Archive → November, 2011
Manchester City And FFP
I think everyone will have seen the latest news from Manchester City and there massive £197m lost but I don’t think anyone has really considered the figures and how they will get anywhere near meeting the UEFA Financial Fair play rules. Manchester City believe the Champions League money, sponsorship deals and winning the league will go to solving the problem of the massive losses. The figures below will show how this clearly isn’t the case.
First if we consider that Manchester United were paid a total £45m from UEFA, Barcelona were paid a total £43m and Tottenham a new team into the Champions League were paid £26m. Manchester City were paid £6m from the Europa League last season. The extra I’d expect they’d get would be no money than £20-24m.
Secondly lets consider the sponsorship deal reportedly worth £400m over ten years, that would be worth £40m a year unless they’ve been paid upfront or its for the youth development project when part of it wouldn’t count. City were already been paid £8m a season by Etihad Airways. That’s on average an extra £32m.
Then theres winning the league. Third placed Manchester City made £55.5m in prize and tv money from the Premier League. Manchester United league winners and you’re expecting this to be a lot higher only made £60.4m. That means if City did win the League between the two positions is a maximum of only £5m.
Adding those three areas up only comes into to an extra £61m on top of what they already earn. Even if they made what United made from the Champions League that would only be an extra £76m.
Then if we consider that Manchester City had a £174m wage bill for the 2010-2011 season, it seems a very very far fetched idea that the Champions League money or anything else would help solve a near £200m a season problem. It would still leave them at least £100m-120m off paying the wage bill and that break even point. I’m sure once the players bonuses for winning the Premier League and advancing into the Champions League come along that wage bill will increase. If we look at Chelsea, a club who have done all what City plan to do, they still have huge losses. My view, history and the figures say they will not meet Uefa Rules.
American Owners, are they good for the clubs and the fans?
After Stan Kroenke comments on American owners and the Glazers which can be seen here…
http://www.guardian.co.uk/football/2011/oct/31/stan-kroenke-arsenal-american-owners
…. it’s time we looked at a number of the American owners who have been and are involved in English football clubs. I’m looking at just how trust worthy each owner is and how that relates to me and you the fans.
First off the Glazers. The list of issues and problems could go on for pages but Kroenke as ever, misses the major problems. If United make £50 or £300m, do or should I really care? No. What I do care about is where that money goes. He makes the mistake of mixing what happens on the pitch and off the pitch together. It either goes on the pitch or into investment in the stands, anywhere else and its a complete waste. Its pretty clear that the Glazers costing the club £535m has had no benefit for the club or the fans. My last blogs shows how even the British Government has now accepted this view.
Next is Hicks and Gillett at Liverpool. These are two Americans who tricked the fans and everyone else into thinking they could solve all Liverpool problems. They said no debt would go on the club, that was a lie and at the end they even tried to block the new takeover with more debt by taking out a massive payment-in-kind loans like the Glazers used. This would have basically crippled the club. A big issue has been the new stadium, the new owners promised to build it but it never happened. They were welcomed with open arms at first and left the club in a right state.
Following on from those two con men is another con man called John W Henry but he’s just the face of NESV. If I was a Liverpool fan I would seriously start to question the motives this group have because there are a lot of similarities to the Glazers and to the past Liverpool American owners. There is a lot of information that is hidden and that has not been made public. Just like Uniteds ultimate ownership, NESV ownership and ultimate Liverpools ownership is in Delaware. In 2010 Uniteds ultimate ownership was moved there and just at the same time the PIK debt was ‘gone’. We say gone but as Andersred put it on one of his past blogs “It is virtually impossible to get information on Delaware companies” We don’t even know who the Directors are, let alone what the accounts look like. The most likely position thats accepted is the Glazers PIK debt was refinanced behind closed doors. I can’t see any other way the Glazers could find £250m over night.
This leads on to Liverpools real position. Most Liverpool fans believe they are One. Debt Free and Two. Now Loaded. Henry and the like have refused to say what NESV debt consists of or how the takeover was really funded. They have also refused to say they won’t put debt on Liverpool. They sound to me just like Hicks and Gillett but just without the promises.
Heres a some quote from John W Henry on the matter..
“LFC discloses its financials annually, so monies going in and going out are disclosed. But I’m not going to disclose NESV financials or financing information.”
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“But NESV has always had debt, from the first day we purchased the Red Sox.”
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“£218m was partly raised from the NESV partners personally and partly from borrowing.”
So just like the Glazers and just like Hicks/Gillett, NESV has debt and they’ve admitted they’ve taken on debt to fund the takeover. Hidden in Delaware, has taken on debt, won’t be open nor truthful to provide the real figures. Where have we seen that before? It’s clear why no commitment has been over a stadium. They just like the past Liverpool owners are going to struggle to raise the £400m needed for the new stadium and there is always a possibly debt could be moved onto the club. I don’t see how the club has really moved on.
Next is Stan Kroenke. If you’re an Arsenal fan and you believe his comments about the Glazers, you are a very naive person. If he has no problems with what the Glazers have done at United I’d be very worried. It sends out all the wrong messages. I’d be very worried about debt and I’d be very worried about him increasing his shareholding over the next few months. I’d hope the new licensing rules are already in place before he could mount a leveraged takeover and if he’s going to mount one I’d expect it to be sooner rather than later. At one end of the scale we have Chelsea and City but at the other end these American owners who believe putting debt on clubs, increasing ticket prices and increasing turnover is the way to go. My view is neither are good for the game, the fans or the clubs.