Financial crisis toll on football

Football is by far the most loved sport in the world with fans flowing into stadiums all season long to watch their favourite teams. Unfortunately, football continues to fall prey to the highs and lows of financial markets. The game faces a tough future this year as fears of a prolonged recession spread to every sector of the economy. The largest stakeholders of the game are the players, owners and fans of the clubs and with the current global financial crisis, these facets of the game are starting to be affected. Even the super-rich are feeling the pinch; Fear surrounds the possible close up of the teams if the present financial climate prevails. For clubs that rely on the proletariat (highly waged people) for the majority of their disposable income, the financial crisis will undoubtedly see losses in revenue from ticket and merchandise sales. While this problem may at first seem a minor inconvenience, for heavily indebted clubs – Valencia, Liverpool, and Manchester United, namely – a substantial loss in revenue could induce panic as managers try to make regular payments on their loans in spite of their having less revenue to use. In these tight financial times, clubs cannot expect fans to give out the money that they had in the past for tickets. Considering other expenses, such as travel and refreshments at the ground, the average fan cannot afford to take their child let alone themselves to a game whenever they fancy. The Gunners are exposed to some £268 million in debt but gate receipts from the Emirates should service it. It’s reported that their Part-owner Alisher Usmanov lost about £7 billion in the Russian stock exchange; the property crash imperils the club’s Highbury Square development project. The delayed payments by the buyers is said to affect the club future finances. Aston villas debts stand at £63 million, the club owns a stadium which is said to give them a significant amount of revenue. Their chairman Randy Lerner’s who is worth about £800 million is said to have been spared by the global financial crisis. Chelsea robust game has not spared them from financial turmoil; the teams Roman Abramovich lost £12 billion on the Russian stock exchange, the club insist even the tycoons losses would not trigger bankruptcy, but Chairman Bruce Buck’s suggestion that players could be sold proves times are changing. The London soccer club has already gotten rid of 15 scouts and will sign fewer new players or none this season because of the credit crunch. Abramovich has been reported saying that he is ‘not ready to sell’. Everton’s Chairman Bill Ken Wright was looking to sell long before the markets ground to a halt. The club’s planned stadium at Kirkby is likely to be delayed further because of difficulties in the construction industry, but the team debts and wages are said to be under control. Mohamed Al Fayed, owner of Fulham club is personally safe . Mohamed an Egyptian businessman is estimated to be worth £555 million. Amongst his business interests is ownership of Harrods department store in Knightsbridge. The club must however find a way of financing their £181 million debt. This might turn out hard because of high interest rates and scarce credit will make that more painful. Liverpool club has announced that the plans for their new stadium in Stanley Park have been delayed yet again. It has been feared for some time that American owners Tom Hicks and George Gillett are having trouble raising the funds for the £400 million new ground The current credit crunch is being blamed for the latest delay, even though enabling work has already started in and around Stanley Park. A £350 million loan from Wachovia and RBS to the club must be repaid or refinanced this year; the two banks have already been bailed out by their governments. Mancheter United Is hopeful that they will live through the crunch despite their £600 million of debt. Their Jerseys are sponsored by American International Group Inc. (AIG), the insurance company now controlled by the U.S. government. Middlesbrough club is in £85 million debt mostly to devote owner Steve Gibson, meaning no bank can foreclose on the loan. Gibson is not likely to pull out, but a spiralling wage bill some £40 million-a-year is a problem to the team. While there is no concrete information for this season, reports show that the attendance figures at Middlesbrough home games are down. While Middlesbrough do not rely directly on the money that they pull in from ticket sales, the club still needs the fans to be there to support them. New castle’s owner Mike Ashley lost £300 million as HBOS shares plunged. He is desperate to offload the club but a disastrous sales technique has forced him to drop his valuation from £480 million to just £300 million. The club’s players wear the logo of Northern Rock Plc, a U.K. mortgage-lender that was nationalised in February last year. Alexandre Gaydamak owner of Portsmouth fears he no longer has the funds to bankroll the club’s wage bill, which accounts for 90 per cent of turnover. Unconfirmed reports suggest he would have welcomed a buyer long before the markets collapsed. Tottenham which is owned by billionaire Joe Lewis-- who lost £300 million in the Bear Stearns collapse last March. Is said to be in the wake of a take over. The club’s debts are not a s vast and this could attract more buyers to its table. West Brom’s debts are minimal; meaning their exposure to the problems on the financial markets is less than most. Without loans to finance, they can concentrate on matters on the pitch. West ham’s future hangs in the balance after Iceland’s economic collapse. Owner Bjorgolfur Gudmundsson’s Landsbanki is in receivership and he is said to have lost £230 million — the sum selling West Ham would raise — when the bank was part-nationalised. The team lost its shirt sponsor XL Leisure Group Plc in September last year when the tour operator grounded all its flights because it ran out of money Dave Whelan a former professional football owns Wigan. He has sold majority of his shares in JJB Sports whose shares are plunging but he is not immune from the turmoil. Wigan’s debts stand at £54 million The Tigers of hull are one of the few clubs not saddled with massive debt, thanks to Chairman Paul Duffen. With no loans to repay or banks to placate, the team is confident that it will live past the financial storm. The Abu Dhabi United Group for Development and Investment (ADUG) in Manchester city has significantly strengthened the Blues financial position. The team is also considerably safe from the crunch and in as much as oil prices are falling this losses amount to loose change to the clubs owners. There is no doubt that the football world is facing a river of toxic debt that may lead to closure. But even at times as hard at this we remain hopeful that even this will pass. Ends