Banking crisis - how's it affecting football?

[Rocksuperstar]

So here i, once again, ask for someone with the knowledge to enlighten me as a question has formed in my messy head. This time i need someone of the banking variety, clued up on this banking crisis.

I remember reading that when Woolwich were looking for cashish for their shiny new stadia they went begging to a load of lenders and organisations to fund this venture. Who was that, how are they faring and what's going to happen if those who did lend suddenly call that debt back in? Or have the Woolwich already paid off the bajillions they borrowed? Can't see it, personally, though that said, it's not like they've spent much on players the last few years.

I've heard of a lot of friends of mine who deal in large sums of cash getting a little hot under the collar about lending rates, interest and fluctuating fluctuations, or some such malarky but then i thought about the AIG situation and how Man U are now technically sponsored by the US Government, following the bail out.

West Ham's tefal-headed owner is now looking a bit shakey too, as the ice-cube tray that is Icebank has frozen a load of it's customers accounts whilst it works out if it's going down the pan, where Magnussussnussnon (edit: apologies, i forgot he was bought out, it's the other fella who has the banking investments, the one who bought Magnusson out - Bjorgolfur Gudmundsson) has a substantial amount of dough invested.

It's all well and good having bajillionairre owners pouring their cash into the premiership, some of you i know are smiling seductively at the thought of it happening to us but, unless you're a gang-star like Mr Abramovic and have all your notes stashed inside a damp matress, in a safe house in an ex Balkan state, i'm not so confident that the Premierships salad days will go on much longer.

Anyone with a more valid opinion, please join in here and put me straight, but you don't get rich by sitting on cash - you have to either steal it, inherit it, or invest it and those that have invested, right now, especially in banks, must be crapping their very expensive pants i would imagine.

 

[knilly]

with regards to our club levy has done a fantastic job to make us have very little debt. the footballing side hasnt gone to plan but the financial side of the club is a contrast to many clubs. chelsea and utd have debts of over 700m each.

scary stuff and i think the bubble will burst for more clubs very soon.

maybe thats why we shifted a lot of players, upped the ticket prices and havent built a stadium yet.

 

[Rocksuperstar]

http://www.dailymail.co.uk/sport/fo...mmers-does-club-fare-Premier-League-debt.html

According to this list, we still have a debt of £17m but, as per usual with the Daily "My mum didn't breastfeed me and i was an only child" Mail it has no actual detail or substance to the article, just what appears to be some random numbers plucked from mid-air.

Anyone want to take a stab at where our debt lies? :shrug:

To be honest, a £17m debt could be wiped out right here and now, with the amount of cash we have slopping about at Spurs, so why would it be left there to gather interest? :shrug:

Seems West Ham are listed as the most beleaguered, with Chelsea, Liverpool and the Woolwich in as the next most indebted teams, but once again, no detail as to where or how these debts have built up - The Daily Mail drives me nucking futs, it's such a shit rag and they have their heads so far up their own arses.

 

[TheChosenOne]

Saw this on my web travels this morning...

http://www.dailymail.co.uk/sport/fo...mmers-does-club-fare-Premier-League-debt.html

But this story is doing the rounds as well in other papers as well.....

http://www.dailymail.co.uk/sport/fo...wn-Champions-League-unless-sort-finances.html

 

[Hoowl]

with regards to our club levy has done a fantastic job to make us have very little debt. the footballing side hasnt gone to plan but the financial side of the club is a contrast to many clubs. chelsea and utd have debts of over 700m each.

scary stuff and i think the bubble will burst for more clubs very soon.

maybe thats why we shifted a lot of players, upped the ticket prices and havent built a stadium yet.

I definately think the stadium plans have been affected by the Credit Crunch. How can they not have been when we'd need to take out significant loans to finance the project? I have heard suggestions of us trying to get funds from Supermarkets etc so that we can minimise the amount we have to spend and consequently our risk. This was posted on COYS, it originally came from devonian on another forum:

If the rumour is out and if it is true that Boris is supporting the rail link (thank you Lord Ashcroft) then the next rumour will be that the Haringey Local Implementation Plan (LIP) will be funded partly by Central Government, LDA and private companies. This strategy is why there has been a delay in the announcement of the Stadium Project – we have been trying to get the majority of the Stadium funding paid for by other people – the Everton/Tesco regeneration scenario. This has been discussed in another thread. If that rumour does come out then the next announcement will be from THFC stating that we will build a new Stadium adjacent to our current home and that our funding requirement will be +/- 35% of the build cost of the Stadium.


Ashcroft is certainly pulling strings and the whole scheme will ensure that all residents of Tottenham will profit as will, of course, THFC.


The details below are taken directly from the Haringey LIP and is available from the Haringey website:


5.10.13.

Park Lane forms part of the town centre and is a principal focus of
pedestrian activity on match days. It joins the High Road at White Hart
Lane Stadium and provides a link to Northumberland Park bus interchange
and station. The road serves a wide range of land uses and functions,
including a local shopping parade, housing, the football ground and two
schools. Park Lane has been the subject of a streetscape and traffic
management improvement study and strategy, which has been developed
with the involvement of local people and the North London Chamber of
Commerce.


5.10.14.

A Step 1 submission has been prepared and submitted to TfL in
April 2006. Funding of £50,000 has been allocated to develop the project
further in 2006/7. The purpose of this scheme is to deliver improvements
to the public realm of Tottenham Town Centre. In particular the scheme
aims to:

• Improve the physical and living environment of Tottenham and
improve the accessibility of residents to sustainable forms of
transport

• Increase the opportunities of local people to use the street as a
local environment by creating attractive outdoor living spaces,
resulting in reduced social exclusion

• Improve the facilities for pedestrians, cyclists and bus users
resulting in increased journeys by these modes, supporting a
reduction in vehicle dominance of the High Road and adjoining
roads

• Improve personal security and reduce the perception of crime

• Improve public access to transport interchanges

• Facilitate regeneration and sustainable growth of the local
community by integrating the town centre scheme with other
development proposals such as the possible Tottenham Hotspur
football development.

It sucks for West Ham btw.

 

[Rocksuperstar]

It's this trend for rich people to hedge their bets - they buy the club with their money then recoup that cash by securing a loan against the club itself. From then on out it's a case of the owner not actually spending any of his own cash at all, just continually borrowing and securing each transaction against the club.

Well, that's how it appears to me, as a layman who can barely cope with budgeting his own monthly wage.

This to me is just a sign of how the rich get richer, use their money to give the impression of investment then don't actually risk anything more than the club on any deal done in the future, let alone leave themselves in an awkward position.

If it does get tight, they sell up and walk away from this mountain of debt they've created but with their pockets almost as full as when they arrived.

It's abysmal that they have this free-reign to treat clubs as their own little whores. I hope FIFA does step in and start laying down some rules about solvency and borrowing amongst football clubs.

 

[worcestersauce]

To be fair arsenal's debt is a loan to cover the cost of their stadium which they are servicing. They aren't able to buy big money players and pay the big wages like Utd & chelsea but that has nothing to do with the financial crisis.

If you think about it it is clubs like ours that are most effected by the financial crisis because whilst our debt is low and we have no fear of folding on bankruptcy grounds we are not able to raise the money for a new stadium, certainly not at aqcceptable rates which means we will be down on revenue for the forseeable future.

I still think Man Utd are in greater danger than chelsea as their debt is owed to the banks that financed the glaziers purchase of the club so they got ownership but the club is buying itself for them, if they walk I'm not sure where that leaves the club.

 

[SpurSince57]

I definately think the stadium plans have been affected by the Credit Crunch. How can they not have been when we'd need to take out significant loans to finance the project? I have heard suggestions of us trying to get funds from Supermarkets etc so that we can minimise the amount we have to spend and consequently our risk. This was posted on COYS, it originally came from devonian on another forum:



It sucks for West Ham btw.

We are definitely in with Sainsbury's, the idea being that they will close their existing store and open a much larger one on the site of the existing ground, where there will also be flats and other commercial and leisure facilities.

What rail link is Bojo supposed to be supporting?

 

[Bobishism]

The combined total of debt in the premier league is 3billion. 17 million is trivial ammount. Apparently debt is healthy.

 

[AllSeeingEye]

Having debt means that you have some amount of liquidity.

Tottenham, like many other clubs use assets as collateral against any loans they may need to keep an amount of cash flowing - for stuff like player purchases, and anything that might require cash up front when the level of cash is low. Like when I've blown my wages for the week and need to borrow a tenner off a mate.

The problem with the credit crunch is that banks will find it increasingly hard to lend money because they don't actually have any to give out.

This is passed to the clubs in question, so any club that has borrowed cash by liquidizing assets could soon find itself in trouble when they can't borrow that extra tenner to tide them over til next pay day.

Most clubs will have stringent accounting procedures after what happened at Leeds so the only problem is that next year we may see price hikes either in ticketing or merchandise.

The buck will stop at the fans, because a few quid more per ticket isn't gonna hurt us as much as the banks at the mo.

 

[Wellspurs]

Just heard that the government have been grabbing Iceland assets held in the UK?
Does this mean Spammers will be affected, hope so.

 

[trevo]

According to the pinnacle of modern journalism-London Lite, Joe Lewis has lost loads.

Under the cost to London's Billionaire table the entry reads

..................Company.....................Worth.......Loss
Joe Lewis.... Bear Sterns (Dec 07)... £670m..... £602m

Times are hard eh?