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By Tony Attwood
I have bored you stiff many times before saying that this is the moment when football collapses under the weight of its own financial stupidity.
Yes, I hear you shout, but when? And who? “Where’s the evidence?” you call (and I know you do because I can hear these voices in my head).
But truth be told, talk of Sheffield Wednesday tottering to administration is hardly earth shaking, and we have heard so much about Liverpoodle and Man IOU of late that it seems as if the old timers can go on forever.
Except, except… the defeat of the Russian Oil Fund in west London by our old chum Steve Bruce did cause a little upset. The talk has been that Chelsea (for it is they to whom I refer) have cut their “25” squad so very thin – in fact the thinnest in the league (I reprint the list at the end). And for all the talk of their brilliant youth squad, there is no equivalent to Theo, Vela, Ramsey, Wilshere, and the rest sitting around on the subs bench – nor even JET and Lansbury (now apparently an England goal keeper) waiting for a chance to move on up from the reserves.
It is not a shortage of money, but a real and genuine concern about the new regulations – plus a final recognition that while money can buy most stuff, it still can’t guarantee the league. (Ask Sheikh Yermoney’s team).
It’s not just in England that the problem is shaking its way through the game. Take AC Milan, the subject of a detailed investigation by Swiss Ramble in a recent edition of his exquisite blog.
Milan’s did actual manage to get their financials into what Uefa now likes to call “acceptable deviation”, but they did this by selling Kaka – not something they can do every year.
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WC Milan have in fact been in a headbasket league with Real Mad and Barca-loan-us. According to Swiss Ramble between 1999 and 2003 they spent €260 million net. In the following eight years , “the net spend was effectively zero. Even when they paid big money for someone like Ronaldinho in 2008, this was recouped (and more) with the sale of Kaka the following season.” Meanwhile Inter have actually started to make money from transfers (€50 million in the last two years).
Of course WC Milan suffer from having an income that is only about 65% of Arsenal’s, and they are desperately trying to cut their wages bill by 30% to be able to enter the Champs league in the future (given that there are no more Kaka’s to sell). The debt has risen in four years from €151 million to €301 million.
Meanwhile of course in England we have uncertainty. Manchester IOU’s owners are paying off the notorious PIK loans (which are charged at about the same level as the Gone West bank want to charge my company for an overdraft.)
But how, we all scream. Anders Red, the best thing ever to come out of Manchester IOU as always gives us the latest. Refinancing is the most obviously with a little saving on the 16.25% currently being paid. My guess is they found a credit card dropped in the directors’ box and are using that.
In fact the money has to come from somewhere, and maybe the Glazers have found another source of borrowing at a lower rate of interest. But consider this comment from Anders Red (and do remember, this guy is an honourable Man U supporter, who wants the best for his club – his data invariably makes a lot of sense). Reviewing the latest quarterly accounts he says…
“On the cost side, I have to say the rise in salaries at 14.8% is totally staggering. Last year wages rose 7% so this doubling reflects a huge acceleration in wage increases. Note, these figures do not include Rooney’s pay rise! Salary inflation shows no sign of slowing down in the run up to UEFA’s Financial Fair Play rules coming in. Other costs rose 5% year on year. In total, costs rose 12%, ahead of the rate of growth in revenue.”
So even if the Glazers have cut their interest rate a little the club’s finances are running away with themselves.
The latest figures also show that matchday revenues are just about static (actually increasing just 0.5%) and we know they can’t sell all their season tickets, while they are also advertising in the nationals to sell tickets. (This compares with Arsenal who as was pointed out in correspondence in the last article, look to sell out for the league cup quarter final – a match which is not covered by season ticket allocations).
But what of Liverpoodle – the Americans’ favourite lapdog?
Mr Henry, who owns the show has said there will be no “quick-fix” to the multiplicity of problems the club has including lack of depth in the squad, poor results, mediocre youth set up, continuing debt over the new stadium plans, and no serious end in site to the stadium issue.
Their solution of course, as with every club with problems, is to “do an Arsenal” by which they mean build up a production line of youth players signed aged 9 or 11, alongside the best overseas players signed aged 16 or 17 (we’re back to JET, Lansbury, Wilshere, Vela, Theo, Gibbs, Clichy etc etc).
Frank McParland is now academy director and he’s signed up two Barcelona youth coaches, José Segura and Rodolfo Borrell. “We need ‘top four’ young players,” Henry said. “They will not produce a quick fix but our philosophy in football will be based on the long-term. That is what has made Arsenal and Manchester United so strong. They understand something we understand in Boston – to be consistently strong on the field you must have a consistent flow of young talent that has been nurtured and developed the right way. We will focus on that. That is also the philosophy of Damien Comolli.”
As for the Oil Men, well who knows, either at Sheikh Yerbooty’s den or at the home of Mr Abramovich. The former are struggling to maintain their top four spot and don’t care a toss about breaking even, while the latter just doesn’t seem to have the right sort of players in depth to stay at the top and get the financials right.
Here’s the The oil men (South) “25” although there are not “25”.
Homegrown players: Ashley Cole, John Terry, Frank Lampard, Ross Turnbull
Non homegrown players, Petr Cech, Branislav Ivanovic, Michael Essien,
Ramires, Yossi Benayoun, Didier Drogba, John Mikel Obi, Florent Malouda,
Jose Bosingwa, Yury Zhirkov, Paulo Ferreira, Salomon Kalou, Alex, Henrique Hilario, Nicolas Anelka
Makes you think.
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