Some interesting words on Club buy-outs

[Evil Monkey 52]

http://www.guardian.co.uk/sport/blog/2009/jan/07/west-ham-newcastle-football-financesSimilar to an article a few months ago I believe, but worth bearing in mind... Gods, its depressing, isn''t it.... [:S]

Financial nightmare has disrupted dream of club ownership

Even for millionaire Newcastle fans the climate is too cold for them to dive in and buy out Ashley

Whatever 2009 has in store for English football as economic crisis

engulfs the world, it is unlikely to include another giddy round of

club takeovers, according to the man who engineered a packet of them,

Keith Harris. At the turn of the year, when Newcastle United,

a club that Harris had been instructed to sell, was withdrawn from the

market, the club''s owner, Mike Ashley, sought to make a virtue out of

necessity, telling somewhat sceptical fans: "2009 will be the year we

drive the club forward together."

The fact was that Newcastle, despite all the turmoil, had been considered a prime Premier League

club for investors because of St James'' Park''s 52,000 capacity and the

bloody-minded Geordie will- ingness to fill it but the club was on sale

for three months and no buyer bit. Harris said that, despite interest

from the US, Middle East and South Africa, a solid offer never arrived.

"The

problem was not the price being asked but the general climate," he

said. "In a way it is a wake-up call: we''re in the toughest economic

situation anybody has endured in our lifetime and that means we are

unlikely to see much activity on the football takeover scene."

For

Harris, a banker with the firm Seymour Pierce, that negative diagnosis

includes Everton, which he remains instructed to sell, and the other

Premier League clubs publicly for sale, including Portsmouth and

Blackburn. He advised the billionaires who bought Chelsea, Aston Villa,

West Ham and, at Manchester City, Thaksin Shinawatra, but now says the

party is over and clubs – with Sheikh Mansour''s City the exception –

should go into 2009 committed to tightening belts, not hoping for a

sugar-daddy saviour.

"We have been through a time when clubs have

been overspending, with very ordinary players commanding huge transfer

fees and wages," he said. "The climate has changed and takeovers are

not going to be the solution to the woes that they may have been two

years ago. That is unequivocal."

Harris painted a picture of straitened times even for billionaires, some of whom, like West Ham United''s

owner Bjorgolfur Gudmundsson, have been seriously damaged by the

banking collapse while others have fortunes invested in shares and

property whose value is plummeting.

In that environment, and with

the financial world bracing itself for the inevitable next hideous

shock, Harris said those who might have taken a punt on English

football''s glittering global "brands" have become suddenly more

cautious. "You can''t force a club down somebody''s throat," he said.

"They have to really want to buy it. They may expect to make money out

of a club ultimately but a football club is a trophy asset, for

enjoyment. Confidence is dented everywhere and I do not see much

activity on takeovers until we get some form of stability in people''s

minds."

He argues that the club which might prove the exception

and find a buyer is the one most afflicted by the banking collapse,

West Ham. Harris believes London clubs have a cachet which still

appeals to investors even in this market and that a court action

brought by a creditor in Iceland against Gudmundsson''s holding company,

Hansa, laid bare how crucial a sale has become to the former

billionaire.

Hansa is in administration and argued in court that

its best chance of paying off its debts, which amount to £110m, lies in

selling West Ham – its "largest and most valuable asset". The club has

already been put up for sale.

West Ham''s vice chairman, Asgeir

Fridgeirsson, has said there are several interested parties, although

the suggestion that Dubai International Capital are among them was

denied by a DIC representative. As reported in the Guardian, in the

court action in which Hansa argued for more time to pay its debts, the

company''s lawyers suggested £250m as a likely price for West Ham. That

valuation was based on comparing the club to Manchester City, which the

lawyers said Sheikh Mansour took off Thaksin Shinawatra''s hands for

£230m. Yet that £230m was understood to comprise City''s £190m debts,

leaving just £40m for the club shares themselves which Thaksin owned

almost 100%.

In court Hansa put West Ham''s current debts at £50m,

so a buyer would be expected to take those on plus give Gudmundsson a

price for the shares. Hansa''s lawyers argue West Ham has an attraction

"because of its location in London, its loyal supporters, its greater

possibilities for related real estate projects, its proximity to the

Olympic Village and the fact that West Ham owns its own stadium which

Manchester City does not". However, sources close to Gudmundsson have

conceded what many already felt, that it has become unrealistic to

think West Ham will attract a total value of £250m.

So two years

after Gudmundsson''s £85m takeover sparked a round of extravagant

spending in the transfer market, West Ham have become sellers of

players, with Mansour''s City the potential buyer, and Gudmundsson is

publicly having to sell the club itself. Harris believes their chance

of finding a buyer depends "massively" on the price they put on the

club and the amount West Ham will ultimately have to pay Sheffield

United in compensation for the Carlos Tevez saga.

Elsewhere there

are mixed signs of clubs'' preparedness to face straitened times. Just

four Premier League clubs have so far filed recent accounts covering

the 2007-08 season; of those Arsenal, Tottenham and Everton increased

their income on the strength of the Premier League''s booming £2.7bn,

three-year TV deal, all three clubs made profits and were carrying debt

generally reckoned not to be alarming. However, Middlesbrough''s

accounts for the year to December 2007 showed that the club turned over

£48m, made a loss of £8.3m and had increased bank borrowings from £84m

to £93m. Boro''s total creditors were £132m.

The accounts said the

chairman, Steve Gibson, had "undertaken to provide financial support to

the extent necessary" but there was no evidence in the accounts that he

had in fact put any money in last year. All of that, the overspending

on wages, the losses, the debts incurred to stay in the honeypot

Premier League, lay behind the manager Gareth Southgate''s apocalyptic

warning that the English game could face a "Serie A style collapse".

Few

in the Premier League go along with that and its chief executive,

Richard Scudamore, remains confident of securing another TV bonanza,

although Football League clubs are not contemplating the oncoming

recession with any relish. Harris, advisor to Roman Abramovich''s 2003

takeover of Chelsea and the series of other deals which came to

represent the boomtime, believes meltdown is a possibility if the clubs

making losses do not get a grip of the transfers and wages they pay.

"The

clubs have been spending too much and the club owners were looking for

richer people to buy the clubs and take on the losses," Harris said.

"But we are in a different climate now, where the football clubs have

to realise it is back to the fundamental basics of managing their

costs. The supply of richer people has proved to be finite."

[Hog 0]

Which leaves a certain man from Kent as our only realistic hope then....

[Robert Ketts Yellow Army 20]

[quote user="Evil Monkey"]http://www.guardian.co.uk/sport/blog/2009/jan/07/west-ham-newcastle-football-finances

Similar to an article a few months ago I believe, but worth bearing in mind... Gods, its depressing, isn''t it.... [:S]

Financial nightmare has disrupted dream of club ownership

Even for millionaire Newcastle fans the climate is too cold for them to dive in and buy out Ashley

Whatever 2009 has in store for English football as economic crisis engulfs the world, it is unlikely to include another giddy round of club takeovers, according to the man who engineered a packet of them, Keith Harris. At the turn of the year, when Newcastle United, a club that Harris had been instructed to sell, was withdrawn from the market, the club''s owner, Mike Ashley, sought to make a virtue out of necessity, telling somewhat sceptical fans: "2009 will be the year we drive the club forward together."

The fact was that Newcastle, despite all the turmoil, had been considered a prime Premier League club for investors because of St James'' Park''s 52,000 capacity and the bloody-minded Geordie will- ingness to fill it but the club was on sale for three months and no buyer bit. Harris said that, despite interest from the US, Middle East and South Africa, a solid offer never arrived.

"The problem was not the price being asked but the general climate," he said. "In a way it is a wake-up call: we''re in the toughest economic situation anybody has endured in our lifetime and that means we are unlikely to see much activity on the football takeover scene."

For Harris, a banker with the firm Seymour Pierce, that negative diagnosis includes Everton, which he remains instructed to sell, and the other Premier League clubs publicly for sale, including Portsmouth and Blackburn. He advised the billionaires who bought Chelsea, Aston Villa, West Ham and, at Manchester City, Thaksin Shinawatra, but now says the party is over and clubs – with Sheikh Mansour''s City the exception – should go into 2009 committed to tightening belts, not hoping for a sugar-daddy saviour.

"We have been through a time when clubs have been overspending, with very ordinary players commanding huge transfer fees and wages," he said. "The climate has changed and takeovers are not going to be the solution to the woes that they may have been two years ago. That is unequivocal."

Harris painted a picture of straitened times even for billionaires, some of whom, like West Ham United''s owner Bjorgolfur Gudmundsson, have been seriously damaged by the banking collapse while others have fortunes invested in shares and property whose value is plummeting.

In that environment, and with the financial world bracing itself for the inevitable next hideous shock, Harris said those who might have taken a punt on English football''s glittering global "brands" have become suddenly more cautious. "You can''t force a club down somebody''s throat," he said. "They have to really want to buy it. They may expect to make money out of a club ultimately but a football club is a trophy asset, for enjoyment. Confidence is dented everywhere and I do not see much activity on takeovers until we get some form of stability in people''s minds."

He argues that the club which might prove the exception and find a buyer is the one most afflicted by the banking collapse, West Ham. Harris believes London clubs have a cachet which still appeals to investors even in this market and that a court action brought by a creditor in Iceland against Gudmundsson''s holding company, Hansa, laid bare how crucial a sale has become to the former billionaire.

Hansa is in administration and argued in court that its best chance of paying off its debts, which amount to £110m, lies in selling West Ham – its "largest and most valuable asset". The club has already been put up for sale.

West Ham''s vice chairman, Asgeir Fridgeirsson, has said there are several interested parties, although the suggestion that Dubai International Capital are among them was denied by a DIC representative. As reported in the Guardian, in the court action in which Hansa argued for more time to pay its debts, the company''s lawyers suggested £250m as a likely price for West Ham. That valuation was based on comparing the club to Manchester City, which the lawyers said Sheikh Mansour took off Thaksin Shinawatra''s hands for £230m. Yet that £230m was understood to comprise City''s £190m debts, leaving just £40m for the club shares themselves which Thaksin owned almost 100%.

In court Hansa put West Ham''s current debts at £50m, so a buyer would be expected to take those on plus give Gudmundsson a price for the shares. Hansa''s lawyers argue West Ham has an attraction "because of its location in London, its loyal supporters, its greater possibilities for related real estate projects, its proximity to the Olympic Village and the fact that West Ham owns its own stadium which Manchester City does not". However, sources close to Gudmundsson have conceded what many already felt, that it has become unrealistic to think West Ham will attract a total value of £250m.

So two years after Gudmundsson''s £85m takeover sparked a round of extravagant spending in the transfer market, West Ham have become sellers of players, with Mansour''s City the potential buyer, and Gudmundsson is publicly having to sell the club itself. Harris believes their chance of finding a buyer depends "massively" on the price they put on the club and the amount West Ham will ultimately have to pay Sheffield United in compensation for the Carlos Tevez saga.

Elsewhere there are mixed signs of clubs'' preparedness to face straitened times. Just four Premier League clubs have so far filed recent accounts covering the 2007-08 season; of those Arsenal, Tottenham and Everton increased their income on the strength of the Premier League''s booming £2.7bn, three-year TV deal, all three clubs made profits and were carrying debt generally reckoned not to be alarming. However, Middlesbrough''s accounts for the year to December 2007 showed that the club turned over £48m, made a loss of £8.3m and had increased bank borrowings from £84m to £93m. Boro''s total creditors were £132m.

The accounts said the chairman, Steve Gibson, had "undertaken to provide financial support to the extent necessary" but there was no evidence in the accounts that he had in fact put any money in last year. All of that, the overspending on wages, the losses, the debts incurred to stay in the honeypot Premier League, lay behind the manager Gareth Southgate''s apocalyptic warning that the English game could face a "Serie A style collapse".

Few in the Premier League go along with that and its chief executive, Richard Scudamore, remains confident of securing another TV bonanza, although Football League clubs are not contemplating the oncoming recession with any relish. Harris, advisor to Roman Abramovich''s 2003 takeover of Chelsea and the series of other deals which came to represent the boomtime, believes meltdown is a possibility if the clubs making losses do not get a grip of the transfers and wages they pay.

"The clubs have been spending too much and the club owners were looking for richer people to buy the clubs and take on the losses," Harris said. "But we are in a different climate now, where the football clubs have to realise it is back to the fundamental basics of managing their costs. The supply of richer people has proved to be finite."

[/quote]

What we''re seeing, across the real economy, is a contraction in asset values that is both painful and necessary. The fact that Norwich gets 23,000-plus crowds and still cannot afford a decent team is the clearest sign that professional football in Britain in the 21st century is totally unsustainable

[The Butler 0]

[quote user="Salahuddin"]Which leaves a certain man from Kent as our only realistic hope then....[/quote]

Don''t think so. He has already stated his non intentions.

Back to the "who replaces DS after the revolution"

WE and they may not like it but we are all stuck!

[Ian 1,141]

[quote user="beejinz"]

What we''re seeing, across the real economy, is a contraction in asset values that is both painful and necessary. The fact that Norwich gets 23,000-plus crowds and still cannot afford a decent team is the clearest sign that professional football in Britain in the 21st century is totally unsustainable

[/quote]Spot on.

[Joanna Grey 0]

[quote user="I.S."][quote user="beejinz"]

What we''re seeing, across the real economy, is a contraction in asset values that is both painful and necessary. The fact that Norwich gets 23,000-plus crowds and still cannot afford a decent team is the clearest sign that professional football in Britain in the 21st century is totally unsustainable

[/quote]

Spot on.
[/quote]

A good example, if you have not got a mega-rich owner or lucky enough to sell your players for multi-million pound profits then you are in trouble.

[Mello Yello 2,322]

[quote user="I.S."][quote user="beejinz"]

What we''re seeing, across the real economy, is a contraction in asset values that is both painful and necessary. The fact that Norwich gets 23,000-plus crowds and still cannot afford a decent team is the clearest sign that professional football in Britain in the 21st century is totally unsustainable

[/quote]

Spot on.
[/quote]

What about before ''the recession?''....When the Chairman of NCFC said we required 16,000 fans to break even?......and we were getting 20,000+....

 

[JJ 0]

[quote user="The Butler"]

WE and they may not like it but we are all stuck!

[/quote]

Think we are completely stuck, and at the worst possible time considering our squad size and league position.  Not good.

[ncfcstar 296]

Well time to focus on support then lads, because that is all the will save us now, lets get behind the team and board (somehow :S) and try and force our way out of this mess.

I''m kind of glad about this news, Cullum no longer seems the saviour people constantly claim he is.

[Ian 1,141]

[quote user="Mello Yello"]

What about before ''the recession?''....When the Chairman of NCFC said we required 16,000 fans to break even?......and we were getting 20,000+....

[/quote]Do you have a link/citation for when he said this? I don''t have access to the club accounts, but I would assume that gate receipts are around the £7.5 million mark each year. Surely the wage bill must be approaching that, and with other overheads leaves us with the simple fact is that the spectators can''t/don''t provide enough money to sustain the wages + overheads of the club AND allow for significant investment in players.It''s a very sad state of affairs, but it''s quite clear to me that the powers-that-be who are responsible for football in this country aren''t really interested in anybody other than the top half a dozen teams or so... 

[Arthur Whittle 0]

shame they didn''t accept PC''s offer prior to the recession. A man of his business know how and of course financial clout, would''ve been a better option than our current set up IMO.

[The Butler 0]

[quote user="Arturo Whittlupoli"]shame they didn''t accept PC''s offer prior to the recession. A man of his business know how and of course financial clout, would''ve been a better option than our current set up IMO.[/quote]

Back to what offer.

And so the tale goes round and round, eventualy if it''s said enough times it MUST be true.

[Ian 1,141]

[quote user="The Butler"]

[quote user="Arturo Whittlupoli"]shame they didn''t accept PC''s offer prior to the recession. A man of his business know how and of course financial clout, would''ve been a better option than our current set up IMO.[/quote]

Back to what offer.

And so the tale goes round and round, eventualy if it''s said enough times it MUST be true.

[/quote]I think there was an offer on the table at some point, although not for ownership? Didn''t PC offer a multi-million pound loan at around this time last season, which had to be repaid in full if the club were relegated?

[Andy Larkin 15]

[quote user="I.S."][quote user="The Butler"]

[quote user="Arturo Whittlupoli"]shame they didn''t accept PC''s offer prior to the recession. A man of his business know how and of course financial clout, would''ve been a better option than our current set up IMO.[/quote]

Back to what offer.

And so the tale goes round and round, eventually if it''s said enough times it MUST be true.

[/quote]I think there was an offer on the table at some point, although not for ownership? Didn''t PC offer a multi-million pound loan at around this time last season, which had to be repaid in full if the club were relegated?[/quote]And now you can see why on Canary Call I asked the press to pull their f**king finger out and get this put to bed once and for all.http://www.pinkun.com/cs/forums/1518886/ShowPost.aspxThis just goes on and on and on… Did he, didn''t he? Did she, didn''t she? Christ, is there no end to this?

[Mr.Carrow 382]

[quote user="I.S."][quote user="beejinz"]

What we''re seeing, across the real economy, is a contraction in asset values that is both painful and necessary. The fact that Norwich gets 23,000-plus crowds and still cannot afford a decent team is the clearest sign that professional football in Britain in the 21st century is totally unsustainable

[/quote]

Spot on.
[/quote]

Can either of you explain then, how NCFC managed to make a £500k profit in `02 with crowds of 18,000 and no transfer profit??

In fact the club have made a profit in 9 out of the last 14 years and overall are well in profit over that period, yet we can`t make one now?  Doesn`t that call into question the financial management of the club?

[Mr.Carrow 382]

[quote user="I.S."][quote user="Mello Yello"]

What about before ''the recession?''....When the Chairman of NCFC said we required 16,000 fans to break even?......and we were getting 20,000+....

[/quote]

Do you have a link/citation for when he said this? I don''t have access to the club accounts, but I would assume that gate receipts are around the £7.5 million mark each year. Surely the wage bill must be approaching that, and with other overheads leaves us with the simple fact is that the spectators can''t/don''t provide enough money to sustain the wages + overheads of the club AND allow for significant investment in players.

It''s a very sad state of affairs, but it''s quite clear to me that the powers-that-be who are responsible for football in this country aren''t really interested in anybody other than the top half a dozen teams or so... 

[/quote]

The player wage bill is easily covered by gate and tv income.  It`s the non-football wage bill which continues to soar (it was £7m in `07) and is unsustainable.

[Ian 1,141]

[quote user="Mr.Carrow"]

The player wage bill is easily covered by gate and tv income.  It`s the non-football wage bill which continues to soar (it was £7m in `07) and is unsustainable.

[/quote]If that''s the case then it certainly seems more than a little crazy - it probably makes an average staff wage of £30k, and it would certainly be interesting to see who this money has been spent on. Still, regardless of whether the club could do with a "root-and-branch" staff overhaul, you must agree that it simply isn''t viable for a club to succeed in the Prem/Champ in the long term without massive outside "investment".And who would invest in a loss-making business...?

[blahblahblah 2]

Andy, I think you''ll have to assume that unless something happens, which none of us will know about until it does, then nothing will happen.Personally, I think it''s safe to say it''s dead in the water.

[Robert Ketts Yellow Army 20]

[quote user="Mr.Carrow"][quote user="I.S."][quote user="beejinz"]

What we''re seeing, across the real economy, is a contraction in asset values that is both painful and necessary. The fact that Norwich gets 23,000-plus crowds and still cannot afford a decent team is the clearest sign that professional football in Britain in the 21st century is totally unsustainable

[/quote]

Spot on.
[/quote]

Can either of you explain then, how NCFC managed to make a £500k profit in `02 with crowds of 18,000 and no transfer profit??

In fact the club have made a profit in 9 out of the last 14 years and overall are well in profit over that period, yet we can`t make one now?  Doesn`t that call into question the financial management of the club?

[/quote]

Players'' wages were substantially lower then, I''d suggest. Also, remaining income from ITV, at a guess.

[ricardo 7,460]

[quote user="I.S."][quote user="beejinz"]

What we''re seeing, across the real economy, is a contraction in asset values that is both painful and necessary. The fact that Norwich gets 23,000-plus crowds and still cannot afford a decent team is the clearest sign that professional football in Britain in the 21st century is totally unsustainable

[/quote]

Spot on.
[/quote]

Actually not so.

The only thing unsustainable is the present wage structure in the Championship. This has only been kept at a high level because rich supporters and benefactors have been backing their clubs financially. With the credit crunch in full swing these people are disappearing fast and the financial reality will soon be felt in the next round of wage negotiations.

Players will find that there bargaining position has been erroded and they will also find that they are not immune from the financial realities.

[Ian 1,141]

[quote user="ricardo"][quote user="I.S."][quote user="beejinz"]

What we''re seeing, across the real economy, is a contraction in asset values that is both painful and necessary. The fact that Norwich gets 23,000-plus crowds and still cannot afford a decent team is the clearest sign that professional football in Britain in the 21st century is totally unsustainable

[/quote]Spot on.[/quote]

Actually not so.

The only thing unsustainable is the present wage structure in the Championship. This has only been kept at a high level because rich supporters and benefactors have been backing their clubs financially. With the credit crunch in full swing these people are disappearing fast and the financial reality will soon be felt in the next round of wage negotiations.

Players will find that there bargaining position has been erroded and they will also find that they are not immune from the financial realities.

[/quote]I assumed that was what was meant be the original statement Ricardo - that professional football in Britain in its CURRENT FORM is totally unsustainable - and that includes the ridiculous wages. Clearly, if finances change and clubs are no longer able to afford the level of wages currently on offer, then logically things could return to such a level that the clubs can be self sufficient.

[Robert Ketts Yellow Army 20]

[quote user="ricardo"][quote user="I.S."][quote user="beejinz"]

What we''re seeing, across the real economy, is a contraction in asset values that is both painful and necessary. The fact that Norwich gets 23,000-plus crowds and still cannot afford a decent team is the clearest sign that professional football in Britain in the 21st century is totally unsustainable

[/quote]

Spot on.
[/quote]

Actually not so.

The only thing unsustainable is the present wage structure in the Championship. This has only been kept at a high level because rich supporters and benefactors have been backing their clubs financially. With the credit crunch in full swing these people are disappearing fast and the financial reality will soon be felt in the next round of wage negotiations.

Players will find that there bargaining position has been erroded and they will also find that they are not immune from the financial realities.

[/quote]

 

err... that''s what  I said

[Mr.Carrow 382]

[quote user="beejinz"][quote user="Mr.Carrow"][quote user="I.S."][quote user="beejinz"]

What we''re seeing, across the real economy, is a contraction in asset values that is both painful and necessary. The fact that Norwich gets 23,000-plus crowds and still cannot afford a decent team is the clearest sign that professional football in Britain in the 21st century is totally unsustainable

[/quote]

Spot on.
[/quote]

Can either of you explain then, how NCFC managed to make a £500k profit in `02 with crowds of 18,000 and no transfer profit??

In fact the club have made a profit in 9 out of the last 14 years and overall are well in profit over that period, yet we can`t make one now?  Doesn`t that call into question the financial management of the club?

[/quote]

Players'' wages were substantially lower then, I''d suggest. Also, remaining income from ITV, at a guess.

[/quote]

Player wages in that year were £5.2m, in the second season that we were benefitting from a £7.1m parachute payment they were £7.4m; turnover was £9m higher yet wages were only £2.2m higher.  According to Doncaster a break-even player budget is now £4m- so lower than it was in `02.  And there was me thinking all these expensive non-football developments were supposed to be providing funds for the team.......

[yellow hammer 0]

[quote user="Mr.Carrow"][quote user="beejinz"][quote user="Mr.Carrow"][quote user="I.S."][quote user="beejinz"]

What we''re seeing, across the real economy, is a contraction in asset values that is both painful and necessary. The fact that Norwich gets 23,000-plus crowds and still cannot afford a decent team is the clearest sign that professional football in Britain in the 21st century is totally unsustainable

[/quote]

Spot on.
[/quote]

Can either of you explain then, how NCFC managed to make a £500k profit in `02 with crowds of 18,000 and no transfer profit??

In fact the club have made a profit in 9 out of the last 14 years and overall are well in profit over that period, yet we can`t make one now?  Doesn`t that call into question the financial management of the club?

[/quote]

Players'' wages were substantially lower then, I''d suggest. Also, remaining income from ITV, at a guess.

[/quote]

Player wages in that year were £5.2m, in the second season that we were benefitting from a £7.1m parachute payment they were £7.4m; turnover was £9m higher yet wages were only £2.2m higher.  According to Doncaster a break-even player budget is now £4m- so lower than it was in `02.  And there was me thinking all these expensive non-football developments were supposed to be providing funds for the team.......

[/quote]

Quite so, Mr. Carrow. I''ve often wondered whether those non-football salaries are removed from the non-footballing accounts in order to show a profit from non-footballing activities.

As the accounts do not show the breakdown by activity, I guess we will never know the answer.

[Badger 0]

[quote user="beejinz"][quote user="Evil Monkey"]http://www.guardian.co.uk/sport/blog/2009/jan/07/west-ham-newcastle-football-financesSimilar to an article a few months ago I believe, but worth bearing in mind... Gods, its depressing, isn''t it.... [:S]

Financial nightmare has disrupted dream of club ownership

Even for millionaire Newcastle fans the climate is too cold for them to dive in and buy out Ashley

Whatever 2009 has in store for English football as economic crisis engulfs the world, it is unlikely to include another giddy round of club takeovers, according to the man who engineered a packet of them, Keith Harris. At the turn of the year, when Newcastle United, a club that Harris had been instructed to sell, was withdrawn from the market, the club''s owner, Mike Ashley, sought to make a virtue out of necessity, telling somewhat sceptical fans: "2009 will be the year we drive the club forward together."

The fact was that Newcastle, despite all the turmoil, had been considered a prime Premier League club for investors because of St James'' Park''s 52,000 capacity and the bloody-minded Geordie will- ingness to fill it but the club was on sale for three months and no buyer bit. Harris said that, despite interest from the US, Middle East and South Africa, a solid offer never arrived.

"The problem was not the price being asked but the general climate," he said. "In a way it is a wake-up call: we''re in the toughest economic situation anybody has endured in our lifetime and that means we are unlikely to see much activity on the football takeover scene."

For Harris, a banker with the firm Seymour Pierce, that negative diagnosis includes Everton, which he remains instructed to sell, and the other Premier League clubs publicly for sale, including Portsmouth and Blackburn. He advised the billionaires who bought Chelsea, Aston Villa, West Ham and, at Manchester City, Thaksin Shinawatra, but now says the party is over and clubs – with Sheikh Mansour''s City the exception – should go into 2009 committed to tightening belts, not hoping for a sugar-daddy saviour.

"We have been through a time when clubs have been overspending, with very ordinary players commanding huge transfer fees and wages," he said. "The climate has changed and takeovers are not going to be the solution to the woes that they may have been two years ago. That is unequivocal."

Harris painted a picture of straitened times even for billionaires, some of whom, like West Ham United''s owner Bjorgolfur Gudmundsson, have been seriously damaged by the banking collapse while others have fortunes invested in shares and property whose value is plummeting.

In that environment, and with the financial world bracing itself for the inevitable next hideous shock, Harris said those who might have taken a punt on English football''s glittering global "brands" have become suddenly more cautious. "You can''t force a club down somebody''s throat," he said. "They have to really want to buy it. They may expect to make money out of a club ultimately but a football club is a trophy asset, for enjoyment. Confidence is dented everywhere and I do not see much activity on takeovers until we get some form of stability in people''s minds."

He argues that the club which might prove the exception and find a buyer is the one most afflicted by the banking collapse, West Ham. Harris believes London clubs have a cachet which still appeals to investors even in this market and that a court action brought by a creditor in Iceland against Gudmundsson''s holding company, Hansa, laid bare how crucial a sale has become to the former billionaire.

Hansa is in administration and argued in court that its best chance of paying off its debts, which amount to £110m, lies in selling West Ham – its "largest and most valuable asset". The club has already been put up for sale.

West Ham''s vice chairman, Asgeir Fridgeirsson, has said there are several interested parties, although the suggestion that Dubai International Capital are among them was denied by a DIC representative. As reported in the Guardian, in the court action in which Hansa argued for more time to pay its debts, the company''s lawyers suggested £250m as a likely price for West Ham. That valuation was based on comparing the club to Manchester City, which the lawyers said Sheikh Mansour took off Thaksin Shinawatra''s hands for £230m. Yet that £230m was understood to comprise City''s £190m debts, leaving just £40m for the club shares themselves which Thaksin owned almost 100%.

In court Hansa put West Ham''s current debts at £50m, so a buyer would be expected to take those on plus give Gudmundsson a price for the shares. Hansa''s lawyers argue West Ham has an attraction "because of its location in London, its loyal supporters, its greater possibilities for related real estate projects, its proximity to the Olympic Village and the fact that West Ham owns its own stadium which Manchester City does not". However, sources close to Gudmundsson have conceded what many already felt, that it has become unrealistic to think West Ham will attract a total value of £250m.

So two years after Gudmundsson''s £85m takeover sparked a round of extravagant spending in the transfer market, West Ham have become sellers of players, with Mansour''s City the potential buyer, and Gudmundsson is publicly having to sell the club itself. Harris believes their chance of finding a buyer depends "massively" on the price they put on the club and the amount West Ham will ultimately have to pay Sheffield United in compensation for the Carlos Tevez saga.

Elsewhere there are mixed signs of clubs'' preparedness to face straitened times. Just four Premier League clubs have so far filed recent accounts covering the 2007-08 season; of those Arsenal, Tottenham and Everton increased their income on the strength of the Premier League''s booming £2.7bn, three-year TV deal, all three clubs made profits and were carrying debt generally reckoned not to be alarming. However, Middlesbrough''s accounts for the year to December 2007 showed that the club turned over £48m, made a loss of £8.3m and had increased bank borrowings from £84m to £93m. Boro''s total creditors were £132m.

The accounts said the chairman, Steve Gibson, had "undertaken to provide financial support to the extent necessary" but there was no evidence in the accounts that he had in fact put any money in last year. All of that, the overspending on wages, the losses, the debts incurred to stay in the honeypot Premier League, lay behind the manager Gareth Southgate''s apocalyptic warning that the English game could face a "Serie A style collapse".

Few in the Premier League go along with that and its chief executive, Richard Scudamore, remains confident of securing another TV bonanza, although Football League clubs are not contemplating the oncoming recession with any relish. Harris, advisor to Roman Abramovich''s 2003 takeover of Chelsea and the series of other deals which came to represent the boomtime, believes meltdown is a possibility if the clubs making losses do not get a grip of the transfers and wages they pay.

"The clubs have been spending too much and the club owners were looking for richer people to buy the clubs and take on the losses," Harris said. "But we are in a different climate now, where the football clubs have to realise it is back to the fundamental basics of managing their costs. The supply of richer people has proved to be finite."

[/quote]

What we''re seeing, across the real economy, is a contraction in asset values that is both painful and necessary. The fact that Norwich gets 23,000-plus crowds and still cannot afford a decent team is the clearest sign that professional football in Britain in the 21st century is totally unsustainable

[/quote]No it isn''t. The Guardian article is clearly written by a pro - Delia apologist. It is all part of the Carrow Road spin machine. It''s the same with the global recession - Delia says that she wants to sell the club but can''t find a buyer. To provide cover for her spin she gets her cronies - Bush, Brown etc to invent the myth of recession. It''s all spin - "wake up and smell the coffee!"

[Badger 0]

[quote user="ricardo"][quote user="I.S."][quote user="beejinz"]

What we''re seeing, across the real economy, is a contraction in asset values that is both painful and necessary. The fact that Norwich gets 23,000-plus crowds and still cannot afford a decent team is the clearest sign that professional football in Britain in the 21st century is totally unsustainable

[/quote]Spot on.[/quote]

Actually not so.

The only thing unsustainable is the present wage structure in the Championship. This has only been kept at a high level because rich supporters and benefactors have been backing their clubs financially. With the credit crunch in full swing these people are disappearing fast and the financial reality will soon be felt in the next round of wage negotiations.

Players will find that there bargaining position has been erroded and they will also find that they are not immune from the financial realities.

[/quote]Might that work to our advantage if we have a small playing staff - presumably we will be able to recruit new players more cheaply and premiership clubs might be keener to loan out players?

[Arthur Whittle 0]

[quote user="The Butler"]

[quote user="Arturo Whittlupoli"]shame they didn''t accept PC''s offer prior to the recession. A man of his business know how and of course financial clout, would''ve been a better option than our current set up IMO.[/quote]

Back to what offer.

And so the tale goes round and round, eventualy if it''s said enough times it MUST be true.

[/quote]

So what you are saying in a roundabout way is that there was no offer and his business brain wouldn''t of benefited the club at all, bearing in mind hes a passionate supporter as well.

[BigFish 2,001]

[quote user="Arturo Whittlupoli"][quote user="The Butler"]

[quote user="Arturo Whittlupoli"]shame they didn''t accept PC''s offer prior to the recession. A man of his business know how and of course financial clout, would''ve been a better option than our current set up IMO.[/quote]

Back to what offer.

And so the tale goes round and round, eventualy if it''s said enough times it MUST be true.

[/quote]

So what you are saying in a roundabout way is that there was no offer and his business brain wouldn''t of benefited the club at all, bearing in mind hes a passionate supporter as well.

[/quote]There is no evidence, anywhere that PC made a substantive offer for the club. PC went on to apply his business brain to the problem and I paraphrase what he was quoted as saying that clubs are now run for the benefit of players and managers.

[Arthur Whittle 0]

[quote user="BigFish"][quote user="Arturo Whittlupoli"][quote user="The Butler"]

[quote user="Arturo Whittlupoli"]shame they didn''t accept PC''s offer prior to the recession. A man of his business know how and of course financial clout, would''ve been a better option than our current set up IMO.[/quote]

Back to what offer.

And so the tale goes round and round, eventualy if it''s said enough times it MUST be true.

[/quote]

So what you are saying in a roundabout way is that there was no offer and his business brain wouldn''t of benefited the club at all, bearing in mind hes a passionate supporter as well.

[/quote]

There is no evidence, anywhere that PC made a substantive offer for the club. PC went on to apply his business brain to the problem and I paraphrase what he was quoted as saying that clubs are now run for the benefit of players and managers.
[/quote]

So nothing whatsoever happened with regards to PC and the Board and therefor we all imagined it.?

[lappinitup 629]

[quote user="Arturo Whittlupoli"]So nothing whatsoever happened with regards to PC and the Board and therefor we all imagined it.?[/quote]Absolutely arthur, twas all a cunning stunt! [:D]