| Professional football in this country has always been based on precarious funding. But the changes of the past decade have put even the largest of clubs only a poor season away from penury — and the asset-strippers... |
Capital casts its shadow over British football
WORKERS, MAY 2005 ISSUE
Turn on the television and, if you have satellite or cable access, you can guarantee that football will be available somewhere. Pick up any daily paper in Britain and four or five pages of print will be devoted to the professional game here or abroad.
Football in England is big business, even if it isn't the biggest participatory sport — angling has more adherents — it attracts more spectators by far than any other professional sport in the country.
With new grounds all over England, big transfer fees and massive merchandising, one could be forgiven for thinking that the national game is in good health. The reality of football's finances shows a much more fragile picture.
Old Trafford: a home for fans, or just another asset ready for stripping?
Precarious
Professional football in this country has always been based on precarious funding but the changes of the past decade have put even the largest of clubs only a poor season away from penury.
The current three West Yorkshire league clubs — Bradford City, Huddersfield Town and Leeds United — have all come close to extinction in the past four years with the first two having been placed in administration. Supporters have had to organise fund-raising events. Players have had to be sold and creditors fobbed off with much-diminished payments for services. And, inevitably, with the sale of assets has come relegation. Of course, the relegation has always been blamed for the sale, but in truth the asset stripping has always started before the loss of status.
Leeds have had to sell their star players so that the team which reached the European Champions League semi-finals has been dispersed and the ground sold and leased back, with the state-of-the art training complex and youth academy facilities sold off.
When neighbours Bradford City went into administration, supporters were astonished to discover that the club did not own the ground, nor the players' contracts, nor the turnstiles or floodlights, gates, doors or carpeting!
Before Chelsea were transformed by Russian roubles of dubious origin, they owed even more than Leeds, some £110 million. Then Chairman Ken Bates is reputed to have received around £17 million for his share of the sale to Abramovich. He now chairs Leeds United, but not before the former chairman of Bradford City had re-emerged with his former fellow director and son as a putative saviour of Leeds.
The carousel
Peter Ridsdale, who had overseen Leeds's rise and fall, popped up at Barnsley when they came close to the brink. He has now moved on to assist Cardiff City in their looming fight against bankruptcy. The carousel goes round and round with the usual suspects bobbing in and out as clubs become vulnerable to the stripping of their assets. There are plenty of potential victims out there.
Of the existing Premiership clubs, only a handful trade at a profit. Collectively, the top twenty clubs in England owe £800 million. Most borrow against the value of their grounds and the potential transfer fees associated with their players, but it is a precarious, hand-to-mouth existence.
Football needed re-capitalisation after it had reached its nadir in the 1980s with the Bradford City fire that killed over 55 people, the Heysel Stadium and Hillsborough tragedies and the fatal Birmingham/Leeds riot.
The rebuilding of death-trap stadia was essential but that needed an injection of capital. And SKY TV needed a mechanism whereby it could quickly develop a captive audience for its thin portfolio of programming. The banks agreed and the exclusive live rights were sold to satellite TV — and football became an industry into which "outsiders" with no previous interest could buy.
Does it matter for the workers who are wedded to this form of entertainment?
Manchester United's fans (and those of the other clubs referred to above) seem to think so. Their club, loved and loathed in equal measure, is the most widely supported and successful club in world. Its sales and support base outstrips those of even Real Madrid and Juventus, and yet it now finds itself vulnerable to takeover by an American financier.
Malcolm Glazer has been given "due diligence" — access to the books of the club's finances. The owner of Tampa Bay Buccaneers American football club, Glazer owns a number of companies in the US, one at least of which is the subject of a federal enquiry.
He does not have enough to buy control of the club even with the support of a banking consortium, but he can "leverage" the money out of the club once it is totally in his hands by borrowing against its current assets and future success. Man United will be instantly transformed into a debtor club in the same fashion as so many others.
Fans
The real cost will fall on the fans' pockets with increased admission prices, merchandise costs and subscriptions to MUTV. It may also come in another form. American sports clubs stay in business because they are franchises. There is no promotion and relegation, no prospect of moving up and down the leagues, because they don't exist in the same way as in Britain and Europe. How long before that becomes the norm here as the big clubs try to protect their position?
The Scottish Premier League already places minimum ground conditions on clubs winning promotion. Now the big clubs in Europe want preferential treatment to ensure that there is minimal likelihood of them being knocked out before the lucrative later stages of the Champions League.
The Premier League in England, now it is a separate body from the rest of English football, is only kept in check by the Football Association and by over a hundred years of tradition. Give it the chance, and it will make minimum ground size or some similar condition a prerequisite of entry. And, given the increasing tendency for England's top clubs to be sold to foreign buyers, we can't rely on tradition — that will count for nought when debts of £800 million have to be met.
