Money Talks

With the Credit Crunch seemingly ready to eat up everything in its way, her next destination leads her to the once insusceptible football. Money has become the talk of football recently and everything from salary caps,  foreign owners and the ’39th game’ has been talked about in the last few days.

Here’s a summary:

Uefa could ban debt-ridden clubs

On Tuesday, Football Association chairman Lord Triesman estimated the total debt of English clubs to be about £3bn. Lord Triesman said the Premier League’s four top clubs – Manchester United (£764m), Liverpool (£350m), Arsenal (£318m) and Chelsea (£736m) – are believed to account for a third of that debt.

Uefa general secretary David Taylor has warned that football clubs with heavy debts could be excluded from future European competitions.

“We are looking at strengthening the minimum financial criteria and other forms of self regulation that may impose greater standard on clubs that want to compete in European competitions and, beyond that, club football,” Taylor explained.

“A situation where a club would not be allowed to compete in Europe would arise if a club didn’t obtain a licence from their national football association. Club licenses are awarded every year and it’s a requirement for clubs to have such licences before they compete in European competitions. It certainly won’t happen next season but we’ve started with a working group to look at some of these issues,” he said.

However Chelsea have internal interest free loan worth £578m from Roman Abramovich (introduced to sign players and pay wages) that have no repayment time frame attached and have no external loans. They are though still making a loss though it is down to £75.8m. Man United while still owe £666m to financial institutions, including £152m to hedge funds taken on by the Glazer family when they bought the club, then loaded on to United itself. Both Clubs say they should cope with the Credit Crunch. In fact most clubs are in debt so nearly all could be perceived to be on the borders of being insolvent.

’39th game’ is back

Earlier this week, Premier League chief executive Richard Scudamore said the previously mooted ‘international round’ of matches had not been discounted and was still a possibility. Asia are interested but would like teams to promote the development of grass roots football as the main priority not to make money. It would be great for our friends over the other side of the pond to get a piece of the premier league pie but not at the detriment of their own game. Maybe there’s a reason for a country to host Bolton v Wigan now?

“Manchester United have 300m overseas supporters but do not make as much money from them as possible,” said Deloitte’s Alan Switzer. “Even £2 extra from each fan would make an enormous difference. That is something all the big English clubs are now focusing on. The idea of a 39th game is part of that strategy.”

The AFC may also look to adopt a Uefa-style regulation which would allow it to decide when Premier League broadcasts of matches may be beamed into the continent. Uefa rules allow countries to ban broadcasts of matches from abroad when league matches are going on in their country, such as Saturday and Sunday afternoons in this country. The Asians may opt for a similar ban.

Salary Cap

Michel Platini believes a salary cap needs to be introduced into football for the good of the game but concludes it is likely to happen for some time as the salary cap is actually illegal in Europe. How to implement it would be a huge problem as doing it by a percentage of turnover would mean bigger clubs would be able to increase their wage limit more than other clubs. Bigger clubs would argue they would be at a disadvantage as then they won’t be able to offer big name players bigger wages anymore resulting in fewer players. A wage cap is more likely in the shorter term but it has to be agreed by all parties. Platini wants to also take action over foreign ownership.

Arsenal Holdings Plc – Results

We haven’t had time to talk about Arsenal’s finances since they were released last month though the last time we left them, the club was making £41.6 million in operating income but that has slipped to £36.7 million though turnover increased to £223.0 million (The full results can be found here).

Interesting readings include the wage bill has increased and there is growing pressure on that to further increase making Arsenal having the third most highest wage bill in the league. This is without Arsenal apparently having big name players. What I can gather is that the players at Arsenal are earning more at their age in proportion to other premier league clubs while they are all potential world beaters. All this and they are yet to his their peak. The second interesting point is the development of Highbury Square where Arsenal are having to rethink their income generated from this project because of current conditions in the property and mortgage markets. Also £80m put into regenerating Queensland Road has yet to obtain planning permission.

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Let’s leave on a lighter note: A group psychologists and economists have teamed up to compile an anthology book using statistics and data to understand such things as where goalkeepers should satnd for penalty kicks among others. The answer which is to just stand still in the middle of the goal. A study of 259 penalties taken in France and Italy between 1997 and 2002 showed that 81 per cent of kicks aimed straight down the middle found the net, while only 70.1 per cent of kicks to the right and 76.7 per cent of kicks to the left did the same. Meanwhile, another study looked at 286 penalties and discovered that those keepers who stayed in the middle of the goal were more successful. Sadly, there’s an issue of “action bias” to conquer: keepers would rather dive and not save than stay still and fail to save, even if the latter would be the better option.

I think I could give better advice to a keeper: If a he wanted to save a penalty from one of the most successful penalty takers in recent times, Frank Lampard, he should dive to the left as he mostly shoots in the bottom left corner, hardly ever in the middle. While Owen’s recent penalties have been in the middle due to his past failures from this postion. Maybe these scientists should study more on the psychological side as it differs where shots are taken because a number of factors; mentality, ability, the importance (e.g. final).

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