"If you want some accessible but informative insight into football then I suggest you couldn't do better than the Political Economy of Football website, which is not only intelligible but comes with the added bonus of being written by Addicks fan Wyn Grant."
Ben Hayes - Charlton Athletic programme
As we have argued, football north of the border has taken a big hit from the credit crunch with proportionately more clubs under threat. The credit crunch came at a time when football clubs had finally started to make inroads into their debt. Most SPL clubs reduced their liabilities to some degree in the last financial year. Clubs had finally begun to budget properly and many of them had got back to break-even point. Now clubs face a new challenge from the credit crunch. Supporters perceive that they have less disposable income, or at least need to set more aside for a rainy day.
Relegation threatened Championship side Charlton Athletic have reported big losses in the year to June 2008. Losses were up 16 per cent, £11.5m compared with £9.9m in 2007 (operating losses were £8.6m). Turnover was down 26 per cent from £35.9m to £26.7m, a figure that includes parachute payments which run out at the end of the season. Ticket income, sponsorship / banqueting and retail income was down 21 per cent from £16.8m to £13.2m.
Just before Christmas officials from the FA Premier League sent out invitations to brodacasters to tender for the television rights for the three seasons starting in August 2010. Last time the value of the rights increased by 60 per cent, but no one is expecting such a big increase this time, although the Premiership is still hoping for a small increase. A blind auction for the rights will take place in the spring.
A transfer embargo has been placed on Morecambe. Rules in League 2 state that no more than 60 per cent of a club’s income can be spent on wages. The salary cap was introduced in 2006. Hartlepool and Swindon were the first two clubs to be hit by the regulations. Morecambe have seen their average attendance cut by a quarter compared with last season. ‘From an average of 2,800 to around 2,100 this season, that amounts to an awful lot of money,’ said Morecambe vice-chairman Graham Hodgson.
The owner of West Ham United, Bjorgolfur Gudmundsson, has just two months to sell the club before his holding company, Hansa, faces the possibility of being declared insolvent, court papers in Iceland have revealed. Gudmundsson has put West Ham on the market in order to pay debts exceeding £50m that resulted from the collapse of the Icelandic bank Landsbanki, in which he held a 41 per cent stake. As many as nine potential buyers have shown a potential interest in the club.
Spending in the January transfer window has soared in recent years from £33m in 2003 to £175m last year. However, will it fall this year against the background of the credit crunch? For example, Manchester United plans to limit its spending to around £15m. There will also be fewer bargains from abroad. Sterling’s fall means that players from the European continent are 20 per cent more expensive this January than they were last. Football League chairman Lord Mawhinney has warned, ‘Things look calm now, but the crunch comes in the run-up to next season.
Dubbed ‘George’s Folly’ the Reynolds Arena on the southern edge of Darlington cost its creator, the former Darlington FC owner George Reynolds, £20m – and started a chain of events that led to him being jailed for a second time. With marble fittings, expensive furnishings and a capacity of 27,500, it appears more suited as the home ground of a team in the Premiership. With the football team now attracting an average crowd of a little over 2,500, its new owner is having radical thoughts about its long-term viability.
Dedicated football fans will spend £100,000 in a lifetime supporting a club according to research by Virgin Money. Calculations show that supporters of Premiership clubs spend as much as they would raising a child or buying a home. The keen supporter currently shells out £1,875 a season and once inflation has been taken into account that tots up to more than £100,000. Travel costs alone come in at £40,000 in a lifetime with another £25,700 going on club merchandise, food, drink and programmes. The calculations are only for a single fan with food and the cost of travel to away matches.
Glasgow Rangers manager Walter Smith has revealed that the club would be prepared to field a ‘B’ team to fulfill their Scottish League obligations in order to bridge the gap with Europe’s elite clubs. The Rangers manager has floated the idea of an updated version of the Atlantic League, an idea unsuccessfully advanced in the late 1990s by the continent’s geographically handicapped. He foresees a new European league made up of the top sides in Holland, Belgium, Scandinavia and Scotland, running in parallel with the domestic divisions and providing entry to the Champions League.
Carlsberg, Liverpool’s biggest sponsor, has criticised Liverpool’s owners, Tom Hicks and George Gillett, for delays in building their new stadium. Keld Strudahl, Carlsberg’s international marketing director, said: ‘While we have a good relationship with Tom Hicks, we are naturally unhappy that the planned new stadium has been postponed. That cannot be good for Liverpool as a long-term business.’ The Danish brewer, whose relationship with Liverpool stretches back 16 years, said it would be happy doing business with Dubai International Capital should it still be interested.
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