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Wayne’s World – The Tipping Point

November 27th, 2010 by · No Comments · Features, Football

Man City? No Way, Way.

We may look back at the start of the 2010 season as the point where, like all bubbles before, the financial madness of the English Premier League started to finally deflate. Wayne Rooney’s Big Pay Out will go down as the last hurrah of this madness. Why? Let me tell you a story…

The Premier League, by some measures, can be considered a success since being formed in 1992. But, despite an extraordinary rise in income, profits have not followed. Most clubs have been living beyond their means and even in these, most lucrative, times just six of the top-flight clubs made a profit last year.

Even those lucky few [Manchester United, Arsenal, Liverpool, Tottenham Hotspur, Everton and Birmingham City] have had mixed fortunes. In fact the Premier League in total carries 56% [£3.5bn] of total European football debt. The ‘big four’ are, according to UEFA, carrying 36% of the total debt in European football alone.

Of the top four only Arsenal seem to be a club run on financially prudent grounds, being described in one survey as a ‘pocket of financial sanity’. It’s a very small pocket.

What about the others? Manchester United are paying interest of nearly £70m per year [and growing] on profits of £90m, Liverpool made £25m profit but paid £36m in interest, and bad boys Chelsea made a loss while carrying over £500m in debt.

The really special case is of course Manchester City. Their latest accounts show a company with a turnover of £87m and a loss of £34m. Total debt stood at £194m. Since those accounts were published the club has spent another £117m on new players.

So what are the signs that the party is over? Well, any bubble is marked with the ‘irrational exuberance’ that things can go on just like the always have. You can read that in every interview this weekend. They are also marked with tell-tales signs that look obvious in hindsight.

  • Cesc Fabregas is still at Arsenal. Why? Not because Wenger is a persuasive chap but because Barcelona are broke. If the traditional big spenders of Spain, Italy and England are raining in their wallets the cold winds blow across the transfer markets.
  • Yaya Toure is on 10m a year. Not important? Can you hear Wayne’s agent telling him that an average midfielder is earning more than twice the salary of ‘The Best Player in the World’ TM. To a money-grabbing tyke like Rooney that hurts. Hence the latest dirty protest.
  • Chelsea have begun to show their true colours now the limitless spending has stopped. A squad that is finally showing it’s age is struggling to maintain form and results. Where are the reinforcements? Well our guess is that Abramovich has finally discovered what many rich men have before him. Football isn’t big business, it’s not good business, in fact it’s not really business at all.
  • Portsmouth are the first Premier League club to go bankrupt. That made the news but what didn’t was the fact that nearly 50% of Football League clubs have been in some form of administration in the last 10 years. Also glossed over is the fact that most of the top-flight teams are technically insolvent [ie. costs are higher than income].
  • We now watch an England team and expect not to ‘win it this time’ but to expect humiliation at the hands of the worst team in the World Cup [yeah France].
  • We learn today that Carlos Tevez wants to punch young players at Man City because all they care about is money – well said Sir, and well said from your £145K a week.

English football is broke – financially and morally.

What’s to be done? Make like a banker and grab what you can while there’s still some left. In the last chance saloon it’s time to ‘Party on Wayne’.

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