Football Management

Commentary on the management of over 160 English football clubs by Dr John Beech, winner of the FSF Writer of the Year Award 2009/10 Twitter: @JohnBeech Curator of! Football Finance

Review of Season 2008/09

Posted by John Beech on August 4, 2009

This was not one of the great season’s from a management perspective. It is best summed up by a (slightly misleading) headline from the BBC this very morning – English club finances worry UEFA. Their worries are to do specifically with the Premier League clubs; mine have extended way down the football pyramid for several seasons, and I shared these (2) with UEFA before Christmas.

The Big Four, who should be the healthiest financially, have all had their problems of course: Manchester United and Liverpool with handling their structured debt, Arsenal with board members edging towards but avoiding 30% ownership, and Chelsea with faintly ridiculous attempts at looking after the pennies rather than the pounds. West Ham have suffered through their Icelandic ownership, and both Portsmouth and Newcastle suffered from a lack of commitment from their ‘benefactors’.

Talking of struggling Premier League teams, a trend has been the change of ownership of a club, especially into, and in 2008/09 between, foreign hands. We have seen Manchester City pass from Thai to Arab hands, Sunderland move from Irish to Arab hands, and Portsmouth seem set to pass (eventually) from Israeli to Arab hands (how mind-boggling is that?). Even lowly Notts County attracted Arab investment, although to what extent this is actually British expatriate investment is not clear. It has not been exclusively a move to Arab ownership however – Japanese backing, for example, is included in the consortium that has taken over Plymouth Argyle.

The debt levels of Premier League clubs in particular have continued to escalate. Despite concerns over some of their membership staying out of insolvency events, none actually succumbed. Indeed, no member of the top flight has thus succumbed, but who would put money against 2009/10 providing the first occurrence?

Administration in the second flight is not that uncommon – I have found 13 such occurrences – but the demise of Southampton, in the form of the club’s holding company, in April came as a bit of shock. In general the peak tier at which insolvency occurs has been lower down the pyramid, and that has been the case in the past season. In addition to Southampton, the following have faced insolvency events in 2008/09: Stockport County (Tier 3); Chester City and Darlington (Tier 4); Farsley Celtic, Fisher Athletic, Northwich Victoria (Tier 5); AFC Hornchurch, Gresley Rovers, and Merthyr Tyfil (Tier 7); Racing Club Warwick and Ringmer (Tier 9); and Darwen (Tier 10) – a very worrying record of 13 in one season, and a significant increase on the 6 occurrences during during 2007/08.

Historically the peak month for insolvency events has been December, with a secondary peak in June. This season has certainly shown a marked change from this ‘norm’. With the exception of Ringmer, all the 2008/09 incidences have been since April, with a period of one incidence per week latterly. This is probably down to two factors – the timing of the increasing bite of the credit crunch, which will be specific to this season, and the impact of the introduction of the movable feast which determines which season points deductions are applied in, which is likely to remain with us. The latter has caused clubs to hold back in seeking Administration until after the the third Thursday in March.

The clearest of the continuing trends is the ever-growing financial disparity between the revenues of, on the one hand, Premier League clubs, and, on the other, the lower tiers of the professional and semi-professional clubs. There is evidence however of a slight closing of the gap in debts, with some lower-ranking clubs managing to accumulate disproportionately high levels of debts, which, hardly surprisingly, are proving unsustainable.

What then can we expect in 2009/10? Certainly there will still be high levels of insolvency, although hopefully not record-breaking again. We will drift further into a world where sustainability will be down to the ability of clubs to attract arbitrary overseas ‘benefactors’, and then pray that their commitment will hold up.

All in all, a depressing picture.

Finally, on an even more depressing note, valete to two giants in their respective worlds – Tony Kempster and Sir Bobby Robson. Both are sorely missed.


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