la vie.

    merci beaucoup!

  22. ok well i see my whinging post up there but not my actual one, so i’m going to try and reintroduce it…. perhaps it was a bit long? i’ll trim the fat and try again!

    even tho i’m new to arsenal, one thing i’ve ascertained from reading a handful of articles about their finances is that they’re in a very very solid position going forward. they’ve got enough $$$ around that they’ll be able to pretty much do whatever they want in terms of affording personnel on the pitch, 1bil buyout clause for messi notwithstanding.

    i reckon no matter who owns united, come CL or naught, they’re still going to be able to find a way to raise up ~50-100mil for players if they need to. they’re like RM in that they’re also huge in the business of selling high-priced replica kits to people all over the world, so i just can’t fathom their situation being one where moyes decides he wants a 25mil player and the board sits him down and says “now david, you’re going to have to sell someone first”

    perhaps they’ll be unable to come up with bigger-than-bale-money to go get ronaldo back (cuz if you haven’t read, moyes made sure to keep the #7 open for ronaldo during the transfer window. how sweet!) or go out and drop 50mil on a suarez type (should RvP regress to his old “getting paid to lay on the training table” self) or decide “you know, we should have paid pogba back when he wanted a fatter contract”

    it’d be bloody brilliant of all of a sudden united hit a 2-3 year patch where their spending was limited. idk how long they’re committed to moyes if things go sour b4 his 6(six) year deal is up…. but if they’re unable to spend at a level that keeps pace with city, chelsea, the scousers, or even spurs….. and moyes is around managing united like a midtable club (example: who gets up 1-0 during the 17th minute in the ukraine(or romania or wherever shakthar is) and then decides to park the bus and hold on to ensure that they get at least one point. i know that no english team has won there since jesus walked the earth, but still, you’re manchester fk’n united and what kind of a message are you sending the club when you explicitly play for a draw when you’ve gone up 1-nil in the 17th minute? yeah yeah yeah easy group and playing it safe will get you through, but still the vibe i got was that the point from the draw would be the most important point in the history of mankind.

    arsenal’s got a wonderful young team with legitimate upside that’s ideal starting XI hasn’t even hit the field yet, and we’re still right there at the top of the table. i’m gonna pray that the injury mothra (as opposed to a bug) goes away and we can FINALLY see the fullblown ideal starting XI/subs, cuz i think great things are possible for this team right now…. let alone in the future where arsenal, be it football-wise or financially, are in a position where they should be able to develop a juggernaught that gives the EPL/CL problems for the next ~5-10 years.

    yeah, there will be more chinese water torture x-fer windows, and plenty of pundits wondering aloud if arsenal was out of character in getting ozil and now they’ll resume not splashing the cash (even in the case of a luis gustavo, who i reckon didn’t come here only because he wasn’t going to be guaranteed a spot in the starting XI, which of course was reported as “CHEAP ASS ARSENAL MISSES OUT ON *ANOTHER* TARGET WHO WAS SOLD FOR UNDER 20MIL. CAN ARSENAL SIGN *ANYONE*?”

    gotta love the media’ when arsene doesn’t go out and get the squad depth that we all cried for (and still do in some places) and then ends up promoting/using gnabry on the right wing, and in either his second or third proper start he gets a goal– the headlines/stories talk about how dumbass arsene was forced to use, gasp, an 18 year old out of sheer desperation!

    but when moyes inserts an 18 year old into the starting XI and he goes out and scores a brace against a relegation-caliber team…. well talk about some str8up proactive brilliance! that moyes has a magic touch i tell you what! nevermind the part where the midfield was looking rather shit under moyes week in and week out, that’s immaterial… what matters is that moyes has started to show a streak of brilliance by making the gutsy call to go with a kid who he clearly knew had that spark of class in him. someone give that man the manager of the year trophy right now because all of us, not just united, are entering the moyes era! 6(six) more years plz!

    again, c’est la vie. sorry to delve into a bit of a united/media tangent, but i rather dislike reading about proactive genius moyes in the wake of januzaj’s game tying/winning brace, cuz when the same thing happes @ arsenal it’s a condemnation of manager and club.

    but hey, that’s what you get in a one-team-league like the EPL. and i wouldn’t have it any other way, cuz when arsenal does get around to winning trophies in the hopefully-not-too-distant future it’ll be all that much sweeter knowing that everyone talks their crap because deep down somewhere they’re afraid of arsenal getting it together and having a run of form that lasts an entire season, cuz if arsenal plays their cards right they have a chance to build the best team in england and challenge for the CL within the next few years. and they’re not necessarily gonna go anywhere once they hit that plateau. shomer shabbos!

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