By Aaran Dehal
“You get people turning up with banker’s guarantees who are interested in football and then they lose interest in the clubs and leave. What happens to the clubs then?” – FIFA President Sepp Blatter
Don’t worry, it’s not a typo. Sepp Blatter really did say that. Who would have thought it eh, Sepp Blatter capable of some compassion and sense.
But for once the FIFA President does raise an interesting point. What does happen to those clubs?
Well fans of Leeds United, Portsmouth, Queens Park Rangers and Luton Town, to name but a few, are fully aware of the repercussions that befall these clubs.
Yet foreign owners seem to be blamed for any financial disaster that strikes these clubs, as well as being apportioned blame for the general state of football.
“They’re ruining the game with all this money”, “They have no real feelings for our club, we’re just a new toy to them” and “They’ll be gone as soon as they are bored”. These are just some of the things you hear along the terraces at games and in pubs up and down the country.
So are foreign owners really to blame? Are foreign owners the reason behind the state of football now?
Well in truth; no. We cannot blame all of this on just bad foreign owners. Of course where they are culpable, then by all means give them the stick they deserve but to generalise and say that all foreign owners are bad is plain wrong. Some of you may ask why?
Now before you fly off the handle and list the numerous bad foreign owners (and I believe that there would be a few) just take a second to hear me out.
For the number of bad foreign owners there have been, there have been countless bad British owners. For every Malcolm Glazer, there is a Mike Ashley, for every Sacha Gaydamak, you have a Peter Ridsdale and for every George Gillet and Tom Hicks there is a Jon Gurney.
The issue I have, that we should all have, with these owners, British or foreign, is what their intentions are for our clubs. Are they in it for the long haul? Are they willing to spend money responsibly in the areas where its need without risking the clubs finances in the long-term? Or are they just going to splash the cash, saddle the club with enormous debt and then scarper off without any remorse and repercussion and leave our clubs in serious trouble.
Because if they are about the latter then my issue, and yours, should be with them. Not with stereotyping foreign owners.
Bad club owners have been ruining the game and our clubs for years. They see all the money being bandied about in football and think “Yeh, I want a piece of that action too”, whilst not understanding a dam thing about what it takes to run a successful football club.
They come in, spend god knows how much to purchase a club then spend ridiculous amounts of money trying to compete instantly with the likes of Arsenal, Chelsea and Manchester United. That can’t happen, not instantly anyway; it’s not a sustainable or smart way to run a club. And once they realise they can’t compete and they see the debt that they’ve amounted through players wages, transfer fees and manager compensation pay offs; they get cold feet and bail out. Who suffers then? You guessed it, the fans.
We have to watch as our star players are being sold off at knock down prices; we have to watch as administrators come knocking on our club doors, threatening the very existence, history and tradition of our beloved clubs.
An example of this would be the case of Leeds United and Peter Ridsdale. Ridsdale was a boy-hood Leeds United fan that had forged a successful business career prior to him taking over at Leeds. Of course Leeds fans were excited at the prospect of, essentially, one of their “own” taking charge.
To be fair to Ridsdale during the first four years of his reign, Leeds reached UEFA Cup semi-final in 1999-2000 and then the UEFA Champions League semi-final in 2000-2001 while building a highly talented side.
Ridsdale enjoyed a good relationship with fans, always willing to talk to them and listening to what they had to say and on the fact of it, everything seemed fine. Yet once the truth behind the clubs financial situation began to unravel, it all changed.
He had gambled the club’s future to, as he says, “live the dream”.
The club failed to achieve “the dream” and were now in dire straights. Players, some very average, were bought for large sums of money and given equally large wages, which the club could no longer sustain. Star players were sold for knock down prices, but it wasn’t enough to save the club from relegation and the club eventually found themselves in League One. He left the club in debt to the tune of £79 million, which included expenses on quite remarkable things such as, £20 a month to look after the goldfish in his office and £600,000 a year on 70 company cars.
Why the hell would a club, whose staff would have been on considerable wages, need company cars, let alone 70 of them?! Don’t even get me started on the goldfish scenario.
For a man to use the phrase “live the dream” to justify that type of financial profligacy is nothing short of a disgrace.
While he went on to earn hundreds of thousands of pounds at other clubs, notably Cardiff where he was also caught lying to fans and plunging the club into deeper financial crisis, the fans of Leeds United are only just starting to see their club piece itself together.
Yet Ridsdale is not the only one. There’s Roman Abramovich who, despite his club being in quite a bit of debt, feels the need to splash out £50 million on Fernando Torres and £26.5 million on David Luiz to attempt to get his side back in the title chase.
I know a lot of you will be saying he’s doing his job as owner, which is right. It’s his money and it’s his right, as the owner, to spend the amount he does, but let me ask you this; is it right for a club already in debt to spend that sort of money, with the players signed surely on an average wage of £60,000 a week at the very least?
I know some people out there will say Chelsea is debt free and that Abramovich has written off what he is owed, but this isn’t quite the case. Whilst effectively the club is “debt-free”, Abramovich has the right to call in the £726m that is owed to him. He can do so at once and if the club are making a profit, he can decide to sell the club or give 18 months notice to call the debt in.
So how happy are you, Chelsea fans, to see your club spending that sort of money, knowing the debt could get called in at any stage? Where would that leave you then?
This is the sort of reckless spending that leaves clubs in trouble. Its fine “living the dream” for these owners as they probably don’t see their long-term future with the club. But for the fans, you guys, it is a lifetime commitment. Do you really want to see your club “live the dream” for a couple of seasons but ultimately end up like Leeds or Portsmouth?
Yet some people don’t see it this way. Some people believe owners pouring money into clubs and the Premier League makes it a better place to be. Stefan Szymanski, a Professor of Economics and Director of Sports Business Network Research Centre at the Case Business School at the City University London, is one of those.
“There are two ways to look at it. The more people putting money in is surely a positive thing, it proves how popular and attractive our league is but of course with that there is also the risk of the competition becoming imbalanced and just a competition between those rich clubs.
“The amount of money people are investing in the game should definitely be considered a good thing, but people should remember that football is very small part, small business, in comparison to society.”
With the recent spending in the January transfer window reaching a whopping £225m (a new record), many within the game are wondering how long this sort of spending can be sustained for.
“This sort of spending has been happening for the last 50 years, there is nothing to suggest that this sort of spending cannot go on. I’ll turn the question around; why can’t it go on? Why shouldn’t this spending stop?
“It just goes to show how popular the English Premier League still is.
“But now a lot of flack seems to be directed at the owners, because of the amount they spend but there are a lot of things that have to be considered.
“For one, if it is the owners own money then why shouldn’t they be allowed to spend what they want?”
Szymanski doesn’t buy into the premise that owners simply buy a club because they need a new “toy” to use because they’re bored.
“Listen, owners come and go. It has been happening for years but due to the circumstances and situations some clubs have landed themselves in (i.e. Portsmouth), people feel the need to point the blame squarely on the owner, which I suppose is fair enough and some cases deserved.
“But as I said, they’re many things that need to be considered. It is so easy these days to turn chairmen and owners into pantomime villains.”
I suppose Mr Szymanski has a few good points but I still feel that it’s fundamentally wrong for clubs to go on these reckless spending sprees and risk the clubs future. I mean would you be happy for your club to be spending £58million on a new strike pairing when your club is still in severe debt and you’re paying through the nose for a ticket, programme and replica shirt?
I know I don’t. I want my club to be financially stable, operate at a profit, and buy the right players for the right price without risking the clubs future. It can be done. Look at Arsenal.
They’ve had the right business model for years and have still managed to challenge for major honours. Ok, they haven’t won anything for a while but that is more down to the manager not strengthening in the right departments. The money is there for him to do so.
It shows that clubs can challenge the likes of Chelsea and Manchester United without risking their future, by investing wisely over a period of time. Success is not instant; you have to build a club up the right way. The same way Manchester United did, the way Arsenal has done. These are the business models to follow, not these owners who throw money at a club until they’re bored and then disappear to find a new toy to play with, leaving football clubs behind in total financial ruin.
This is the way clubs should be run, based on sound financial principles and the right spending when and where it is needed.
Then maybe football can return to some form of normality and sense and then fans will only have to worry about their teams’ result on a Saturday afternoon again.
