Football on the brink: Liverpool and Manchester not immune from financial crisis

12 December 2009 22:16
From the world's oldest football club in League Two to the Premier League champions, an institution until recently onsidered the richest in the world game, the cracks in the smooth financial fa?e of English football widened this week to reveala little more of the ugly truth lurking beneath.[LNB]Out of Europe: Steven Gerrard and Martin Skrtel after LIverpool's Champions League exit[LNB]The crisis which is engulfing Notts County, with Sven Goran Eriksson still likely to end his association with the world's original football club despite yesterday's announcement of another takeover, and the prospect of 2008 FA Cup winners Portsmouth becoming the first Premier League club to fall into administration, are likely to mark just the initial stages of the financial collapse of many clubs within the English game.[LNB]Even Sir Alex Ferguson was last week forced to deny that champions Manchester United, who once proudly topped football's rich list but whose most significant financial figure now is the £699million of debt the Glazer family have loaded on to the club, were in a financial crisis after bizarrely pulling out of the £9m signing of Serb teenager Adem Ljajic. [LNB]Nevertheless, until United spend the £60m Ferguson claims he has at his disposal from last summer's £80m sale of Ronaldo, many will conclude that the ever-rising annual interest bill £69m at the last count is debilitating the club. [LNB]In Liverpool, Rafa Benitez has finally spelled out explicitly what has been clear for some time: the priority of that once-great club now is to reduce their £300m debt and their interest payments of £36.5m a year. [LNB]Manager Benitez has threatened to resign if Fernando Torres is sold and sources at financial institutions say that nuclear option has been discussed, although dismissed, by the club's bankers, RBS. Whether they could reject the £75m bid with which Manchester City will be ready to test them in the summer remains to be seen. [LNB]Even clubs which are run in a more cautious fashion now find they can no longer make football's ludicrous mathematics add up: Everton reached last year's FA Cup final and finished fifth in the league, but last week they announced a £6.7m loss over the season.[LNB]The financial maelstrom will clearly hit the lower leagues first. Even though Notts County's current owner, Peter Trembling, yesterday announced that he 'had restructured the ownership of the football club in order to secure new investment', it remains unclear how the club will fund unpaid bills. [LNB]Sportsmail understands that the restructuring of ownership did not involve Eriksson and sources close to the former England manager were unaware of the developmentuntil Trembling made his announcement yesterday afternoon.[LNB] How it was: Sven Goran Eriksson as the New Director of Football of Notts County alonside Executive Chairman Peter Trembling (right) and Club Manager Ian McParland[LNB]Even if it buys the club some time, it is increasingly likely that Eriksson will part company with County in the coming weeks if, as expected, those fresh funds are not forthcoming. The club owe money to local suppliers and were threatened with awinding-up order from the taxman last month over a bill estimated at £400,000. The Revenue issue such proceedings only as a last resort. [LNB]Eriksson's departure will mark the end of a fantastical saga at the club, taken over by investment firm Qadbak, though it later emerged Russell King, a man wanted in the Channel Islands over further allegations of fraud and with £1.9m worth of assets frozen, was one of the key negotiators and advisors to the company. [LNB]Qadbak, fronted by father and son Peter and Nathan Willett, attempted to purchase the Formula One BMW Sauber team, even though its holding company, Swiss Commodity Holdings, had no demonstrable assets. [LNB]Cash value: Glenn Johnson will cost Pompey £8m next month[LNB]But, two weeks ago, as the questions about the provenance of Qadbak's funds remained unanswered, BMW blocked the deal, selling the team to its founder, Peter Sauber. [LNB]Nevertheless, it is the collapse of a Premier League club, namely Portsmouth, which would prove most embarrassing for English football. In what has now becoming a regular occurrence, the club will not be able to bank its £10m TV cheque due in January but instead will see around £8m diverted to the likes of Chelsea, to whom they owe a sell-on fee relating to Glen Johnson's transfer to Liverpool in July, and, as revealed by Sportsmail last week, French club Rennes, from whom they signed John Utaka in 2007. [LNB]Watford are also expecting instalments on the sales of Tommy Smith while the ownership dispute has left Notts County in chaos and Mike Willliamson but have aneven more stark deadline of their own on December 22 by which time billionaire owner Lord Ashcroft, or someone else, needs to find £5.5m to keep the club afloat.[LNB]Twice Portsmouth have failed to pay the wages of their players on time and managed to meet their obligations only by arranging bridging loans, a matter of increasing concern to the Professional Footballers' Association, who have been forced to pay the wages of numerous Football League clubs in recent months.[LNB]A PFA source said: 'It is not ideal for us to be paying the players that is the job of the clubs. 'But when they hit hard times, we have a choice of helping our members or walking away. But Premier League clubs are a different matter. We could not afford to help Portsmouth even if we wanted to. Portsmouth get more revenue from television deals in one year that the PFA have built in assets over a hundred years.'[LNB]The new regime at Portsmouth insist that the club are not in crisis and point out that it would make little sense for owner Ali Al Faraj and his financial backers to have saved the club from administration in October, only to see it suffer the same fate a few weeks. [LNB]But it does not help that so little is known about the owner, who is yet to be seen at Fratton Park. The weakness of football authorities in being able to investigate and control who takes over English football clubs has recently been utterly exposed. For more than a decade, English football has lived it up, enjoying the proceeds of anyone and any corporation that saw fit to enrich its owners and officials by whatever mean they could. [LNB]Now it's payback time. [LNB] Manchester United 0 Villa 1: Gabriel Agbonlahor the hero as Villa break Old Trafford hoodooChelsea 3 Everton 3: Saha strikes to dent Blues' title hopesTottenham to probe Assou-Ekotto's clash with fan after Wolves defeat You losers! Benitez's stunning blast at Souness and Klinsmann[LNB][LNB]  Explore more:People:Glen Johnson, Rafa Benitez, Steven Gerrard, Sven Goran Eriksson, John Utaka, Alex Ferguson, FERNANDO TORRES, Martin SkrtelPlaces:Liverpool, Manchester, United Kingdom, Europe, Premier League club, Fratton ParkOrganisations:Football League

Source: Daily_Mail