My take on sport from the week gone by, and the week upcoming. I like all sports from Archery to X-Games (couldn't think of a sport beginning with Z!) and everything in between; except horse racing which bores me to tears. Enjoy, and please comment if you like.
Sunday, 4 March 2012
Football finance: How long can it go on?
With events last week seeing two massive clubs in Britain entering administration (Portsmouth and Glasgow Rangers), this week saw a Football League founder member Aston Villa reporting a loss of £53.9 million for the 2010/11 financial year. The Birmingham based club claim to be happy with the situation, and on the face of it they have no reason not to be. They have increased overall revenue by 1.3% and commercial revenue by 15.9%, as well as decreasing borrowing by 8.3% so Randy Lerner is certainly steering the good ship Aston Villa in the right direction; but with the Aston Villa fans becoming increasingly unhappy with things on the field it highlights the balancing act that club chairmen have to perform.
Villa Park Stadium
This led me to look a little deeper in to the general finances. I sought out the Deloitte report on finance for the top twenty clubs (based on revenue) in Europe and it does make interesting reading. (read the full report by clicking here or see overview below) Perhaps the most interesting point to note is that broadly German clubs take the large part of their revenue from commercial exploits, as where around the rest of Europe most clubs see Broadcast rights bringing in the lions share. Also, if you'd asked a group of people to guess the top ten in this Money League, not many would have put Schalke 04 in there; I'd also hedge my bets that nobody would have put Hamburger SV in the top twenty bearing in mind that they haven't even played European football. Manchester City fans will constantly tell you that they are now the richest club in the world, but they haven't even made the top ten;in fact their revenue is only just over a third of that of the top club Real Madrid.
Perhaps the most interesting fact I found in this report is that in the group of teams between places 21-30 in this list, (see full report) you will find Everton and West Ham United. I don't think fans of these clubs would place them in the financial European top 30, bearing in mind that the lack of money at Everton has been making headlines for years and West Ham were nearly bankrupt a few years ago. It brings to mind a phrase said many times by Duncan Bannatyne of Dragons Den fame; "Turnover's for vanity, profit's for sanity!"
I think this phrase hits the proverbial nail right on the head, and I think if British football does not get its act together we will start losing the 134 professional clubs in England and Scotland at an alarming rate. Eighteen months ago, my club Liverpool were days away from administration and our £350 million debt being called in by the bank before Fenway Sports took over the club and rescued the situation. If this situation can nearly happen to Liverpool it can happen to anyone. To return to my points at the start of this article, Aston Villa are reducing debt and increasing revenue but their fans are probably as unhappy as they've been for years, so I guess my over-riding message is - Be careful what you wish for!
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