Credit crunch bites into Premiership
I don’t confess to be an expert on high finance, though I have made some stupid purchases on my credit card while inebriated, such is the danger of online shopping.
Today, though I worry not about my finances but those of my beloved football club, Manchester United.
This is not a story about heroic sports figures. It is a story about how big business investment is destroying sport. They did it with Leeds United and they’re doing it with Portsmouth and they could yet do it with Manchester United, Manchester City and Chelsea.
You see, big money players don’t care a twat about football. For them, it’s about ego, marketing synergies and perceived opportunities which have more to do with a shell game of debt and finance than it has to do with winning and human triumph against adversity.
Manchester United was bought by the American Glazer family who promptly saddled it with 600 million pounds in debt in 2003. They have jacked up ticket prices and brought about the usual efficiencies business people do when they over spend for an asset but they are now running very close to the line.
From all reports, Man U spends about 70 million pounds a year to service its debt, some of which is at 14.25 per cent per year. It’s margin is about 90 million pounds a year meaning it has some 20 million pounds a year left to pay off the Glazer family, future investment and, oh, yeah, buy new players.
While they sold Cristiano Ronaldo to Real Madrid for 80 million pounds last summer, they’ve sat on those funds and all indications are they will not buy players this January during the transfer window.
The effects of not keeping pace are dramatic: United have lost their iron grip on the Premiership title and while they are second, a string of injuries and shock results - a 3-0 loss to Fulham and a 1-0 loss to Burnley have underlined their plight. Then they lost 1-0 at home to Leeds United, a team fully two divisions below them in the FA Cup.
Now their European Champions League knock out round run is overshadowed by chronic injuries. Simply put Man U are not the force they once were and look like they could fall out of the top five of the EPL which would mean they won’t qualify for Europe next year.
All of this means with fewer games, less gate money and less TV revenues the 20 million pound margin the Glazers depend on to service their debt will start to shrink and bingo bango you’re in big trouble.
Shocking to consider but Man U could end up seeing points deducted if they fall into recievership under the EPL rules. And if that happens they could start a free fall which would see them end up in the Championship and once that happens, it’s a slippery slope to get back on top, especially if you have no money.
Thanks to the Glazers and their greed the most stories football club in the world is in danger of financial collapse.
What a 1958 plane crash could not do, three American trolls are on the brink of achieving.
Shocking. Absolutely shocking.