Football: The Giggs up!

[Soylent Brown]

Just now, polishgenius said:

Butt was head of the academy as Rashford, Greenwood, McTominay and Henderson came through. He did alright.

How long has he been there? It strikes me that their paths would have been solidified before his time.

Still not sold on McTominay mind.

[Wilbur]

21 minutes ago, Tywin et al. said:

...Josh Kroenke said the current model isn't sustainable. 

For the owners like the Kroenkes or Glazers, the meaning of "sustainable" is something entirely different to the meaning assigned by the fans of clubs.

For Kroenke, "sustainable" means being able to cream off all the profits of that specific club, and that specific club generating profits year over year in a predictable way, and finally seeing the value of the club increase year over year in a predictable fashion.  Kroenke doesn't see any difference between Accrington Stanley and Nike as a business.  If Kroenke owns Nike shares, Kroenke wants dividends and a future price increase for when he sells the shares.  He doesn't give two $hits about the people who make or wear the actual Nike gear.

For a fan, "sustainable" means Accrington Stanley has a league of 90+ teams to compete with in a league format and two cup competitions every year.  "Sustainable" means that Accrington Stanley owns its own stadium and can periodically do maintenance and hygience for the grounds to keep it a pleasant place to enjoy games.  "Sustainable" means that Accrington Stanley has the opportunity to refresh its team and play a full set of games, generally at 3PM on a Saturday.  "Sustainable" means that Accrington Stanley gets to play its traditional rivals two or three times a year, and the prices to see those matches are something he or she can afford.

Thus "sustainable" has two very different meanings, depending upon if your name is Kroenke or Bob Fansworth.

[polishgenius]

2 minutes ago, Soylent Brown said:

How long has he been there? It strikes me that their paths would have been solidified before his time.

 

Nine years as coach, since 2016 as head of academy.

[BigFatCoward]

Glazers sound alright to me. 

[A Horse Named Stranger]

1 hour ago, Tywin et al. said:

Noob question: Do EPL teams actually make an annual profit if you don't factor in asset appreciation? I just read a couple of brief articles on the subject and I can understand why Josh Kroenke said the current model isn't sustainable. 

 

That's actually not a noob question, and not just for the EPL clubs.

Short answer is yes. You can run clubs sustainable (if you don't get hit by a global pandemic).

Ofc, you properly have to define sustainable.

A club is sustianable, if his expenditures don't exceed its income. It is possible to run that club that way. I wouldn't look at it annually tho. If your club has been run profitable for over a decade, then one year with a negative bilance sheet isn't necessarily the end of the world (depending on how big that deficit was obviously). In the same sense, clubs who have big loans outstanding don't have to be on the verge of bankruptcy. Loans only get problematic if you can't pay it off.

E.g. we still have started to rebuilt our stadium from 2010 to 2015 (different parts at different time, so the stadium was still in use during the rebuilt), of course that meant loans, and we still have as a second tier club outstanding loans. In 2019 we had an oustanding loans of around 47m in 2019. Sounds like much, but at the same time we were able to roughly pay off 4m or so each year. The stadium was supposed to be refinanced by 2027. Which would've been the biggest chunk of that debt. So that debt level was/is sustainable for my club. Corona will undoubtedly have put a dent into that plan, and push things back a bit.

What the clubs at the upper echolon of the football pyramid are doing is something completely different. The main issue there are really wages and agent fees, financed by future revenue through CL money. I've described this before. That's basically a bet on the future (success) of the club. If they lose their bet, their financial house of cards might very well collapse. As in they are stuck with the players' wages, but without the CL money. And if they crash out of the European competition alltogether, they have a bloated squad with a lot of potentially unhappy players, who don't see enough game time on top of their financial woes. Anyway, the clubs are then faced with two option. Option one, offload players to reduce costs (with a certain risk of not getting what you hope for, asset depreciation if you will), but lose competitiveness with the other top clubs. Or take another gamble that next year, will be our year. If you lose a few more of those bets, your financial problems unsurprisingly grow. Given that only four Premier League clubs can qualify for the CL, and you have six or seven clubs in the running for four spots, you can see how this is not gonna end well. And those clubs end up with a structural deficits. As for Kroenke, Arsenal having missed out on CL football for a few seasons, well, let's just say what they paid Özil and Sanchez/Mkhitaryan in wages must have been quite painful, when the CL money wasn't coming in.

Burnley on the other hand are or rather were pre-corona run profitable. So you obviously can run an EPL team on a sound financial base. But that's really not the fun, you are gunning for trophies club.

I suspect Norwich, who will return to the EPL next season, as club that's also rather run on a financially sound base. Well, if not for corona.

[Mr. Chatywin et al.]

2 hours ago, Wilbur said:

For the owners like the Kroenkes or Glazers, the meaning of "sustainable" is something entirely different to the meaning assigned by the fans of clubs.

For Kroenke, "sustainable" means being able to cream off all the profits of that specific club, and that specific club generating profits year over year in a predictable way, and finally seeing the value of the club increase year over year in a predictable fashion.  Kroenke doesn't see any difference between Accrington Stanley and Nike as a business.  If Kroenke owns Nike shares, Kroenke wants dividends and a future price increase for when he sells the shares.  He doesn't give two $hits about the people who make or wear the actual Nike gear.

For a fan, "sustainable" means Accrington Stanley has a league of 90+ teams to compete with in a league format and two cup competitions every year.  "Sustainable" means that Accrington Stanley owns its own stadium and can periodically do maintenance and hygience for the grounds to keep it a pleasant place to enjoy games.  "Sustainable" means that Accrington Stanley has the opportunity to refresh its team and play a full set of games, generally at 3PM on a Saturday.  "Sustainable" means that Accrington Stanley gets to play its traditional rivals two or three times a year, and the prices to see those matches are something he or she can afford.

Thus "sustainable" has two very different meanings, depending upon if your name is Kroenke or Bob Fansworth.

And that's precisely what I was getting at in the previous thread. There are two very obvious competing forces at play, and for a long times they've lived in functioning disharmony.  That's beginning to crack. I completely agree with the general layout @A Horse Named Stranger described, but that's the reason why clubs could be in trouble as things go forward. The risk in investing in a European club is rather high at the moment, which is again why I said if you were operating on a ten year plan you'd rather buy into a MLS expansion team than most European clubs. 

If you think wages and fees are the main issue with today's game, again, that means a cap and a cap means a floor and there's still no way to actually do that as there would be literally no buy-in from any side and it would cripple relegation.

 

[Wilbur]

Alternatively, the clubs with European Cup ambitions could operate without the gambles, as it is the gambling which gets them into financial trouble (see the example of Dirty, Dirty Leeds at the turn of the century).

If the big clubs were able to live within their means, making reasonable plans within reasonable budgets, then English football would probably be OK.  The problem is that when Real Madrid or Barcelona out-spend for all the stars and monopolize the Big Cup finals year after year, the big English clubs are tempted to start gambling again.

So they bUy BiG nAmEs and pay big wages in the hope that they can sustain their Big Cup challenge, as A Horse Named described above.  And when it doesn't work out (see Arsenal currently, or again, Leeds two decades ago) the negative outcomes of gambling can be pretty rough.  It took Leeds most of those two decades to recover from their escapades.

But the "investor-type" owner wants something different.  So the proposed-and-burned European Super League would have provided them the escape from variable revenues year over year, as the ESL was supposed to be a closed shop with guaranteed big games and big incomes as a result.  No fears of the drop (relegation), no loss of European revenues, just an asset that poops out TV contracts and cash on a regular basis.

The rest of the 88 or so English teams are an irrelevant background hum to these "investor" owners.  Local fans - who cares, we can market to three billion Chinese fans instead.  Let's shift the games to 8AM on Fridays and Saturdays, in fact, so that our Asian TV contracts can really maximize their earnings potential!

[The Winged Shadow]

Masterstroke from United fans. Denying Liverpool the chance of ruining their title run (long shot as it was...), denying City the title for another week, giving the squad a bit more rest before and after their European matches, as well ass pissing off some pundits/broadcasters.

Well played

[A Horse Named Stranger]

13 hours ago, Tywin et al. said:

The risk in investing in a European club is rather high at the moment, which is again why I said if you were operating on a ten year plan you'd rather buy into a MLS expansion team than most European clubs. 

So? I fail to see the problem there. As in, if your American owners stay in the US, I can live that.

Again, this seems to be a fundamental misunderstanding of football fan culture in Europe. Which is also one of the things at the core of that European Soccer League farce. Really, if I were in chase of the best product, I'd be supporting Bayern. But that's not bein a football fan is about. Disclosure, my club is not publicly traded, it's well, a club. I pay my membership fees, I get a vote at the general assembly to vote for or against the supervisory board. Supervisory board nominates the president (who is running with his team). They run the club, if it doesn't work or does some things that turns the fans stomach,  the supervisory board removes the president, new General Assembly, new elections. And the club leadership wouldn't dare to take any drastic measures (likesay selling the stadium name for x years), without a vote from the general assembly. E.g. a member (young woman named Ana) filed a formal request for the GA in 2016 for the club to be run (more) sustainable (ecologically sustainable that is). Result we will be producing our own fair trade jerseys next year. Also we finally ended our contract with effing Under Amour.

Anyway I digress... Where was I. Yeah, the problem for European clubs. Like I said, I don't want any investor anywhere near my club, no investment company, no human rights violator from the middle east, and no dubious Russian billionaire. That horse has bolted for the English clubs a good while ago. The financial calamities of the big clubs is really down to their own financially unsound dealings. Barca is kinda the poster boy for utter insanity right now. They had a debt of round 250m or so a decade ago. That has ballooned to well over a billion. Nobody forced them to pay Messi 70m++ a year. C. Ronaldo is rumoredly on 31m a year Neymar on 36. In comparission Bayern's Lewandowski is reportedly earning around 20m a year. So of course if you pay a player 2-3 times as much as any other player on the planet, then your business model is shit and you can't be sustainable. Plain and simple. And I doubt Messi would've refused to play for Barca, if he was paid half. And Barca is a regular at the CL and is one of the big earning clubs. It's really the clubs that have to reign in their spending, and learn to say no. I doubt the ESL money would've turned Barca's or the Italian clubs fortune around long term. They probably would've found new ways to burn cash and accumulate more debt.

And otherwise what Wilbur said. For the investors the European Soccer League was just another source of revenue to create more profit. With all the move kick off times to I don't give a toss for the benefit of the Asian TV market. Again, this is not what fans want, and why I am not particularly unhappy about investors not wanting to invest in football clubs.

 

[Mr. Chatywin et al.]

That's really apples and oranges though. If fans of the EPL really wanted to further prevent the sport from being a business they'd demand the German model be put in place, but that's never going to happen. And if you want to control costs and level the field a big you need a salary cap, which again is never going to happen.

Also, your last sentence is an issue. You keep referring to fans in just the European sense. The owners and the leagues want a global fanbase, and that means they will at times compromise on what the European fanbase wants. I will say though the push back to this has been interesting to say the least. I'm surprised these big clubs don't have more stomach for a fight.

[polishgenius]

29 minutes ago, Tywin et al. said:

they'd demand the German model be put in place,

 

If only there had been a bunch of people at Old Trafford yesterday demanding that.

[Mr. Chatywin et al.]

42 minutes ago, polishgenius said:

 

If only there had been a bunch of people at Old Trafford yesterday demanding that.

It was a drop of water in a bucket, but it does remain impressive. The only way you’re getting that kind of change is if Parliament makes it law and I have no idea if that would even be league (and in would absolutely cause a new ESL to happen in lieu of such a decision).

[A Horse Named Stranger]

Nope, they can try force the cancellation and ultimately forfeiture of quite a few games (+ fines) to make United unprofitable for the parasites. It's surely destructive. But if the bottom line isn't working for the Glazersites anymore, they'll hopefully bugger off to somewhere else.

[Soylent Brown]

That still requires someone with insane wealth to buy the club, and there's no guarantee any new owner won't be just as bad.

And there's always the chance that the Glazers become vindictive and asset strip the club before dumping it.

 

I just really don't see a way out of this for any of the clubs with bad owners. The only clubs worth buying are the ones that are undervalued, the fixer-uppers. With the likes of United, Liverpool and Arsenal, there's just way too much money involved.

[Mr. Chatywin et al.]

And the only way to fix the bloat at the top would be to effectively end the current system. It's hard to see a way out without upending everything. 

[A Horse Named Stranger]

1 hour ago, Soylent Brown said:

That still requires someone with insane wealth to buy the club, and there's no guarantee any new owner won't be just as bad.

And there's always the chance that the Glazers become vindictive and asset strip the club before dumping it.

 

I just really don't see a way out of this for any of the clubs with bad owners. The only clubs worth buying are the ones that are undervalued, the fixer-uppers. With the likes of United, Liverpool and Arsenal, there's just way too much money involved.

As of right now they are more or less slowly sucking life and cash out of the club - over 1bn as of right now. United is really literally their magical money tree right now. If forfeitures affect other teams and owner in the EPL there might be sufficient pressure to sell fast. If they go into asset stripping mode, there's a fair chance they'd have done that anyway. And maybe, if United were to fall victim to that, it could really trigger change in English club football.

[Soylent Brown]

Again, who exactly do you think is going to step in ready to spend £4bn+ on a club? Santa is busy year round getting ready for Christmas, and I can't think of any other benevolent ultra-billionaires that might be interested.

Any new owner would have the same temptation the Glazers have - United make so much money that they can keep up with the other clubs while not spending everything the club makes.

You talk about the money they make as if it's all that much - I expect if they just wanted to make money, there are a lot of businesses where they could do that much more efficiently and with a lot less hatred directed toward them.

[Mr. Chatywin et al.]

1 hour ago, A Horse Named Stranger said:

And maybe, if United were to fall victim to that, it could really trigger change in English club football.

And what changes would those be given there doesn't appear to be a ton of apatite for change?

[Consigliere]

 

[MercenaryChef]

14 minutes ago, Consigliere said:

 

I'd happily put money on him not surviving the season.