Posts Tagged → Manchester City
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.
Your now thinking this is going to be about how Manchester United should have spent big money to compete with other clubs and next your going to think I am going to ramble on about how we should have. Infact this is the true story not only of past transfer windows but future ones to come. It all starts back in the Summer of 2009, when a certain club called Real Madrid decided to to splash the cash. At the very time I was on the other side of the world in San Francisco, so if anyone was unconnected and shocked by that weeks events it was myself. I went off one morning and found a Starbucks with wireless internet, put the BBC news page up and there it was Kaka had just moved to Madrid. Afew days later I woke up with a text message saying ‘Ronaldos been sold to Madrid’. I never get messages about football news stories, so for this to be sent means its big news. At that time I am thinking. ‘We’ve just built a great squad, we’ve been in two champions league finals, so why the hell are we cutting it up’ I was also thinking something else and this has always stuck in my mind. They’ve told all the season ticket holders as a ploy, just days before the renewal deadline ‘Ronaldo would not be sold’, all just to sell season tickets, then just after it our best player & the best player in the World is sold off. So I get back to Manchester afew days later and the world to me has gone totally nuts.
This is where the business side of the story comes in. All the figures given are true straight from United’s official accounts. In June 2009 United sold Ronaldo in a £80m deal. In January 2010 it was also reported United had already been paid £35.9m from AON from the new £80m sponsorship deal. This shows up on past accounts. So those two big payments of money are around £116m. In May United was to have reported £95m in cash in the bank, later on it was £162m, and the latest now is £151m in cash in the bank. At this point everything sounds brilliant £150m in the bank, happy days. The problem is of the £80m in the sponsorship deal United have already received £47m. When you add the Ronaldo money to this that’s £127m of £151m cash in the bank. If you are reading that like I am, without the two AON payments and without Ronaldo money since June 2009 the club has only been able to create extra £24m or £35.8m in cash if you take out 2010s payment. To me that’s pretty worrying. With all the prize money, TV money, extra sponsorship deals and increased ticket prices, it shows there is a very good reason why the club hasn’t seen alot of movement in the transfer market. This is not to say the market isn’t over valued, in areas it is. Some of the figures that have been paid out for certain players by City, Chelsea, Villa and Liverpool have been very silly. The reason Manchester United haven’t been out and got a £20-30m player isn’t because they can’t, its because if they do that money is then gone and to recoup that money could in theory take 12-18 months or longer just to get back £30m. One other area shows that at one stage cash reserves reached £162m but then dropped by £12m, so this shows any budget changes or increased costs within the club could have a big effect. The biggest problem I see is if United went out and spent £115m tomorrow on either the stadium or the team, there is only a £35m gap for the budget to be increased, once over that you need an overdraft or you need to find another source of income quick. Remember this is football and alot can happen in a short space of time. This to me is alot more shocking and alot more worrying than any debt and the problem in part is the debt. If United removed the interest payments that gap goes from £35m to £80m. Now I am pretty sure if that was the case, the club would have more access to the transfer market and there would be more value. The fact is until that £45m interest payment is removed and the Government recommends we get a share in our clubs, we are unlikely to see any increase in transfer spending outside of the Ronaldo money at Manchester United in years to come. When the Ronaldo Money is spent, that’s it, that’s the reason it’s not been touched and it won’t be touched.
Love United Hate Glazer
This may not be Manchester United related and some will say keep your nose out but its been noticed and I’ve seen the photos of the Spurs fans protesting against any move from White Heart Lane.
In a football environment what you want isn’t what Crystal Palace have got planned or what the FA did with Wembley. What you need is seats near the pitch, you don’t want a running track creating extra yards to the pitch. At Wembley you need a mobile phone to talk to the person next you as they are that far away. You also need a tv if your in the heavens to see what score it is. I’ve been to Moscow and Rome, stadiums with running tracks. Fact is no, it doesn’t work. Olympic stadiums with running tracks over the years have been redeveloped or become underused. You give Westham the track for running and by 2025 they’ll be looking for another option. Trust me now, interms of a bid and move for football the Spurs bid is the one to go for. City removed the running track in Manchester. Bayern Munich moved from the Olympiastadion as soon as they had the chance. Juve are currently converting the old Stadio delle Alpi into a proper football stadium with no running track. Give Roma and Lazio a chance, they’ll move of out their running tracked stadium. The Spurs move seems like the best option but for the fans it might not be. Spurs currently have plans in place to redevelop their current stadium, my view go ahead with that. Now Westham, interms of location they aren’t a million miles away from their home and some Westham fans won’t want to move. The perfect option that I can see is the Stadium goes as Spurs plan to do, its knocked down or made smaller, with a new stadium built next door. Westham build a new 40,000-60,000 seater football stadium, as Spurs have planned and a smaller athletics stadium is in place. The site which the stadium sits on the areas around the current stadium should in theory be large enough for both. In the short term this might seem like total madness but in the long term, more than likely UK athletics always has the possibility of losing its track. Spurs plan to knock it down anyway. It says alot about the stadium which has been put up for the games, about how they funded it and built it in the first place. The plan from the start was to reduce it down to 20-25,000 seats after the games. The two plans put forward don’t really seem to suit anyone and more than likely it will cause more hassle which ever route they choose. If they choose Westham or Spurs, this will end up in the courts and it will go on for along time. Football gets its self in a mess again. If your a director of Spurs listen to the fans, they know what is good for the club, its why they support it.
The Aim Is Quite Simple. Two Weeks Get This To Number One. The Manchester United Supporters Trust are promoting this as they are getting the Profits from the sales but more importantly I am promoting this too. My Reason is it makes a huge political statement and music is always an excellent PR story. Also one of the people in the song is very local to myself, that local and that smaller world I might be asking for a little blog interview. Watch This Space. Video is below, one lad is a Red and the other a Blue both from Manchester, with a tune aimed around Manchester. Buy it here £0.79! GET IT TO NUMBER ONE! I’ll send you a cheque for the £0.79 if hate it or if your pocket is empty. No Excuses. Click Like On Facebook
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F.O.A.K - Welcome To My City
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Soon New UFEA Regulations are coming into effect. Next year they will say what a club can spend and where its earnings come from. These are known as the Financial Fair Play Regulations aiming at reducing spending within football. The full regulations were due to be in place earlier than is now planned but they are still coming fast. The 2011-2012 season will see these introduced all over Europe and it will limit what a club spending if it wants a european place. The first 3 season of the new rules will be testing ground before in 2014 they come into force fully. It is more than likely for the first time in history, a club over spending could be banned from UFEA competitions.
The first test during the 2011-2012 season for a number of clubs across Europe is too vastly reduce their wage bills. They have a time frame in which to do this or face bans UFEA bans. The first time a club could be banned would be during the 2013-2014 season after accounts from 2012 and 2013 have been analysed. In the past two years if these regulations were in place. Inter Milan, Manchester United, Manchester City, Chelsea and many more could be in big trouble.
Inter have the problem of the San Siro and their massive wage bills. Even through the San Siro is as big as they come, holding 80,000 people , it is owned by the local Government and therefore the revenues are spilt hence why compared with Manchester United or Arsenal they make less than half the revenue on match day. While United and Arsenal can pull in around £3m, Inter can end up with just over 1 million euros. The other problem is for the last 3 years they’ve made a loss of over 100 Million Euros. You maybe surprise to hear this after they’ve just won the champions league but its true. The 2009 loss, was a 131.5m euros. If you didn’t know they are a club bank rolled by an oil rich billionaire much like City. When it comes to looking at City they are the Inter Milan Of the UK. Ok City haven’t won anything for 34 years & they are clearly not as successful, but they aren’t as successful as the other local team AC Milan & they are run by an Oil rich billionaire. Without them, am not sure many of their top players would still be there. Eto’o, Sneijder, etc would all be up for grabs.
These new rules could be why some teams are breaking transfer records such as Real/City and why others aren’t spending alot. City have a very short time frame to reach the Champions League, otherwise the revenue on offer from other areas won’t be enough to cover the wages, let alone anything else. For City, Chelsea and Inter Milan funding new Stadia now would be a very good idea. The same could be said for Liverpool and Spurs. Although there is a mix of teams in this pot, these 5 teams looking to either build new stadia or meet the financial limits have limited options. For example if Spurs or Liverpool decided to build new stadia, the cost of building them and paying any debt back to banks, could cause them to make huge losses. The question is would UFEA allow these one of losses or would they be banned?
For City, Chelsea and Inter Milan, it is a must. For many big games all 3 could make more revenue than their current stadiums allow. Chelsea often sell out Stamford Bridge for League games but Roman hasn’t expanded or developed a new stadium. For them I think that’s a huge mistake although their losses have been dropping. This is due to the fact Roman hasn’t been spending big on new players. Chelsea made a £66m loss in 2009 so they have the possibility over the next few years of cutting wages while increase other revenues. Spending big to improve the team? I think Chelsea maybe at their current peak. Inter Milan are in the same boat as City, either keep the old Stadia or been banned. They have to increase other revenue streams or reduce the wage bill by a huge percentage. I don’t see anyway around it.
Manchester City might be spending big now but have said they won’t be spending like they have done to improve the team as they want to meet the regulations but I don’t see that as their problem. They spend £130m+ a year on wages alone. This is just £10m under want Chelsea pay and it will likely keep rising once the 50% tax rate comes in. City have to increase Revenue streams by around £100m or more, if they just want to break even. £200-225m would be a good target. This is more than Arsenal and Chelsea bring each season. Two London clubs where ticket prices are high and stadiums are full every week. City have to do this without getting banned, successfully reaching the Champions League, possibly increasing the size of the stadium and likely ending 34 years of no silver wear. My view is they have to reach the champions league and get their losses down to £30-40m a season by next. Chelsea didn’t spend as much, won silver wear and still can’t get the losses down. The question isn’t if City can do it, its what season they get banned in.
When it comes to Manchester United, they don’t face wage bill problems, winning silver wear, reaching the champions or looking for new streams of revenue. We have the stadium, the wage bill is under control and we’ve won enough over the past 20 years to be one of the biggest clubs in the world. The problem we have is our current owners and there is only one thing which would ever see Manchester United banned by UFEA. Its paying and controlling the debt on the club. In 2009 United would have a made around a £60m loss unless Ronaldo was sold. This was due to interest payments. This season Manchester United did make a loss. It was £84m. This was due to refinancing the debt and paying interest. United paid Ronaldo type money to sort someone elses debt out. Now its known the Glazers want to use the clubs funds to pay the PIK debt which is in their own names. As fans of the club that cannot be allowed to happen. If the club losses another £70m to debt repayments, its Ronaldo type money again being wasted. Two Seasons £150m gone. That wouldn’t even include the bond interest for 2010-2011. I have this question to ask. If Malcolm Glazers took £70m out of the club next season to pay off his debt, would that mean United making another huge loss meaning possible banning from UFEA competitions? If its taken out this season, there is nothing to worry about but a fan backlash. Next season a fan backlash and possible future ban. Is the clock already ticking for the Glazers?