With just over a week to the commencement of the new gambling season, the initial influx of the summer transfers have arrived and an early assessment of the impact of both the increased television money and the incoming breed of hyper owners may be made. The positive configuration of a non World Cup/Euro summer with a massive new television deal and lots of hot money from interesting sources sloshing around has yielded informative patterns.
Booming demand from Asia and the Middle East has allowed the league to tie up contracts worth £625 million ($1250 million) for broadcasting rights for the next three seasons, boosting overall media income to £2.725 billion, 60 percent above previous levels. Additionally, the promised transfer funds that were utilised as marketing tools during the takeover processes must be backed up by some market activity although some of the owners highlighted below are busy backtracking.
The tabulation below attempts to demonstrate the spending power of the twenty Premiership teams in the close season but a few assumptions must be stated. Firstly, transfers based on illegal behaviour are not included in the figures so even when Manchester United finally get Tevez, this transfer will remain a footnote with regard to West Ham. Secondly, many teams, particularly those under private ownership, are reluctant to disclose the financial details of transfers as it is in their interests to cause as much blurring of financial realities as possible. Thirdly, there is still a month to the conclusion of the transfer window and the alleged money still to be released by Ashley at Newcastle, to name an example, may possibly tilt the data. We will update these figures at August 31st. The figures below represent our estimates of the financial inflows and outflows to date. It should be noted that a + figure represents nett spending by a team.
Arsenal -12.0m; Aston Villa +9.5m; Birmingham +8.0m; Blackburn +5.0m; Bolton +1.0m; Chelsea +14.0m; Derby +7.5m; Everton +3.0m; Fulham +16.0m; Liverpool +26.5m; Manchester City +35.0m (after Bojinov); Manchester United +29.0m (without Tevez); Middleboro +11.5m; Newcastle -4.0m (after Dyer); Portsmouth +15.0m; Reading -1.5m; Sunderland +11.5m; Tottenham +28.5m; West Ham +16.0m (after Dyer); Wigan +3.0m.
These data are fascinating on a range of levels.
* The foreign hyper owners have been busy. The total nett spend at these eight clubs has been £161.0m at an average of just over £20m each. By the end of the month, it will be surprising if this figure hasn't reached a quarter of a billion pounds. There is a marketing requirement among the hyper owners to build an initial transfer splurge into their strategy - the prime way to convince the gullible fan is to spend big in the early days of ownership with the transfer kitty depreciating over time, take Chelsea, for example.
* Newcastle is a disaster waiting to happen. As we previously posted (see: http://footballisfixed.blogspot.com/2007/07/man-out-of-his-depth.html), Mike Ashley is financially compromised. Big Sam is getting increasingly vocal about the lack of available funds saying publicly yesterday that three or four other players will be required on top of the money from the transfer of Dyer. Geordie gullibility is currently being glossed over by the Toon's pre-season victories over a Juventus team that remained on the beach for ninety minutes and a heavily jetlagged Celtic. Last night's defeat to Hull City was probably more indicative of status although several first teamers were rested.
* Arsène Wenger continues to be the sharpest mind in the market. Every year the man sells allegedly key players when such players are near the peak of their market price while being in decline professionally - think Vieira, Petit, Overmars and now Henry and Reyes - meanwhile Arsenal bank the profits from their extensive scouting network. Wenger, unlike Ferguson for one, chooses to purchase players prior to the summer spectacular international tournaments saving millions on players like Rosicky in the process. For a not very astute Ferguson, think Ferdinand and Rooney. One of the prime reasons that Arsenal are currently able to withstand Kroenke's advances is the economic astuteness of their operation. Although Henry will be missed on one level, the sale was perfectly timed. Henry was represented throughout the transfer negotiations by Darren Dein, the son of the former vice-chairman David Dein. Once the fissure between Wenger and Dein became a chasm and Henry chose his side, the transfer was an inevitability and a good thing strategically for the Gunners.
* On the day when the Thai authorities upped gear in their campaign to have Thaksin Shinawatra extradited, the situation at Eastlands is worthy of an update. We indicated in earlier posts regarding this farce that Shinawatra was using hot money (very probably linked to the underground betting markets in Thailand) to purchase the Mancs. Thailand's anti-graft body confirmed on Wednesday that Shinawatra may have bought the club with money he had deliberately hidden from the government. Thaksin is unable to explain where he gained the assets which were utilised in the purchase of Manchester City and, until he and his lawyer are able to do so, the takeover should be put on hold while investigations continue. Pointless platitudes from Thaksin's team and the Manchester City hierarchy are irrelevant - if his legal team had any leg to stand on, they would be backing up their pseudo-threats with writs. Other new details in the daily soap at City include a refusal by the club to pay £806,000 owed to Manchester City Council whose leisure management budget is overspent almost entirely on the basis of City's refusal to hand over the cash. The process is already a little opaque due to Manchester City's irritating tendency to doctor attendance figures. Aimed at promoting the brand and increasing advertising income, attendance figure manipulation has negative side effects including these payments to the council. The money is largely rental for the City of Manchester Stadium which the club have leased from the council for 250 years (like City will still be around in a quarter of a millennium!). In a bad day for Frank, the Thai Asset Examination Committee (AEC) also ruled on Wednesday that Thaksin had ordered a state bank illegally to provide a soft loan to military-ruled Myanmar for satellite equipment it was buying from a Thai firm in which Thaksin's family was a major shareholder. Viroj Laohaphand, head of the Myanmar loan panel, told reporters Thaksin's order to the bank to lend the Myanmar government 1 billion baht (£16.5 million) on top of 3 billion baht initially agreed had cost the taxpayer 100 million baht. Additionally, there are rumours in the Far East that the three young Thai players that Thaksin wishes to bring to the City are linked contractually to some of Thaksin's cronies... Following on from the Premier League's increasingly desperate defence of its decision to allow the Man City takeover to proceed following allegations from Human Rights Watch regarding Shinawatra's human rights abuses and an expensive and ill-thought out transfer strategy from Eriksson, City's week deteriorates seemingly by the hour. Can't wait for the big extravaganza to welcome cuddly Frank this weekend - it will be worth going just to determine how many languages (Italian, Swedish, Spanish, Croatian, Portuguese, Mancunian, Bulgarian, Flemish, Chinese and Greek!) will be used on the pitch as City's team of overrated, overpriced and semi-anonymous newcomers with intriguing agents are introduced to the great and the gullible. The final negative for Shinawatra is the disappearance from the political radar of the poodle's urban regeneration of East Manchester via the creative input of a supercasino. Shinawatra had built the supercasino into his financial strategy and the allegedly affordable social housing that will be constructed in its place will only be of interest to Thaksin if he revisits his former practice of illegally taking out any drug dealers or muslims that might be in his vicinity.
* It is probably worthy of note that fan volatility will be a major factor as circumstances develop at Newcastle and Man City. Along with Leeds fans, the supporters of these two teams are peculiarly quasi-religious about their devotion to their outfit. But this belief mechanism becomes duplicitous at times of turbulence resulting in a hugely negative impact from the terraces. One of the main reasons for City's poor showing in the latter half of last season was the melancholic drone of a moan that accompanied any of the many misplaced passes made by the team - it is difficult to try creative sportsmanship with this fickle fan on your back. Whereas Celtic fans, for example, celebrate their team whatever: "it don't matter if we win or lose...", City fans attempt to exorcise their life miseries in a peculiarly self-harming manner of support.
* Niall Quinn is evidently correct when he questions the negative impact that the money of the hyper owners is having on the transfer market. It is possible to strip out the individual inputs of the tv money and the new owner's money and transfer inflation is related mainly to the latter. All three promoted teams have spent around £10 million to secure another year in the Premiership. Without the possibility of an enlightened longer term transfer strategy available to the likes of Wenger, the yo-yo teams are forced into cyclical upgrading and downsizing to accommodate their promotions and relegations. There would seem to be some logic in purchasing more heavily to ensure a longer term survival in the top league. A popular figure in the mainstream media around the onset of the West Ham scandal was that the Premier League's decision to exonerate the Hammers of any blame for their criminality was worth £30 million - this figure apparently being the financial benefit of appearing in the Premiership. One would have thought that increased transfer activity to reward promotion should be amplified as, if £30 million may be achieved for, say, five years, a £25 million transfer kitty now seems like a very good investment. Unless, of course, such behaviour just raises the platform for all teams... So many individuals benefit from an inflated transfer market as so many individuals have their fingers illicitly in the pie.
* If £30 million is indeed the benefit of staying in the Premiership then the £29.5 million spent to date by the Hammers in the close season is in a remarkably similar ballpark.
* The Stevens bungs inquiry was a whitewash and, from evidence over this summer, has had absolutely no positive impact on the transfer market. Of the individuals implicated at any level by the inquiry, only the situation of Sam Allardyce is problematic. After leaving Bolton in the wake of the BBC Panorama expose, Allardyce has been hampered by Ashley's chaos (see above). Elsewhere, Portsmouth have spent big as have Liverpool and Boro and Pini Zahavi has been buzzing around. And the Tevez inevitability drags on and on and on...
* The eight clubs excluding the foreign hyper owner brigade, the promoted trio and Tottenham Hotspur who are attempting to buy their way into a Big Five have a nett spend only £6 million which, at just £0.75 million per club, is markedly less than the £20 million average of the hyper bunch. One might expect that this increasing transfer imbalance will unduly influence affairs on the pitch but the major global transfer market is a more complex beast than that...
Requoting Francesco Barelli: "economic interests in football far outweigh sporting interests".
