davieG Posted 26 February 2010 Posted 26 February 2010 As well as Portsmouth we now have Bournemouth being issued with a winding up order by HMRC. Clearly points deduction is not working and frankly I never thought it would. Arsenal make £35mill profit and yet their debts are reduce from £332m to £203m. When is the collective might of FIFA, UEFA, The FA, The Premier League and the The Football League going to do something about English professional football's obscene financial mis-management? What is needed is strict regulations to make sure clubs operate within certain financial boundaries, fans need to be assured that the club they invest so heavily in, significantly more proportionally to any of the current owners/shareholders of clubs that their club is not at risk. Relegation through football performance is something fans can live with through financial mis-management and extinction is not!
davieG Posted 26 February 2010 Author Posted 26 February 2010 This is what is wrong with football: From Sky.Arsenal non-executive chairman Peter Hill-Wood has indicated that Arsene Wenger could be handed 'surplus funds' after the club announced half-year pre-tax profits of £35.2million. The Gunners have revealed their latest financial records and there has also been a significant reduction in the club's net debt to £203.6m as of 30th November 2009 from £332.8m on 31st May 2009. Where are these 'surplus funds' they have debts of £203million? And they aren't even the worse club!
Fosse Boy Posted 26 February 2010 Posted 26 February 2010 When is the collective might of FIFA, UEFA, The FA, The Premier League and the The Football League going to do something about English professional football's obscene financial mis-management? Never. Because they're all quite happy to line their own pockets while the sport they're supposed to govern falls into ruin. They're quite happy to blame the chairmen/executives of individual clubs for the unfortunate situations that seem to be springing up like wildfire at the moment, but forget their own responsibilities to the game at the same time.
FoxyPV Posted 26 February 2010 Posted 26 February 2010 It's the agents' fault as they drive up the wages that are killing all football clubs. At most PL clubs wages account for a minimum of 60- 75% of all costs incurred which is insane. how can you expect a club to survive with this as an accepted norm? there should be a salary cap and if the most free market of economies (the US) can do it with their sports then i don't see why it can't happen in England. You would have to balance your books to make room for the superstar signings. Look at Dyer at West Ham average players getting obscene wages - Sullivan/ Gold came out and said that if it weren't for signings like him then WHU wouldn't be in the situation they are now in - same at Portsmouth (Utaka between 30k - 80k a week depending on who you believe) it's a joke!!!!!
Head Honcho Posted 26 February 2010 Posted 26 February 2010 As well as Portsmouth we now have Bournemouth being issued with a winding up order by HMRC.Clearly points deduction is not working and frankly I never thought it would. Arsenal make £35mill profit and yet their debts are reduce from £332m to £203m. When is the collective might of FIFA, UEFA, The FA, The Premier League and the The Football League going to do something about English professional football's obscene financial mis-management? What is needed is strict regulations to make sure clubs operate within certain financial boundaries, fans need to be assured that the club they invest so heavily in, significantly more proportionally to any of the current owners/shareholders of clubs that their club is not at risk. Relegation through football performance is something fans can live with through financial mis-management and extinction is not! Financial mis-management isn't exclusive to English football as I'm sure you know. This being the problem! Can you imagine the leading clubs attached to UEFA agreeing to adopt a wage capping system or a rule being imposed whereby you can only spend a certain percentage of takings on players and paying off debt?
davieG Posted 26 February 2010 Author Posted 26 February 2010 It's the agents' fault as they drive up the wages that are killing all football clubs.At most PL clubs wages account for a minimum of 60- 75% of all costs incurred which is insane. how can you expect a club to survive with this as an accepted norm? there should be a salary cap and if the most free market of economies (the US) can do it with their sports then i don't see why it can't happen in England. You would have to balance your books to make room for the superstar signings. Look at Dyer at West Ham average players getting obscene wages - Sullivan/ Gold came out and said that if it weren't for signings like him then WHU wouldn't be in the situation they are now in - same at Portsmouth (Utaka between 30k - 80k a week depending on who you believe) it's a joke!!!!! No it's not the clubs choose to deal with these agents often hiring them themselves as for wages the clubs have the power to say no you can't have that much.
davieG Posted 26 February 2010 Author Posted 26 February 2010 Financial mis-management isn't exclusive to English football as I'm sure you know. This being the problem!Can you imagine the leading clubs attached to UEFA agreeing to adopt a wage capping system or a rule being imposed whereby you can only spend a certain percentage of takings on players and paying off debt? Maybe not the big clubs but if 'living within your means' was introduced globally then there are enough 'smaller' clubs around to make sure it happens. It also depends on how you define a salary cap, it doesn't have to be an individual player cap just a club based one similar to rugby and many other professional sports. Couple this with a fairer distribution of available funds and we're part way there.
Jon the Hat Posted 26 February 2010 Posted 26 February 2010 Where are these 'surplus funds' they have debts of £203million?And they aren't even the worse club! Having debt is not a problem in itself. Arsenal have a fixed term debt secured on their stadium - think of it as a mortgage with strict terms whereby they are not allowed to pay it off early. Arsenal have shown they are capable of paying their mortgage, and they still have some cash left over - the profit. They are at liverty to decide what they do with the profit, they could put some into investments - and given the huge drop in their NET debt, it appears they have offsetting reserves or investments offsetting their debt on the stadium. The problems with debt arise in the same was as if I was spending more than my available cash on my Mortgage - I would have to start cutting other spending to break even. And if I had in interest only mortgage, and no investments to pay it off, then I am just maintaining a debt level, and in some cases increasing it when it falls due. Having a ongoing debt is sensible for a business, as it enables them to operate on a greater scale than the equity investment in shares alone would allow. How leveraged they can and should be is questionable, but then stopping these things is not as easy as it looks. Once you allow corporate ownership, then the Glazer model is available, where the equity in the club is from a parent company which may be fulling debt funded. Not good, and hard to counter.
davieG Posted 26 February 2010 Author Posted 26 February 2010 Financial mis-management isn't exclusive to English football as I'm sure you know. This being the problem!Can you imagine the leading clubs attached to UEFA agreeing to adopt a wage capping system or a rule being imposed whereby you can only spend a certain percentage of takings on players and paying off debt? Premiership football clubs in England owe more money than all the other top clubs in Europe put together, according to a study by UEFA. The total debt of the top English clubs is 3.8bn euros (£3.4bn), 56% of the total across Europe, the report says. It also reveals that Premiership assets of £3.8bn constitute 48% of total club wealth across Europe. The European Club Footballing Landscape study looked at the 2007-08 accounts of all 732 clubs licensed by UEFA. It found that the total debt of 18 Premiership clubs is about four times that of the next most indebted top-flight league, Spain's La Liga, which is 978m euros in debt. However, La Liga has assets of 2.5bn euros. The report says most of the debt is linked to the takeovers of Manchester United, by the Glazer family, and Liverpool, by American businessmen George Gillett and Tom Hicks. The report does not include the debts of Portsmouth or West Ham, because they were not granted UEFA licences that year owing to financial problems. Portsmouth, which is currently bottom of the Premiership, reportedly has debts of £70m and will be deducted nine points if it enters administration on Friday. Premiership executives have said that they will not bail out the club. Michel Platini, UEFA president, is pushing for a system where clubs spending beyond their means will be prevented from playing in the Champions and Europa leagues.
Joe. Posted 26 February 2010 Posted 26 February 2010 Premier League owe 56% of Europe's debts And that doesn't even include Portsmouth or West Ham, as they weren't granted UEFA licences as a result of their financial difficulties. EDIT: Oops, didn't see above. Got the link there anyway... worrying stuff.
Flynny Posted 26 February 2010 Posted 26 February 2010 In fairness we also have the bulk of the assets.
davieG Posted 26 February 2010 Author Posted 26 February 2010 In fairness we also have the bulk of the assets. Depends what they class as assets, if it's players then their value is not only subject but very tenuous. If it's the stadiums again their value is in them having a football club as a tenant as we found with Filbert St which was worth considerably less when after we vacated it.
Donut Posted 27 February 2010 Posted 27 February 2010 This is what is wrong with football:Where are these 'surplus funds' they have debts of £203million? And they aren't even the worse club! Arsenal is a well run club Its operations have turned in sizeable profits giving the football club working capital whilst the club is honouring payments to its creditors on its long term liabilities (i.e. the Emirates) so surely its a well run operation on that basis? If you have a mortgage on a house, you are in debt yourself to your lender. your work activities give you working capital to a) meet your creditor's payment when its due and b) reinvest surplus into other areas . Its the same principle within a football club
Donut Posted 27 February 2010 Posted 27 February 2010 Having debt is not a problem in itself. Arsenal have a fixed term debt secured on their stadium - think of it as a mortgage with strict terms whereby they are not allowed to pay it off early.Arsenal have shown they are capable of paying their mortgage, and they still have some cash left over - the profit. They are at liverty to decide what they do with the profit, they could put some into investments - and given the huge drop in their NET debt, it appears they have offsetting reserves or investments offsetting their debt on the stadium. The problems with debt arise in the same was as if I was spending more than my available cash on my Mortgage - I would have to start cutting other spending to break even. And if I had in interest only mortgage, and no investments to pay it off, then I am just maintaining a debt level, and in some cases increasing it when it falls due. Having a ongoing debt is sensible for a business, as it enables them to operate on a greater scale than the equity investment in shares alone would allow. How leveraged they can and should be is questionable, but then stopping these things is not as easy as it looks. Once you allow corporate ownership, then the Glazer model is available, where the equity in the club is from a parent company which may be fulling debt funded. Not good, and hard to counter. Great post, i wish i had have just referenced you before writing my own point. I just skipped to the bottom and missed your succinct commentary
davieG Posted 27 February 2010 Author Posted 27 February 2010 Arsenal is a well run clubIts operations have turned in sizeable profits giving the football club working capital whilst the club is honouring payments to its creditors on its long term liabilities (i.e. the Emirates) so surely its a well run operation on that basis? If you have a mortgage on a house, you are in debt yourself to your lender. your work activities give you working capital to a) meet your creditor's payment when its due and b) reinvest surplus into other areas . Its the same principle within a football club Maybe they are in comparison to other clubs but by all accounts that I've read about the current financial situation in football that is still seen as an excessive amount of debt in comparison to there potential income - the fact that they feel it's necessary to reduce in by a significant % at a time when they could probably do with more/better players suggest they think it is as well. As for running it like other businesses I'm not so sure it's acceptable anyway because if things go wrong a business disappearing is hardly the same as a football club disappearing. I'm not even that convinced it's good for businesses to be run like this , ok there are advantages but when things go wrong and they invariably do as you only need to see the level of bankruptcies these days then it seriously affects people's live,. and makes many of those running these businesses careless, profligate and greedy.
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