Will the financial crisis benefit football?

JimmyG2

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Another day, another bank collapse. As billionaires become millionaires overnight and mere millionaires queue up at the soup kitchen on Wall Street, I return with renewed hope to one of my concerns: can football escape the seemingly inevitable slide into the world of big business.

Some argue that its too late; its already happened and reply to my threads with the words, 'Wake up granddad and smell the coffee'. I'm not entirely sure what this means but take it that they think I'm out of touch and swimming against the tide.

But Iceland's banks are disappearing faster than the polar ice caps with serious repercussions for West Ham. AIG and many other shirt sponsors are going down the tubes with possible adverse effects on a number of Premiership clubs, and who knows how many rich sponsors and owners are caught up with our very own Joe Lewis in the financial meltdown.

Take another sniff my friends, is that coffee or what? UEFA are threatening to exclude clubs who have large debts from the Champions League, possibly in as little as two years time. Talk of wage caps hangs in the air like, well like the lingering aroma of Nescafe. Transfer cap talk drifts up from the Fairtrade African Rich Roast Special Blend I have just poured from the pot. Greater scrutiny is promised of would be investors and more intrusive investigation of both foreign and home grown benefactors.

Clubs expenditure will be related to their assets and apparently their debt ratios will be capped. Clubs wont be able to buy up players as Chelsea did with Shaun Wright Phillips for ridiculous sums and bank them for future use like gold bars in a safe deposit vault. It could be the end of 'to the richest shall be given and from the poorest it shall be taken away' culture in football.

As the recession bites and unemployment increases, more and more Sky and Setanta subscribers will cancel their subscriptions or not renew their contracts. As advertising revenue falls, commercial television will be unable to maintain the dizzying sums poured into sport. Players shirts will read "Sponsored by Barclay's: on loan from HM Government".

The Premiership will be one of the first and one of the largest victims.

Wages will not just be capped they will fall to reflect the new financial realities. Soon there may be no need for restrictions on foreign players imposed from above or rules about 'home-grown' players.

The free market that got us in this mess may, as it collapses, get us out.

Most objectors to my wish for a level playing field in these matters were not because others didn't want it too but that it was not possible in the current climate. Well people, climate change is not just a distant threat: it just became an imminent promise.

Those who are praying for this alleged Asian billionaire to save us from ourselves may get their wish just in time to be too late. The reception and the honeymoon could well be over; pass the Yellow pages, now let me see 'Divorce Lawyers'.
 

Real_madyidd

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#2
Some argue that its too late; its already happened and reply to my threads with the words, 'Wake up granddad and smell the coffee'.
Where are your threads mate? I must have missed them, and I would like to read more.
 
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#3
Good article but one flaw.

Bear Stearns, Enic, Joe Lewis... three seperate legal persons.

Bear Stearns going bust means that the value of Joe Lewis shares plummet. Fine, accepted.

But we are not owned by Joe Lewis, we are owned by Enic.

Enic have not gone bust

And they are not worth any less

Joe Lewis is their majority shareholder, but we are not run by his money, we are run by Enics money (amongst our other shareholders).

By the same token, anybody owed money by Spurs would not be able to sue Joe Lewis to recover their debt, just Spurs (who themselves are a legal person and so Enic could not be sued either).

That is the beauty of a PLC, it is a type of limited company and therefore, if their shares are fully paid, all shareholders have no liability to any debt of the company, and if the shares are not fully paid (unlikely on such a large scale), then they only owe the difference between what they paid for their shares and what the share price at the time was.

Joe Lewis is not liable for any of Bear Stearns debt. He is not liable for enics debt. he is not liable for our debt. we are not liable for his. enic are not liable for ours. you get the picture. basically, even if he went bankrupt, it would not affect our finances because him going bankrupt has nothing to do with how much money enic have. and while enic are solvent and profitable, it is impossible for him to go bankrupt anyway because he always has the value of his asset, i.e his share in enic.

but joe lewis in no way owns us. only enic own us. they are the major shareholder in spurs, not joe lewis. if he sold his share in enic, they'd still own us to the same extent as they already do.
 

Stoof

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#4
That is the beauty of a PLC, it is a type of limited company and therefore, if their shares are fully paid, all shareholders have no liability to any debt of the company, and if the shares are not fully paid (unlikely on such a large scale), then they only owe the difference between what they paid for their shares and what the share price at the time was.
True, but if Mr. Lewis starts to lose a few more pennies, then he might wish to sell his more profitable assets to offset any potential losses. And if ENIC keep turning a profit for him (he owns 50% of it through family trusts) then there's always the possibility he'll sell. (I don't think he will, I'm just being a bit of pedantic ****, for a change ;-))

He is not liable for our debt.
Unless he's guaranteed anything.

Otherwise, good Company Law 101. ;-)
 
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#5
Come on, what we'd really like to see now is the poor saps who've been supporting these artistocats storm onto the pitch and start guillotining the lot of them...the only question is who we'd most like to see fisrt??..I'd have to go for that twit bently, just in front of Jenas. As for the credit crunch, it simply can't go far enough. I hope everyone looses all everything and proper natural selection is put back into place! I hope there's bloodshed on the streets! Let there be such things, such vile, wicked, things, such mayhem and chaos!
 

wooderz

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#6
Come on, what we'd really like to see now is the poor saps who've been supporting these artistocats storm onto the pitch and start guillotining the lot of them...the only question is who we'd most like to see fisrt??..I'd have to go for that twit bently, just in front of Jenas. As for the credit crunch, it simply can't go far enough. I hope everyone looses all everything and proper natural selection is put back into place! I hope there's bloodshed on the streets! Let there be such things, such vile, wicked, things, such mayhem and chaos!
Sorry Defsta, I've waited half an hour for your usual comment, not forthcoming, so im gonna do it



"Oh dear"
 

michaelden

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#8
I'm just hoping that all the clubs above us are badly affected by the financial crisis and 1) have to sell top player in Jan at basement prices and 2) are declared financially unfit by the FA so we win the league :pray: ;-)
 

wooderz

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#9
I'm just hoping that all the clubs above us are badly affected by the financial crisis and 1) have to sell top player in Jan at basement prices and 2) are declared financially unfit by the FA so we win the league :pray: ;-)
LOL that means every team in the EPL bar us?!
 

ethanedwards

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#10
With the current financial armagaeddon, who knows what the final outcome may be,only the fittest financially will be left standing? Liverpool especially would appear to be vulnerable with their debt structure.
 

onthetwo

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#11
For what its worth, IMO the only good that can come out of the pending recession/depression is the bursting of the Sky-driven football bubble.
Just think, no DOFs, fewer agents, and possibly some local players who give a s**t wearing the shirt. To quote Kevin Keegan I would love it, just love it!
 
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#12
Good article,
I strongly believe that the game is totally disconnected from economic reality. So I'm waiting for this bubble to burst. I just hope that spurs can keep it simple until then.
I 'd love to tell those mercenaries to get lost when they come begging for a contract with spurs because their own four sugardaddy's are broke. Haha, then raid the remainder of the league with our own hudds and ohara's.
Sorry, got a bit carried away there :grin:. That is, if we haven't done a Leeds by then ourselves...
 
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#13
Personally I think there's a lot to be said for financial caps in wages and transfers. But it'll never happen. What Jimmy Hill's legacy gave us was fair to the players, but it has gone too far and you could argue has become larger than the sum of its parts.

However, they said that about the house market didnt they?

Nice article, thanks.
 
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#14
Another day, another bank collapse. As billionaires become millionaires overnight and mere millionaires queue up at the soup kitchen on Wall Street, I return with renewed hope to one of my concerns: can football escape the seemingly inevitable slide into the world of big business.

Etc
cheerful chap
 
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#15
I'm just hoping that all the clubs above us are badly affected by the financial crisis and 1) have to sell top player in Jan at basement prices and 2) are declared financially unfit by the FA so we win the league :pray: ;-)
and the champions league becomes the claytons league
 

DC_Boy

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#16
I've very little firm ideas about how the financial crisis will affect us or football in general

I still strongly want us to get in a billionaire benefactor ASAP - but it may be this current crisis will stop that

it's good of course we are financially stable but in the short term that won't stop us getting relegated unless our play improves, cos even the West Hams of this world aren't gonna collapse overnight

indeed I reckon it's very likely they'll finish above us this season(annoyingly), even if in the medium term we probably have a better outlook than them

personally I doubt anything too dramatic will happen this season due to finances - of course some clubs will cut back on spending

next season may see a more dramatic swing of power on the pitch, but again I doubt anything as dramatic as one of the big 4 taking a mighty tumble

if you want me to predict the top four in May 2010 I'd go MU CFC LFC AFC with possibly Citeh at 5th - radical stuff eh

incidentally a salary cap would hurt spurs and all london clubs due to our higher cost of living compared to say blackburn (no surprise they want it - £30,000 a week goes a lot further there than in Chigwell or SW6)
 
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#17
True, but if Mr. Lewis starts to lose a few more pennies, then he might wish to sell his more profitable assets to offset any potential losses. And if ENIC keep turning a profit for him (he owns 50% of it through family trusts) then there's always the possibility he'll sell. (I don't think he will, I'm just being a bit of pedantic ****, for a change ;-))



Unless he's guaranteed anything.

Otherwise, good Company Law 101. ;-)
I've been on the LPC for just over a month and Company Law's my favourite subject so i never miss an opportunity to spout off about it :grin::razz:
 

Geez

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#19
I suspect the WHL expansion plans will now be mothballed pending next season's season ticket renewals and how hard Joe Lewis has been hit (again) :think:

Company Law's my favourite subject
I always knew there was something weird about you but could never put my finger on it :twisted:
 
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