1) Top flight English football is no longer just a local affair (eg, bragging rights after the derby) but a global business. It attracts capital (investment) from all over the world and at a scale far greater than ever seen before in the game. In order to just compete you need to attract this level of capital. Many of the people who have that sort of capital happen to be foreign.
2) The issue of investors being foreign is a red herring ? the real issue is whether they will be effective at running a business. In this case it means will they be effective in having a successful team and attracting greater numbers of supporters (to buy merchandising, tickets, etc).
3) Profit is not bad. Sorry, but it's not. Profit is what is returned to you when you run your business well. In the case of a football team, that means success on the pitch. What would be bad is asset stripping ? an investor coming in and selling off real estate and capital assets to gain a profit and then buggering off. These are few and far between in football, and those that have been seen in the lower divisions have been largely English. None of the foreign investors who have gotten involved with top flight clubs have asset-stripped any of those clubs. (The biggest disaster in top flight football was overseen by Brits at Leeds).
Man Utd have prospered under the Glazers, Aston Villa are healthy, Liverpool are spending large sums of money and getting a shiny new stadium (within the city boundaries too), Portsmouth are newly affluent and competitive, Spurs are spending with the big boys... etc. On the other hand, you could argue that the guy at Man City undermined their new found stability when he fired Sven. The issue isn't what country they're from but how they operate the club.
The point is not that we become Gordon Gekko or a Thatcherite wet dream but that we understand that in order to truly compete we need both a large amount of capital and the people who know how to put it to best use.
My own personal opinion is that Kenwright fails on both counts, but that's just my opinion.
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1 Posted 04/08/2008 at 07:56:00
2 Posted 04/08/2008 at 08:22:58
Not to worry mate, now that one of the worst kept secrets in football is out, namely that it is Sir Philip Green and his oppo Robert Earl who are stearing the good ship Everton - it seems many of those fans you mention have gotten over their collective fear and are willing to embrace the billionaire mercenaries - despite the fact that one is ?a foreigner? and both are Spurs fans.
Fickle Evertonians? Surely not eh?
Alan Willo - ?That?s why I don't understand why so many people attack him because he doesn't or has never had the money so he/we will always fall short.?
Just maybe Kenwright should never have loaned the money off Philip Green to buy the club in the first place then?
3 Posted 04/08/2008 at 09:18:12
I may been in a minority but I would rather be at GP with DM?s 5/6 year plan (including a gradual development of GP) than be at the whim of an investor/owner who has no feeling or passion for the club.This is the peoples club.
4 Posted 04/08/2008 at 09:22:37
Personally, I see nothing to admire. The only ray of hope is that they cannot all succeed and sooner or later the bubble will burst. The question is, how best for Everton FC to still be in business once the dust has settled?
5 Posted 04/08/2008 at 09:54:42
I believe that it is prudent well run clubs who will come out best. I am not putting Everton quite into that category but that is what we need to aim at.
6 Posted 04/08/2008 at 10:59:31
7 Posted 04/08/2008 at 11:20:16
So why not try our own way. We’re not doing too badly at the moment. We’re knocking on the door of the champions league honeypot with significantly smaller resources than our competitiors.
I don’t want to support a club owned by someone who doesn’t give a flying burrito about its fans, traditions, etc.
If I were a long term Chelsea fan I wouldn’t feel it was my club any more. A model could be Arsenal - fans at the top (Peter Hill-Wood) a pay structure and excellent talent spotting.
8 Posted 04/08/2008 at 11:38:59
The big problem is player power sucking up every penny in the game - if that is tackled fairly then the game will open up significantly and investors will look at the Prem as a better bet. Will it happen soon? I doubt it - there are still fast bucks to be made by powerful investors.
So far investors seem to look at these clubs as commodities to buy and sell on at a profit, or somewhere to dump debt, or somewhere to gain political advantage in a far off country. Few seem to take profits in a year on year basis - the game just doesn’t work like that.
Several large clubs will be feeling the heat as more and more competition emerges for the Champions League places - something has to give and Liverpool are the most vulnerable.
I don’t think investors still in this market looking for a club are looking for running profits in the short term - the profits can’t possibly match the sheer scale of investment needed until it is time to sell - and I am not sure how long that model is sustainable.
Income & outgoings must eventually level out but it is easy to see it will be some time yet. Perhaps the more likely outcome is that the income generated by the Premiership will catch up that generated by the CL (already happening with the top team in the Prem getting £50 million), making participation in the CL less imperative? The CL is already becoming dominated by the Prem teams so perhaps that isn’t as unlikely as it first appears?
9 Posted 04/08/2008 at 12:32:21
Well put, mate...
10 Posted 04/08/2008 at 13:06:16
11 Posted 04/08/2008 at 13:59:20
a really good post and some very poignant responses.
I would like to major on what I see as the main weakness in EFC right now (besides the obvious lack of cash with BK)and that is how badly the CLUB (as opposed to the TEAM) is run.
We gave away the catering and merchandising for 30 pieces of silver.
PR is the joke of the century.
Branding with the exception of a couple of initiatives is totally lacklustre and has no direction.
Marketing opportunities are not seized on.
And worst of all the administration is a total joke.
But it sums it all up for me when the Chairman comes out and says "I dont know whats going on I’m only the chairman"
Leadership starts at the top and I have no problem with any sort of investor foreign or otherwise as long as they have commercial acumen and are not in it for a quick buck as Green and Earl appear to be.
12 Posted 04/08/2008 at 14:05:51
Well, most of the capital assets have now gone.
I am not saying Kenwright did it to make a profit then bugger off - I think it was more a case of trying to hold onto the train set - but don’t be surprised if he buggers off with a nice profit!
There’s not much left in the way of fixed assets left for anyone to buy - just our ’franchise’ - but the sooner it happens, the better.
13 Posted 04/08/2008 at 14:04:51
14 Posted 04/08/2008 at 17:04:24
I want to focus on your point 3.
You argue that clubs that have been invested in have thrived (and we are talking about genuine "investment" here; that?s somebody putting money in for his own personal gain).
You argue Man Utd and Liverpool have thrived. Is that really as a result of their owners? Let?s not forget, both have taken money OUT of the cubs. It?s not exactly clear what they have put in. Due to Champions League success, both clubs have vast revenues to spend on players. Both have been among the biggest spenders in British football over the last 10 years. What exactly have they done, other than to raise ticket prices? Liverpool apparently had to sell Crouch to raise funds. Is that thriving?
You argue that no club has been asset-stripped, but there are different degrees of asset-stripping. Glazier and Hicks have both paid their clubs? money to the banks in the form of interest to fund their own purchase of the clubs. Isn?t THAT asset-stripping, just on a smaller scale?
The argument that putting money into the team is a good investment for the investor, as it guarantees ticket sales etc. At the risk of stating the obvious, if it were that easy then every single major bank would be buying football clubs.
I?ll ask the same question I always ask: if a genuine investor came along, how much money would you want him to put in, and how is he going to get his money (with a level of profit suitable for the high risk)? If we get an Abramovich, that?s different, but why would a Glazier style investor be interested?
15 Posted 04/08/2008 at 17:55:46
You make a good point about new owners and how they leverage debt. On the one hand it’s hardly ideal from a fan’s perspective but on the other neither of these clubs have suffered from it. Time will tell in the long run, but certainly the Glazers seem to have the business acumen to make it happen (I hope the lads across the Park don’t).
But what it does show is that whether we like it or not the financial stakes are just so much higher than they ever have been before, and that’s the reality of this new high finance game.
One of the points I made is that it is not whether they’re foreign or not, but how they invest money in the club (eg, a straight buy vs borrowing against the club’s own assets) and then how they actually perform.
I also think there are plenty of ways of improving the club without massive capital (though you would still want that) - for example, Everton’s proud history and the fact that we’re somewhat of a "cursed" club - potential dominance interrupted by two world wars and Heysel, we could be branded somewhat like the Red Sox here are in the States. But nobody knows about us. Ffs.
I also think Aresenal is a wonderful model for us. The guy in charge is a fan but he’s also wonderfully astute business wise. Our chairman is just a fan.
16 Posted 04/08/2008 at 19:51:00
It?s easy to look at Man Utd and say they were top the league, so they haven?t suffered. But they are financially the biggest club in the world ? they are SUPPOSED to be top of the league. They have such a huge turnover that even when money is taken out, they are still the biggest club in the world.
That doesn?t mean they haven?t suffered though. To use a business analogy, if Tesco lost 10% of their profits every year, they would still be the biggest supermarket company in the UK. On a league table basis, they haven?t suffered, but in reality of course they have.
It?s also worth noting that both Liverpool and Man Utd didn?t change their business team - Gill and Parry are still running the businesses. The only real difference is that they have been given free rein to price their tickets on a purely economic basis - i.e. charge as much as they can. The owners have added little value from a business point of view.
On the point of whether an investor would borrow against the clubs own assets - ANY genuine investor would do exactly that, because it?s economically the right thing to do FOR HIM (not for us, obviously). If he didn?t do that, you?d have to quesiton his business nous.
Further, the assumption that pumping money into a Premier League club to try to get into the Champions League is automatically economically profitable is flawed. People on this board seem to think we need to spend £30m this summer to have a chance to make 4th. Add signing on fees and wages, and that?s £50m investment needed in one single year. How is an investor going to recoup £50m if we make the Champions League? More importantly, how is he going to recoup it if we DON?T?
What, however, might well be economically profitable is this: buy a midtable football team. Whack up the ticket prices to whatever supporters will pay. Don?t spend much on players - just enough to keep your club in the top flight. Keep wages down. Sell the top players whenver you get a really good bid. Slowly extract money over a long period of time as dividends/interest.
Which of those two previous business strategies are more likely to be employed by an accountant?
That?s my worry right there. To listen to some people, you?d think that ANY investor would naturally have the same ambitions as Everton fans. That?s simply not true.
BTW, I?m not buying your Red Sox analogy - they are the only team for 200 miles in a densely populated and economically rich area which is sports mad. Based on the success of the Patriots and the Celtics, Boston clearly isn?t holding the Red Sox back.
Presumably, though, the Red Sox are now going to fall apart, because they actually won and aren?t cursed anymore? (Kidding, obviously :) )
17 Posted 04/08/2008 at 21:37:15
18 Posted 04/08/2008 at 22:01:08
The other reality is that Kenwright has neither the capital nor the acumen to make us successful.
As for the Red Sox analogy I think it’s valid. Those guys hadn’t won anything for years (like 90 or something) yet they perpetuated a narrative in the media and popular consciousness that kept them front and center. Everton have potentially a great narrative (one of the oldest clubs, Dixie, but seemingly perpetually thwarted by external events) but we’re pretty anonymous in the public mind.
19 Posted 04/08/2008 at 22:18:09
I just think you have it slightly backward - the Red Sox curse wasn’t in the public consciousness just because they hadn’t won anything for 90 years - any number of teams have a similar record. It’s in the public conciousness because they NEARLY won in the 90s and early 2000s - a lot. Every year they had one of the best teams in baseball, and quite a few times they NEARLY made it - and blew it. The media wrote about them because they were in the big games, on the virge but not quite there.
To bring this back to Everton (thank God), imagine if for the next 4 or 5 years Everton made a few finals, but lost them. Finished 5th a few years in a row. Finished 4th in the year England only gets 3 teams in the CL. Then, the media would write about our unlucky history, because it’s relevent to our current situation (and the "Curse of the Bambino" was a media bandwagon, not a club marketing strategy, for most of its life).
Besides: years not winning a Championship, jealous of the bigger club in the neighbouring big city, convinced everything is down to bad luck, spending loads of money without success....go on, admit it, the Red Sox are the Red Shite.
20 Posted 05/08/2008 at 12:31:41
21 Posted 05/08/2008 at 12:51:43
22 Posted 05/08/2008 at 23:29:58
Looks like the vultures are circling.
23 Posted 06/08/2008 at 01:05:05
The thing that gave me a giggle in this latest saga (and as an Evertonian in the current climate, I needed it) were the comments posted on the official website to the effect that Mr Kenwright "will continue to sit down and discuss the Club?s future with any individual or group which boasts integrity and financial clout". I?d have thought that with all the half-truths, lies and failed schemes that have prevailed since he took over, Bill Kenwright would be the last person to bang on about integrity.
Simon, in one of your posts you stated that "there are different degrees of asset-stripping. Glazier and Hicks have both paid their clubs? money to the banks in the form of interest to fund their own purchase of the clubs. Isn?t THAT asset-stripping, just on a smaller scale?" To clarify your first point, yes, there are different degrees (and means) of asset stripping. However, taking profits out of a business to pay for its acquisition and/or maintenance is not asset stripping. There are very clear definitions of asset stripping in the various accounting and financial management standards that exist and dictate ethical business practice that support this point.
Primarily asset stripping relates to the sale of fixed / capital assets and is generally done to captalise on the value of these fixed / capital assets prior to offloading the shell of what remains of the business. In many countries, including the UK, asset stripping in the form outlined above is regarded as an illegal activity and carries heavy penalties.
Either way, this entire debate in this thread, whilst well thought out and debated, is a moot point. Mr Kenwright has demonstrated clearly in the past, he will say the Club is for sale and/or he is seeking investment 24/7, but somehow never seems to succeeds in this goal probably because he wants to hang onto his own personal ?train set? and, even if contacted by potential investors, sets impossible conditions that lead to withdrawal of these investment offers.
He will sell only when forced to do so by factors outside his control.
24 Posted 06/08/2008 at 15:58:10
When the big financial backers of TV and some of the present top clubs pull the pin due to financial stress or maybe boredom, then there will be a lot of clubs going broke. One thing we do need to do is upgrade our coaching system and weed out the best of the local talent for the future. E V E R T O N
25 Posted 06/08/2008 at 20:08:58
Yes, I agree that no asset stripping by the literal legal definition have occured. I was responding to Robert’s original post when he said "None of the foreign investors who have gotten involved with top flight clubs have asset-stripped any of those clubs. (The biggest disaster in top flight football was overseen by Brits at Leeds)." I was making the point that, while these clubs have not been totally asset stripped, they have had assets taken out of them net and hence does not mean that the new owners have not had a negative effect, albiet one that isn’t visible in the league tables yet.
If Liverpool don’t make the Champions League this year, the backlash against this summers transfer policy will be huge.