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[Archived] Credit Crunch To Hit Football?


Hughesy

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Thought it was time for its own thread.

Looks like West Ham are the 1st club in real danger following the credit crunch. Their owners bank has been put into receivership.

West Ham in trouble?

Add to that their debts, and also a big court settlement for Sheff Utd. It could get very interesting. :P

Then their is Pompey who's owner has also been hit by his dad losing alot of his personal wealth.

And as we know, many clubs are in big, big debts that need restructuring but may struggle - i.e. United & Liverpool.

Glad im a rover! :D

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We've got an echo...

It's going to be an interesting season one way or another. Would the Premier League allow one of their clubs to go under? I do wonder what contingency plans are in place if a club like West Ham end up in receivership. Will the FA's points deduction for a club going into receivership be applied to a club like West Ham?

On another note, does anybody have a clue what debt is like for other European clubs? It'd be interesting to find out if other leagues have the same worries.

I echo the 'Glad I'm a Rover' sentiment.

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Guardian report

The Chairman of the FA talks about toxic debt and English clubs being £3bn in debt.

He adds that the top 4 owe £950m which makes me think his numbers are both out of date and exclude Chelsea's debt to Abramovich. The balance sheet debt of the top 4 is now probably £2bn between them.

The fact that Blatter has talked about ownership then Triesman has talked about debt 24 hours later makes me think there might even be an attempt to do something- unlikely but wsho knows?

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Thought it was time for its own thread.

Looks like West Ham are the 1st club in real danger following the credit crunch. Their owners bank has been put into receivership.

Also the collapsed £8million sponsorship deal with XL Airways will probably affect West Hams cash flow more directly and immediately. As an extra ouch... it has also emerged that Bjorgolfur Gudmundson, West Ham's owner, was a member of a group of investors which took over a loan of £165m given to XL in order to finance a buyout in 2006. The loan is unlikely to be repaid.

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I sat watching the Rovers United match on TV with all United mates on Saturday.

Just before the kick off the commentator made a comment regarding Blackburn not being one of the most affluent areas of the country.I hardly heard the comment and did'nt want to dig deeper at the time as all the United mates ??? were falling about laughing :lol: .Two from Rochdale one from Goole I might add.

What was the comment anyone?

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How will all the banking collapses and problems in US banks like Morgan Stanley affect Man Utd? Didn't the Glazers' use a hedge fund to buy Man Utd, taken out loans to buy the club, and put those loans on Utd's books? I guess Liverpool will also be feeling the squeeze as their Americans took out loans too. A couple of dodgy CL seasons, and these two will be in trouble surely.

Whilst things have stabilised today, it'll only take another major bank to follow the Icelandic banks, and then things will be in a flap again. Makes you happy Dan Williams was not successful, and we're not part of this take over fever. Only Chelsea, Villa and Man City are safe, as Villa's owner has been sensible and not got a lumbering debt, and the other two are owned by super-rich people who can 'lend' as much money as they like. The only danger is that the owner gets bored and leaves in a hurry.

If I was a Sky/BBC/ITV/Setanta executive, I'd be offering a far lower price for Premiership games next time round. Interest from fans is generally waning, the credit crunch will kick some teams in the knackers, and they are too relient on TV money. Sky and the BBC hold the key to this strategy, as they probably have the most money, whereas only 120 people have Setanta, and ITV are slashing budgets and are seeking more cheapo 'board games from hell' type shows.

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Scudamore has no option but to say its all manageable- I doubt the West Ham board feels that way. The Deputy Chairman has just had to tell Zola that the promised funds for transfers next January no longer exist.

For what its worth my guess is that West Ham will have to try to find a buyer and won't- their existance is probably now hanging on the size of damages in the Sheff U case.

Liverpool are looking to be heading to heaps of trouble when they are due to repay RBoS £250m in January. I would imagine DIC would step in and Hicks/Gillett will take a loss personally if, as seems likely, they are forced to sell LFC with debt for £1.

The credit crunch uncertainty means that unless there is a particularly headstrong buyer or a bargain snip of a sale price, the current efforts to sell Pompey, Everton and Spurs will all fail because of the property dimension of all three clubs and Ashley will only sell Newcastle at or near a loss, if at all.

Man U's debts which were £855m in summer 2006 must be closing in on £1bn now. This has the capacity to go very nasty if the lack of liquidity in the money market continues- my guess is the debt is now too large for even Man U to carry in current circumstances. I'd say with some confidence that the bit of money the Glazers personally put in is irretrievably lost and the Glazers will lose control in the spring of 2010, if not before.

Setanta will not be an independent company 12 months from now. Disney the likely buyers of the wreck.

Prices for buying domestic media rights in the next TV contract round will be down 25% at least but the drop in income to clubs will be offset by more foreign tv deals.

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Scudamore has no option but to say its all manageable- I doubt the West Ham board feels that way. The Deputy Chairman has just had to tell Zola that the promised funds for transfers next January no longer exist.

For what its worth my guess is that West Ham will have to try to find a buyer and won't- their existance is probably now hanging on the size of damages in the Sheff U case.

Liverpool are looking to be heading to heaps of trouble when they are due to repay RBoS £250m in January. I would imagine DIC would step in and Hicks/Gillett will take a loss personally if, as seems likely, they are forced to sell LFC with debt for £1.

The credit crunch uncertainty means that unless there is a particularly headstrong buyer or a bargain snip of a sale price, the current efforts to sell Pompey, Everton and Spurs will all fail because of the property dimension of all three clubs and Ashley will only sell Newcastle at or near a loss, if at all.

Man U's debts which were £855m in summer 2006 must be closing in on £1bn now. This has the capacity to go very nasty if the lack of liquidity in the money market continues- my guess is the debt is now too large for even Man U to carry in current circumstances. I'd say with some confidence that the bit of money the Glazers personally put in is irretrievably lost and the Glazers will lose control in the spring of 2010, if not before.

Setanta will not be an independent company 12 months from now. Disney the likely buyers of the wreck.

Prices for buying domestic media rights in the next TV contract round will be down 25% at least but the drop in income to clubs will be offset by more foreign tv deals.

Looking on the bright side, high pressure is expected from the west and there will be some sunshine on Thursday and Friday.

And Blackburn Rovers remain as safe as houses. Well - houses that weren't built by Dan Williams, or funded by British, US or Icelandic banks.

Thank God Rovers didn't twist when so many fans wanted new money, no matter where the money came from. We're in a great place with guaranteed cash injections from the Walker Trust no matter what happens outside our bubble.

We're sitting on 20 points with two picture cards in our hands - we can stick or split or twist - the only improvement can be an ace. STICK.

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It seems to me a crisis of some sort is inevitable. Clubs have borrowed in the region of £3bn to fund the madness that infects the PL. Anyone with the slightest bit of financial sense can see there is not sufficient revenue to fund the debt and certainly nothing like the capital required to repay it. A footballer is only worth what another club will pay and when it comes to a fire sale? Couple this with the staggering situation of clubs spending 75-80% of income on wages - i.e the money flows staright out of the game - and the problems are obvious.

Given the game is £3bn in debt I wonder if those calling for John Williams to burden the club with £50-60m of debt to fund new players would like to comment on the wisdom of the club's prudent financial management?

It's the same greed driven situation as that created by the bankers (a term one might want to adapt with a "W") who have lent billions to individuals who cannot afford to repay the debt. Why can't the debt be repaid - insufficient income. Hmmm.

Come on Rovers

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If the Rovers now play this really cool -picking up players in the "Fire sale" of other Clubs and suppressing the obscene weekly wages,there is a real chance we can ride the next 5 years and eventually find a relatively local buyer.

This will need patience and support from us!!

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I have wondered how long it would be before the bottom fell out of the Premier League and its money driven madness. Will it happen now? Who knows but Man U have to be extremely nervous. How are they going to get out of the hole they are in? I'm glad I'm not a red scum supporter but you have to feel a little for a club with their history and the money they generate to have gone from being the richest to the most in debt by being taken over. Scary. The true fans must be wondering what will happen and when because it can't be good.

West Ham could be seriously screwed as well, if it's possible I like that club even less than Scum but again the fans don't deserve the hole the club are in. All because of a takeover. Hmm, makes you think that Rovers board and the current owners have chosen the wise path regarding picking the new potential owner very carefully.

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Daily Mail's listing of Premier League debt. Yes it adds up to £3bn but is using the Deloittes report so is for the most part two seasons behind the times (2005/6 figures). Intriguingly, they leave West Ham out of the table.

The Man U figures are their last published results which neatly shunted their football debts of £95m off to one side so the true figure for them was over £850m.

The comment that it hasn't affected Man U's transfer dealings is just barmy. If a football club is not spending £250m on debt servicing (which is what the Glazers have committed Man U to in the published accounts since they arrived), what does it spend its money on? Yep, frightening to contemplate, but without the Glazers, Man U could and would have easily spent an additional £200m in transfer fees.

The Rovers figure of £20m reflects bank borrowings which the club incurred strengthening the squad ahead of transfer prices going barmy when the new Sky deal came in. I would be very surprised if Rovers have any debt currently.

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Of the £3bn debt figure, £2.3bn is in the clubs who have new foreign "investors".

£300m of the remainder is at Arsenal where the club has used debt to invest in a new stadium which is transforming the club's operating performance dramatically.

Nearly £200m of the rest is at Wigan, Bolton and Boro where the owner has dipped in his own pocket to lend and so is not an issue so long as the owners continue to back them.

So the debt crisis and new ownership crisis in football is effectively one and the same thing.

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I also thought Bolton's debt was much higher than that list?

I doubt we have that £20m debt anymore. Not when you consider we apparently had £10m ready to play with, + the cash from Bentley.

This was never reported as true though was it?

It was just a figure Nicko grabbed out of thin air.

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To be fair to Nicko - he very rarely grabbed anything out of thin air, im sure it was a very well educated guess/ assessment of the situation.

that 10 million was probably not hard cash. It was probably money we were prepared to risk borrowing, or at least some of it was. Therefore we can't have used it to pay our debts, and are probably still in some debt. Not a lot compared to most though it would appear.

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