SOME THINGS make the mind boggle, and getting involved in a financial way with a soccer club is one of them. Is it a sense of power that makes men – mainly – invest in clubs? Take the case of businessman David Sullivan, his decision to buy into West Ham Utd, a club struggling to hold its head above water financially and in terms of staying in the English Premiership, beggars belief.
What makes the former Birmingham City owner’s move back into club ownership all the more bizarre in a G-U-B-U sort of way is that less than a week previously Sullivan was warning of the dangers of a Premier League club collapsing. He told the BBC, “We’ve looked at 20 clubs since we left Birmingham. The state of the finance of football is frightening . . . many, many clubs have pre-sold their Premier League income, television money. They’ve borrowed against one and two and three year’s season-ticket money. They’ve borrowed against everything.”
By the middle of the week, Sullivan was sporting a claret jacket at Upton Park having taken a 50 per cent holding (along with business partner David Gold) in a club which has a debt estimated at €115 million, owed to both banks and other clubs including settlements to Sheffield United over the Carlos Tevez affair, and former manager Alan Curbishley.
Having made the mind-boggling move to put his money into a club with a seemingly bottomless pit when it comes to swallowing up any financial currency, Sullivan admitted: “We would not buy this club if it wasn’t West Ham. It makes no commercial sense for anyone to buy this club and it’s amazing two other people wanted to buy it. One is another West Ham supporter (Tony Fernandes) and the Italian (Massimo Cellino). I am not quite sure if he looked at the books properly, but if he looked at the books, he might have walked away.”
The move has bucked a trend started by Roman Abramovich which has seen big English clubs fall into the hands of foreign investors. Since the Russian bought Chelsea in 2003, a number of top-tier clubs including Manchester United, Liverpool, Aston Villa and Manchester City have been taken over – although the evidence from Liverpool, particularly, and also Man U would suggest the new owners aren’t in the same league as the Russian or Arab billionaires.
A recent study of football transfer trends by Plain Soccer – which combined reports from Deloitte and Forbes – indicated elite clubs in the English Premier League (with the possible exception of Man City) will be quiet in the transfer market relative to their European rivals. Although Man U, Liverpool, Arsenal and Chelsea are among the highest-earning clubs in the world, they all have debt levels surpassing 50 per cent of club values and the report suggested money previously assigned to transfers will now be assigned to debt repayment.
Perhaps the time has come for clubs in England – and in Europe – to consider salary caps such as exist in American Football, the NBA and, indeed, similar to the structures put in place by rugby unions on their move into professionalism. Regardless of location, it seems crazy that players can be raking in huge salaries at a time when clubs are floundering. Surely it makes sense to introduce salary caps, although common sense – as Sullivan would seem to bear out – doesn’t always exist in the beautiful game.
