Saturday, June 16, 2007

US investors must think English fans are stupid...

George Gillett one half of Liverpool's new ownership team has once again been speaking to the press, he says that he doesn't know why other US investors have acquired English clubs, but he maintains that Liverpool have not been bought with a view to making money. That theory is plainly ridiculous and frankly insulting to the intelligence of all but half wits.

I mean who in their right mind would outlay £434 million to buy a football club if they didn't (a) have a plan to eventually recoup that money (b) make a profit? Certainly none of the usually business savvy Americans who have been buying up English clubs like they are going out of fashion. The big question that all clear thinking fans have been asking themselves is, how are these investors going to achieve their goals?

At Manchester United for example, reports continue to suggest that the Glazer family are in serious trouble, the story goes that the club isn't the cash-cow that they believed it was. One report this week says that the interest payments alone equate to 85% of matchday revenue. Clearly figures like that are unsustainable in the long term. Under the new regime there's been increases across the board from everything from car parking at Old Trafford to season tickets. Supporters group MUST is even talking about making a legal challenge about the recent announcement that all season ticket holders must join the automatic cup scheme, which in turn dramatically raises costs over a season. So prices are rising as the new owners do all they can to try and make the club more profitable ahead of trying cash-in on United at some point in the future.

However, which such huge debts there are few individuals who will be able to afford the sky high asking price. Even when the club was a PLC with no debts, there was only the Glazer family who wanted to buy the club outright. Nonetheless, the current speculation suggests that the Glazers are indeed looking to sell the club NOW.

You do wonder if United's owners might even try to do what Ken Bates did at Leeds United recently. Leeds went into administration because the Inland Revenue had, according to Bates, issued a winding up order after the club had asked the revenue for a payment holiday break. Which again according to Bates was refused.

What followed next was unbelievable in many ways. The club went into voluntary administration once it was clear that they'd be relegated from the Championship to Division 1. Leeds was then immediately sold to a new company of which Bates was a director, that deal was subject to a creditors agreement. At the time of going into administration Leeds United had debts of £35m - this figure pales into insignificance when compared to Manchester United's debts. Bates ended up paying one penny in the pound to the club's creditors having secured their agreement, this even though other interested parties were willing to pay more to the creditors.

The net result of going into administration was that Bates bought back Leeds United, for as a little as £500,000, although there is talk that, if and when Leeds can afford it, the creditors will see more of their initial investments, subject to terms and conditions...

So is going into voluntary adminststration an avenue that the Glazer family might consider? One thing is 100% certain what happened at Leeds United wont have gone unnoticed. We have to remember that Leeds United had already been asset stripped prior to going into administration, the club had sold its star players and all of its assets. What sparked Leeds United's downfall was their failure to qualify for the Champions League, with debts of £100m the club could not finance their loans - the rest as they say is history.

As far as the future goes concerning Manchester United under the current regime, one thing is guaranteed, United will have to be sold on - or face the consequences - it is a matter of when and not if.

Back to our cuddly and open American friends at Liverpool, if they seriously believe for one minute the fans believe that they've come over here for the fun of winning Championships and at great expense, then they must think we're as gullible as those who elected George W Bush. We aint.

The Yanks must think we are as daft as they are...

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