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House of Cards

By Derek Thomas :  03/01/2008 :  Comments (11) :

I haven't actually got the credit card bill yet but it can't be far off and despite strong pre-Christmas appeals to the wages dept. to not pay me all 3 weeks at once (the computer says... no, it's all Christmased out, cough ) when you get paid weekly you know where you are, which is waiting for next week's money (still that's the wifes worry; if it wasn't for her I'd have been skint years ago).

When the Kirkbydome was first floated a few years ago, the marketplace was seemingly awash with money and the world and his hedgefund were binge spending.

Icelandic eggmen could raise cash to buy clubs, who were so desperate enough to play Premier League keepie-up that they agreed to pay the £50 million interest themselves over the next 10 years.

Is, I wonder, the Redshite's deal some sort of smoke-and-mirrors, rob-Peter-to-pay-Paul cunning plan? Maybe their backers will go belly up. It won't be the first time by all accounts.

All together now... boo-hoo.

Well, going on a sp(b)ender is all well and good but the next day you pay with the hangover... unless that is, you keep on the sauce, just so long as the credit source will let you keep on running a tab.

Pretty soon everybody was at it from the Ritz and SaVoy down to the lowest backstreet dive.

Just as the rich are always first to get richer (and stay rich) so the poor are the first to feel the pinch (and stay poor)

Enter sub-prime; it's the little pebbles or snowballs that start the avalanches and so it has proved. Joe Sixpack over in the land of the good ole boy has, on the back of the happy-hour, "el cheapo" credit prices bought his humble abode because the 'suits' at the bank, blinded by the light of increasing their market share, thought, "well, we can't lose, can we? Even a dump like that will be worth more than the 100% mortgage we give them this time next year." Short version... err, no.

This leaves us and Tesco?... Well, just where does it leave us and, more to the point, them?

This time last year, before news that the first pebble had rolled and everything was still (?) well with the financial world, Tesco were hoping to win us over, but even then, due to market confidentiality, etc, etc we weren't over burdened with info? This is even more unlikely to change as the uncertainty grows.

In good times 'you buy the rumour and sell the fact'. In in bad times, everybody stays quiet for fear of saying the wrong thing, disturbing that one pebble at the top.

When the cost of credit was 'easier' the cost to us kept on rising, I think we can say it won't be going lower any time soon.

Planning permission, unless you are related to the Corleone's should never be 100% automatic.

If you are a Yes or a No voter, what affects Tesco also affects Asda and Bestbuy, so status quo there.

What we have is two pyramids: the credit avalanche starting small at the top and getting larger on the way down and the financial one with the littlemen at the bottom and the billionaires near the top, with us somewhere in the middle.

Things go in cycles and we have just gone over the top of the up one. How far down we go and how long it will take to bottom out, who knows. This maybe a little silver lining for me and the other No voters and, for that matter, the ones who were so totally underwhelmed by the "plan A, no plan B" they couldn't be arsed voting no OR yes.

Take last week's game versus Arsenal and take the so called ground move 'pluses': the revenue streams, the concerts, the conferences, etc, etc. I didn't see any of those on the scoresheet, It's about the team; improving the team and its profile in Europe.

Another silver lining is that the right time for ground building has passed us and Tesco by.

If the Sky / EPL thing does go from silver lining to pigs ear, as it could ? or even should (one in the eye for you, mammon) ? then a new ground will be the least of our worries. Some might say, serves us right.

Reader Comments

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Gavin Ramejkis
1   Posted 04/01/2008 at 07:00:53

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Well written article and to add to that the so called money man in the Everton camp, Robert Earl, has been bankrupt twice. My confidence on the delivery of this unwanted project sinks even further. Maybe Maybe an introverted inspection of what’s happening on the pitch is needed by those in the ivory Goodison towers. We need to get the day to day business of a successful team right before we even think about KW’s pension fund and Sir TL’s shareholders.
Tom Brown
2   Posted 04/01/2008 at 09:07:11

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Not so sure this was a well written article. More like a meandering colection of incoherent thoughts.

"I didn’t see revenue streams on the score sheet" Well what paid the transfer fees and wages then? Did all those players come and play for free? Marvelous!

Actually picking the game against Arsenal is interesting. As we can all recite without thinking - Arsenal got to where they are now (still much more succesful than us) without a deep-pocketed sugar daddy. They did it through spending money carefully and working on their revenue streams. They got so far and then realised they needed a big change to grow revenues to a level where they could continue to compete (on the field) with the biggest teams in Europe - and that step was a new stadium.

I’m not trying to say that what Everton are doing is the right strategy or not. Just saying I’m not sure your arguments hold up.



Neil Pearse
3   Posted 04/01/2008 at 09:25:23

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Derek, I think you’ve got it right about the financial bubble we are now over - but for well known ’Sad Realists’ like me the implications are rather different. And probably not what you seem to think they are regarding Kirkby.

The real losers as a result of where we now are financially are our neighbours. They are looking at borrowing serious amounts of money to build their palace on Stanley Park, and the price is going up day by day. One consequence of this is that their hard-headed US owners are quite likely to either seriously downsize their ambitions, or come to us to try to share some of the pain. Especially since they see that at least with Rafa they are not going to win the title anytime soon without buying a couple more players of Torres’ ability (and price).

For us, this situation actually makes Kirkby rather more likely. The point of Kirkby all along has been that, relative to other options (e.g. building on Stanley Park or the Loop), it is financially rather prudent. And has a rather big backer (Tesco), who also of course are going to get a lot out of it.

The reason Kirkby is unsatisfactory to so many is because it is cheap - like buying a house in an out of town location next to shops. Of course it would be nicer to buy your own place in Mayfair with a nice garden around it - but that would cost rather more.

Like it or not, Bill and Keith will be congratulating themselves that, given the credit crunch and financial downturn, the relatively modest Kirkby option now looks even more attractive than it did before.
Chris Gough
4   Posted 04/01/2008 at 09:36:16

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Absolutely right! The next year or so may well see a number of chickens come home to roost for alot of clubs that have taken the investment gamble without the right financial backing, planning or margin for change. Don’t underestimate the looming economic problems. When supporters are struggling to pay the mortgage, feed their family or put fuel in the car - live football matches will become secondary for many. It won’t be long before some of the PL clubs "major investors" have to cut their investment losses and football teams will probably be top of the list. Leeds proved that big spending for success is not the anwer if you don’t have guaranteed financial income. I have a feeling that we will be calling the old lady "home" for some time to come.
Mark Murphy
5   Posted 04/01/2008 at 10:39:48

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I took my seven-year-old to his first game at Goodison last week ? the Arsenal game. Despite the result he was gob-smacked by the experience and is now completely and utterly Everton daft. He was a blue blinkered Evertonian before the game but, as was the case with me years ago, his first visit to Goodison Park clinched it! We were row A, family enclosure between half way and the Glwadys st corner flag, yet our tickets had the dreaded words "obstructed view" printed on them. Now some of my best memories at Goodison were "hindered" by obstructed views - I had to lean around the main stand post when Imre Varadi & Peter Eastoe knocked the shite out of the cup (I still SAW it all!) - but I had never thought it such a big deal until recently when it has been used as a factor in convincing us we need a new ground. To be fair our views of part of the pitch WERE obstructed - we couldnt see the Park End/Paddock corner flag because some ginger bloke in a tracksuit kept standing on the touchline - but other than that my son thought Goodison Park was "better than Wembley" (and yes, he has been!).
My own view is that apart from the Bullens road stand there is nothing I can figure needs replacing at Goodison Park and I cannot understand the urgency to leave. Its really not as bad as some people are making out. So we wont buy the league title in the near future? I?m far happier building a team the way we are than selling out to "compete" with 4 other teams!
Dean Johnson
6   Posted 04/01/2008 at 11:09:21

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I agree with your last statement Mark.

Although I’m struggling with your "there’s nothing wrong with goodison" words.

We need money making facilities, lots of them, and for that we need space. For 1 we will need a much larger stadium footprint to build a roof which wouldn’t obstruct our views, all stands would have to be rebuilt, there is no doubt, but there isn’t the space.

I love goodison, but it’s old, smelly and a relic of a bygone age which everyone clings to with great passion. Maybe moving to a new stadium will help us to quit living in the past and saying "we were great once", yeah, but so were Huddersfield, Bolton, Charlton, Sheff Wed, Forest etc etc.
Chris Gough
7   Posted 04/01/2008 at 11:33:34

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Dean, I agree with you, Goodison isn’t perfect and we do need more money making facilities. Unfortunately what your hoping will happen is that the club enters a financial agreement to fund this and that the club hopes it can optimistically pay back. It is the borrowing mentality with massive mortgages, loans and credit cards that are leveraged beyond the applicants financial means that has brought the economic crisis in the first place. The cost of borrowing is skyrocketing with disasterous consequences. I would much rather have an obstructed view of a premiership game than an unobstructed view of the Second division and the first couple of rounds of the FA cup.

We need to move but unfortunately I think that has to go on hold for the next few years until this economic mess is sorted out.
Steve Ashton
8   Posted 04/01/2008 at 12:26:24

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I sometimes think we look at Goodison through rose (blue) coloured spectacles.

I?ve been visiting the holy ground for 47 years and have more amazing memories of the place than I could ever list, but we do tend to remember the great times and I am no more able to come up with the answer to the question what inspires an amazing atmosphere now than I could in 1960. Why did the whole ground decide at half time of the Portsmouth game last season that they were going to sing their hearts out for the last 45 mins? Presumably a fair percentage of the fans at that game were at the Arsenal game last week when support for the lads was flat until Arteta was sent off.

What I?m saying is Goodison is a complete anachronism. We may love the Archie Leitch stands (some may believe they should be listed buildings as is Leitch?s main stand at Fulham), but Leitch died in 1939 for heavens sake and we now need a modern ground for the modern game, people create atmospheres no matter what the setting, remember Rotterdam.

Everton needs to have the opportunity to tap into every single income stream it can. The alternative is to completely sell our souls to the Americans, Russians, Thais, etc. That in my opinion would be the biggest sell out of all.

To those of you who think money has suddenly become more expensive ? it hasn?t, it just became scarcer, consequently the Tesco deal looks better every day to me.
Stuart Fearns
9   Posted 04/01/2008 at 13:30:18

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Can’t agree with a lot of the comment around the economy and cost of borrwing. Wihtout going into reams of detail, the short term cost of borrowing has increased substatially but is likely to reduce and will start ot recover by as early as the 2nd half of this year. So I wouldn’t get any hopes up that this is going to change the Kirkby plans. Indeed, I agree with some comments that this could strengthen the position.
Personally I voted no to Kirkby but will sadly accept the democratic will of my fellow supporters. That said, we CANNOT live in the past and pretend GP is good enough - IT ISN’T anymore. I have been going there for over 40 years and have been at matches that still make my hairs stand on endI when I think about them. But, we have to progress - standing still is falling backwards and we will gradually become an old has been like Huddersfield - Preston etc if we don’t.
One bright spot is the weak dollare is making it harder and harder for the RS especially with escalating ground costs and dwindling succes on the pitch - and there’s nothing wrong with a bit of schadenfreude heh?
Clyde McPhatter
10   Posted 04/01/2008 at 17:46:18

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I can’t tell you the number of times I hae asked this question...what exactly is wrong with debt? If you were building a house, would you have all the money upfront to build it? No, of course not. You would borrow it.

Why would you thik the Sky/TV money is ever going to dry up? It might flatten out a bit, but th overseas markets are very young and building quickly. 6 Billion Chinese can’t be wrong about our league.

Evertonians tend to live way into the future instead of enjoying the day. Alive in all the Cups and 6th in the league. You could be an RS supporter...4-5-1 against Wigan at home!!!! Wow, pretty pathetic for all the money they have spent.

Keith Glazzard
11   Posted 04/01/2008 at 18:34:42

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The Guardian’s Andy Hunter is usually worth reading and today’s offering is about Benitez’ "bleak midwinter". Our vecino amigo, we are told, ’curses misfortune, profligacy and a lack of spending power’. I think he left out Uranus being retrograde in Pisces because nobody would believe him.

Hunter also mentions the owners’ "struggle to finalise the terms on a £350m loan to refinance their purchase of the club and pay for the first work on a new stadium...". We wish them all the best, don’t we.

My favourite comment in the article speaks of Benitez "copying of Arsenal’s global recruitment policy at youth level ..." - two birds with one stone. Well done Andy Hunter.

One last thought about the shite - el gordo went public about his winter ’spending crisis’. He crawled away with his tail between his legs. Who knows what really happened, but perhaps he was hoping to be sacked and (a la McClaren etc) be handsomely compensated. Maybe someone pointed out to him that in going public he was breaking his contract, and so dismissal would have been immediate. And the best of luck at the industrial tribunal amigo. Just a thought.

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