Slipperduke
The Camden Cad
Imagine the padlocks clinking shut around the Shankly Gates, or the bailiffs moving in at Old Trafford. Imagine half the Premier League collapsing into administration and tumbling down into the lower leagues. According to reports this weekend, it's not as surreal a scenario as you might think.
A perfect storm of crashing markets, chronic mismanagement and growing apathy is threatening to tear the game to pieces. Liverpool must pay off or refinance a loan in excess of SG$1bn next year, and borrowed money doesn't come cheap these days. Manchester United fans can't afford to be complacent, their club is perched on debts of SG$1.8bn, with interest repayments coming in at just under the market value of one Cristiano Ronaldo every year.
West Ham and Newcastle are even more precarious. Scott Duxbury's reign as CEO has coincided with the arrival of a host of highly-paid, poorly performing players, most notably Freddie Ljungberg, whose ludicrously over-valued contract was paid off this summer for the same price as a decent striker. Meanwhile, Rick Parry, the man charged with hawking Newcastle around the world, is admitting that they may actually be unsellable.
Debt is the gunpowder in the basement of English football, piled up and waiting for a spark. Lord Triesman, the head of the Football Association has estimated that English clubs could be as much as SG$9bn into the red.
"If somebody had said to me, 'Did I have a genuine fear that Lehman Brothers would go bust?' I'd say, 'No I didn't,"' Triesman said. "What I know is we are in a very much more volatile position in which debt is not only a problem in terms of its volume, it's a problem because those who own the debt are themselves now often in serious problems."
It's not a view that has been met with much sympathy from our old friend at the Premier League, Richard Scudamore, who countered Triesman's claims with that long-trusted weapon of the ideologically besieged; rambling lunacy.
"Debt is inevitable," he claimed last week. "Debt to a degree is healthy.You'll end up with a situation where no one is allowed to go on holiday to France with a mortgage." Erm...yeah...
In Scudamore's defence though, everything will be fine as long as the Premier League maintains its popularity. Sadly, that doesn't seem to be the case. Though the big four are still selling out every weekend, outside of the elite, at clubs like Bolton, Wigan and Blackburn, it's a rather different story and empty seats make for bad television.
Speaking of which, according to the Association of Licensed Multiple Retailers, the rising cost of TV subscriptions has seen a fifth of English pubs switching off their football coverage in the past five years. The loss has been attributed to unrealistic pricing which, combined with the inevitable drop-off in private subscriptions as British families battle their own financial demons, will force broadcasters to revise the value of the coverage. This will cut the revenue to the clubs and, hey presto, there's that spark that we spoke about earlier. Indebted clubs will see their income shrink, while those repayments continue to bite and they can't sell their assets because, as the Football League found out in the wake of the ONdigital crash, who are you going to sell those high-earning players to when no-one's got the money to afford them?
Scudamore's grip on reality has always been tenuous at best, but if the rest of the league don't wake up to the severity of the gathering storm, the repercussions could be catastrophic. Football is not immune to the credit crunch and those in charge should as be nervous about last week's events as the rest of us.
A perfect storm of crashing markets, chronic mismanagement and growing apathy is threatening to tear the game to pieces. Liverpool must pay off or refinance a loan in excess of SG$1bn next year, and borrowed money doesn't come cheap these days. Manchester United fans can't afford to be complacent, their club is perched on debts of SG$1.8bn, with interest repayments coming in at just under the market value of one Cristiano Ronaldo every year.
West Ham and Newcastle are even more precarious. Scott Duxbury's reign as CEO has coincided with the arrival of a host of highly-paid, poorly performing players, most notably Freddie Ljungberg, whose ludicrously over-valued contract was paid off this summer for the same price as a decent striker. Meanwhile, Rick Parry, the man charged with hawking Newcastle around the world, is admitting that they may actually be unsellable.
Debt is the gunpowder in the basement of English football, piled up and waiting for a spark. Lord Triesman, the head of the Football Association has estimated that English clubs could be as much as SG$9bn into the red.
"If somebody had said to me, 'Did I have a genuine fear that Lehman Brothers would go bust?' I'd say, 'No I didn't,"' Triesman said. "What I know is we are in a very much more volatile position in which debt is not only a problem in terms of its volume, it's a problem because those who own the debt are themselves now often in serious problems."
It's not a view that has been met with much sympathy from our old friend at the Premier League, Richard Scudamore, who countered Triesman's claims with that long-trusted weapon of the ideologically besieged; rambling lunacy.
"Debt is inevitable," he claimed last week. "Debt to a degree is healthy.You'll end up with a situation where no one is allowed to go on holiday to France with a mortgage." Erm...yeah...
In Scudamore's defence though, everything will be fine as long as the Premier League maintains its popularity. Sadly, that doesn't seem to be the case. Though the big four are still selling out every weekend, outside of the elite, at clubs like Bolton, Wigan and Blackburn, it's a rather different story and empty seats make for bad television.
Speaking of which, according to the Association of Licensed Multiple Retailers, the rising cost of TV subscriptions has seen a fifth of English pubs switching off their football coverage in the past five years. The loss has been attributed to unrealistic pricing which, combined with the inevitable drop-off in private subscriptions as British families battle their own financial demons, will force broadcasters to revise the value of the coverage. This will cut the revenue to the clubs and, hey presto, there's that spark that we spoke about earlier. Indebted clubs will see their income shrink, while those repayments continue to bite and they can't sell their assets because, as the Football League found out in the wake of the ONdigital crash, who are you going to sell those high-earning players to when no-one's got the money to afford them?
Scudamore's grip on reality has always been tenuous at best, but if the rest of the league don't wake up to the severity of the gathering storm, the repercussions could be catastrophic. Football is not immune to the credit crunch and those in charge should as be nervous about last week's events as the rest of us.
