A Tale of Two Cities (19^th August to September 3^rd 2012)

To trot out the old cliché – A week in football is a long time. Never has there been a truer statement when it comes to the trials and tribulations of the remains of Portsmouth FC on and off the field. I’ve been somewhat pre-occupied with other projects of late since the last Tale of Two Cities blog published on August 18^th 2012 so I will try recapping all the latest going’s on both here and down the M27 as neighbours Southampton continue their season in the upper echelons of the English footballing world.

The opening two games of the NPower League One Season had seen Pompey record two straight draws at home to AFC Bournemouth and away to Colchester United whilst Southampton had seen a 2-1 lead slip away at the home of current Premier League Champions Manchester City to eventually lose the game 3-2. We pick up the tale as Pompey travelled away to Brunton Park to take on Carlisle United and Southampton hosted Wigan Athletic in their first home game of the season.

Carlisle United 4 Portsmouth 2

Pompey’s unbeaten start to the season came apart in spectacular fashion thanks in part to some kamikaze defending which saw them leave empty handed from Brunton Park on the wrong side of a 4-2 score line. Trailing 2-0 going into the 90^th minute with only ten men following the second half dismissal of Kevin Long, substitute Ashley Harris scored his first league goal for Pompey with a short range header before Michael Appleton saw his side concede for a third time in the game. Fellow substitute Conor Clifford (on loan from Chelsea) calmly slotted the ball home to make it 3-2 before Pompey again came unstuck at the back and the fourth injury time goal was registered.

Pompey: Andersen, Dumbuya, Harley, Long, Connolly, Webster (Obita), Walker, Howard, McLeod (Clifford), Rodgers (Harris), Compton. Subs Not Used: Eastwood

Southampton 0 Wigan Athletic 2

The game saw manager Nigel Adkins restore Rickie Lambert to the starting line up as Southampton looked to secure their first home win in the Premier League for seven seasons as they took on a Roberto Martinez side who had lost their opening game of the season to Chelsea and were without the influential Victor Moses who had been sold to Roberto Di Matteo’s men. Saints fans were surely expecting their side to begin their home campaign with all three points following their performance the week before which had stunned the Etihad faithful into silence having come from 1-0 down to take the lead.

A somewhat lifeless first half saw the sides go in at half time 0-0. The best chance fell to Lallana whose 25 yard drive was tipped onto the bar by Ali Al Habsi. Southampton started the brighter in the second half and Lambert went close with a header before Wigan opened the scoring a minute later through a Di Santo shot which beat Kelvin Davis from a tight angle. Chasing the game in the final minutes Southampton came undone when Fonte hesitated just in front of the half way line and was disposed by Kone who ran on with the ball and slotted past keeper Davis to make the final score 2-0.

Saints: K Davis, Clyne, Hooiveld, Fonte, Fox, Schneiderlin, S Davis (Ward-Prowse), Rodriguez (Sharp), Lallana, Guly, Lambert. Subs Not Used: Gazzaniga, Richardson, Shaw, Seaborne, Puncheon

Stevenage Borough 1 Southampton 4

The first ever meeting between the two sides took place in the Carling Cup second round as Adkin’s men finished comfortable victors in a 4-1 win which saw him change his complete starting line up from the side that lost 2-0 to Wigan at the weekend. Despite holding their Premiership visitors 0-0 at half time the League One outfit went 3-0 down to goals from Lee, Sharpe and Puncheon before substitute Thalassitis's 20-yard effort pulled one back for the home side. Reeve completed the scoring for the visitors to earn his side a place in Round Three against Dave Jones’ Sheffield Wednesday at home.

Saints: Gazzaniga, Richardson, Shaw, Seaborne, Butterfield, Hammond (Chambers), Ward-Prowse, Chaplow (Reeves), Puncheon, Sharp (Moore), Lee. Subs Not used: K Davis, Stephens, Hoskins, Sinclair.

Portsmouth 0 Oldham Athletic 1

A crowd of 12,635 saw Michael Appleton’s Pompey side slip to their second successive defeat in the space of a week and finish the game with ten men again as the young Reading loanee Jonathan Obita saw red in the second half along with Oldham’s Cliff Bryne for violent conduct. Pompey had started the game without the suspended Kevin Long who was serving a one match ban following his dismissal away to Carlisle United the previous weekend. A Jonathan Grounds shot was deflected past Andersen in the Pompey goal by debutant Ertl just before the hour mark for the only goal of the game. The result see’s Pompey drop into the relegation places for the first time this season laying fourth bottom in the league.

Pompey: Andersen, Harley, Connolly, Obita, Russell, Dumbuya, Walker (Harris), Howard, McLeod, Compton, Ertl (Rodgers). Subs Not Used: Eastwood, Webster, Clifford

Southampton 2 Manchester United 3

Nigel Adkins men found that there is no room for rest bite in the Premier League following their 4-1 mid week cup victory away to Stevenage Borough as they took on last season’s Premier League Runners Up Manchester United in Sir Alex Ferguson’s 1,000^th game in charge of the Red Devils. The Saints opened the scoring from who else but Rickie Lambert when he headed in from close range in the 16^th minute. United levelled the scoring through £24 million signing Robin Van Persie who scored his second goal in two games with a sublime volley which Davis could do little about from the left edge of the penalty area. Davis however would get the better of RVP as he turned the Dutchman’s spot kick around the post to keep the score at 1-1 before the Saints regained the lead through a Morgan Schneiderlin header.

Looking to protect his side’s lead in the closing third of the game Adkin’s took off Lallana and Lambert whilst Fergie brought on Scholes, Nani and Hernandez as his side pressed on looking for a share of the points. Van Persie made amends for his earlier penalty miss as he levelled the scores in the 87^th minute before claiming his 100^th Premier League goal and the match ball with his hat trick in injury time to condemn Nigel Adkin’s side to their third straight Premier League defeat leaving them bottom of the league with 0 points.

Saints: K Davis, Clyne, Hooiveld, Fonte, Fox, Schneiderlin, S Davis, Ward-Prowse, Lallana (Rodriguez), Puncheon (Mayuka), Lambert (Guly). Subs Not Used: Gazzaniga, Richardson, Seaborne, Lee.

Michael Appleton’s men face AFC Bournemouth at home in the First Round of the Johnstone’s Paint Trophy tonight before travelling away to Crawley Town in their next league fixture. Nigel Adkins men face another big test when they take on Arsene Wenger’s Arsenal side away at the Emirates who’ve so far haven’t conceded a league goal in their opening three games of the season and beat Brendan Rodger’s Liverpool 2-0 at Anfield in their last game.

Tales of the Two Cities – Off The Field

Pompey’s squad saw two new faces as Ex-Sheffield United midfielder Johnny Ertl and the ex-Norwich City player Darel Russell joined Appleton’s squad on one month deals alongside Josh Thompson who also signs having appeared for the club in pre-season. Kieran Djilali was let go by mutual consent and youngster Sam Magri signed for Premier League Queen’s Park Rangers having been told he wasn’t part of the club’s long term plans.

Mustapha Dumbuya has been named in the Sierra Leone squad for their Africa Cup of Nations game with Tunisia on Saturday September 8^th which means he will miss the away game with Crawley Town the following day.

Pompey administrator Trevor Birch has given both the Portsmouth Supporter’s Trust and Balram Chanrai’s Portpin a fortnight to finalise their bids for the club.

Southampton have brought in Zambia forward Emmanuel Mayua from Young Boys Berne on a five year deal; Japanese defender Maya Yoshida from Dutch side VVV-Venlo for a fee reportedly worth £2 million; American goal keeper Cody Cropper who had been training with the club having been released by Ipswich Town and the club record signing of Uruguayan international midfielder Gaston Ramirez from Bologna in a deal set to be worth in the region of £12 million. Dean Hammond has rejoined former club Brighton and Hove Albion and Billy Sharp has signed for Nottingham Forest both on season long loans.

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.

Who do you think you are kidding Aston Villa if you think financial results are good?

February 2012 and not for the first time Portsmouth FC find themselves in administration and not for the first time in their well documented recent troubled past. The only difference this time is they are joined by some more illustrious counterparts north of the border in the shape of Glasgow giants Rangers. I’ve been saying it for some time now that the football bubble is going to burst, that the current levels of spending cannot be maintained. The worrying sign is that no one really seems to be heeding the warning signs and clubs are like the blind following the blind with only a few showing any signs of financial negligence if any at all. At a time where income into the English Premier League is at an all time high, how is it that only Wolverhampton Wanderers and Arsenal have anything coming close to a business model that seems sustainable over the long term?

An equally worrying sign is that despite being in poor financial health, some clubs genuinely don’t see it as a problem. Take for example Aston Villa who today posted annual losses of £53.9 million. Their bosses insist they are satisfied with the club’s financial position. Whilst that figure doesn’t include the money raised from the sales of Ashley Young and Stewart Downing it does come at a time where Villa’s income had actually increased by 1.3% to a record £92 million. So not taking into account the sums received for the two players, the operating costs for the financial year would stand at £145.9 million. No offence to the staff and followers of Aston Villa, but you would from a neutral point of view state the opinion that this is a club looking to secure mid table security at best, certainly aiming to avoid a relegation dog fight and certainly not a side that look capable of kicking on and securing a European birth anytime soon under the new stewardship of Alex McLeish. Remember Martin O’Neill walked away from the manager’s job over the issue of finance and if huge strides are not made soon to curb their spending then that figure of debt will be maintained and surely cannot be sustained when income levels are at a record high already.

What makes interesting reading are the comments of Chief financial officer Robin Russell who was quoted as saying; "Given the challenging economic environment we're pleased with positive trends in our financial performance." 

“The board of Aston Villa are confident that the actions taken since the end of the 2010-11 financial year have galvanised the long-term sustainability of the club.”

Reading that from a neutral’s perspective reminds me of the comments made by the ex-CEO at Portsmouth Peter Storrie who was stunned when the contracts he had drawn up for the players signed during his tenure had resulted  in the club having to pay out millions in bonuses when they won the FA Cup. He seemed genuinely bemused that a squad of highly paid internationals was capable of bringing silver wear to the club. I mean what were the chances of that? Sadly it seems there wasn’t the slightest glimmer or an inclining that this could possible happen. Some of the contracts contain such wonderful creative pieces of writing that even JK Rowling is jealous and even now the impact of such contracts is felt when you realise that despite having the smallest playing squad in the league they have one of the largest wage bills in the Championship. I’d be genuinely surprised if at least a few players didn’t receive huge bonuses for winning the Asia Cup but then again nothing would surprise me anymore after Peter Storrie received win bonuses alongside the players. I do however wonder if he’s got any goals in him because let’s face it we need someone to get on the score sheet with Kitson again firing blanks; perhaps it stems from the fact his hair if the colour akin to a jaffa?

Villa’s overall loss of £53.9 million for the year up to the 31^st of May 2011 represents a 46.87% increase from £37.6 million, a rise of £16.3 million. Whilst Villa’s commercial income had increased by 15.9% year on year, the club had been impacted heavily by the change in management which cost the club £12 million and the record purchase of striker Darren Bent. No one remind the Villa fans how long he will be out injured for after being stretchered off over the weekend.

So in two years the club has managed to post a total loss of £90.6 million. Whilst I’m sure there will be no marquee signings during the summer for Aston Villa, the club really will have its work cut out as it attempts to start to begin to get its finances under control and work towards a brighter financial footing whatever the Chief Financial Officer has to say on the matter.

However it’s not all doom and gloom in the Premier League when Arsenal  reported a rise in profits to £49.5 million yesterday following on from Sunday’s on the pitch 5-2 demolition of North London rivals Tottenham.  The profit for the six months to the end of November, compares with a loss during the same period in 2010 of £6.1 million.

Player trading, including the sales of Samir Nasri and Cesc Fabregas had helped bring in some £41.6 million and the figures saw Arsenal’s cash reserves rise to £115.2 million up from £110.4 million. Turnover from football also rose to £113.5 million from £97.6 million. Whilst supporters call for investment after a period of seven success seasons without winning a trophy in any major competition, unlike some Premier League rivals, the club is keen to point out that despite a healthy balance sheet, that not all the money is available for spending on new players; a prudent and strong financial decision even if it doesn’t help appease some of the fans in my opinion.

During the week I was posed the question by ex-Pompey player and manager turned BBC pundit Steve Claridge whether I would swap Porstmouth’s FA Cup win for financial security? My answer in a heartbeat was yes. I’m sure the large percentage of diehard fans would probably agree with me on the matter as well. So whilst I’m sure it’s hard as an Arsenal fan to want to see common sense prevailing when you’ve gone so long without winning a trophy, from our fans point of view we would largely swap in an instant to now be watching a talented young side playing attractive football with a strong financial position behind us then we would at being able to look back at one trophy win that was the pinnacle of what in reality has lead to an absolute disaster and warzone landing on our front door step for the footballing world to shake it’s head in disgust at, not just once but twice.

As a footballing fan the noises coming from inside Arsenal are refreshing and positive and other clubs should start to take note of what is being said. "It's important to understand that not all that money's available to invest in transfers," Chief Executive Ivan Gazidis was quoted as saying before adding; "We have running costs of the club, player salaries and so on, so that amount goes down during the year. We also have to keep something in reserve in case things don't go our way."

"We are proud of Arsenal's record and consistency over many seasons and have the foundations in place, at every level of the club, to ensure we remain a force in the seasons ahead," said chairman Peter Hill-Wood.

I’m sorry Mr Russell at Aston Villa, if I was a fan or either yourselves or Arsenal I know whose trust I would rather be putting my faith in over the past two days when it comes to talking about being happy with financial positions having announced two very differing sets of results. As a Pompey fan all I can do at my own club, like every other one of our great fans fan is to sit and hope and pray that we manage to survive until the end of the season at the very least and avoid relegation. Attempting to sustain Premiership costs on Championship income is one thing, trying to do the same if relegated doesn’t bare thinking about.

Who do you think you’re kidding Mr Wenger if you think that Sky will run?

Arsenal manager Arsene Wenger, never a man to stray away from controversy re-entered the arena with his claims that football has “sold its soul’ to television companies and said Premier League bosses must intervene to ensure fixture scheduling was fair to clubs. However he does accept the importance of the money that TV rights bring into the game. Does Mr Wenger have a point or should he be grateful when considering the reliance that many English clubs have on the income received from TV rights and broadcasting deals?

Mr Wenger’s claims of unfairness stem around the fact that all five of Arsenal’s games in January have been moved for the television cameras. I’m sure he has a point but the bigger picture remains that for many clubs in the league without the money brought into the game from TV broadcasting rights they’d be facing the wall. Arsenal luckily for Mr Wenger remains one of the best run clubs on a financial basis anywhere in the world. Only Bayern Munich can realistically be in with a shout of being able to claim they are run on a better basis.

In 2010 Arsenal’s turnover was £382 million of which over one fifth was derived from TV and Broadcasting monies received to the tune of £85 million. Arsenal finished with a pre-tax profit of £56 million. Arsenal’s debt stood at £136 million most of which was occurred after the building of The Emirates which had helped to bring in more revenue than TV standing at an impressive £94 million. The interest due on the debt annually stands at £19 million. With turnover up £66 million on the previous season and a sensible transfer policy, Arsenal are well on course to reverse their debt in the next few seasons. Interestingly the owners at Arsenal didn’t put a single penny into the club for that financial year. Compare that with Aston Villa for example where £206 million was pumped into the club; £116 million in cash and £90 million in loan notes or at Blackburn Rovers where £104 million was put in made up of £100 million in capital and £4 million in interest free loans. Of Aston Villa’s £91 million turnover 57.14% was from TV money. Blackburn’s total of £58 million was even more reliant with 74.14% of the total coming from TV money. So Arsenal in theory can afford to be able to moan a bit louder than most clubs but you cannot escape the fact that football income from TV if offset against wages would have allowed Arsenal to pay off 77.27% of their final wage bill which stood at £110 million.

Whilst Mr Wenger bemoans his fixtures being re-arranged for the sake of television, over in La Liga television plays an even bigger part in the gulf between the clubs in the Spanish top flight. Arsenal may have finished 22 points behind eventual League winners Manchester United last season they finished 29 points above Birmingham City who were relegated to the Championship having finished 3^rd bottom. Contrast this with La Liga and Villarreal who finished 4^th the same position as Arsenal in the Premier League. Villarreal’s point haul of 62 points was 34 points behind the total of League Winners Barcelona who finished the season with 96 points. Second placed Real Madrid finished the season on 92 points, 12 more than the English Champions Manchester United. Barcelona’s goal difference was a staggering +74, Real Madrid’s +69. In comparison Manchester United’s were +41 and Chelsea’s +36.

The most astonishing fact for Villarreal was that they finished closer to the 3^rd relegated team Deportivo than they did to the eventual winners Barcelona, separated by just 19 points. Villarreal were even closer to Almeria who finished bottom on 30 points than they were to catching Barcelona at the top.

Television revenue in La Liga has created the wide gulf. Clubs in La Liga are able to negotiate individual deals with TV companies and ultimately it’s made La Liga into two leagues. One between the top two of Barca and Real and a separate league between the remaining 18 competing clubs. This occurrence isn’t however just a Spanish problem, just look north of the border where the Scottish Premier League is dominated by the two Glasgow giants Rangers and Celtic. Last season’s champions Rangers finished with 93 points one ahead of their closest rivals. Third placed Hearts finished the season on 63 points, 30 off Rangers or to look at it another way a full ten wins behind just to have drawn level on points. Equally as impressive as the top two sides in La Liga Rangers finished with a goal difference of +59 and Celtic +63. Although Scottish football doesn’t have the same levels of income from TV that English football has and certainly not of La Liga’s top two with their own deals, the revenue generated on the turnstiles and from European competition year in year out has created its own two tier league structure in Scotland to mirror that of Spain. In England you can claim that on their day any club is capable of beating any other where as in Spain and Scotland such a claim wouldn’t hold as much weight even if you do get the occasional shock defeat in both leagues from time to time.

It’s estimated that combined Barcelona and Real Madrid receive 125 million Euro’s per season from TV deals. That figure is just on the domestic market and doesn’t include income from the Champions League deals. That figure in context to the Premier League is three times the money that Champions Manchester United got from TV income. Villarreal received 42 million Euro’s from their TV deal. Some of the smallest clubs in the league had deals worth only in the region of 15 million Euro’s. It’s not hard to work out how the Spanish League ended up with their players going on strike when 50 million Euro’s went unpaid from the end of last season. Under a new proposed shared domestic TV rights deal in La Liga, Barca and Real are still set to receive a combined 35% of the revenues coming in with the rest being shared between the remaining 16 clubs.

So unlike in England with Mr Wenger’s comments, you’re unlikely to hear the same murmurings coming from Spanish clubs as you do here. The real issue for them is the complete imbalance of TV money instead which presents such a wide gulf in their league. I’m sure given the opportunity to be able to receive the same amount of money as Arsenal do every season from TV income, the remaining sixteen clubs would quite happily play at 2am on a Thursday morning every week to be given the same.

The bottom line and the crux of the matter is football and TV now walks hand in hand. Since Sky entered the game back in the nineties the two parties would not be able to exist without each other anymore. Why did Sky TV pay an astonishing £1.782 billion for the rights to screen 115 games a season between 2010 and 2015? Because they make their money back and some.

Arsenal have the right as I mentioned to moan when they can boast gate receipts higher than the money they receive from TV deals and can feel rightly aggrieved to have had to change all five fixtures in a month to suit TV. However the coverage they receive will be worldwide. They will be watched by fans all over the world who will watch the likes of Robin Van Persie which will translate in shirt sales for example resulting in a higher income for the team. The wider the audience the more they will be able to claim from sponsors. If you can say to a sponsor that your advert will be shown in five consecutive games on TV in one month, in puts you in a much stronger position than a side like QPR for example who are reliant on the money of new owner Tony Fernandes to pay the reported wages of Joey Barton who is said to be on £80,000 per week when their ground Loftus Road has a capacity of just 18,360 and wouldn’t generate the required amount to pay the total wage bill every season.

So in conclusion whilst Mr Wenger might be bemoaning the rescheduling of the fixtures I’m sure the Arsenal board and commercial department aren’t singing from the same hymn sheet. Perhaps he should spare a thought for the teams outside of the top two in the Scottish and Spanish Premier Leagues as they search for a more level playing field. Football is a business first and foremost now. You cannot escape that fact. If you get into bed with Rupert Murdoch sadly you have to pay the price. So instead of moaning I’m afraid you’re just going to have to accept that football is no longer what is used to be, namely a sport. What happens on the pitch for 90 minutes is now simply a by product or an afterthought if you will.