Wealth, Debt, Glory and Humiliation: This is the Premier League
It is the nature of anything competitive to cause one to win and another to lose; one to acquire wealth and the other to be burdened by humiliation. The Premier League boasts Manchester United; a team worth in excess of £1billion yet simultaneously harbouring debts upward of £700million. Portsmouth remains a top flight team for two more matches and their spectacular nosedive into unmanageable debt flagrantly displays a difficult conundrum for the league to contemplate: clubs at the top and bottom of the table continue to acquire handsome debt.
It is probably Liverpool who best encapsulates the paradox of the current debt climate. The team has a history in English and European football of the highest calibre (eighteen Championships and five European Cups) yet are precariously balanced on the precipice of disintegration: trying unashamedly to sell in order to balance the £270million of incurred debt, almost definitely without the prospect of Champions League football next year, and a manager’s future that is somewhat uncertain. What’s worse is that if Rafa Benitez departs and the funds not available to strengthen the squad then the likes of Fernando Torres, Javier Mascherano, and even Steven Gerrard may just consider their immediate futures. Could the Liverpool talisman be fulfilled by playing a season in Europe’s secondary club competition at the age of thirty? We’re seeing how off field problems relating to club running is affecting players’ desire to perform on the pitch.
There are however some exceptions to the hopeless closed circuit of debt management in football. One, perhaps relying more on luck than on strategy (and unrealistic for pragmatists), is a bottomless purse to finance a club – Manchester City is the most glaring example of this. And the other is Arsenal. For all the recent pages dedicated to their nearly-nature, castigating Wenger for his transfer policy, his youth policy, his policy for policy…his achievements with the club are staggering. The foresight he exhibited when undertaking the financing of the Emirates is as daring as it is revolutionary. Just look at the fate of recent clubs who have built new stadiums: Leicester City, Derby County, Southampton and Coventry City all went down. Is Arsenal in debt? Yes, of course. But it would be foolish to compare their debt situation with almost every other club in the league. Michel Platini does not differentiate debt that has been taken on to finance transfers between debts that have been taken on to build stadiums yet this is a shockingly obtuse stance. When the stadium has been paid for the club will posses greater active capital. In February it was revealed that pre-tax profits for the previous six months was £33million and that Arsenal Holdings plc’s net debt had fallen from £333million to £204million. Such a drastic reduction is evidence that the club is managing a fruitful, sustainable business model in stark contrast with other top clubs who happily plough into heavier debts.
These statistics mean little to so many, including Arsenal fans, because it has translated into no winners’ medals. But the truth is such an achievement is absolutely unheard of in European football. Elsewhere (in France for example) the cost of a building site is nationally or municipally funded, slashing the debt that would be incurred by a club. If you look to Spain the TV rights are negotiated separately (which is why Barcelona and Real Madrid make the most out of it) and Real Madrid have been bailed out by the local government from debts in excess of £700million. This skews the spectrum of European debt management and leaves gentlemen like Platini spewing vitriol solely at the English league (click here), with little to offer by way of regulating the borderline scandalous nature of Madrid’s bailout for example.
I completely subscribe to the need for addressing the endemic issue of debt in our top flight but unless short term measures are overlooked in favour of a model more akin to Arsenal’s then debt will not only be an ever-present, it will be an exponentially increasing ever-present. The harder route to follow is to forgo immediate riches (which paradoxically create more debt) yet more and more we’re seeing that patience is a virtue unilaterally ignored in the Premier League; even Wenger’s time is running out when he, of all people, should be extolled and lauded for his commitment to the longevity of Arsenal.
Sources:
Football News 24/7
Great article, couldn’t agree more!
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Leeds U is agood example.Where would the red face be without the billions spent.
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never read a better article mate and I should know I have tried to write to some myself
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Great article, The boy knows how to write lol, nice one sam
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Good article mate, sad state this league is getting into.
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Great article, however the league and the game are both products of the fans demanding that their teams compete for the best players, irrespective of costs involved. You only have to read the blogs to see how little respect the final cost of a player is thought about?. Oh lets buy so and so for 5million, forgetting the wages and contract length, which could double the costs. Put that against the 900 or so season ticket we spend and you’ve got an idea. Today’s game is corporate, whether we like it or not, and it’s up to the F.A. to start getting tough with clubs to put their houses in order, I.E. only allowing a percentage of turnover to be spent on transfers, and perhaps only a certain amount of transfers per season. But all in all we’ve got the game we’ve asked for!
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“model more akin to Arsenal’s” ???!!?? oh FFS, now , where did I put that 25 Acres of prime real estate in the hideously overpriced sh1thole conurbation that we call lundun ? if I could knock a couple of hundred bijou appts up on that I could pretend my club was well run and making money.
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@tublu
A well run club would be the one that uses all it’s assets sensibly. You seem to have forgotten that in order to have 25 arces of prime real estate, Arsenal had to purchase more, right next door, which wouldn’t have been priced very differently. I would say the use of the old land to generate profit and balance the books was a sign of a well run club that is making money – no? What would you have done with it?
In 3 to 5 years Arsenal will be (barring a complete unforseen catastrophe) completely debt free, with a huge income and a world class and productive youth system. Not to mention a team full of international class players.
Well done to Arsenal for showing the way to still be a ‘big club’ but not fall into the currently reckless transfer habits shown by it’s rivals.
I suppose I should offer you some tomato sauce to go with the rather large chip you have on your shoulder…..
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In general it is a good article and it is well written;such that it doesn’t fall into the usual
unreasoned and under-researched rant so often
appearing on Football Blogs.
I have a couple of questions though.
The footballing policy of Arsenal while directed andmanaged by Wenger seems more likely driven strategically by financial needs that would be dictated by a tightly knit family board.
As such, wasn’t the much maligned Peter Storrie part of the team that devised such a strategy pre-Wenger?
Lastly while the strategy has to be applauded the execution and arrogance that accompanies it is quite distasteful and distracts from all the positives. I do not understand why Wenger is such an obnoxious (fill in your own description here) when he opens his mouth in England. Hearing him in French on TV in his own country he is quite charming and very well informed.
It must be something to do with managing in the odious Sky mini league that turns all the coaches into horses behinds!
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Clive: I understand your point completely. But my reasoning lies somewhere in your statement i.e. the needs demanded that the club change policy and subsequently they have. if the needs hadn’t demanded it then the pressures of the game simply override any business thinkin. needs are demanding that many other clubs attempt to alter but they persist until it’s an impossibility to u-turn. as Essexian76 said, the pressures of football have created this dangerous cycle and we are the problem – if the public didn’t take such an interest in football, fill out grounds, crave knowledge on the celebrity lifestyle that accompanies the whole illusion then wages wouldn’t be so high and the pressures wouldn’t be so monumental.
as for wenger being obnoxious, well, he’s always gonna piss off some people. the tensions are so taxing that i wonder how people like him and ferguson have done it for so long…they’re probably unravelling mentally before our eyes.
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