Glory or Gory future awaiting United

For years the words “Glory, Glory Man United,” have been sung home and away by the Red Army but as we fast approach the 2012/2013 season is it not a case that the L has slipped and it’s now more of a case of ‘Gory, Gory Man United’?

Since the Glazier family took over the running of Manchester United they have saddled a once debt free organisation with millions of pounds of debt to the annoyance of the clubs following. This summer they plan to raise more money through an IPO with the New York Stock exchange giving up ten per cent of the equity in the club with share price muted to be between $16 and $20 a share. For a club with true global appeal this would seem a great opportunity to get involved as a fan but what exactly will you be getting for your money? Well not a lot it seems.

10% equity isn’t a massive amount to give away in a business. Ask any entrepreneur entering the Dragons Den and they will tell you that the Dragons are always as potential investors looking for more return on their money and a larger share of the pot. The shares are issued in two ways; Via Class A shares and Class B shares. Class A shares come with one vote per share, Class B shares come with ten votes per share. Of the 19,166,667 shares can you guess which option of half the shares the Glazier family will take up? Yes you’ve guessed it the Class B shares meaning that despite giving away 10% equity in their company they will only be giving away just a mere 2% of the voting rights meaning they retain the right to run their company how they choose even if the so called other 10% doesn’t actually agree.

So why have the Glazier family chosen to float on the New York Stock Exchange? They previously looked at launching IPO’s in both the Singapore and Hong Kong markets but plumped for NY because it enables them to have a business structure in terms of voting rights which wouldn’t be allowed in the UK markets. It’s as simple as that yet more complicated with other factors included but I’ll leave that side to someone far more qualified than I to explain.

Just like the debt of the club which see’s all the attachment to the company and not the Glazier family, all the costs of the IPO are being born by the clubs coffers as they attempt to raise $330 million from the share issue. However some of that money will be going direct to the Glazier money and not to the club and if the issue is successful it will mean that the clubs debt is only reduced from £425 million to around £350 million which will save the club around £5 million a year in interest which by today’s standards doesn’t buy you very much in English Premier League terms.

Manager Sir Alex Ferguson one of the most vocal men in football has always backed his owners despite the fury of some fans and this may be in part because as part of senior management he will be entitled to share part of the 16,000,000 million shares on offer to them worth $288 million. At £13 a share the value of Manchester United stands at around £2 billion which in theory looks incredibly impressive to any investor but profits at the club actually fell 15% last season as they faded badly in European Competition. The real worrying figure is the cash balance of a club which is supposed to be valued at £2 billion which has fallen significantly since 2009. The cash balance is the pool of money that is used for acquisitions of new players. In 2009 the audited balance stood at £150,530,000. In 2010 that figure rose to £163,833,000 before falling again in 2011 back down to just over the 2009 mark at £150,645,000. The unaudited figure for March 2012 puts the cash balance way, way down from any of these figures at £25,576,000 a total of £138,257,000 from its four year peak of 2010.

So what exactly would potential investors be getting for their money exactly? It’s hard to see really offer than being able to say they own a small part of one of the world’s most iconic teams. There are no dividends paid on the shares annually, they come with no real voting power, the clubs profits are falling and the total raised will largely go to the Glazier families pockets and see just £75 million written off the clubs debts in total. With falling cash reserves it’s hard to see what serious investors would actually gain from investing in a club who are trying to compete against rivals like Chelsea and Manchester City who are owned by billionaires who can push United out of the transfer stakes for players they would have only a few seasons ago been in a poll position to attract as they bid to compete in domestic and European competitions.

It remains to be seen if the lure of investing in the name of Manchester United will be enough for the Glazier families IPO to succeed. Buying into a big brand name comes with no guarantee’s and the serious investors will I’m sure have seen the warning signs after this year’s Facebook IPO which has seen share prices drop 45% since their issue from $38 a share when they were issued on May 18^th. The IPO instead of improving the company’s reputation has actually seen its brand damaged a lot and worse is set to come for investors when August 16^th comes along. The date will see insiders such as company officers, directors and employees being able to sell 268 million shares of stock after the 91 day rule has passed. Between 91 and 181 days after the IPO insiders can sell an additional 137 million shares. With investors braced for an influx of insider shares into the market it’s expected that the share value will be hit once more.

I think given what’s happened with Facebook low level investors will be put off and any serious investors will have weighed up how little potential there is to see a return on any investment. Maybe the Glaziers will have chosen the best market to launch their IPO or maybe their non UK allowed structure will significantly back fire on them. I guess only time will tell.

Glory, Glory or Gory, Gory?

Why rebuilding shouldnt always be done the Green Way

“Do you wish to rise? Begin by descending. You plan a tower that will pierce the clouds? Lay first the foundation of humility.” The words and thoughts there of St Augustine the Latin philosopher and theologian. A Wise choice of words I believe when looking at how to aspire to greater heights though I suspect they would be sadly lost on one man north of the border. If you’ve fallen from grace before you consider how to rise again wouldn’t you be better off to show some humility in doing so? It seems not so in the case of Rangers new owner Charles Green who some might say has gone on the record with some ill advised comments aimed at City rivals Celtic and the state of Scottish football financially.

When the old company went into administration it owed up to £134 million to unsecured creditors before it was eventually liquidated. Whilst the exact financial knock on affect is yet to be seen on Scottish football of the old clubs liquidation it’s widely predicted that it will have a massive detrimental effect and could potentially see some smaller clubs pay the ultimate price and go to the wall. Given this fact and claims from clubs like Stenhousemuir FC that they will have to scrap their youth system in order to be able to survive and you would think that Rangers new owner Charles Green would be somewhat careful in regards to what he has to say about building for the future.

Charles Green it would appear is akin to a bull in a China shop.

Yesterday saw Rangers win their Ramsden’s Cup first round tie away to Brechin City 2-1 in a tightly contested cup game which went into extra time after Rangers has taken the lead within the first five minutes. The good news for the Scottish game is that the travelling support is believed to have contributed around £30,000 to Brechin City’s coffers, the bad news is that it seems Green can’t resist having a dig at City rivals Celtic. Before the game Green went on record as stating he believes that his new company will be financially stronger than current Scottish Champions Celtic in a year.

Rangers are aiming to follow in the footsteps of Scottish league teams Gretna and Livingston who have both successfully climbed their way through the leagues and into the Scottish Premier League. Despite no longer receiving income from European matches after their subsequent relegation and punishment for liquidation for at least three years Green is confident about the new club’s short term financial prospects.

Green went on record stating; "If you look at the balance sheets at the end of next season you should see the strength of the two companies.

"We are in the third division and Celtic are in the SPL and what I'd like you to do is promise me at the end of the season, when all the games are played, examine the balance sheets of the clubs and tell me which one is strongest.

"Let's see who has got the strongest balance sheet. We've not got the debt that any of these clubs have.

"On the last day of the season I would really enjoy some clever financial analyst looking at the balance sheets and debt-to-equality ratio of every club in Scotland."

Yes – these are the words of a man who’s just set up a new company after the demise of the old one which went into liquidation owing £134 million to unsecured creditors. Ladies and gentlemen, boys and girls, members of the jury do you think it is wise to start trumpeting the fact that you haven’t any debts whilst the old Rangers went into liquidation owing so much money? Do you think it’s wise to bring such matters up when clubs in the Scottish Premier League like their English counterparts have spent beyond their means in an attempt to keep their position in the league which in the case of the SPL and like La Liga has been dominated for so long by just two teams? Celtics debts if any will have been contributed to by trying to compete with the old Rangers Company in the first place. You’ve been allowed to continue to use Ibrox; an all seater stadium with a capacity of 51,802 so for every home game if you only charged a tenner and sold out every seat your match day income would be over half a million alone before programme sales, food and drink sales etc where included into that tally. Given that many of the team’s highest earners have been removed from the wage bill will be another testimony to the chances of ending the season in the black and not in the red for once.

So whilst you might be correct in your claims Mr Green wouldn’t it be wise to just think them rather than say them as if you are some sort of moral hero. Whilst you may not have been the man that created so much debt in the first place there are many, many people who will have suffered as a consequence being amongst those who were owed part of the £134 million. Do you think they want to have to read the types of comments that you raised yesterday? Just one more kick in the balls as far as I’m concerned.

So Mr Green would surely stop there would he not making ill advised comments and rubbing the noses of others into the ground that have lost money after the old companies liquidation. No it appears Mr Greens levels of decorum are akin to a snow ball rolling down the side of a hill; by the time they stop they have created a full on avalanche.

So having been so disregardful of the old company Rangers part in the debts now acquired by fellow members of the Scottish league he then sets about a vitriolic questioning of the future financial viability of Scottish football.

Green as part of negotiations to acquire membership of the Scottish FA agreed a deal which will allow Ranger’s matches in the Third Division to be shown as part of the SPL’s broadcast offering. Something I’m sure wasn’t offered to the nine other teams competing in the Scottish leagues bottom tier. Watch how Mr Green distances his new company from the mistakes of the old one yet still retains Ibrox and all its potential benefits. On why they agreed to the deal;

"We signed up to the TV deal because we don't want to be held responsible for the downfall of Scottish football," Green told the Rangers website.

 “This is not the end of the problems for Scottish football”

"But someone is responsible for the demise.

"It's the end of the problems for Rangers but it will be the beginning for many other clubs. I think it will hugely difficult for Scottish clubs.

"There is no doubt Scottish football has been going downhill and if you look back in history, as I can as a non-conflicted outsider, to 14 years ago when the SPL was formed and since that time Scotland hasn't qualified for a major competition.

"Incomes have not grown and there really has to be a look at where Scotland as football business is going."

Yes Mr Green really did say the words "But someone is responsible for the demise.” Would that be the same way someone in the old company was responsible for such huge levels of debt which are set to have a knock on affect on the whole of Scottish football?

"If we had come to the table with a clean piece of paper then we wouldn't have signed up to the agreement but the realities are there have been historical misdemeanours and this is the price we have paid," Green said.

"We were on the outside trying to get membership of the SFA and they set the rules and the regulations.

"I'm interested to see how things will be applied in the future because this is not the end of the problems for Scottish football.

"We'll make a lot of friends along the way I'm sure and while our former friends have the difficulties they are going to face Rangers and the fans will have an enjoyable few years walking through the divisions."

Mr Green also indicated that there shouldn’t be any job losses as a result of Rangers having to start the new season in the bottom tier of Scottish football whilst clubs like Stenhousemuir are looking at having to scrap their youth system and community support workers in a bid to stay afloat.

So for Mr Green everything is bright for Rangers whilst piled somewhere in a back office in the Ibrox stadium are the past of misdemeanours of Rangers pilled under a carpet ignored and nothing to do with his new company. The new club has washed its hands of the problems of the past and distanced themselves as best they can from anything that went on previously yet are indebted to have transferred £5.5 million worth of assets into the new company including Ibrox which should see them finish this season in the red whilst other clubs are struggling to survive and having to cut costs.

With the starting line in sight for Pompey in the next few days let’s hope that Mr Chanrai has the common decency to keep his mouth firmly shut as we head into the future. We can’t and won’t shy away from the mistakes of the past as we look to rebuild for the future.

Counting the cost of the beautiful game

There is an expression that in life there are some things so precious that you cannot attribute a price to them, seeing you child take their first steps in life for example, precious and treasured memories that will live in our hearts and minds forever and a day. Reality dictates that everywhere else in our lives there are costs involved and none more so than in the game of football.

In the week that Scottish Premier League clubs voted against allowing the Rangers newco entry in the top tier of Scottish Football, Stenhousemuir FC of the Irn-Bru Scottish Football League Championship Second Division outlined in a statement the impact on their club financially and on the part of Scottish football as a whole if Rangers were to find themselves playing in the bottom tier of Scottish football.

The following contracts total £15.7 million per season in the Scottish Leagues and all include termination contracts should either of the Old Firm clubs not be involved in the SPL.

Loss of Sky broadcasting payments of circa £10 million per season.

Loss of ESPN broadcasting payments of circa £5 million per season.

Loss of Sportfive broadcasting payments of £2.7 million per season (overseas broadcasters)

Loss of Sponsorship of £1 million per season.

Additional new broadcasting deal with income of £3 million per season.

The inclusion of Rangers into the lowest tier would see Stenhousemuir lose the SFL central payment aligned to the SPL settlement payment which would total £50,000 per season. Whilst that figure might pale into comparison to the sums in the leagues south of the border, for a club of their size it will have a real detrimental effect and as such costs would have to be cut accordingly to make savings. The demise of one football club will it seems have as detrimental effect on the leagues as losing the ITV contract did several season previously south of the border.

In the statement the clubs outlines that having already made commitments to the playing staff for the season significant savings would have to be found in other areas such as having to scrap the youth system entirely. Some of the staff who oversee their community programme would have to be made redundant. This won’t be an isolated case in Scottish football either. Many clubs I am sure will have to follow suit and scrap their youth systems to and in the very worst cases of some small Scottish sides, the threat of administration will be a very real threat indeed.

The loss of revenues into the Scottish game and the culling of youth training will see the standard of the game diminish which will in turn have a future impact on TV contracts and sponsorship with companies not wishing to invest in a market further reduced of quality.

In a tough worldwide economy the supporters of other clubs are finding themselves punished for the actions of just one club that they have never themselves ever supported. Why should the fans of a club like Stenhousemuir FC be punished for what did they do wrong or the sets of fans from any other teams who will equally be effected? Why should hundreds of youngsters be denied of the chance to be able to turn professional because of the conduct of one football club who flew too close to the sun and got their fingers burned? The grass roots game in Scotland will be praying for rain in the forthcoming weeks and the seasons that follow if some sense of normality is to be resumed but how many people will be left counting the costs of others mistakes and just how many teams will be left cometh the hour when the decision what league the newco Rangers will be allowed to play in this season?

Football is now more than ever a game of the haves and the have not’s.

The irony at the demise of one club in Scotland and it’s not impact across the board can be summed up south of the border where the English Premier League has just tied up another record breaking broadcasting rights package which will see Sky TV and BT pay a joint total of £3.018 billion for the privilege. Now compare that to the poultry sums of £15.7 million set to be lost in the Scottish game or the loss of just £50,000 and the effect it will have on Stenhousemuir. It’s hard to believe the land of Scotland and England joins together the two countries Premier Leagues are so far apart.

But whilst the English Premier League on paper seems to continue to thrive underneath the surface the levels of debt do not dwindle as clubs spend beyond their means and above their levels of income. Lessons are still not being learned and we remain in danger of the threat of teams being forced into administration or out of very existence despite record levels of money coming into the game at the very top level.

This week saw the news that Manchester United, the largest football club anywhere in the world, were once again seeking fresh investment to pay off some of their estimated £423 worth of debt by filing for an initial public offering of shares in the US.

The club claims to boast a worldwide following of a staggering 659 million fans. With another huge cash injection from broadcasting revenue and sponsorship deals with worldwide firms including DHL pouring into the clubs coffers how may you ask did the club see its cash and cash equivalents on its balance sheet drop to £25.6 million as of March 31^st this year down from £150.6 on June 30^th, 2011.

Since the bitter takeover of United by Malcolm Glazer and his six sons in 2005 fans have cited that the family has saddled the club with too much debt and left them unable to compete against rivals or be able to compete to buy or retain the world’s top players. The shift in financial power and the league title to city neighbours Manchester City will only add fuel to the fire and the anger of the fans.

Further anger will be shown after the filing in the US showed that not only has the family borrowed from the club, something they are legally entitled to do, but that at least one of the Glaziers son’s also brought the clubs debt which earned him a higher rate of return on the money than the family was paying on its borrowings; All legal and above board.

Whilst it remains unclear why the family borrowed the money from United back in 2008 or what the funds were used for, the filing shows that at the height of the global financial crisis in December 2008, the six sons were given £10 million in loans for at least five years from the club for ‘general personal purposes,’ to be repaid at an interest of 5.5% At that time commercial banks were charging on average an interest rate of 11.44% for a two year personal loan in comparison according to the US Federal Reserve. Furthermore between October 2010 and January 2011 Kevin Glazier, members of his immediate family and a Glazer family company bought $10.6 million of Manchester United senior secured notes in the open market that they placed an 8.375% interest charge on. In April 2012 the Glaziers were paid a dividend of £10 million which I’m sure you won’t be surprised to read and discover was subsequently used to pay back the original loan that had been made to the family.

What should remain paramount to this entire network of interest rates, borrowing, lending and debt levels is that prior to the £790 million takeover of the club by the Glazers in 2005 is that Manchester United were entirely debt free yet the league ratified a deal to allow the Glazers to saddle the club with the burden of debt, not themselves but the club itself having been totally debt free. Let us not forget that the club had seen a move by Australian media mogul Rupert Murdoch’s Sky TV to buy the club some years before in 1998 which would have seen him pay 875p a share for the club which has been rubber stamped by the board in September of 1998. The deal however was rejected the following April by the Monopolies and Mergers Commission and the DTI.

In the case of Manchester United moves are being made to raise funding to pay off the debts however in the case of Portsmouth FC who now find themselves in the 3^rd tier of English football having been relegated last season following a ten point deduction the agreement in principle to a new CVA to take them out of administration will mean that the club have legitimately been able to shed £107.3 million worth of debts in two seasons without having to even paid a penny on them according to the administrator from their first administration Andrew Andronikou with up to £40.1 million being owed to the HMRC. The club found itself back in administration after the arrest of club owner Vladimir Antonov on charges of fraud and embezzlement lead to the clubs parent company CSI going into administration before the club itself subsequently again went back in administration.

Under the terms of the new CVA non-football creditors will be paid just 2p in the pound on monies owed whilst footballing creditors i.e. the players, agent’s et al will be due all monies owed to them by the club. However the deal is dependent on the club being able to remove the large earners off the clubs wage bill before anything is finalised and Pompey boss Michael Appleton heads into pre-season with just ten senior pro’s set to return to training and no goal keeper in place having released first choice GK Jamie Ashdown as well as Matt Gledhill and Daniel Nizic.

Once again those most affected by the actions of a few remain the fans and local businesses as well as the UK tax payer though unlike in the case of Rangers FC the fall of Portsmouth FC won’t have such a disastrous knock on effect to other clubs as it is about to north of the border.

The question remains what is being done to stop a possible meltdown of the highest order in English football. Whilst UEFA’s Financial Fair Play system will see attempts made to stop clubs living beyond their means and getting into debt, this will only affect the clubs playing in Europe each season and won’t stop the problem which has seen clubs like West Ham and Bolton build up levels of debt of over £100 million each. Wigan Athletic chairman Dave Whelan has called for a wage cap to be introduced and was joined this past week by West Ham Co-Owner David Sullivan who expressed his opinion that a cap should be introduced. The high levels of revenue being poured into the English Premier League haven’t seen debt levels decrease, but increase further as clubs wage bills continue to rise and money going out of the game in the form of fee’s being paid to agents. These levels of debt can only be sustained for so long as we have seen in the case of Portsmouth FC and it’s surely only a matter of time before we start to see some of the middle size clubs being caught out which will start to have a ripple effect through the leagues.

Sadly as always I fear it will be at the point of no return for some when things are finally ever changed.

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.