At the risk of turning this Blog into a collection of football related articles, i would like to take the time today to reflect on the latest news coming out of Old Trafford.
It was announced today that the level of debt that Man Utd's owners find themselves in has risen to £1.1 Billion. That's a whole £400 Million more than was previously believed, and a great deal more than any Football club should be saddled with. I should point out that not all of this money is secured against The football team, but if Glazer defaults on repayment they may well be the first port of call for creditors looking to get their money back. A spokesman for the Glazer family has since come out and stated that they hold over £2 Billion in assets (First Allied shopping Malls and the Tampa Bay Buccaneers), however Andy Green (a disgruntled Man Utd supporter and City analyst) has discovered that 63 of the 64 First Allied shopping malls have already been mortgaged and most are likely not making enough money to cover the interest on the payments.
Simply put, Glazer mortgaged his only viable business, and secured money against the Football Club he was yet to buy at the height of the financial boom. The bubble then burst and he's been playing catch up ever since.
Last summer Cristiano Ronaldo was sold to Real Madrid for £80 million, sparking the Green and Gold protests which have now garnered 158,000 members and also seemingly been given the support of David Beckham. The importance of this sale to the club is now self evident. Man Utd wouldn't be getting any money from the Glazers to invest in new players, and so they had to sell one of their prized assets in order to develop the team.
The outlook is bleak for a Glazer controlled Manchester United FC, at best they sell up and the new owners clear the debts attached to the club, at worst they default on their massive repayments and the creditors move in. Man Utd are in a terrible position at present, and it is only their continued success on the field which has kept them from slipping. Unfortunately with only one major asset at the club (Wayne Rooney) and no other way of raising significant funds for squad development they may find themselves quickly slipping down the league.
Lets contrast this with the situation at Arsenal. No major trophy for 5 years and seemingly about to sell the club captain and heart of the team Cesc Fabregas to his childhood team, Barcelona, for between £30m and £60m depending on who you ask.
On the surface you would say that they are underachieving, that Arsenal should have won something in the last 5 years. Everyone says that the fans will grow restless, and that the Manager will soon have to win something or leave. What a load of rubbish! Here's some points to explain my position.
- Cesc Fabregas will most likely leave this summer, but the club will make pure profit on a player that cost them nothing and has given his best every time he played.
- If Fabregas does leave this summer Arsenal have a number of alternatives to replace him. Rosicky, Nasri, Diaby, Ramsey, Wilshere, and interestingly if the rumours are to be believed Joe Cole.
- Arsene Wenger has developed Arsenal into consistent top four contenders, and a credible threat to win the champions league. The fans that were there when he was appointed have faith in him, and can understand the importance of running a club as a proper business that is sustainable.
- Arsenal FC are in debt, but unlike man Utd it is a manageable amount that is being payed back quickly and on time thanks to the new stadium that the borrowed funds helped build.
- Of the traditional big 4 teams in England two are owned by Americans that have heaped massive debt (un-related to the actual running of the clubs) onto their new play things, one is owned by a Russian Billionaire that has decided to stop spending his own money on the team, and the other is Arsenal, a team with one of the lowest proportional wage bills in the premier league and a sustainable financial plan for the future.
If the price of a sustainable future for my football club is a trophy shortage then i will gladly pay it, If you ask the same question to Crystal palace, Southend or Portsmouth fans they would agree. They would break your arm off to be in the position that Arsenal find themselves in. Chances are however that Man Utd, the team that wins things every year, will be out of business within 10 years.
In the end i'd rather have a club to support...
Robinho
