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WHAT RELEGATION FROM THE SPL MEANS – 13/10/08

The impact of relegation from the English Premiership is a familiar story, but what about the implications of being relegated from its Scottish counterpart? The absence from the fixture list of matches against the Old Firm can create a serious financial shortfall for relegated clubs. Relegation leads to an almost immediate loss of £1.5m. Relegated clubs are provided with a £250,000 parachute payment by the SPL during their first season in the First Division, followed by £125,000 the following year. Contrast this with the situation in the English league where there are parachute payments of £11m for two years. If a club goes up for just one year and is then relegated, the additional income can amount to over £50m. If the club does not splash the cash on new players, outgoings will increase by a relatively small amount. In the Scottish league's recent history, only Dunfermline (in 1999) have been capable of dropping down and coming straight back up. Paisley's St.Mirren took five years to get back after being relegated in 2001. This absence almost destroyed the club financially and led to the sale of the Love Street ground to Tesco for £15m. With this money the club was able to clear its £2m debt and finance a new 8,000-capacity stadium at Ferguslie Park which should be available in 2009-10.

The club that finishes last in the SPL will receive a maximum of £720,000. This prospect is causing alarm at bottom-of-the-table Aberdeen, although the bookies favour Hamilton Accies to go down. Average attendances at Pittodrie, a stone's throw from the North Sea, were 12,000 last season, but for the quartet of Old Firm matches they went up to 16,547. Last year's accounts showed a 11 per cent increase in turnover to £7.5m, a figure that is expected to nudge £8m when the latest accounts are published. The last operating profit was a modest £62,000, following on two years of substantial losses and the club remains heavily indebted. The Dons hope to build a new ground on a greenfield site adjacent to Loirston Loch or at the King's Links. Last year's estimates of Pittodrie's worth as development land have taken a big hit since the spring. But Aberdeen is a prosperous city and the club could clear its debts if a joint venture with the city council to build a new stadium acquired fresh momentum. Banks which are partially nationalised may find it hard to turn their back on popular football clubs with lots of supporters who are also voters.

WHEN CASH IS KING – 12/10/08

Net debt figures for football clubs don't really make a lot of sense. Take the four most indebted Premiership clubs on the basis of 2007 figures: Manchester United (£666m); Chelsea (£578m); Arsenal (£318.1m, 2008); Fulham (£181.7m). Two of these are 'benefactor' clubs. Now even Roman Abramovich is not immune to losses on the stock exchanges. But he can lose a lot of money and still be very rich. Chelsea are not immune to, for example, slowdowns in merchandise sales in the run up to Christmas. But they are not suddenly going to be impoverished. Arsenal have caught a bit of a cold with the way that their Highbury property development has been hit by the changing market, but they are not going to default on their payments. Manchester United is a more complex case, because of its quite complicated financing arrangements, while at Liverpool the American owners cannot deliver on their promises if they are unable to borrow money. However, even for a club as financially troubled as West Ham, there is a buyer waiting in the wings. However, it is the sovereign wealth funds or billionaires from India who now have the whip hand. If you have lots of money in gold and a basket of currencies, you can still buy a club, but it may not cost as much as it would have done a few months ago. One consequence is that Newcastle may be difficult to sell at a price which would recoup Mike Ashley's investment.

Richard Scudamore, the chief executive of the Premiership, is a man that many love to hate, although it could be argued that what he does is fight his corner which is what he is paid to do. But even he has been moderating his tone. He has had talks with government ministers. Admittedly, those talks are part of an ongoing dialogue, but they are taking place in a context where there is more emphasis on regulation. When Mohamed Bin Hammam, the president of the Asian Football Confederation, who had previously been opposed to the 39th game proposal indicated that he might have changed his mind, Scudamore's reaction was very cautious. He said that nothing might happen for a year and emphasised, 'I've gone on record as saying that the idea will not come back in exactly the same form as announced in February is wrong. We're not daft and we're not insensitive to the reactions of fans. We've never been confident that the 39th game will happen.' With the number of purchasers of clubs from the United Arab Emirates, with more probably yet to come, they will soon be in a position to stage their own local competition between clubs they own!

'MELTDOWN' AND FOOTBALL – 12/10/08

The International Monetary Fund (IMF) has talked this weekend of a 'meltdown' in the world's financial system which could lead to a further 20 per cent being wiped off stock exchange values. We don't claim to be economic forecasters on this page, but one of the difficulties with statements of this kind is the so-called 'Oedipus effect': making the prediction increases the chances of it occurring. Some of the commentary in recent days has come from people whose agenda is the failure of the Premiership. As we have emphasised before, we think that the real threat could come to lower or non-league clubs in the near future. Two examples: work on a new stadium for Northern League Penrith has been hit by the credit crunch. The National Bank of Australia has withdrawn backing for the purpose-built £80m development which would have included a superstore. Following Blue Square premier club Salisbury's appeal for donations (£40,000 against a target of £100,000 raised so far), Kidderminster has asked individuals to pay £50,000 for a place on the board. The chairman's building company has been hit by the slowdown and gates at the former Football League club are currently 1,000 below a 2,500 target.

What the Premiership model really rests on is the television money. For a club like Manchester United, gate money along with corporate boxes and merchandise is important and the latter two categories could be hit in a slowdown. But a club like Wigan can get along with relatively low gates (a lot of them youngsters), the television money and a benefactor. Of course, benefactors may be hit by a slowdown. There are a lot of factors to consider, and it's a fast-moving picture, but we will try to provide as much in depth analysis as we can. What we don't know - and nor does anyone else - is what the length and depth of the global economic slowdown will be.

DUBAI GROUP BID FOR CHARLTON – 10/10/08

On a day in which global markets have been in turmoil, unfashionable south-east London club Charlton Athletic have received a bid from a Dubai-based investment group headed by His Excellency Mohammed Ali Ali Hashimi. Apparently the group considered a number of football clubs but thought that Charlton offered the greatest potential. In a statement, the prospective new owner has praised the passion of the club's fans, its heritage and its commitment to the community. He also expressed his determination to get the club back to the Premiership. Due diligence has to be undertaken, but it is hoped that the sale could be completed within a few days. It has the full support of leading Addicks shareholder, Richard Murray. Normally reliable sources at the club indicated that among the factors that had attracted the new owners were: the development potential of the Thames gateway; the status of Greenwich as an Olympic borough; the club's community programme; and the fact that it has a reputation for good internal management and effective structures.

Zabeel has links with Dubai International Capital, the group that was interested in buying Liverpool. They received approaches from a number of clubs in England, elsewhere in Europe and in South America before settling on the Addicks. They had talks with Newcastle owner Mike Ashley, but thought that his asking price of £480m was too much. Portsmouth were available at a bargain price, but it was thought that the London club offered more potential. They are thought likely to pay somewhere in the region of £20m-£25m, giving them a relatively economical route into English football with reasonable prospects of a Premiership place. They do not intend to splash the cash, however, but to build up the club steadily in a similar way to the strategy being followed at Queen's Park Rangers.

UEFA THREAT TO DEBT RIDDEN CLUBS – 9/10/08

Uefa are threatening to ban debt ridden clubs from their competitions. This is a major threat to leading English clubs to whom Champions League football is a key slice of their income. Some might feel that the move is motivated by continental jealousy at the success of English clubs in the Champions League. Others might feel that Uefa are trying to tackle a genuine problem facing football. So what arguments have been put forward by David Taylor, former secretary of the Scottish Football Association, but now the second most powerful man in European football as general secretary of Uefa? His experience in Scotland has clearly had a big impact on Taylor. He referred specifically to the collapse of Gretna. He also recalled the controversial Italian lawyer Giovanni di Stefano who stepped down from the board of Dundee five years ago before the club went into administration with debts of more than £20m after initially parading himself as a saviour.

Entry to the Champions League and Uefa Cup is subject to licences issued by European football's governing body. Taylor says clubs must address debts or face 'the ultimate sanction'. He explained, 'There would be forms of communication, even warnings or reprimands, before one got to a situation of exclusion but it is absolutely possible.' If Uefa did exclude a club on these grounds, they might well find a law suit winging in their direction. However, Taylor believes that clubs with huge debts are putting their future in jeopardy and feels they have to bring their finances under control. 'There is concern about these numbers, particularly in an era of financial crisis,' Taylor said. 'Debt in itself is not necessarily a bad thing. Just because I have a mortgage doesn't mean I'm bankrupt. But the debt does have a requirement to be properly serviced. Clubs must work within all available means and they must not expose themselves to such an extent that the whole future of the club is jeopardised unless some white knight comes over the horizon with millions and millions of pounds.'

On one level that sounds sensible enough and Taylor did succeed in making his case in a more reasonable way than some of the other individuals who have jumped on the regulatory bandwagon. However, some of his remarks have a hint of 'four legs good, two legs bad'. He stated, 'There are a number of English clubs being touted to Russians, Americans and Nigerians. Which do you want to choose from the list?' A harsh critic might say that such a remark could be seen as a little xenophobic. Or to put it another way, the owner of Gretna was British. A British owner can be irresponsible and a foreign owner can be responsible. What is really needed is an effective 'fit and proper person' test which involves a more than superficial examination of a person's credentials. For example, one might scrutinise with some care individuals from countries with a known history of corruption or 'crony capitalism'.

TRIESMAN BLASTS FOOTBALL DEBT – 8/10/08

Lord Triesman, the chairman of the FA, and Richard Scudamore, the chairman of the Premiership, got in an argument yesterday about the effect of the credit crunch on football at the Football Leaders conference, ironically held at Stamford Bridge. What a lot of this is about is a power struggle between the FA and the Premiership over who has the biggest influence on the game. Triesman, who is a former trade union leader, used the opportunity posed by the credit crunch to try and land a few debating punches on the Premiership supremo, but Scudamore gave as good as he got. I was asked to go on television at noon and my basic message was: calm down. Your own club is not about to go under and, unfortunately, if anyone does, it won't be the big clubs, but smaller clubs who are more reliant on overdraft finance, short-term loans or other forms of finance that can be cut off and perhaps the finances of a UK businessman. The most indebted club in the country is Chelsea, but this is money 'owed' to their benefactor, Roman Abramovich. He isn't about to run out of money, nor is the Russian economy. Indeed, they have offered to bail out Iceland.

Triesman announced that City analysts had told him that football owed a collective £3 billion. Scudamore shrugged his shoulders and announced that there was nothing wrong with debt. 'Debt, to a degree, is healthy ... What is important is that the level of indebtedness has got to be in proportion to your income,' he said. Debt, he added, was on a 1:1 ratio with overall revenues in the game. Like Sepp Blatter, Triesman is unhappy about the influx of foreign money and players into the English game. He wants a new Sports Law to regulate who governs what in English football. This is not a disinterested call, as it would strengthen the position of the FA, an organisation which enjoys little confidence among fans. Of course, this is good time for calling for more regulation. But one needs to think whether it would really work, or whether it would be yet another case of government/governance failure.

BLATTER HITS OUT AT FOREIGN OWNERSHIP – 7/10/08

Fifa president Sepp Blatter has called for stricter rules on foreign ownership of clubs in the UK and elsewhere in Europe. On a visit to the European Parliament, the football supremo stated, 'Something has to be done about these billionaire owners. These days you can buy a club as easily as a football jersey. This is not just about England where the problem is acute. This will spread across Europe.' Blatter is, however, less clear about what the solution is to what he perceives as a problem. A country like Britain, which has always welcomed foreign investment, is not going to bar foreign ownership in one sector of the economy and it is not an area in which the EU is really competent to act. Blatter admitted that there was 'no single remedy', but he believed owners should have an association with the area before buying a club. Apparently, there is a Swiss law of this kind, but any such measure would be open to challenge in the British courts. What is most likely to dry up the flow of foreign investment is the credit crunch. But that is likely to have more of an effect on where the money comes from rather than the actual flow.

NO WORRIES AT WEST HAM AS ICELANDIC ECONOMY COLLAPSES – 7/10/08

Iceland could be the first country to go bankrupt since Newfoundland was absorbed by Canada after the Second World War. But at Icelandic-owned West Ham an air of benign calm reigned today, although below the surface there may be more turbulence. The Icelandic bank chaired by the club's billionaire owner was put into receivership by the Icelandic government. The family of Bjorogolfur Gudmundsson are reported to have owned over 40 per cent of Landsbanki, so their personal finances have taken a hit. Gudmundsson is Iceland's second-richest person, after his son Thor. Gudmundsson bought the East London club in November 2006 for £85m. He subsequently invested another £30.5m in December 2007 after buying a further 5 per cent stake. Gudmundsson was listed as one of the thousand richest men in the world in the 2007 Forbes Rich List. However, most of his money comes from outside Iceland. The sectors he is involved in include construction and shipping.

West Ham, already hit by the collapse of its shirt sponsor last month, said that the club was not for sale and that the owner remained 'as committed as ever' in spite of the financial services. A spokeswoman told wire services, 'All at the club remain focused on taking West Ham United forward and these developments have no implications and no impact for the club.' A senior board member is reported by BBC Sport to have said, 'One of Mr Gudmundsson's investments has gone bad, but he is still standing and has a lot of other investments.' Unconfirmed reports have suggested that Indian billionaire Anil Ambani was interested in buying the club and was told that it would be available for £150m.

CREDIT CRUNCH COULD HIT NON-LEAGUE CLUBS – 6/10/08

There has been a lot of speculation about whether the credit crunch will hit a leading Premiership club, but it may be non-league clubs that will be first in the firing line. The sums involved are smaller, but such clubs are often dependent on the patronage of local businesses. Smaller businesses are very reliant on cash flow and banks are reluctant in present circumstances to cut their overdrafts or give them new loans. A number of non-league clubs are currently facing difficulties. In the Conference, former top flight club Oxford United have seen their chairman Nick Merry stepping down. Kelvin Thomas came over from Florida to take over, followed by admissions of serious short-term financial difficulty. One problem is that the club do not own their stadium, which belongs to the former owner after whom it is named, and making the quarterly rent payments is sometimes a stretch. Salisbury should be big enough to support a Conference club, but they have had to try and raise £100,000 in a fortnight from supporters with local businesses asked to chip in with £1,000 each. The club budgeted for gates of 1,550, but they are down by 350.

In the British Gas Business League (aka the Southern League) Merthyr Tydfil have escaped a threatened winding up. They have paid off their £22,000 Inland Revenue bill. The directors had to dig into their pockets. Cambridge City have done a deal which will enable them to maintain rent free at their Milton Road ground until the end of the 2010 season and haven't given up hope of staying there permanently. An earlier phase of the saga involved the club in a lot of litigation. In the Ryman League, Margate have been granted a breathing space in their fight against administration. HM Revenue and Customs threatened to wind them up over an unpaid tax bill. Now they have got until November 26th to solve their financial problems and are confident of getting the money.

SETBACK BUT NOT MAJOR BLOW FOR SKY TV – 5/10/08

Decisions by the media regulator Ofcom on live television rights represent a setback for Sky, but not the major blow they could have been. It has been proposed that the satellite television operator should sell its live football to rivals at regulated wholesale prices. But following an 18-month investigation, OfCom declined requests by BSkyB's rivals to immediately refer the company's allegedly unhealthy dominance of the pay TV market to the Competition Commissioner. Virgin Media, the cable TV operator, along with BT, Setanta and Top Up TV, were presing for a referral to the Commission in the hope that it would lead to BSkyB's break-up. The new arrangements should enable Virgin and others to resell BSkyB's football output to consumers at a profit. The regulator said BSkyB exercised 'market power' in the supply of wholesale premium content, which led to concerns it was likely to restrict rivals' access to it. Ofcom believes its proposal could be implemented next year. BSkyB declined to comment on the possibility of a legal challenge. It was the second piece of bad news for BSkyB in a few days, On Monday the Competition Appeal Tribunal ruled that BSkyB should sell down its 17.9 per cent stake in ITV to below 7,5 per cent. It bought the stake in 2006 to successfully block the proposed takeover of ITV by Virgin Media.

BSkyB should retain its position as the largest pay TV operator, with 9m customers, if the Ofcom proposals are implemented. However, they should give a boost to Virgin which currently has 3.5m customers. Virgin and others should be able to sign up a few hundred thousand additional pay-TV customers if the Ofcom proposals are implemented. However, analysts think that these should be mainly new subscribers rather than BSKyB defectors. BSkyB's wholesale fees are estimated to represent 4 per cent of its revenues. A severe 10 per cent cut in wholesale prices would reduce BSkyB's earnings per share by 3 per cent in 2010.

It is interesting to recall how far television fees have gone up. In 1983-5 and 1985-6 the deals with BBC and ITV were worth £12m with rights fees of £0.5m per match. By 1988-91 the deal with ITV was worth £100m with a rights fee of £1.38m per match. With the arrival of the Premiership the first Sky deal in 1992-6 was worth £425m with a rights fee of £1.41m per match. By 2007-9 the overall deal, now involving Setanta as well, had quadrupled to £1,706m with a rights fee of £4.76m per match for Sky and £2.84m for Setanta.

BOLTON MAY SUE WEST HAM – 3/10/08

Bolton Wanderers have said they may sue West Ham over the Tevez affair. They join a number of players who are threatening to start actions. Sheffield United's claim for £30m is based on the club's relegation. Bolton chairman Phil Gartside has argued that Tevez cost Bolton one league place and consequently £700,000 in prize money because he scored twice in West Ham's victory over Wanderers. Although deducting the two goals would make the score 1-1, Gartside added that West Ham may have won the game without Tevez leading the line for the Hammers. Quite how the courts are supposed to decide what the score might have been in a game without a particular player is a mystery. However, they may have to because the Bolton chairman added that other clubs may also be inclined to pursue West Ham for compensation. No doubt there are others who see this as a gravy train, but it is doing the image of football no good. Should all these actions succeed, which is highly doubtful, and West Ham went bankrupt, what good would that do the game?

SPRINGBOKS FRONT RUNNERS AT MAGPIES – 2/10/08

A South African consortium is thought to be in the lead among bidders for Newcastle United. As many as eight consortiums have been in talks with owners Mike Ashley. However, the five-strong South African group are thought to be prepared to make a bid in the region of the £300m that Ashley is asking for and could seal a deal within a matter of weeks. They are thought to be keen to bring back Kevin Keegan as manager and might offer him a 5 per cent stake to persuade him to come back for a third spell at the helm.

NEWCASTLE SALE PRICE CUT – 30/9/08

Mike Ashley will now settle for a price of £280-£300m for Newcastle United which would still leave him with a profit of £30-£50m from his 15 months in charge. Prospective buyers would get a debt-free club and one with prime commercial property assets in the vicinity of the club's St.James's Park stadium worth in the tens of millions of pounds. Ashley is now taking a more sober view of the situation after his initial sales pitch launched in the Middle East a day after putting the club up for sale, during which he reportedly hawked the club for around £480m. One person close to the sale told the Financial Times, 'The buyer will be a long-term owner of this asset who understands that, in football, profits may not come each and every year.' What was not mentioned is that any buyer will have to cope with the massive - and some would say unrealistic - expectations of Newcastle fans. The Nigerian consortium interested in the club has reportedly already submitted a bid, although they would not have had an opportunity to examine the books, which requires signing a confidentiality agreement.

FINANCIAL WORRIES AT POMPEY – 30/9/08

Although Harry Redknapp has denied that there will be any 'fire sale' of players in the January transfer window, concern about the financial situation of Portsmouth FC persists. They have the smallest ground capacity in the Premiership and are set to lose about £25m as staggered payments of player purchases become due in January and August. Top earners in the side such as Peter Crouch are pulling in over £50,000 in wages with others not far behind. The club currently brings in around £65m through ticket sales, TV money and merchandising, but £60m of that is swallowed up in staff costs. A further £20m is due in deferred transfer fees by the end of the season and owner Alexandre Gaydamak has reportedly accepted that the club needs someone with deeper pockets than him. A club statement has denied that the club was up for sale, but said that if an offer were received it would be seriously considered. What would constitute an acceptable offer is unclear but reports suggest that Gaydamak would accept £40m with hhalf the money paid up front and the rest in a year's time. This is a modest figure by Premiership standards, but any new owner would have to take up the debt and committed costs which would push the full package up to £100m. Ideally, any new owner would be in a position to provide £130m fund the projected new 36,000-seater stadium which would solve a lot of the club's financial problems by adding on ticket sales of 16,000 each match.

BLADES RULE OUT APPEAL – 28/9/08

Sheffield United will not allow West Ham to take the judgement by an arbitration panel over the Carlos Tevez affair to the Court of Arbitration for Sport in Lausanne. The CAS has already made it clear that it will not hear the case unless Sheffield United agree. West Ham are also exploring taking the case to the High Court as they believe the three-man FA tribunal 'based much of its findings on opinion'. The panel chaired by Lord Griffiths has hearings on Thursday about when it will decide the amount of compensation. Lawyers believe that there is little chance that the High Court will hear the club's case. It would only intervene if there was a serious error or irregularity in the tribunal's decision. West Ham are trying to put forward the argument that it can be more profitable for a club to operate in the Championship than at the bottom of the Premiership. However, this argument is not likely to get them very far and they are probably going to have to pay a sizeable sum in compensation. Moreover, a number of former and current Blades players are preparing to sue West Ham for loss of earnings.

ASIAN BILLIONAIRE IN FOR SPURS – 28/9/08

Bottom Premiership club Tottenham Hotspur may be rescued by an Asian billionaire. The news about the 'super rich' investor comes from Singapore. Super-agent Pini Zahavi and the wealthy Asian have been discussing a possible deal. Zahavi brokered the deal in which Roman Abramovich bought Chelsea in 2003. The discussions are at a prelimary stage, but the billonaire investor views Spurs as a perfect buy because of the profile of the club and the fact that they are in London. This last point is regarded as crucial. John Lewis' Enic Investment Group has been the majority owner of Spurs since 2001. A sale has been talked about with an asking price in the £300m-£400m range. Lewis, who owns more than 80 per cent of the shares, lost £400m after the collapse of American investment bank Bear Stearns.

WHY BUY A PREMIERSHIP CLUB? – 28/9/08

Nine out of the 20 clubs in the Premiership are wholly or partially owned by non-British entrepreneurs and the number may well increase soon. Arsene Wenger has asked, what is the motivation for a billionaire to buy a Premiership club? It's interesting to look at a perspective from the Gulf states where many of the owners are increasingly likely to come from. Jumana Al Tamini from gulfnews.com argues, 'While the buyers' motives might vary, they all share the same goals: more social exposure; huge profits and high financial returns. In essence it's big business offering big returns for big egos.' Moreover, 'British clubs benefit from more lax foreign ownership laws.' There is a lack of regulations preventing foreign citizens from owning an English football club. Most English football clubs are not plcs and potential buyers usually only need to buy out a few key shareholders.

In terms of motives, 'There is an element of the billionaires' club - like collecting fine art or giant yachts,' commented Raoul Simons, sports editor at the Evening Standard. 'Of course, there is the added benefit that if you own a sought-after premier league brand, you may be able to sell it in future at a profit to another billionaire who wants to join the exclusive club.' Kuwaiti economist Ali Al Nemash commented, 'It's more of an international social presence than an economic issue. And prestige comes from popular places.' It is important to note that Manchester City was bought as a private transaction not as a sovereign wealth investment. Gulfnews.com were told this 'is not a purchase by a sovereign fund in the same way investments [are] made by other sovereign funds. This is not a sovereign fund investment in the definition of the International Monetary Fund.'

OWLS TOP OF EMPTY SEATS LEAGUE – 28/9/08

Sheffield Wednesday are top of the Championship empty seats league with Hillsborough the most under-occupied stadium. Average attendances at home games is 19,005, leaving the 39,814 capacity stadium only 47.7 per cent full in the four games played there. Top of the Championship stadium filling attendance league are Cardiff City, although this shows that a lot depends on how big your ground is. On average Ninian Park is 93.3 per cent full even though their average gate is just 19,031. Sheffield United are clearly more popular in the steel city with average home gates of 26,210, giving them a healthy 80.3 per cent occupancy at Bramall Lane. Championship newcomers Doncaster Rovers are mid table in the empty seats league with the Keepmoat Stadium 74.7 per cent full on average. Barnsley fill 55.3 per cent of their seats at Oakwell. Southampton are the only club apart from Wednesday to dip below the 50 per cent mark and that is particularly worrying for them as they have substantial annual payments to make on their stadium.

Derby have the top average attendance of 29,131, followed by the Blades and then Norwich, Wolves, Ipswich, Charlton, Nottingham Forest, Birmingham (surprisingly far down), Reading and Cardiff. A nearly full stadium makes for a better atmosphere, but a higher average attendance keeps the bean counters happy.

HEARTS SORT OUT PAY PROBLEMS – 26/9/08

Last week weekly paid players at Hearts didn't get paid and those on monthly salaries faced delayed payments, but the problems should all have been sorted out today. Hearts maintain that the failure to pay employees was down to a technical problem. It appears that the problem arose when owners Ukio Bankas Investment Group, who regularly deposit money into Hearts' bank account, stopped making payments earlier this month. HBOS, who have their own problems, refused to let the overdraft rise above £100,000. A spokesman for UBIG stressed that Hearts' finances were 'in the best shape they have been for five years.' Club debt was last reported at £36m, since when UBIG has announced a £12m debt-for-equity swap. The wage issue has led to questions about the financial health of UBIG. The company brings in profits that are described as being only at a similar level to a local 'boutique' specialist bank like Edinburgh-based Adam and Company. Such smaller banks are said to be less exposed to 'toxic' credit markets than the global operators. UBIG has a better capital ratio (the percentage of its assets that it has in capital) than Scotland's two banks, HBOS and Royal Bank of Scotland. Overall group pre-tax profits at UBIG increased by 15 per cent to £14.3m in the half year to the end of June 2008.

THE CREDIT CRUNCH AND FOOTBALL – 24/9/08

How will the credit crunch hit football? The financial storm is not over yet, but at the moment, within the Premiership at least, the top clubs are sitting pretty, while smaller clubs in less prosperous areas are having to be more innovative in their response. Watching football at the top level either live or on television isn't cheap at a time when incomes are being squeezed. A Sky package costs around £400 a year and season tickets have gone up by almost 800 per cent since the Premiership was set up. Another consideration is sponsorship and corporate entertainment budgets which companies often have to cut back in hard times. However, Dan Jones of the sport business group at Deloitte, believes that Premiership football is less vulnerable than other industries, because of fans' enduring loyalty, and because much of clubs' money is already secured. The record £2.7bn television deal runs till after 2010 and Sky's competitors are already lining up for the next round of bidding as we highlighted in a recent story. Below the Premiership it's more of a struggle, but the crowds are still at historically high levels.

At six of last weekend's 10 Premiership matches there were capacity or near capacity crowds. These came at Chelsea and Liverpool, but also at West Ham and Spurs and at newly promoted Hull City and West Brom. Sunderland failed to fill the 49,000 capacity Stadium of Light, but a crowd of over 38,000 is still a good one. Bolton Wanderers still had 6,000 empty seats for the visit of Arsenal, illustrating how hard it is to raise their crowds above 22,000. Blackburn Rovers used a kids for a quid deal to get the crowd above 19,000 for a fixture against Fulham. That is still 12,000 below capacity, but Rovers argue that 20,000 attendees in a town of 100,000 is a good outcome. Indeed, in the Championship, nearby Burnley also do proportionately well. Perhaps the most disappointing attendance was the 7,000 empty seats at newly enriched Manchester City, even though the match was not on television. However, it is undoubtedly the case that City draws more on a catchment area made up of the less prosperous parts of Greater Manchester compared with the cosmopolitan crowd at Old Trafford. I was travelling up to Manchester last week when they had a game and there were two lads from High Wycombe in beechy Bucks on their way to Old Trafford. They asked the train manager if she was a City fan. 'Yes.' she replied, 'I'm from Manchester.'

United's season ticket waiting list has melted away following the expansion of Old Trafford and successive price increases, but the crowds remain immense. The prawn sandwich brigade is still there in force with 96 per cent of the corporate boxes occupied. Arsenal and Liverpool still have waiting lists for season tickets and Chelsea have sold out despite adult prices ranging from £650 to £1,150. However, clubs such as Blackburn, Bolton, West Brom, Sunderland, Wigan and Middlesbrough have to cope with more difficult local economic environments and a smaller travelling support with links with the area. Blackburn season tickets and corporate boxes are both down this season and the club is working harder to attract crowds match by match. The Baggies cut season tickets by 11 per cent after promotion last season, following a 20 per cut the previous season. That makes season tickes at The Hawthorns almost a third cheaper when the club was last in the Premiership. As a result, there have been capacity crowds at all three home games so far. The club lacks a sponsor but their finance director commented, 'Clearly companies are watching their budgets, but we are talking to two very attractive potential sponsors. However, we are not willing to under-sell our sponsorship and have a price below which we won't go.'

BLADES WIN CASE AGAINST HAMMERS – 23/9/08

A FA arbitration tribunal has ruled in favour of Sheffield United and against West Ham in the Carlos Tevez affair. West Ham were found guilty of breaching league regulations in the signing of Tevez and Javier Mascherano in 2006. The Hammers survived in the Premiership in 2007 at the Blades' expense. Rather than being docked points by the Premiership arbitration panel, West Ham were fined £5.5m. The FA panel has found that the presence of Tevez made the difference in terms of West Ham staying up. The question of compensation has not been resolved, but a figure of £30m is being widely talked about, although the Blades originally calculated the figure at £50m. West Ham are reserving their position while they consult their lawyers. Sheffield United have not ruled out further action against the Premiership, although it is difficult to see what they could do other than pay further compensation. Reinstatement is an impossibility. However, the outcome reflects credit on the Blades' board for sticking to their guns. At least one former United player has said that he will talk to his agent about the possibility of compensation.

AFRICAN BID FOR NEWCASTLE? – 23/9/08

If a bid by a Nigerian consortium for Newcastle United comes to fruition, they could become the first African owned club in the Premiership. Jokers are, of course, saying that owner Mike Ashley has already E-mailed his bank details. The front man for the bid is Chris Nathaniel of NVA Management entertainment group. He claims to have been 'working hard to get wealthy and football-loving Nigerian entrepreneurs to buy the club'. Supposedly his consortium is willing to meet the asking price of £400m and have already collected £350m. Nathaniel insists that the bid is not a stunt and that he just needs to raise another £50m or £100m to see off interested Arab investors. Meanwhile, Newcastle has appointed London-based investment bank Seymour Pierce to handle the sale of the club. The bank's chairman is Keith Harris, the former chairman of the Football League, who brokered buyouts at Chelsea and Aston Villa. With initial interest from India and the Middle East fading, he has to find a buyer. Ashley may have to drop an asking price which is more than three times what he paid for the club 16 months ago.

ARSENAL BOOST THEIR DEFENCES – 21/9/08

Arsenal's board members have reinforced their position against a possible takeover bid from leading shareholder Allsher Usmanov by making US sports franchise owner Stan Kroenke a fellow director. Arsenal wants Mr Kroenke, who owns a 12.4 per cent stake, to sign up to the lockdown agreement drawn up last year by board members that stops any of them trading shares without each other's consent. The agreement was intended to counter the predatory instincts of Mr Usmanov, the Uzbekistan-born billoonaire and Russian citizen who, with business partner, Farhad Moshiri, owns slightly less than 25 per cent of the club. Arsenal's relations with Mr Kroenke, owner of the Colorado Rapids US Major League Soccer team, who is said to be sympathetic to the need for the agreement, have improved since he bought an initial 9.9 per cent stake - a move that drew a hostile reaction from Gunners chairman Peter Hill-Wood. Mr Kroenke has cemented commercial and marketing links between Arsenal and his US sports interests and completed the purchase of ITV's half-share in the club's broadband business.

The property slump has hit Arsenal's hopes of a windfall from the development of their old Highbury stadium, prompting the North London club to say that any profit from the sale of the flats would now be regarded as a 'bonus'. Arsenal had earlier this year confidently predicted that it would generate turnover of more than £350m from its development projects, which would have provided a surplus of up to £100m. However, Peter Hill-Wood has now admitted that the sale of 680 apartments 'may be affected' by the state of the property market. Arsenal's earlier confidence was built upon the sales of 95 per cent of the Highbury Square development and advanced negotiations for the sale of another development site. But the club is braced for a wave of cancellations from investors who put down deposits but are now unable or unwilling to raise a mortgage. Property sales are intended to repay the club's loans and reduce net debt of £318.1m. It has so far banked sales of £18.7m from the initial 65 completed units.

SHIRT SPONSORS ARE HARDER TO FIND – 21/9/08

The turmoil at Manchester United's sponsors, Aig, has focused attention on football shirt sponsors. Football shirt sponsorship has enjoyed steady growth in recent years. According to sports marketing consultant Sports Markt, total revenues last year were £287.8m in the six large European leagues, up 10.6 per cent on the previous year and doubling their value in eight years. But, as with most aspects of life in the Premier League, there is a gulf between the top clubs and everyone else, and the economic downturn is leaving other clubs struggling to find a sponsor. Newly promoted West Brom have no shirt sponsor, while Aston Villa is following Barcelona, which carries Unicef on its shirts, by donating its shirt rights to Acorns, a children's hospice.

'Clearly with three teams without jersey sponsorship income, the overall revenue from jersey sponsorship of all Premier League teams will certainly drop this year in comparison to previous seasons,' Andrew Walsh of Sport Markt told the Financial Times. 'In relation to other European top leagues, the actual figure appears even lower, due to the strong currency abroad.' Shirt sponsorship represents about 20-25 per cent of a club's commercial revenues, but clubs are finding it harder to nail down sponsors for periods of two to three years. 'A lot of sponsors are using it as a dip-in.' Mr Barrand commented. 'Once they've got brand exposure, they come out.' Online gambling comapnies, a lucrative partner for several clubs, are quetsioning the wisdom of tie-ups after the government banned their names from appearing on children's replica kits. One thing is clear: as the economic climate worsens, so, too, does the outlook for football clubs' shirt sponsorship.

CANARIES' TROUBLES ARE ALL TOO TYPICAL – 21/9/08

The financial problems being encountered by Norwich City have their own specific local causes, but they are also typical of the challenges being faced by many lower league clubs. Little money from the Premiership now trickles down even to the Championship because few players from that level are signed by Premiership clubs who are either interested in foreign players or those British players who have already proved themselves at the top level. Bosses at Carrow Road are insisting that the club is 'not in trouble at all' and will not go into administration. Nevertheless, the next set of accounts due within the next month will reveal that the Canaries lost at least £1m last season and will lose millions of pounds more than this year. City chief executive Neill Doncaster admitted that the accounts would show a 'substantial seven figure loss' for the 2007/8 season and warned the losses for this season would run into 'millions of pounds'.

The reason for the big loss has been put down to players' wages, with the current player budget of £8.5m the most the Canaries have ever spent on wages while in the Championship, even though their parachute payments ran out last year. Mr Doncaster said the only way losses were sustainable were through the sale of assets, including players, or through financial help from directors. However, he insisted: 'We are in a far better position than a lot of other clubs because our season tickets sell out and activities off the pitch.' The reason the club lost money was simply because 'in common with the vast majority of clubs, we pay our players more than we can afford. Assuming that we sell out season tickets but that we do not enjoy a lucrative cup run, a break-even player budget is around £5m. Our player budget for this season was originally set at £10m, which would therefore have generated cash losses of around £5m this season.' He said that as part of a package of measures introduced in the past few weeks, the player budget has been reduced to £8.5m, but even so the losses this season will run into millions of pounds.

The departure of millionaire directors Andrew and Sharon Turner meant that the promise of a further £2m loan they had pledged disappeared with them. Majority shareholders Delia Smith and her husband Michael Wynn Jones quickly agreed to plough another £2m loan into the club to try to plug the gap, but redundancies are likely at Carrow Road. The ongoing saga about whether or not the club is in talks with insurance billionaire Peter Cullum rumbles on.

IS NEWCASTLE UNITED A GOOD BUY? – 16/9/08

Mike Ashley's plan to sell Newcastle United has got off to a sluggish start. As expected, Dubai International Capital issued a statement denying that they were interested. More significantly, Icelandic bank Kaupthing which helped him buy the club said that it was not representing him over the sale. Newcastle United has average attendances in excess of 50,000 and matchday revenues in 2006-7 of £33.6m. Broadcast revenues that season were £25.9m and commercial revenues were £27.6m, giving it total revenues of £87.1m. This made it the 14th highest revenue earning club in Europe according to Deloitte. However, as Ashley revealed, he is still paying off £100m of debt. A banker told the Financial Times that Newcastle lacks the growth potential of other clubs and is stuck in a footballing rut. 'Any buyer who comes along faces a lynch mob,' he said. 'There is attractiveness in Newcastle, but what can you do with Newcastle? There can only be four Champions League places.' Paradoxically, the fans' protest persuaded Ashley to go, but may make it more difficult for him to sell the club.

UNITED SPONSORS IN TROUBLE – 15/9/08

AIG (American International Group), the US insurer, is seeking to raise $10-$20bn in equity from buy-out investors as part of an emergency plan to shore up its balance sheet. The Manchester United shirt sponsor has suffered $18.5bn in losses in the past three quarters and is also considering selling up to $20bn in assets. The shirt sponsorship deal with United is the biggest in the Premiership and is worth £56.5m in total. There are two years to run on the present deal. However, United appear to be unfazed by the crisis and are confident of getting their money. Even if they lost their sponsor, they could probably get another one without too much difficulty, although the deal might be worth less than £14m a year.

POMPEY DENY OWNERSHIP CLAIMS – 15/9/08

Portsmouth have dismissed as 'absolute rubbish' claims by the father of owner Alexandre Gaydamark that he, rather than his son, is the owner of the Premiership club. Acradi Gaydamak made the claims to the Israeli newspaper Yedioth Athronot to refute suggestions that financial uncertainity was threatening his personal wealth. Gaydamak senior is currently running for Mayor of Jerusalem. Who owns the club is not a trivial matter as Gaydamak senior might have some problems with the admittedly somewhat defective 'fit and proper persons' test. However, even the football authorities might find it difficult to overlook an Interpol arrest warrant over alleged arms sales in Angola. Israel has refused extradition, but the father has been investigated by Israeli authorities for money laundering and by fraud police over allegations of vote buying.

Gaydamak senior also claimed that Portsmouth's proposed new stadium was to be built in partnership with the Dubai royal family. In fact, there is no evidence that they have any interest in projects on Portsea Island, while Gaydamak's valuation of Portsmouth at 1,895,700,000 shekels (about £300m) is probably about five times what it could fetch. Nevertheless, it would appear that the club is on a short list of Middle East interests who want to buy a Premiership club, although they are not from Dubai. An immediate sale is unlikely, but it may well happen before the season is over.

NO SHORTAGE OF BIDDERS FOR NEWCASTLE – 14/9/08

There will be no shortage of bidders for troubled Newcastle United after owner Mike Ashley put the troubled club up for sale. A Chinese businessman is said to be interested, a North-East consortium is waiting in the wings and, as we discussed in an earlier story, there is also a possible Indian bidder. Ashley himself would like to involve Dubai Investment Corporation, although their first target is likely to remain Liverpool. Ashley explained his reasons for selling the club in a lengthy and emotional statement. He explained that Newcastle attracted him because 'it has the best fans in football', but claimed that if he had not come in the club might not have survived. He paid £134m to buy the club and then put in another £110m, not to pay off the debt, but just to reduce it. The club remains in debt and 'owes millions of pounds in transfer fees'. Moreover, money on sponsorships and advertising had been paid upfront and spent. Ashley insists that he did not buy Newcastle to make money, but because he loves football. Nevertheless, he could walk away with a tidy profit and one thing he makes clear is that 'this is not a fire sale.'

Ashley says that he is no longer prepared to subsidise the Magpies: 'I am not stupid and have listened to the fans. I have really loved taking my kids to the games, being next to them and all the fans. But I am now a dad who can't take his kids to a football game on a Saturday because I am advised that we would be assaulted.' He continues, perhaps with a tinge of bitterness: 'I hope that the fans get what they want and that the next owner is someone who can lavish the amount of money on the club that the fans want.' He assures the fans, 'I have listened to you. You want me out. That is what I am trying to do but it won't happen overnight and it may not happen at all if a buyer does not come in. You don't need to demonstrate against me again. I have got the message.' Perhaps recalling the old joke that the best way to make a small fortune is to start with a large one and buy a football club, the embattled owner says, 'I am Mike Ashley, not Mike Ashley a multi-billionaire with unlimited resources. Newcastle United and I can't do what other clubs can. We can't afford it.' This has been a sorry episode for everyone involved, not least the fans, but hopefully the club can now move on.

BIDDERS LINE UP FOR PREMIERSHIP TV AUCTION – 14/9/08

Negotiations on the next Premiership television package are due to start in the first three months of 2009 and already potential bidders are lining up. The last three year deal covering the seasons to 2009-10 raised £1.7bn, 66 per cent more than in 2003. Packages are now sold separately to prevent any one company having a monopoly position and the last deal saw a 2:1 split of live matches between BSkyB and Setanta Sports. There had been speculation that the economic downturn would reduce the amount paid, but the influx of foreign owners is likely to increase the price obtained, especially for foreign rights.

Entertainment multinational The Walt Disney Company is expected to mount a bid through its ESPN sports broadcasting subsidiary. ESPN is also interested in taking control of the US rights from Fox, the broadcaster owned by News Corporation. BT, which launched a live television service last year, is also considering making a bid. At present BT offers customers 46 live Premiership games a season through a deal with Setanta. Some analysts think that the best way forward for BT would be a joint venture with Setanta or even the purchase of the Irish company. BT Vision does not have a distribution platform, given that broadband is not suitable for widescale broadcast of live sport. Setanta has channels on cable and satellite platforms.

One complication is that Ofcom, the media and telecoms regulator, has launched an investigation into the pay TV market last year following a complaint by BT, Virgin Media and Setanta that claimed consumers were charged too much because of Sky's continuing dominance. The outcome of these regulatory disputes is always difficult to forecast, but many analysts think that Sky could be obliged to act as a wholesaler, making its content available to BT and others at a regulated price. This complicates the bidding process, but Sky will want to retain its leading role in Premiership coverage which is key to its success as a broadcaster.

RECORD PROFITS AT ARSENAL – 14/9/08

Arsenal are expected to announce record turnover figures later this month, making the club the world's third richest behind Real Madrid and Manchester United. Turnover from the whole business has increased to about £225m. The figures for the year to May 31, 2008 will reveal record pre-tax profits of nearly £40m, while operating profit is expected to be above £50m. Arsenal is not a benefactor club and the results demonstrate the success of the Emirates stadium and the board's policy of living within its means. Match-day revenue last season from 31 home matches was just a few millions short of £100m, while broadcasting revenues increased by £17m as the club benefitted from the enhanced Premiership television contract. Admittedly, the turnover figures include non-recurring property income, but more than £200m is expected to be delivered by the core football business. The wages-to-turnover ratio is expected to fall below 50 per cent, the lowest in the Premiership. However, the club is £245m in debt and has to service annual repayments of £24m so much interest will centre on its success in selling flats at Highbury Square. 91 per cent were intially sold, but some buyers are understood to have walked away forfeiting their deposits. The prediction of £350m from redeveloping Highbury may have to be adjusted downwards.

HAMMERS TAKE SPONSORSHIP HIT – 14/9/08

West Ham could face a £5m shortfall after travel firm XL Holidays went into administration. It is believed that the Hammers had received only £2.5m from a three year deal with the travel company. A £7.5m deal, worth £2.5m a year, was signed in February 2007 but only one year of the contract has been paid up. West Ham played against West Brom on Saturday in an unbranded kit. They have suspended all sales of replica shirts and hope to remove all branding from Upton Park. To add to their woes, Hammers chairman Bjorogolfur Gudmundsson is one of the guarantors of a €207m (£163m) bank loan given to XL. West Ham will now look for another shirt sponsor, but that will not be too easy in current economic circumstances for a club that is not in the Premiership's top rank. However, the star appeal of their new manager may help. They can also console themselves that have not had two shirt sponsors go bust like neighbouring Charlton.

ENGLAND HIGHLIGHTS MIX UP – 14/9/08

Pay television company Setanta took the unusual step last week of suspending its encryption technology so that fans could watch highlights of England's World Cup qualifying match against Croatia. The move meant that anyone with access to the channel on satelitte, Freeview or cable television could watch the highlights at 11.30 p.m. (after the highlights from Scotland's game against Iceland). There had been criticism of the BBC and ITV for failing to reach a deal on the highlights with Setanta which had paid £5m for exclusive rights to broadcast the match live from Zagreb. The company was reportedly demanding £1m for the excerpts, but ITV initially refused to pay more than £250,000. It doubled its offer, but the two sides failed to reach an agreement.

Setanta's decision to drive a hard bargain was based on a complex calculation of the value of the game. Apparently their view was that selling highlights to a terrestial broadcaster would have proved a disincentive to the tens of thousands of people who might have chosen to take out a subscription to Setanta. The last day before a big match is often the most fruitful for subscription. With an England win, the maximum audience figure for the highlights would have been about three million. By contrast, ITV's live broadcast of Liverpool playing in a Champions League game drew an audience of five million and cost only £300,000.

THE LIVERPOOL STADIUM SHAMBLES – 14/9/08

George Gillett made a rare visit to Liverpool yesterday to see his club beat Manchester United, but while fans celebrated their victory, large numbers of them protested against the American owners. As one of them said on Sky Sports News, he wished the American owners would just take their profit and go. It was the way in which United eclipsed Liverpool on the pitch and their continuous expansion of Old Trafford that led Liverpool into an urgent search for a new stadium to replace Anfield. The principal reason the club was put up for sale was to find 'investors' who would fund a new stadium at nearby Stanley Park. It was hoped that this would push Liverpool's earnings somewhere near a level at which they would be able to compete with United. Club chairman and major shareholder David Moores favoured the Americans over the wealth of Dubai International Capital because Hicks and Gillett were more positive about their ability to get the stadium built.

In their formal offer to take over the club, they stated 'their intention to take forward the Stanley Park development ... and to commence building one of the leading stadia in Europe as soon as is reasonably practicable.' In order to buy the club, pay off debts and fund player signings they took out a £350m credit facility with Royal Bank of Scotland which now has a mortgage over everything owned by Liverpool. That £350m has been borrowed just until January 2009, with the option extend it only as far as next July. Having brought debt to the club rather than investment, many analysts considered that they would struggle to borrow another £400m to fund the stadium. Hicks blamed the credit crunch rather than the level of indebtedness for the failure to make progress on the stadium project.

The revised aim is for Liverpool to start playing in the new stadium a year later than planned for the start of the 2012-13 season. Even if that does happen, putting Liverpool £750m in debt, by then United will have had four more seasons at their 76,000-capacity Old Trafford stadium. Arsenal will have had the same time at the Emirates (although they have been constrained by the repayments) and Chelsea will have had four more seasons spending Roman Abramovich's money. That is before you factor the wealth available to Manchester City into the equation. Liverpool are probably the most vulnerable of the top four clubs, particularly if they were to be knocked out of the qualification places for the Champions League which earned them £21.6m last season. The best hope for the fans must be that Gillett and Hicks sell out to Dubai Investment Corporation and bring this unhappy episode to an end.

THE FUTURE OF SCOTTISH FOOTBALL – 8/9/08

In many ways Scottish football has never been in better shape. Per head of population, more of Scotland's inhabitants pay to watch top-flight football in their country than anywhere else in Europe. In 2004-5, 73 per cent of SPL players were Scottish. However, when one is talking about Scottish football, one naturally focuses on 'The Old Firm' because they dominate the game far more than the top four do in England. On the face of it, they are doing well. In Europe, Celtic reached the last 16 of the Champions League for the first time in 2007, losing to eventual winners AC Milan. Rangers reached the Uefa Cup Final. Rangers enjoy a bigger home attendance than Liverpool, while Celtic are 17th in Europe's rich list of clubs, the only operation in the top 20 from a minor domestic league outside of England, France, Germany, Italy and Spain.

Nevertheless, small Premiership teams like Wigan and Fulham with less than 20,000 fans can easily outspend Celtic and Rangers because of television money. As SPL champions for the third successive year, Celtic earned £1.5m from last year's deal with Setanta, whose coverage has received wide praise. The SPL has already agreed their next contract with Setanta which will start in 2010. It's worth £31m per season for the whole league compared with the £35m Derby County alone received for finishing bottom of the Premiership. It's total value is four per cent of the £775m Premiership deal. The Old Firm need somehow to get in a virtuous circle: they need success in Europe to be able to spend money, but they have to succeed in Europe to have the money to spend. Moreover, there is always the risk that Scotland could lose one of its two Champions League places if its Uefa coefficient falls.

So what's the answer? The Old Firm would like to be in the Premiership, but the Premiership doesn't want them. The one thing they would bring is a massive international support base at a time when that is becoming more important to the Premiership. But their presence would do nothing to help the bottom line of the leading clubs, while those down the league would not want two new competitors. In the early days of this page, we reported on the idea of an Atlantic League which would bring together some of the less important European football countries such as Holland, Portugal and Scotland. Uefa is talking informally to Belgium and the Netherlands about a new league, but that is hardly likely to involve Scotland. The Scandinavian Royal League, a winter competition, was a flop.

Investors from the Middle East and elsewhere are unlikely to be attracted to Scotland while there are still plenty of interesting English clubs potentially on the market. Glasgow is a much more attractive city than when I lived there nearly forty years ago, but it is not a world city like London, nor does it have the football glamour of Manchester. In financial terms, Celtic are the stronger club, making an annual profit of £10-£15m. But if they did pull away financially from Rangers, the Old Firm rivalry would be weakened and that is really the mainstay of Scottish football.

INDIAN BILLIONAIRE IN FOR NEWCASTLE – 6/9/08

It looks increasingly likely that Indian-based telecommunications giant Reliance Communications will seek formal talks with Newcastle United with a view to a £220m takeover. Anil Ambani, the owmer of Reliance, is the sixth richest man in the world and boasts a fortune of £21 billion. A Premiership club is increasingly becoming the accessory that every seriously rich man needs and it is understood that at least £100m would be provided to strengthen the squad in the new year. Ambani regards Kevin Keegan as the only man to move the club forward and would reinstate him as manager. Newcastle owner Mike Ashley paid £130 million for Newcastle in July 2007 and wiped out debts of £80m, so the offer would leave him with a decent profit of £10m. That would not be as much as he was hoping for when he was looking for offers in excess of £250m for the club, but it would enable him to escape the wrath of the fans.

NORWICH CITY UP FOR SALE – 3/9/08

Norwich City has effectively been put up for sale by majority shareholders Delia Smith and her husband Michael Wynn Jones. Their twelve year relationship with the Canaries looked set to come to an end after fellow directors Andrew and Sharon Turner resigned from the board, leaving City with a £1.5m black hole to fill this year. The Turners, who own financial services business Central Trust, which deals in sub-prime mortgages and is valued at £275m, will not be able to immediately recover £2.5m of interest-free loans to the club, which are on long-term repayment schedules. But they will now not be making good their promise to put in another £1.5m this year. It leaves the East Anglian club with a worrying cash shortfall, which could lead to backroom redundancies and a bid to cut the current £10m wage bill for playing staff. Club chairman Roger Munby said there had been no boardroom bust-up and the Turners' reasons for leaving were private. He emphasised that there was 'absolutely no danger' of the club going into administration.

The club said that talks were taking place with two prospective investors, but refused to disclose who they were. Delia and her husband are looking for investors of all sizes, including outright ownership. All eyes will now turn to Peter Cullum, the 57-year old executive chairman of the Towergate Partnership and one of the 40 richest men in the country. The former Norwich City youth player and lifelong Canaries fan offered in the summer to spend £20m on players in return for ownership of the club. The offer was rejected. The board argued that the real cost of buying the club and investing £20m in players would be £56m, a figure that Mr Cullum did not accept. Behind-the-scenes diplomacy by new City sponsors Aviva saw the two sides reopen discussions a few days after the initial offer, but the talks ended almost as soon as they had begun with no agreement. John Tilson, chairman of Norwich City Independent Supporters Association, commented, 'There are fans who are pro Delia, those who think her shelf-life is up and those who think she should have gone a long time ago, but the fans have to stick together in this.'

BELLES IN DISTRESS – 3/9/08

Doncaster Belles, the oldest club in the Women's Premier League, are on the verge of bankruptcy. The club's future is in jeopardy after it lost a major sponsor and it may be forced to close within days. The club may have to shut down after Sunday's match with Arsenal if some funding cannot be found. At the moment the club can't even pay for the coach down to Arsenal which would cost £500. The Belle's annual budget is just £65,000. Doncaster Council and Doncaster Rovers have offered to help out, but their money won't be available until the end of the month. The club would have been 40 years old in January. Women's football has suffered a number of blows in recent years with Charlton Athletic withdrawing most of their funding after they were relegated from the Premiership. The women's game has not been as successful as it has been in the United States where legal requirements obliging colleges to make provision for women's sports have given it a boost.

YOU AIN'T SEEN NOTHING YET – 2/9/08

The acquisition of Manchester City by Abu Dhabi investors may be the first of a number of takeovers of Premiership clubs by fabulously rich sheikhs. The City deal was brokered by Amanda Staveley whose financial advisory company PCP Capital Partners has put together several deals for Middle Eastern buyers. The ultimate owners of Manchester City are thought to be the ruling family of Abu Dhabi. Although Sulaiman Al-Fahim is a celebrity businessman and real estate magnate who is rich enough to buy Manchester City in his own right, it is thought that he was really a front man for the Al-Nahyan royal family. Most of the money is being put up by sheikhs in the royal family, in particular the royal chamberlain Sheikh Manosur bin Zayed. He is married to the daughter of Sheikh Mohammed, the ruler of Dubai. Sheikh Mohammed is interested in buying Liverpool through the Dubai International Sovereign Wealth Fund. Other possible targets are Tottenham and Everton who need funding for new stadiums. There are, of course, rules against one person owning more than one club, but the nominal owners could be different members of the ruling family. One consequence of the City takeover could be that Premiership chief executive Richard Scudamore may have found a new ally in his campaign for an international round of fixtures. Winter and summer tours of the Middle East may become the norm.

LIVERPOOL STADIUM PROBLEMS UNDERLINE VULNERABILITY – 2/9/08

Which of the top four clubs are most vulnerable to the new 'Middle Eastlands' Manchester City's stated ambition to become a top four club? The cost of their new stadium has limited spending at Arsenal, but Liverpool looks more vulnerable under its American owners. Tony Hicks and George Gillett have been forced to delay plans for a new stadium because they do not have the funds. Eighteen months after Gillett had declared that work on their Stanley Park stadium would start within 60 days, Liverpool issued a statement saying the delay had been caused by 'global market conditions'. It is likely to be another year before construction can start. Liverpool have accepted that they need to leave Anfield and move to a bigger stadium if they are to challenge the financial muscle of Manchester United and Arsenal. Liverpool say they will revisit the plans to ensure that if and when the stadium opens it will have a capacity of 73,000, rather than the 60,000 for which it currently has planning permission. The difficulties that both Liverpool and Everton are encountering with new stadium plans has revived talk of a shared stadium. For fans, however, the identity of the club is strongly bound up with the stadium. What might be financially rational in another business is not possible in football, at least in England.

ARAB GROUP TO SPLASH THE CASH AT CITY – 1/9/08

A man known as the 'Donald Trump of Abu Dhabi' who has a fortune so big that it is said that it can be seen from outer space is behind the Arab group that are poised to acquire Manchester City. With his troubles mounting at home in Thailand, Thaksin Shinawatra has decided to throw in the towel after only a year in charge and has signed a memorandum of understanding with the Abu Dhabi United Group headed by Dr Sulaiman Al-Fahim. Due diligence will have to occur before the deal is completed and Shinawatra will remain as honorary president with a minority shareholding. The cost of the takeover has not been stated, but a figure of £200m has been mentioned. The new supremo intends to turn City into a top four club in three seasons and has already made an audacious attempt to snatch Dimitar Berbatov from under the noses of Manchester United. The takeover has been welcomed by City fans with Kevin Parker, general secretary of the club's official supporters club, stated, 'Football clubs are looking for investors with deep pockets and it would appear they have got deep pockets. We need someone to give stability. In the last 30 years we haven't had any success and we're desperate to win a trophy.'

SMALLER PREMIERSHIP WITH NO RELEGATION URGED – 21/8/08

Manchester City executive chairman Gary Cook believes that the Premiership remains too parochial in its outlook and the future lies in an elite league of perhaps 14 clubs with no relegation. Cook commented, 'We are getting into a situation where there are maybe ten clubs. Do Saudi Arabians want to buy - and no disrespect to these clubs - Stoke City or Derby County? Or do they want to buy Newcastle United, Aston Villa, Manchester United, Manchester City?' Cook's model is the NFL in American football, but English fans are used to promotion and relegation. Television companies may believe that the relegation struggle is an important component that makes their product attractive. However, Cook denies that a league without relegation would minimise the excitement for supporters and lessen the appeal to supporters. 'You would create that excitement in another way, wouldn't you? The sport will change and the fans will find a way to get passionate about a piece of it.' He insists, 'If you want to become a multi-million pound empire, you may have to look at changing the model. There's something not right about sitting in a bar in Bangkok or Beijing and seeing a match here and seeing Fred Smith's plumbing.' Brave New World indeed.

THAKSIN OFFERS TO STAND DOWN – 23/8/08

Thaksin Shinawatra is 'embarassed' about the damage that his legal, political and financial circumstances have inflicted on Manchester City of late. He has offer to resign from the club's board in order to alleviate any growing pressure from the Premiership whose 'fit and proper person' test he no longer appears to satisfy. Thaksin is close to selling a significant minority stake in City to another Asian tycoon who will help to bankroll the club while £800m of his assets remain frozen in Thailand. Manchester City sources insist that the financial position at the club is far healthier than it appears from the outside. It has been reported that the club granted two new charges to Standard Bank last month. It has been suggested that the club would have appear to have assigned to the bank a series of expected payments from the Premiership relating to television money, as well as the merit and basic fund payments plus the stabilised cash flow payents due in January 2009 or payable over the next two seasons. These are security for a facility agreed with Standard Bank on 21 July. The facility is guaranteed by the club and by Thaksin's company UK Sports Investments (Holdings), which owns Manchester City.

POLICE BID TO MAKE FOOTBALL PAY STARTS ROW – 21/8/08

There has been a strong reaction to a proposal by the Association of Chief Police Officers that football should pay all the costs of policing games with some commentators suggesting that the plan is based on envy and class hatred. More likely cash strapped police forces see rich Premiership clubs as a potential revenue stream. But any change in the law would hit all clubs including cash strapped ones fighting for survival. Clubs currently only have to pay back the costs incurred inside their ground or on their property with the rest coming from police budgets. Assistant Chief Constable Stephen Thomas said local communities were in effect subsidising the clubs. Freedom of information requests from Radio 5 to the police showed that it cost £7.5m to police 13 Premiership clubs with the teams paying £4.3m and £3.2m coming from police budgets. The amount paid by clubs varied with Chelsea paying less than half the cost of policing their games while Arsenal paid over two-thirds. Manchester United were the most expensive club to police with Greater Manchester police spending £543,442 from their budget to patrol the games last season while the club paid £904,059.

Acpo admitted that calculating the exact cost of policing football matches is difficult. Is an officer who was on patrol anway and intercepts a hooligan a general policing cost, or should the club contribute? And as the Premiership pointed out clubs already contribute £700m a year to the Treasury through taxes, quite apart from the taxes paid by individual fans.

FOREIGN PLAYER DOMINANCE CONFIRMED – 21/8/08

A study for the Professional Football Players Observatory shows that foreigners represent 59.5 per cent of the the players in English Premiership clubs compared with an average in the top five European leagues of 42.4 per cent. However, two of the five clubs assessed as having the most sustainable squad management were English: Arsenal and Manchester United (the others were AS Nancy-Lorraine, Barcelona and Bayern Munich). The criteria used to assess sustainability were performance, stability, training and effectiveness in recruitment. As well as being very competitive, these clubs (except Bayern) have a large number of locally trained players in their line-ups or recruit sufficiently young players for them to be considered as such. In the case of Manchester United, the stability of the team is also markedly above the norm, which compensates for the weakness of players recruited at the start of the season (new recruits played in few matches).

MAN CITY BOSS COULD BE BARRED – 12/8/08

Thaksin Shinawatra could be barred from running Manchester City even if he wins his pending battle to stay in the UK. The Thai authorities are planning to press on with corruption charges against him even if the British government grant him political asylum. After he and his wife flew to the UK from Beijing rather than returning to Bangkok as he said he would court officials issued arrest warrants for Thaksin and his wife and have indicated they will start extradition proceedings. The case against the fugitives is likely to continue in their absence. Premiership supremo Richard Scudamore indicated a guilty verdict would force them to reconsider whether Thaksin passed their 'fit and proper person' test for club owners. One wonders about the quality of the test applied in the first place. The Premiership's rulebook says any director is automatically disqualified if convicted by a 'competent court' of any one of a number of offences. The list includes specific charges relating to corruption.

Manchester City has been trying to maintain a brave stance in the face of these events, insisting that it was 'business as usual'. City executive chairman Garry Cook denied that the developments would destabilise the club. He claimed Mr Tsksin - who ha seen £800m of assets frozen as a result of the case against him - remained committed to his '10-year vision' for the club. Mr Cook insisted, 'City's future is in jeopardy. We don't rely on Mr Thaksin's money.' True, but it does help in terms of efforts to take the club to a higher level. The chairman added, 'When Mark Hughes makes a decision we go through the normal process, which can include banks, finance or a whole bunch of different things just like any other club.' However, Mr Cook admitted the club was no longer running on a strategy of over investment. He said that Mr Thaksin might look in the long term to get extra investment in through 'partnership' deals.

WILL CREDIT CRUNCH HIT ARSENAL? – 11/8/08

Arsene Wenger has had to be careful in his acquisitions of players, possibly affecting on pitch performances, as Arsenal services the debt it took on board to build the Emirates Stadium. The club describes itself as a 'football and property' business and there are fears that the credit crunch and falling property prices could now hit Arsenal's financial plans. The club goes into the new season looking foward to a financial boost from the sale of apartments at its former stadium. When the club moved from Highbury it turned its old home over to housing development. The Highbury Square development is made of 711 one, two and three bedroom apartments priced between £250,000 and £1,500,000. At the end of the month those who have paid a deposit - of between 10 per cent and 20 per cent - on apartments in the South Stand of the scheme will have to pay the rest of waht they owe.

However, there are those who argue that the club may be regretting the decision to rely strongly for future income streams on the property market. It has been suggested that some of the purchasers who put down 10 per cent on the new apartments might cut and run in the light of plummeting property prices, even though they would lose at least £25,000. However, the Arsenal board envisgaes no problems with the development, despite current housing market uncertainty. The club believes that even in a falling property market, the uniqueness of the Highbury Square development will help the flats hold their value. Nevertheless, three buyers have so far given up their deposits and walked away from completing their purchase, probably because they could not raise the necessary finance. The club, which decided it would make more money by redeveloping the stadium itself rather than selling out to a developer, highlights the fact that it has sold more than 93 per cent of its apartments.

As well as Highbury Square, Arsenal has also recently submitted a planning application for the redevelopment of Queensland Road as part of the Emirates Stadium regeneration programme. There, it plans to sell affordable housing to a housing association and to market other accommodation to a residential property company. The club had turnover of £23.7m on its property development in the six months to November 2006 and in November 2007 this was £7.6m. Operating profit from property fell from £9.3m in 2006 to £2.5m in 2007. However, it is understood that this is merely down to the fact that more payments-due dates fell in the earlier financial period. Attendances at the Emirates during the 2006/7 increase represented a 76 per cent increase on the total attendance during the final year at Highbury. The move also saw a £90m 15-year deal which gave the airline Emirates exclusive naming rights to the stadium. Critics still complain there is nobody on the slightly old fashioned board with a marketing or advertising background. Nevertheless, they are the third richest football club in the world.

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