No one forsaw Leeds United crashing...
Are things spiralling out of control in the EPL?
yeah
i feel that there should be a limited amount of money that the club owner can spend for the club =/
Originally posted by Y_Shun:yeah
i feel that there should be a limited amount of money that the club owner can spend for the club =/
ditto
As long as they remain profitable and able to pay those instalments, then they should be ok.
BUT if they start losing money like unable to get into CL football etc, then they are in big trouble, like what happened to Leeds.
Debts(all in USD million as in 2007)
Clubs-------------Value-----------------Debt/Value----------------Debt
ManU-------------1,800-------------------60%---------------------1,080
Arsenal-----------1,200-------------------43%---------------------516
Pool--------------1,050--------------------65%---------------------682.5
Chelsea----------764----------------------0%-----------------------0*
Spurs-------------414----------------------15%---------------------62.1
http://www.forbes.com/lists/2008/34/biz_soccer08_Soccer-Team-Valuations_Rank.html
Basically all the big 4 are all heavily in debt, except Chelsea on paper( how much internal debt the the club own to Roman A?)
The way I see it, this season Pool and Arsenal are not as strong as use to be , Arsenal will be in trouble if they lose a few key players,Pool as usual with their inconsistency etc.
And other clubs like Villa, Citeh and pershap Spurs etc are getting better and could possibly knock one of the them for 3rd/4th spot.This season will be interesting.
as far as i know. arsenal situation si quite different.
The debt is mostly as a result of building the stadium.
the stadium itself as a asset, can be sold to a third party to pay off the debt ( in full/partial).
EPL clubs that could be in trouble will be newcastle, Everton.
Originally posted by reyes:as far as i know. arsenal situation si quite different.
The debt is mostly as a result of building the stadium.
the stadium itself as a asset, can be sold to a third party to pay off the debt ( in full/partial).
EPL clubs that could be in trouble will be newcastle, Everton.
A debt is still a debt , it does not matter how they were incurred.
One thing something is happening over in UK, clubs are selling players for example, Citch wanted to sell Corluka behind the back of Hughes a few week ago , Spammers sold Anton, Toons sold Milner etc all for the same reason I suppose , money crunch.
Perhaps due to the recession, the sales of ST and/or shirt and other merchandise were not selling as good as expected, thus the belt tightening measures.
Edit: His bro Anton, not Rio.
Originally posted by Y_Shun:yeah
i feel that there should be a limited amount of money that the club owner can spend for the club =/
Like putting a cap on transfer fees ?
Originally posted by Trump_Card:Like putting a cap on transfer fees ?
That dun work, unless all European leagues follow as well.
Then another is the players' salary as well, this another one that could erode the profit.
As in putting a cap to the amount of money that the owner can invest in the club? Hence the money also includes wages, stadiumm building etc.
I dunno how it will work though.
Originally posted by Y_Shun:As in putting a cap to the amount of money that the owner can invest in the club? Hence the money also includes wages, stadiumm building etc.
I dunno how it will work though.
Investment is always good , is the external debt that worrying.
Investment is more or less self-regulating becos one expects a returns on the their investment, but not Roman Abramovich. I wrote this elsewhere:
It is not sustainable, just look at Chelski.
According to Forbes for 2007, Chelski operating profit is actually -ve USD5m, a club with success in CL(QF, SF & F etc is considered success as no club could possibly win it every year), league and other cups competition and yet make a loss?!?
One possible reason is players' high wages that eroded any profit. I remember there was an article that reported that Chelski has to pay high wages every month.(can someone post that link)
So getting a full squad of star players and paying ridiculous high wages is a financial disaster regardless how successful the club is on the pitch!
2ndly, it was understood that most of those ridiculous high transfer prices for all those star players were actually bankrolled by Roman Abramovich, he probably hold a large number IOUs over the club.
So what if one day he want to cash in those IOUs for whatever reason?
Or he has a plane crash and die, his descendent decided not to pour any more money into the club and want the club to repay all those IOUs?
So can the club repay those IOUs?
I don't think so,not with those high wages and negative profit.
So what Roman Abramovich has done is not "investment" but rather pouring money into a well year in year out with no returns!
Eventually it will stop, what will happen to Chelski then?
So there is kind of limit that a club could earn their money no matter how successful they are on the pitch, let's say it won all competition they are in, CL league, FA cup etc etc, so that will max out on gate , TV & prize monies.
Merchandising and sponsership are a bit more variable but there is also limit to it and less predictable.There is why clubs want to expand their presence in Asia mkt for their merchandising profit.
The best way is to limit the debt a club could incurr say 40% of the value of the club?But that is kind of difficult to implement, firstly is it illegally in EU laws,local laws etc?
Then 2ndly how the valuation is done, then there are clubs that dun show external debt like in the case of Chelski, I am no expert though.
returns can be a pretty subjective word, for some it may only means money or profits, for others it can be in a form of political returns, profile enhancement or just for the seeking of probably having better chances of seeking asylum among many others..
just like our F1 project, its not what the entrance tickets that'll cover the cost of the initial investment, its also for the general spending by visitors (to our shopping complexs, hotels... etc etc), jobs created, retaining Sing dollars (as ppl locals might opts to watch local F1 then flying elsewhere), as well as building an image for Singapore.. among many many others...
there is no way to stop ppl from investing, again investing is being termed differently by differently folks.. if you have the money you can just decide how to spend it, at the end of the day England does have pretty strict T & C for foreign investment, maybe it needs to be updated but thats for their HM to decide.. for sports it had already comes to an age where money will outbid anything else, those days where its pure passion for the sport that they love is already long gone and will probably not return..
so i take is, just sit back pop a beer and enjoy whatever and whenever you can!!!!!
Cheers!!!!!