Richest Premier League clubs face backlash

by Michael Somerville

Friday, May 22nd, 2009
 

It’s impossible to see Manchester United relegated from the Premier League…well ever, especially if Sir Alex Ferguson can deliver more success and then can pick a worthy successor to take his place once he retires. United have been so thriving so much recently, that it’s difficult to imagine Ferguson letting the club’s owner Malcolm Glazer in having too much of a say in who succeeds him. Steve Bruce, Mark Hughes, David Moyes, and Jose Mourinho all remain strong candidates for the coverted job which surely cannot be too far away now. The only reason Fergie strongly hinted at leaving in 2001 was because of United’s poor form in the league (in December 01 they were a lowly ninth in the Premiership) and admitted that his decision to pre- announce his retirement had had a “negative impact on his players.” Possibly one of the biggest mistakes he ever made (not counting signing Juan Sebastian Veron for £28.5 million) you can excuse him, as Sir Alex is a true managerial legend who will always be idolised in the world of football management.

After Malcolm Glazer acquired full control of the club in 2005 (gradually increasing his stakes over five years), he put huge debts of around $860 million on the club, with interest of £60 million a year. Glazer bought the club because he felt that it wasn’t “fulfilling its market potential around the world.” Fairly difficult to make money and fulfil your potential if you’re paying back £60 million a year just on interest if you ask me. However, since 2005, season ticket prices have increased by 42%, merely confirming fans’ fears that Glazer sees the loyal supporters as the real money makers.

Throw in the recent economic collapse, and you have a rich, American who has most likely seen his personal wealth halved, and therefore the sustainability of Manchester United is thrown into uncertainty. In short, the unthinkable has happened.  Even the pre- season tours of Asia and the United States, the ridiculous middle season crusade to Japan and the twin successes of Premier League and Champions League trophies have still riddled the club with pre-tax losses of $65.2 million. You have to ask yourself… what more exactly can the players do?

In reality,  Manchester United are so much more than a football team, they are a brand where turnover and expenditure matter more than passion and loyalty.

Let’s cast our minds to this Premier League season. Manchester United, Liverpool, Chelsea and Arsenal have once again dominated the league, guaranteeing Champions League qualification for another year. However, these four clubs have combined debts of up to £2 billion. How is it that they have continued to buy players they can’t afford and to pay huge wages (Harry Kewell on £76,000 a week at Liverpool anyone?)

Basically, TV revenues from Sky and now Setanta Sports have sent Premier League spending to the next level, and big clubs are prepared to pay out until the bubble bursts. Revenue is increasing all the time, but spending is increasing even more, making the whole operation unsustainable. Here’s the problem we’re dealing with, when will the bubble burst?

Will it be when the fans can’t afford to spend £50 to see their favourite team, with aggressive and arrogant players dominating the headlines (and the wage cut?) Or will the FA and UEFA finally see sense to put a wage cap on teams, bringing to an end overpriced spending? The wage cap may put off some players, but a vast majority will still see football as a very profitable area of work to go into. Arsenal’s self imposed wage cap should surely be a template for the future.

F1 have already taken the plunge, placing a £40 million budget cap onto all team spending from 2010. Ferrari of all teams- the Manchester United of Formula 1, have recently failed in their appeal to stop F1’s governing body introducing the controversial new rules. The proposal prompted Ferrari to threaten to quit F1, with Renault, Red Bull and Toyota sharing a similar view.

When the two figureheads of English football met in October 2008 to hopefully show the world a plan that could rescue the league from a mountain of debt, they simply revealed that they couldn’t agree with anything at all.
Lord Triesman, chairman of the FA met Richard Scudamore with other delegates (somewhat appropriately at Stamford Bridge) at which Triesman expressed his grave concern of the news that English football is £3 billion in debt. Scudamore shrugged apathetically, and simply praised the bedrock of the 92 clubs in the football league, stating that they are “very similar to the 92 of yesteryear.”

Owners, businessmen, and fans are worried that the credit crunch will finally burst the unbelievable level of popularity of football in England for the first time, as advertising budgets could be slashed- much similar to Formula 1.

Teams with huge debts to their name could become untenable and it’s possible to see points docked due to financial irregularities. It would certainly make the Premier League more interesting next year if the big four were docked ten points each!

With FC United (Manchester United’s semi professional alter ego club) promoted for the fourth year running this year, we could see FC United play Manchester United in a league match. I may be getting ahead of myself, but you can’t rule it out can you?

Be Sociable, Share!

Previous post:

Next post: