The Modern game needs to look at Rome and Arsene to secure it's long term future

There’s a famous expression that Rome wasn’t built in a day. Rewind back nearly three decades to 1984 and Apple under Steve Jobs launch the first Apple Macintosh. In 1985 Apple released Jobs from his position and by 1997 the company was looking at the real possibility of going bankrupt. Fast forward back to the present day and Apple are now valued at more than 600 billion dollars a staggering turn around in fortunes masterminded largely off the back of the vision of one man. The rise in fortunes isn’t alone to the technology industry either. Back in 1984 kicking a ball around a field for 90 minutes didn’t bring the players the same riches that we see today. Before the formation and the days when the top league was known as Division One, the average wage of a top flight footballer was just £480. Wayne Rooney’s current contract at Manchester United see’s him collect an annual salary of £8 million a figure just shy of £154,000 a week. Whilst today’s players aren’t all earning multimillions per year in the top flight, the average wage in the Premiership by the 2009-10 season has risen to £22,353 per week, close to nearly 47 times the amount players were earning 25 years previously. Looking at this on an annual basis this means the average annual salary will be £1,162,356 per season, not bad work if you’re fortunate enough to get it.

Football like the world of technology has changed beyond belief over the past three decades with the money inside the top flight of the English game beyond the wildest dreams of the Chairman of any owner back in 1984 could have ever imagined. Manchester City, today crowned Premier League Champions for the first time today have since 2008 spent a total of £930.4 million. Of that total just £365.3 million of that money came from revenues generated by the club with the rest coming from the pockets of billionaire Sheikh Mansour to the tune of £565.1 million. Whilst figures like these might not be a problem to a billionaire benefactor like Mansour, other clubs are now finding that chasing the dreams and living beyond their means can only last for so long before the bubble bursts and the problems begin to mount. Portsmouth found themselves the first club to have ever gone into administration in the English Premier League. A successive round of financial problems has been well documented to be joined by the names of Glasgow Ranger north of the border fighting for their very survival. With so much money flooding into the game it’s hard to believe that any top flight club could manage to get themselves into a financial mess but it’s a sad reality of the changing face of English football.

Whilst the blue half of Manchester will be celebrating their first title win since 1968 today, just over ten miles down the road at neighbours Bolton Wanderers fans will be commiserating after their relegation to the Championship with debts estimated to be in the region of £100 million and no rich billionaire benefactor to bail them out. Owen Coyle’s Wanderer’s will see a total of 14 players either out of contract in the summer of loan players returning to their parent club. Captain Kevin Davis, influential playmaker and winger Martin Petrov and top goal scorer Ivan Klasnic are just three names who will be out of contract in the summer. Whilst West Ham and Blackpool are both in with a chance of regaining their place in next season’s Premier League, Birmingham City have failed to go up at the first time of asking of the three teams that were last relegated and ultimately only one of those three will find themselves back in the top flight after the end of this season. Bolton will be looking very closely at Birmingham City’s plight and the challenge ahead as they try to balance their books, consolidate their debts and attempt to jump back into the top flight of football at the first time of asking.

The cost to Birmingham City of failing to be promoted will most likely be administration. Birmingham will have all but run out of money by June. The club’s owner Carson Yeung is absent facing fraud charges in Hong Kong relating to £59.7 million is a case of alleged money laundering. The banks have withdrawn a £7 million overdraft facility and the club cannot raise much needed revenue by remortgaging St Andrew’s as HSBC hold the deeds to the ground as security on an outstanding loan. The club are subject to a transfer embargo imposed by the football league, manager Chris Hughton is largely believed to be heading out of the door to join neighbours West Bromwich Albion after Roy Hogson’s departure to take over the reins at England and the clubs wages to income ratio remains hovering very close to the 100% mark. The parachute payments received by the midlands club are nowhere near large enough to offset the huge wages of star players retained on the clubs books like striker Nikola Zigic earns a reported £2.5 million a year alone. Birmingham City in the next month are set to follow in the footsteps of Portsmouth and fall victims for chasing the dream with too much vigour and financial recklessness.

Failure to publish their accounts on time for the second season running means the level of debt Birmingham City is actually carrying isn’t being reported. Contrast that to fellow relegated side Blackpool and we see a totally different picture. Despite only staying up for one season, they sit one game away from a personal first time return against Sam Allardyce’s West Ham United, another club carrying significant levels of debt from their time in the EPL. Blackpool’s promotion saw their income levels rise by a staggering 450% to £51.7 million. During their season in the EPL their net cost on transfers was £3.5 million but that brought in ten players, losing only two in comparison. The wage bill only rose by less than £600,000 or roughly 4.5% year on year. Majority shareholder Owen Oyston paid off all the clubs external debt as cash balances at the bank rose from £2.8 million to £8.1 million.  Blackpool’s finances for the following Championship season will make very interesting reading indeed having seen stars like Charlie Adams depart in the summer to Liverpool, the inclusion of wage reductions for players and staff following relegation and the addition of parachute payments being received. I’m sure if Blackpool were to win promotion via the play offs again, Blackpool would start the season fully believing they would potentially be able to stay up this time around as all three of last season’s promoted clubs have managed to do this time around. Whilst QPR only managed to survive on the last day of the season, in comparison Norwich City and Swansea City have been able to breathe easy and stop watching over their shoulders for some time and finish the season in 11^th and 12th places respectively both finishing on 47 points, 11 ahead of newly relegated Bolton Wanderers. They both managed to do so on reality meagre budgets in comparison and all three sides will be hoping to consolidate and build on this season when the season restarts in earnest this coming August.

The gulf in football from the EPL to League Two is vast and we see the average League Two player earns £747 per week, some £21,606 behind their top league counterparts. The significance of winning promotion to the EPL or remaining in the league has never been higher with so many clubs carrying such high levels of debt without the backing of billionaire owners at their disposal. Whilst this true of many clubs, Wolverhampton Wanderers have continued to buck this trend and despite being the first club to be relegated this season, remain debt free. Their main struggle this summer will be trying to keep hold of their main players rather than a worry about balancing the books.

The annual PKF survey published in regards to the state of English and Scottish football brought about some interesting revelations into the views on football finance in the game and the way clubs are structuring and using finance on offer to them or will potentially be doing within their business models in the forthcoming season. In 2011 10% of English Championship clubs increased their banking facilities a figure very similar to the previous season though most banks remain reluctant lenders to the sector and are unlikely to commit further facilities. 40% of Championship clubs envisage having to use 90% of more of the total banking facilities presently made available to them during the coming season a sign that borrowing will remain a significant part of trying to gain promotion or avoiding relegation will be done raising levels of debt within the national game. Whilst 50% of clubs said they didn’t envisage using the facilities the other 10% stated they were unsure whether they would have to take advantage of the facilities or not. A further 30% of clubs admitted that they were having problems sourcing finance for the season a figure of nearly 1 in 3, a worrying sign and trend for the forthcoming months and years in football indeed.

10% of clubs admitted to being late with payments due to the HMRC and a further 10% wouldn’t commit to admitting whether or not they had made late payments. Of that 10% not one club had done so with the agreement of the HMRC itself. Another worrying statistic is 20% of Championship clubs have admitted they are worried that a sizable challenge by the HMRC on the use of image rights in player’s contracts would likely to cause them an issue. We’ve seen the issue north of the border with Glasgow Rangers and it would be hugely naïve to believe the potential problem doesn’t exist in the EPL.

44% of EPL clubs have player’s contracts in place whereby player’s wages will decrease if they are relegated from the top flight. Impressively that figure increases to 90% of Championship clubs who it seems are way ahead of their EPL counterparts in now beginning to see the financial impact potential relegation can bring.

Whilst looking at the clubs who’ve recently been relegated or promoted, it would be hard to forget the last of this season’s EPL clubs to have been relegated who haven’t already been mentioned so far, so step forward Blackburn Rovers. Until today Rovers were one of only four clubs to have lifted the EPL championship alongside Arsenal, Chelsea and Manchester United. This season has been a turbulent one on and off the pitch for the Lancashire club which has seen the fury of fans vented at the owners the Venkys and manager Steve Kean with calls for both to go. Fans have begun to boycott home games, the club shop and fail to renew season tickets in a bid to bolster the chances of removing Kean and ultimately the Venky’s themselves. When the Venkys took over at Blackburn Rovers they promised the fans they would deliver European football within five years and the signing of Ronaldinho. What they actually delivered was Championship football and David Goodwillie who last month narrowly avoided a prison sentence after being guilty of his second assault within a year. Perhaps someone should take the Venkys aside and remind them that despite the money of the EPL, it’s the fans who remain at the heart of any club and not the finance. Whilst the owners deny any attempts to sell the club it wouldn’t come as any surprise after the mistakes they’ve made during their tenure see’s Kean removed from his job or the Venky’s try and sell on the club. The next twelve months promises to be an even more turbulent time for Rovers if not.

I’ll end this the same way that I started it. I mentioned how Rome Wasn’t built in a day. It’s best to remember the cornerstones of Roman civilisation stood for hundreds of years and to this day we still have Rome although in a different form to its earliest times obviously. The way the English Premier League is currently operating, unless serious changes are made at the bass roots of the industry the debts carried in the game are going to be a burden that some clubs will no longer be able to potentially trade. Birmingham City are likely to go into administration next month, Portsmouth and Glasgow Rangers both remain in administration already as do Port Vale. If Bolton Wanderers fail to bounce back in their first season of asking will they be left facing administration? With debts of £100 million relegation will pose very serious questions of the Wanderers board and how levels of debt were allowed to build up to such levels in the first place, questions the game should have been asking itself a long time ago now.

I will leave you with my favourite bit of research from this entire piece which surrounds Mr Arsenal aka Arsene Wenger, the man who revolutionised the Premier League more than any other manager in my opinion. Since Arsene Wenger arrived at Arsenal the top sides in the country have continued to spend lavish sums on players backed largely be either billionaire owners in the cases of Manchester City and Chelsea or be leveraging large amounts of debt in the case of Manchester United. The following shows the overall spend on player purchases since Arsene Wenger’s arrival in the English game of some of the clubs around them in the same time and more interestingly after transfer monies received what their net spend was.

Manchester United:

Overall Spend: £534.05m
Overall Received: £283.975m
Net Spend: £250.075m

Manchester City:

Overall Spend: £628.1m
Overall Received: £155.543m
Net Spend: £472.557m

Chelsea:

Overall Spend: £720.83m
Overall Received: £216.185m
Net Spend: £504.645m

Liverpool:

Overall Spend: £523.33m
Overall Received: £318.87m
Net Spend: £204.46m

Tottenham:

Overall Spend: £392.55m
Overall Received: £217.93m
Net Spend: £174.62m

Now compare this to Arsene Wenger’s record at Arsenal where their overall spend is less than all other five clubs, the transfer income was only bettered by one club in the shape of Liverpool and the last figure in comparison is astonishing and none of the other biggest clubs in the country even come close. Read it and marvel at it folks.

Arsenal:

Overall Spend: £314.75m
Overall Received: £310.514m
Net Spend: £4.236m

Remember under Arsene Wenger Arsenal have never failed to qualify for a Champions League slot. If there’s a starting point for other teams to base themselves upon then all roads lead to Arsenal.

Stand up, take arms and prepare to be counted - Pompey, Port Vale and Rangers are counting on you

Two decades ago if you were to pick up any newspaper in the country the headlines on the back pages were traditionally dominated with what had happened on the pitch for 90 minutes. Fast forward to the present day and the headline news surrounds the misdemeanours of players on and off the pitch and the financial difficulties being suffered by clubs up and down the land. Football in twenty twelve see’s far too many clubs staring into the financial abyss. The possibility of a domino effect occurring and club’s going to the wall in the next twelve months is a very real one. How many will go is anyone’s guess but the days of sugar daddy owners seems to have gone. Whilst owning a successful Premiership side may be the ultimate have for some billionaire owners, sadly investing in lower league clubs with financial problems isn’t so appealing. Who suffers the most? The fans and the local creditors sadly, those who least deserve it.

In my previous blog I alluded to the financial results at Aston Villa where a £53.9 million loss was considered by their Chief Executive a good set of results. I’d had to think what would have constituted a bad set of results in his eyes. Better news came from Midlands rivals Wolverhampton Wanderers who posted pre-tax profits of £2.2 million, falling some way short of Arsenal’s half year pre-tax profit of £49.5 million but still in the black all the same. Worryingly though that figure was down £6.9 million on the previous season as player investment and an increase in the wage bill saw Wolverhampton begin to keep up with the Jones in their pursuit of Premier league survival and improvement. The wage bill increased from £29.8 million to £37.9 million an increase of 27.2% or monetary wise £8.1 million year on year. Turnover was up from £60.4 million to £64.6 million but that was largely down to an increase in TV revenues. The impact and cost of Sacking Mick McCarthy is likely to impact the clubs next set of financial results as they battle to stay in the Premier League for next season.

That’s not in for the Midlands round up though with the announcement that fellow Championship clubs Birmingham City and Coventry City have both had a transfer embargo placed on them this week both due to a failure to submit their club accounts on time.

There’s an age old statement that things in life always come in three’s, so it should come as no surprise that Portsmouth and Rangers are set to be joined by League two playoff hopefuls Port Vale who are currently operating under a transfer embargo and failed to play their players their wages for February. It will come as no surprise to learn that their problems stem from an unpaid tax bill which resulted in the HMRC issuing the club with a winding up petition.

I’m sure the fans of Port Vale won’t mind me alluding to the fact that they sit in the shadow of rivals Stoke City who currently occupy 12^th place in the English Premier League and are flying the flag in this seasons UEFA Europa League after they lost to Manchester City 1 – 0 in last season’s FA Cup final. Despite some decent average crowds during the 1950’s Port Vale’s support has declined in the subsequent decades since. Their Vale Park ground potential holds 19,052 supporters but last season’s average attendance of 4,678 meant that on average the ground was just under a quarter full for every league game a damming indictment that success across the way means someone has to suffer. In years gone by fans of Liverpool and Everton would flock to Tranmere Rovers on a Friday night to watch their smaller neighbours play. It seems that the fans of Stoke City have little or no desire to help out their smaller neighbours in a similar vein at any point during the season. Attendances would have no doubt been helped by a Potteries derby game but the last one happened in 2002. Stoke City in comparison regularly sell out their Britannia Stadium and can rely on income from the various Premier League television deals and Europa rights to boot.

This isn’t the first time Port Vale have found themselves in administration having previously been placed in 2002 when the club was then brought out by a fan based group. In 2006 their most famous fan one Mr Robbie Williams invested £240,000 into the club but admitted he doesn’t have the levels of finance needed to sustain the sort of levels required to run the club. Hope it seems rest with Mo Chaudry who had an offer of £1.2 million for 54% of the clubs shareholding turned down. The move into administration will see the club docked ten points and tumble back down the table. They currently sit one place outside the play offs. Once again those who suffer the most when football clubs fail to pay their bills are the fans. Do they great fans of Port Vale deserve to see a potential day out in the play off finals at Wembley in May be taken away from them through no fault of their own? If course they don’t but with players failing to be paid for February and the threat of the HMRC hanging over the clubs future at a time when things looked up on the pitch, events of it will dictate that the fans will suffer the most. What Vale need is the support of their community to bring much needed revenue into the club at the very least. As a Portsmouth fan my prayers go out to Port Vale and their fans and I hope that some much needed investment is found and soon.  

One of the key factors when a club goes into administration is that trust disappears and when trust goes then things start to become harder for any club to survive whether you have a fan base the size of Glasgow Rangers FC or as small as Port Vale’s. Local businesses lose the trust and clubs lose their supply chain and line of credit. Some fans will lose trust and question why they should spend their hard money going to attend home games when so many mistakes have been made in the past. To be fair it’s a valid question that needs consideration. Rationally there should be no malice aimed at those who choose to stay away. What people need to sell isn’t guilt but a remembrance of why you loved going there in the first place. As football fans we can all pretty much remember our first home game we went to see unless you were really taken from a young age. We remember why we were hooked from that first time and why we fell in love with our clubs. The support of a true fan never wavers. Sometimes it just gets a little lost and we need reminding of why we fell in love with the club in the first place.

Loving any football team can at points be like a marriage. When times get hard and the arguments start we can lose sight of why we fell in love in the first place and of all the happy memories that were there before the sadness and the anger began to kick in. Money makes the world go around. Sadly those at the top echelons in football are poisoning that money. What we need to do is inject clean money back into the game and reclaim our national game. We need to find a reason to fall in love again. It’s seems hard to remember that football was first and foremost a game where the masses came to watch 22 men on a pitch week in week out. Rows and rows of filled terraces football really was the people’s game. The feeling of comradery and belonging, standing toe to toe with other people who loved the club as much as you; People who would jump in unison when you scored and would feel the same pain when you conceded. Thousands of people all stood together kicking every ball from the stands willing on their sides to win. We need to reinstall this passion into people. We need true football fans to step up and be counted whatever team we support. If we would watch any game on a television or pay a Sky Subscription then what stops us going to watch a team we don’t support and taking in the atmosphere of those who do love the clubs you are watching. Nothing beats the feeling of seeing a game first hand. There is no feeling like it. Even the most boring of 0 – 0 draws will always far outweigh the feeling of watching something on a TV.

So I would implore the people in and around Stoke to go and pack Vale Park whatever side you follow. Communities are better when there’s a rivalry to be had and bragging rights to be told. No true football fan wants to see a club die anymore than they want to see their neighbours win come Saturday afternoons at 3pm. I give that specific day and time because the majority of league games in the lower league kick off at traditional times and haven’t been chopped and changed for the sake of a TV audience rather than those fans who’ve been attending games for season after season.

If you can’t get to a game then visit the club shop in person or online there are bargains to be had. If you can’t afford a shirt then buy what you can afford to buy. Every football fan needs to do their bit so that great clubs with great fans like Glasgow Rangers, Port Vale and my own love Portsmouth FC survive. If you don’t act now then it will be too late. Hindsight is a wonderful tool but sadly no use if you no longer have a club to follow and support.

Stand up, take arms and prepare to be counted.