Having watched the momentous events of this week unfold with a certain amount of incredulity got me thinking of the wider implications of a global down turn on our beloved game.
I am by no means a financial expert so my comments need to be taken it that context.
Given that much of the revenue in the Premier League is derived from TV rights, what would happen if, as subscription TV via Sky or Setanta is a major discretionary spend - (my costs are in excess of £60 per month and I for one am seriously considering knocking them both on the head), people deserted them in droves, jeopardising their ability to finance the TV rights purchases they have made, or forcing them to put forward much more modest bids, the next time they are up for renewal? Likely to happen? Well we've seen it before with ITV Digital. What effect would that have on our Premier League?
My guess is that for clubs owned by billionaires who are cash rich, like Chelsea, and Man City, there will be little affect. Then there are the clubs who are owned by sharp suited Americans such as Man U, and Liverpoool. As far as I'm aware, these clubs were purchased with leveraged finance. If the loans that underpin these purchases were to unravel and be called in because of falling TV receipts, where would that leave these clubs? Probably they would be OK as they would be prime take over targets by other Oil-monied play boys!
That leaves all the rest. Most of these clubs have considerable levels of debt. I think some of these clubs will be in deep do do. Clubs like West Ham, Middlesborough, Bolton, Everton, Spurs to name a few may find themselves unable to meet their financial commitments.
The trickle down effect to clubs beyond the Premier League may also be felt with clubs unable to solve their debt problems by selling their player assets at inflated prices.
All the more important for clubs like ours to ensure we have our finances under control. Clubs prudently run with everything shipshape and any excess baggage jettisoned will find it easier to survive the storm when it arrives - thats my view. Indeed it may already be here.
0
Comments