We will remember 19 June 09 for many years to come

We’ll remember this day for three reasons.

First and most pointlessly, because today I was proven right on the transfer market for the third time in a row. I called Nasri, Arshavin and now Vermaelen correctly, all weeks before the actual transfer. Clever me. I feel rather chuffed.

Much more to the point is the Vermaelen deal itself – done before the transfer window even creaks on its hinges. And an important strengthening of the squad. Normally Liverpool and Manchester have signed six players each for £23m a time. This time, errr, well, nuffink.

But finally, and the real reason we will remember this day (unless of course Vermaelen turns out to be Adams II), is the fact that Setanta lost its contract. It didn’t pay the £10m, so it is out and dead.

It is the start of the end of the end. As it were. It might seem like a little thing, but I really think this is it. Big time.

Sky can buy one of the two packages of live football that Setanta owned for the coming season, but in doing so it knows it will have no real rival. So it won’t bid much.

And under EU law it can’t buy the other package (the one where Blackburn play out a 0-0 with Bolton on a monday night). ESPN will get that. Setanta paid £130m for the rights to both packages for 09/10. That was when prices were at a premium and they were trying to rival Sky. What are they worth now?

Since that bid capitalism has been more or less destroyed by our friendly bank managers at RBS/Nat West, there is an EU court ruling which could allow pubs to show games that are available in Europe but not in the UK, legally on their TVs, and Sky doesn’t have a real rival.


EPSN the most likely bidder is jogging around quite happily showing Match of the Day games from the 80s (Liverpool to score an offside winner in front of the cop in the final minute of injury time anyone?) They’ll take the final package, but they’re not really bothered.

So from £130m down to… what? One analyst said, shock horror, £100m. But why? Sky might pay £50m for its package if it thinks that there’s someone else watching, but still I ask why? Audience numbers are dropping. Pub numbers are dropping. EU rules are around the corner. Make that £40m – no, lets say £30m, well, let’s cut it to. £25m. Just to be fair.

That’s package five. But what of pack six where it can’t bid. Who gets that? EPSN. £5m? Maybe.

Of course I may well be missing a trick somewhere, but I would not be astounded if the income turns out to be £30m instead of £130m.

Let’s just say it is, for the sake of argument. That cuts the income per club by £5m. Except the big clubs get more – a lot more – than the diddly widdly Blackburn’s and Notlob’s playing with 11 behind the ball. Arsenal’s income could go down by £10m. Bad news. As could Manchester IOU – very bad news. Same for Liverpool Insolvency. Disaster.

And as our friends at RBS/NatWest arise from their cocaine infested fantasy fueled slumbers, ready to maraud around the streets of industrial Britain, stealing our money and destroying our businesses, they might think, “My goodness me – if Liverpool goes bust, I might lose £1m off my bonus. Better call that loan in.”

Of course it may not be quite like that – but there are issues on the horizon. I remember my colleagues at university doing maths and stats who analysed situations (mostly drunken parties with semi naked women in them) in which things happened. Using probability theory they worked the situations back to their point of origin, and invariably it was one small act which set off a whole train of events. That’s how it goes.

(Actually one of my mates wrote a hilarious thesis which started, “In a little known and unpublished analysis, I argued that…” The analysis was a record of every party he’d been to in the past 3 years while doing his doctorate. Rumour is that his prof said he’d recommend the PhD if the student gave him his address book.)

Remember the date. 19th June. Start of the end of the end.

(c) Tony Attwood 2009.

14 Replies to “We will remember 19 June 09 for many years to come”

  1. Apocalyptic stuff Tony. With your track record for accurate predictions this should be taken very seriously. It’s bizarre. look around the blogosphere and all you see is people worrying about Vermaelen’s height – and here the whole edifice is wobbling on the edge of the precipice.
    People need to realise that all bubbles burst in the end. Letting rich men play with venerable institutions in the hope that the bubble will last just that little bit longer can only end in tears. Liverpool too big to go bust? I grew up watching us fighting Leeds for the top honours. Leeds used to make it to European semis and even finals once; where on earth are they now? While we’re at it, Lehman Bros anyone? GM?
    It’s like watching the dinosaurs blithely bumbling across the planet as the shadow of the meteor grows ever larger. Or, if you’ll permit me one more clichéd metaphor, the man who, having fallen from the roof of a tower block, says to himself as he passes each window “Well, I’m OK so far”.

  2. Great to hear Vermaelen has finally joined us! Our most expensive defender yet? Definitely signals an intent!

    Yet another interesting piece about Setanta. Scary times these. Wonder how this is all going to end up. Thankfully we have an Economist running our club, who has pretty much prepared for times like these!

  3. Dear Tony

    Some thoughts on high finance, and a bit about footie as well.

    I hope your prediction is wrong but also fear it could be correct. Without wishing to insult any football fan supporting any team, at least not yet, I would suggest there are some very uncomfortable parallels between the aims and values that led to the banking crisis and the aims and values of the directors, managers, and supporters of some clubs.

    If it has taught us anything, the collapse of large parts of the banking system has shown that insisting on short term success regardless of risk really can destabilise, and ultimately destroy, any enterprise, no matter how permanent and invulnerable it may appear.

    It seems that the bankers came to believe they could always win, and win massively, with no real risk of adverse consequences from any of their actions. Those voicing caution and the need for a more patient and responsible approach, were marginalised and ignored. Huge immediate profits from every investment became the shared expectation, and those not achieving this were seen as mediocrities and losers, out of touch with the new values. The ideology, as distinct from the reality, was that if you were not winning, and winning big, you were not trying hard enough, were not committed enough, lacked vision and determination.

    So, you may ask, what has this all got to do with football? Is it too much to suggest that these same ideas and values can be seen in the owners and supporters of a growing number of English teams? Don’t get me wrong, as a Gooner, I want the team I support to win every game, win emphatically and in style, and get hugely disappointed when this does not happen. But I don’t actually believe that The Arsenal can win every game, or that if we could, that this would be desirable or sustainable. So, I have had to learn to cope with disappointment, and to accept that we won’t win every game and every trophy, and if we did, the game of Premier League football would ultimately become boring and devalued.

    Think about it. What if the-team-whose-name-cannot-be-spoken-by-any-right-thinking-person were to achieve complete dominance of the Premier League? What would football be like, both for their own supporters, and for the rest of us who don’t have severe personality disorders? In a word, pointless. What excites and engages me, and perhaps others interested in footie, is that the outcome of every game and every season cannot be fully predicted. That, for a variety of reasons, mostly connected with the fact that players and managers are human rather than machines, each game presents a new challenge and tests the preparation, strategy, capabilities and heart of the team to the full. If they work hard in preparation, are wisely deployed, and play with commitment, against another team who do the same, then the result will always be thrilling and worthwhile, but not always predictable.

    I would argue that we now see some big names in English football experiencing the consequences of the unrealistic and ultimately undesirable expectation that, with enough money invested in the right players, total dominance of the Premier League can be achieved. When fans come to believe this, clubs become vulnerable to the predatory money men, peddling the same discredited dream that toppled the bankers. With, eventually, the same consequences for clubs and the League. Teams controlled by finacial backers interested solely in maximising the return on their investment, encumbered with massive long term debt, and sold at knock down prices when their market value falls.

    Finally, a word about The Lord Wenger. Perhaps because he is from France, where longer term planning and sustainability are given a high priority in political and cultural life, Wenger has striven to achieve both financial stability for the club and sustainable success on the field, by emphasising the longer term development of individual players and the team as a whole. Of course, we will always need to buy in players who offer capabilities not present in the exisiting team. But the desire to buy total success at any price, even if it were possible, risks destroying that which we all value so much. It might just be that Arsene’s foresight and nerve in the face of criticism has saved our club from the downward spiral that appears to threaten some of the biggest club names in England. Let’s just hope that if these other big clubs fail, they do not take the whole of the Premier League with them. For me, every game next season will seen even more precious because we just might be watching the end of English footie as we know it.



  4. Doomed, we’re all doomed! You are right Tony this may cause a reining in of the spending at the big clubs, but it’s going to take a while for it to hit. And of course this doesn’t really affect the ‘Shakes’ at Man City, or the ‘Godfather’ at Chelski.

    In reality I suspect this won’t change the status quo in the Premier League. If anything the 2 most vulnerable clubs are Arsenal & Liverpool.

  5. Nice piece Tony.

    Pete the First – Why do you think that Arsenal are one of the 2 most vulnerable clubs? Our income ratio shows a higher proportion comes from gate receipts than other sources compared to other clubs.

  6. Tony – I know it’s a little bit off topic (and how strict you are on this) but I’m curious about something. In your piece a couple of days ago you talked about ManU’s debt and secured/unsecured creditors etc.

    If ManU are “rolling over” the interest on their loans and thus increasing their indebtedness every year at some point they will become insolvent and have to seize trading. We know what the approximate debts are. Do you know what the assets are valued at?

  7. That should of course read “cease trading” not “seize trading” bloody spell checker. It change Jonny to Jenny yesterday. Sorry Jonny!

  8. Tony – Not wanting to post something off-topic on your blog yesterday, I made the same point on ACLF, less compellingly I will admit:

    “Its official, Setanta has lost its rights to the EPL for the 2009-10 season. Couldn’t find the 30 million payment they owed the league. Apart from being very concerned about how much AFC games I will get next season with Fox Soc Ch (in the Caribbean), this is one more victim of the credit bubble that has gone splat. They overbid based on some over-optimistic business plan and now they can’t pay. The Bank’s had better have a lien on some tangible assets. But slowly but surely the chickens are coming to roost. Apparently both Rafa and Fergie have been asked to pull in their horns – before they buy, they must sell. Fergie cannot buy any player over 26, according to the Guardian, they must have resell value. Yet we have continuing stupidity like 17-18 million for Glen Johnson.
    We gooners, despite the foolish doomers, are in the catbird seat only because of Arsene Wenger’s policy of sustainability, while I shudder for the future of Pool and ManU.”

    IMO, football fans cannot depend on the vagaries of club management, on the presence or not of one great individual (luckily we have the genius of Arsene Wenger, for now) but need laws/rules on club management and financing that put clubs beyond the reach of the speculative millionaires and greedy bankers. Again the Bundesliga model is a good place to start.

  9. shotta-gunna – Can’t agree more about the need for better regulation. I actually think that it is not possible for investor’s to make money out of PL clubs unless they buy a small club and look for a return based on finishing mid table, maybe some Europa cup income. Even then the return is going to be tiny. The idea that anyone is going to make money out of a Liverpool situation is farcical.

    What you say about ManU only signing players 26 or under is interesting. When I heard this a couple of days ago I assumed it was because of the Webster ruling. I never considered that it might be to try and guarantee some resale value. Does this mean that ManU are to become a selling club?

  10. Personally I fervently hope that it in fact does cause a cascase effect that sees the end of a few of our rivals that have been living on the “never never” above their means whilst denying us success earned in the proper manner through sustained financial vigilance.
    I would love to see Liverpool do a Leeds followed in close order by Manchester United. It is what they deserve.

  11. Marc – The Guardian, not a very trustworthy source IMO, did report ManU’s new transfer policy. Tony has been proven right, there is a trickle of information that clearly bears out his prediction that the bursting of the credit bubble will negatively affect the reckless spenders; if I may add, in ways that not even he can predict.

    Terence – Don’t be in a hurry to gloat over our opponents demise because as in real life, both the guilty and the innocent are affected by credit bubble fueled by the big Banks and the monetary authorities. In the case of football, the FA has done sweet nothing to protect the clubs from short term greed, many of which will end up like Leeds.

  12. Marc although we are run very sensibly we still have an almighty amount of debt on our backs. If the funds keep coming through from the boxes and club level we’ll be fine……but we need to keep filling the Stadium and sell all the flats in Highbury pronto.

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