“A CLUB WILL GO BUST”
How many times have you heard that forecast as the football season gets underway? We all know that the financing of football is crazy. We all know that the forthcoming season will produce stories of clubs tottering on the brink of oblivion. But it never happens does it?
I say never. Maidstone United seems to be dead and buried but Accrington Stanley and Aldershot have risen from the grave and Portsmouth stagger on. Fan loyalty comes to the rescue when all the red financial lights are on.
But could Portsmouth or even Blackburn Rovers go out of business for ever? A recent Downtown seminar on football heard the forecast repeated that this season one or more of our clubs will bite the dust.
That wasn’t the only startling forecast by Alan Switzer; Director in Deloitte’s Manchester based Sports Business Group as he presented the company’s annual review of football finances.
He also believes UEFA are serious about enforcing their financial fair play rules. The burning question here is would UEFA devalue the Champions League by telling Manchester City, for instance, that they can’t play in the 2014/15 competition if they are not breaking even?
Alan believes there might be some leniency if the direction of travel is right and developments around youth academies will be exempt. However he is in no doubt that UEFA are determined to bring an end to the precarious arms race that is afflicting so many clubs.
Deloitte’s figures are staggering. Premier League average salaries are over a million a year whilst in Division Two it is£47,000. Soon the Championship play off match will be for £150m; even Sky won’t need to hype that! The Premier League wages to turnover ratio is 70%. Most significantly profit levels are flat.
Why the alarm with the new Sky/BT deal coming along worth £3 billion? It may be an opportunity for clubs to put their finances in order, but that would be a triumph of hope over experience. It seems more likely that the poor old fans will see their viewing subscriptions soar up in order to put even more money in players’ wallets.
Alan Switzer produced a graph showing that success was linked to the money clubs spent. There are exceptions like Blackpool’s glorious adventure but generally you get what you pay for.
Is there a tipping point where Sky won’t be able to milk the fans anymore? The seminar heard that increasingly pubs are struggling to pay to show the matches.
The big kick off will soon be with us, but first it’s wall to wall Olympic Games.
North West companies have benefited from Olympic orders. Watson Steel of Bolton, Ainscough cranes from Wigan and Glasdon recycling based in Blackpool being among them. But let’s not kid ourselves it’s London and the South East, the region that least needs it that is benefiting most.
However let’s hope it all goes well and reflect on the fact that without the success of the Commonwealth Games in Manchester ten years ago, none of this would be happening.