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 Liverpool Football Club has continued to attract a lot of coverage over the last month and not just for its up and down fortunes on the pitch. There have also been many off pitch developments that attracted our attention at www.footballeconomy.com . The future ownership of the club remains uncertain and this must be a distraction from their efforts to secure a Champions League place for this season and to continue to progress in this year’s European competition. Certainly manager Rafael Benitez has looked harassed when he has been asked about off pitch developments.
It is evident that American co-owners George Gillett and Tom Hicks have fallen out with each other. Apparently they have an agreement that each of them has to offer first refusal on their 50 per cent stake in the club. Gillett seems keener to get out, but it is doubtful whether Hicks could raise the funds to buy out Gillett and to continue to fund the new stadium. Gillett could sell to Dubai International Capital (DIC) which continues to hover in the wings waiting its chance to buy the club, leaving Hicks with the other 50 per cent. He might then eventually sell.
In the meantime, a fans’ group ShareLiverpoolFC have launched an attempt to acquire the club for the fans on the lines of Barcelona FC. Fans have been asked to pledge £5,000 each. So far they seem to have attracted a little short of £50m in pledges which is well short of the club’s value of at least £350m. Although more money might come in, a sale of the club is more likely to take place in weeks rather than months. Both Gillett and Hicks would probably prefer to sell to DIC in any case.
Two of the leading clubs, Chelsea and Arsenal, have produced new sets of accounts in the past month. Chelsea is having difficulty in meeting their target of breaking even by 2010, having cut their losses by only 7 per cent from £80.2m to £74.8m despite revenues that were up 25 per cent. Their main challenge is that 71 per cent of their funds are still going on wages, mostly those of players. Although they have pledged to cut this back, it is difficult for them to do so if they wish to continue to succeed on the pitch.
Chelsea claim to have 90 million ‘core’ fans around the world, compared with 135 million for Manchester United. In particular, they claim to be the best supported team in Roman Abramovich’s native Russia. The club is exploring ways of increasing the capacity at Stamford Bridge which at 42,000 is well below the capacities at the Emirates and Old Trafford. The constraints of the site may make this difficult and the club has considered moving in the past, but they are looking at ways of adding another 10,000 or so seats.
Arsenal saw a 55 per cent rise in profits over the last six month period. The sale of Thierry Henry for £16.1m was one factor, but the results were also boosted by an increase in broadcast income from £6.5m to £24.3m as the result of the improved Premiership deal. Match day income showed only a modest rise, but the club expects to raise ticket prices next season in the back of the ‘Emirates effect’.
In League 2 Rotherham has been the latest club to announce that they have filed a declaration of their intention to go into administration if they do not receive additional investment. Debts to the Inland Revenue are the main immediate problem, but their underlying difficulty is continuing losses at a club that is not all that far from the two clubs in Sheffield and plays at a lower level.
One club already in administration, Bournemouth, had some encouraging news when Harry Redknapp revealed that he was trying to put together a consortium to rescue the club. He still lives in the town and has a sentimental attachment to the club where he began his managerial career in 1982. One obstacle is league rules that bar an individual from having an interest in two clubs. However, Harry may get round this by putting his son Jamie in to run the club.
Benefactor clubs are always vulnerable if the owner’s circumstances change and Scottish Premier League club Gretna have had a difficult month. At one point wages were not being paid while owner Miles Brookson was in hospital and rumours of the club going into administration circulated. The club has rocketed from the non-league to the Scottish Premiership in ten years.
Life in the top flight has proved difficult. It has proved more difficult to attract players of the required standard with the resources available. The club has had to ground share with Motherwell because their own stadium is not up to standard. This has meant a 160 mile round trip for home fans which are thin on the ground in any case given that Gretna has a population of 3,000. They have faced increased police and stewarding costs, ground rental and a record low SPL attendance of 1,002 for one of their matches. It looks like the fairy tale may be over.
Our most unusual story this month has been about Britain’s smallest league where the chant ‘can we play you every week?’ has a very special meaning. On St. Mary’s on the Isles of Scilly the only two teams, the Garrison Gunners and Woolpack Wanderers, have to play all league and cup matches against each other. David Beckham came to the island to do an advert for Adidas last autumn and this has led to a big financial boost for the two clubs, reports community radio station Radio Scilly. They have got new kits through Adidas and each club now has a local sponsor.
It’s been a busy month at www.footballeconomy.com, not least because of the Premiership’s plan to play a 39th game abroad which now looks like a dead duck. You can read about this and many other stories on the web site, including Birmingham City’s plans for a new stadium, good financial results from ‘The Old Firm’ in Scotland and the troubles of the non-league club in Inverness, Clachnacuddin.
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