English Club Finances

English Club Finances

Post by Aidan Philip Heerdeg » Fri, 07 Aug 1998 04:00:00


We've been hearing alot about the dodgy finances of alot of old
and venerated English clubs, and I know that not all of them
are having trouble, but then I read the following in the SMH:

"Meanwhile Wallaby second-rower John Welborn has knocked back a $700,000
offer from the Bath club in England, to remain with NSW and Australia
next season.

Welborn was seriously considering playing in England, after he was
recently offered a two-year contract worth $350,000 per season.

Welborn, mindful that he is rated the next best second-rower behind the
Test combination of John Eales and Tom Bowman, stated that he was
prepared to accept an appreciable drop in salary as he wanted to be
part of the Wallabies' campaign to win next year's World Cup."

$350k/year!?!

I know the exchange rate is crocked, but seriously, how can Bath
justify those sorts of salaries? Are they really more cashed up than
the ARU?!

To quote a well-known Australian stateswoman .. "Please explain".

Cheers

Aidan

 
 
 

English Club Finances

Post by Jeremy Fieldse » Fri, 07 Aug 1998 04:00:00


Quote:
> $350k/year!?!

> I know the exchange rate is crocked, but seriously, how can Bath
> justify those sorts of salaries? Are they really more cashed up than
> the ARU?!

> To quote a well-known Australian stateswoman .. "Please explain".

You're right it's crazy.  In fact it's suicide.

Everyone can see than the clubs cannot afford to sustain these salaries.
Coventry has just gone belly up.  (Back in the 60's/70s they were a Bath
equivalent and produced some world class players - remember David
Duckham?).

Since professionalism (and I support it) the game at first class level
has gone crazy.  Players from lesser clubs are being sucked out of their
clubs only to find a) they can;t get a game because of overseas players
and b) they're not getting paid.  Npow many are returning.

It's a case of the big will get bigger (then go bust) and small will go
bust now.

Jeremy

 
 
 

English Club Finances

Post by John Willia » Fri, 07 Aug 1998 04:00:00


Quote:

>We've been hearing alot about the dodgy finances of alot of old
>and venerated English clubs, and I know that not all of them
>are having trouble, but then I read the following in the SMH:
>"Meanwhile Wallaby second-rower John Welborn has knocked back a $700,000
>offer from the Bath club in England, to remain with NSW and Australia
>next season.
>I know the exchange rate is crocked, but seriously, how can Bath
>justify those sorts of salaries? Are they really more cashed up than
>the ARU?!

[snip]

There are special reasons for Bath's offer I think, Aidan. Bath is one
of the "sugar daddy" clubs, the owner a Mr Brownsword, who made a
fortune (600 million pounds?) selling greetings cards. So although
they are probably not making a profit, they still have potentially
huge resources behind them. Add to that the fact Bath are *very* short
of locks, having let Llanes go, and it would seem they have rightly
poinpointed lock as a "must strengthen" position. The most likely
first team locks, Haag and Redman, have never been the best pairing in
England, and I'm surprised Redman hasn't retired.

I make the offer about 135k sterling p.a., which is very much at the
top end of the salary scale from what I've heard. I doubt they would
have offered nearly as much for any other position except perhaps at
halfback.

Newcastle are, as far as I know, spending the most on one player, 250k
p.a. on Tuigamala. Absolutely insane in my view, especially as they
couldn't afford the 100k they needed to keep Pat Lam at the club. Lam
was far more important to Newcastle's league win last season in my
view.

One of the problems that hasn't been mentioned much on rsru is the
fact owners themselves can get into difficulties very suddenly.
Bedford, recently promoted to AD1 are suffering because their ownter,
Frank Warren is in legal dispute with Don King, the boxing promoter,
and his assets have been frozen (ouch).

I haven't noticed any comment here about the fact that the biggest
sugar daddy of them all, Rubert Murdoch, is being divorced by his
wife. It isn't inconceivable that this might cause problems with his
rugby funding in the future.

All the best

John Williams.

 
 
 

English Club Finances

Post by Ian Diddam » Fri, 07 Aug 1998 04:00:00

Quote:

> I haven't noticed any comment here about the fact that the biggest
> sugar daddy of them all, Rubert Murdoch, is being divorced by his
> wife. It isn't inconceivable that this might cause problems with his
> rugby funding in the future.

According to R4 the other day, Mrs. Murdoch is sueing for divorce in
california where the settlements are a straight 50% split.

Dicky could end up losing a LOT of dosh/shares/etc etc etc.

--
Didds.

Live in the UK ?  Want free internet access, a completely free 500
pounds overdraft while helping me win a free dinner at the Ritz?
Email me....

 
 
 

English Club Finances

Post by Mees Roelo » Fri, 07 Aug 1998 04:00:00

Quote:

>> To quote a well-known Australian stateswoman .. "Please explain".

Pauline Hanson I suppose?

Quote:
>You're right it's crazy.  In fact it's suicide.

Yes it is. What I don't understand that it has been going on for a few
years now. And now that clubs are getting in really big problems
everybody is surprised at that.

You can't spend money that simply isn't there. It's an easy law in any
economy but English clubs seem to have a problem with it.

Quote:
>Since professionalism (and I support it) the game at first class level
>has gone crazy.  Players from lesser clubs are being sucked out of their
>clubs only to find a) they can't get a game because of overseas players
>and b) they're not getting paid.  Now many are returning.

Exactly the same has been going on in the Premier League at soccer. A
team like Chelsea could field 11 foreigners and no Englishman. This
will cause a serious lack of new talents coming thru as well as a lack
of good Englishmen on key positions, which are, obviously, the first
positions to buy an expensive overseas star for.

Once again, a typical example of not looking to the future by the big
English clubs.

Cheers,

Mees Roelofs
To reply replace ***ySpammers with Geocities in address

 
 
 

English Club Finances

Post by Mees Roelo » Sat, 08 Aug 1998 04:00:00

Quote:

>> I haven't noticed any comment here about the fact that the biggest
>> sugar daddy of them all, Rubert Murdoch, is being divorced by his
>> wife. It isn't inconceivable that this might cause problems with his
>> rugby funding in the future.

>According to R4 the other day, Mrs. Murdoch is sueing for divorce in
>california where the settlements are a straight 50% split.

>Dicky could end up losing a LOT of dosh/shares/etc etc etc.

Rupert has enough money to start negotiating for a multi-million
pan-European soccer league.

So I reckon his problems aren't too big and that he still keeps on
finding a little bit of money to spend on your beloved game.

Cheers,

Mees Roelofs
To reply replace ***ySpammers with Geocities in address

 
 
 

English Club Finances

Post by Terry Fitzpatric » Sun, 09 Aug 1998 04:00:00

Quote:


> >> To quote a well-known Australian stateswoman .. "Please explain".

> Pauline Hanson I suppose?

> >You're right it's crazy.  In fact it's suicide.

> Yes it is. What I don't understand that it has been going on for a few
> years now. And now that clubs are getting in really big problems
> everybody is surprised at that.

> You can't spend money that simply isn't there. It's an easy law in any
> economy but English clubs seem to have a problem with it.

Maybe you should try studying economics. What does an expanding business
do if they wish to build a plant or buy additional raw materials? What
does every ***y Government in the world do every day of the week?
Answer, they spend money that isn't there. Or at least it isn't there
until they borrow it. And the reason that they can do this is the
promise of returns in the future when revenue from their product
increases. It really is quite simple you know.

Quote:

> Exactly the same has been going on in the Premier League at soccer. A
> team like Chelsea could field 11 foreigners and no Englishman. This
> will cause a serious lack of new talents coming thru as well as a lack
> of good Englishmen on key positions, which are, obviously, the first
> positions to buy an expensive overseas star for.

Yes, this has been said for the last 5 years or more and the standard of
the England side (not great at the best of time, I know) has not
suffered in the least. Skill levels may have even increased due to the
improved standard of the Premier league.

Quote:

> Once again, a typical example of not looking to the future by the big
> English clubs.

The argument behind this was wrong, so it's not surprising that the
conclusion is too.

Terry

 
 
 

English Club Finances

Post by Jeremy Fieldse » Wed, 12 Aug 1998 04:00:00

Quote:

> Maybe you should try studying economics. What does an expanding business
> do if they wish to build a plant or buy additional raw materials? What
> does every ***y Government in the world do every day of the week?
> Answer, they spend money that isn't there. Or at least it isn't there
> until they borrow it. And the reason that they can do this is the
> promise of returns in the future when revenue from their product
> increases. It really is quite simple you know.

Er.... Not that simple.  Borrowing money against  projected profits
(note: not returns) is fine.  But it's a question of degree.  The issue
is that the clubs are borrowing too much to pay too few players too much
money.  And the reason it's too much is measured on the scale of what
the market will support.  The grounds are too small to bring in
sufficient gate money and the there isn;t enough sponsorship to go
round.  It's a very high risk strategy.  Too high.  And clubs without a
multi-millionaire sugar daddy will go to the wall and that's no good to
anyone.

And consider this.  What would happen if Murdock decides that rugby
union is not quite worth as much to him as international fart-lighting.
The Sky contract millions will disappear.  The terrestrial TV companies
won't have to pay anything like what Murdock has forced them to and
overnight, the game's major source of sustaining revenue will vanish.
Ooooer.

 
 
 

English Club Finances

Post by Rodger Donalds » Wed, 12 Aug 1998 04:00:00

On Tue, 11 Aug 1998 09:41:00 +0100, Jeremy Fieldsend

Quote:

>And consider this.  What would happen if Murdock decides that rugby
>union is not quite worth as much to him as international fart-lighting.
>The Sky contract millions will disappear.  The terrestrial TV companies
>won't have to pay anything like what Murdock has forced them to and
>overnight, the game's major source of sustaining revenue will vanish.
>Ooooer.

Or Rupert got divorced under California law and had a huge divorce
settlement.  And needed cash.  Or gave the rights to his ex-wife sold them
to Nike.

--

"The three principal virtues of a programmer are Laziness, Impatience, and
Hubris.  See the Camel Book for why."

 
 
 

English Club Finances

Post by Terry Fitzpatric » Wed, 12 Aug 1998 04:00:00

Quote:


> Er.... Not that simple.  Borrowing money against  projected profits
> (note: not returns) is fine.  

My use of "return" is as in "return on investment", but let's not be
pedantic.

Quote:
> But it's a question of degree.  The issue
> is that the clubs are borrowing too much to pay too few players too much
> money.  And the reason it's too much is measured on the scale of what
> the market will support.  The grounds are too small to bring in
> sufficient gate money and the there isn;t enough sponsorship to go
> round.  It's a very high risk strategy.  Too high.  And clubs without a
> multi-millionaire sugar daddy will go to the wall and that's no good to
> anyone.

I wouldn't argue that it isn't a high risk strategy, clearly with the
amount of money being pumped in it is. That wasn't the original
argument.

Quote:

> And consider this.  What would happen if Murdock decides that rugby
> union is not quite worth as much to him as international fart-lighting.

Can one get sponsorship for this?

Quote:
> The Sky contract millions will disappear.  The terrestrial TV companies
> won't have to pay anything like what Murdock has forced them to and
> overnight, the game's major source of sustaining revenue will vanish.
> Ooooer.

You make the assumption:

a) that the investors have not got a clue what they are doing

b) that Rupe will not to turn a profit.

While the evidence suggests that (a) may be correct, no one could accuse
Rupe of being stupid so I don't expect (b) to apply. And anyway, it
isn't the great man personally that is doing this, it is whoever is in
charge of running that particular business division.

Terry

 
 
 

English Club Finances

Post by Jeremy Fieldse » Fri, 14 Aug 1998 04:00:00

Quote:

> Or Rupert got divorced under California law and had a huge divorce
> settlement.  And needed cash.  Or gave the rights to his ex-wife sold them
> to Nike.

Quite.  (nice one.)
 
 
 

English Club Finances

Post by Jeremy Fieldse » Sat, 15 Aug 1998 04:00:00

[snip]

Quote:
>And anyway, it
> isn't the great man personally that is doing this, it is whoever is in
> charge of running that particular business division.

That's a nice thought but not unfortuneately one that would occur to
anyone working within News International.

Anyway.  I hope of course you're right.  My fear/belief is that the
investors are not investors as such, i.e. not just doing it for the
money.  They're doing it because they want to as well.  

But here's another thought.  The whole idea of sports teams being sound
public investments is crazy. (I refer to public quoted ones.)  It's far
too volatile for most.  Interestingly, I understand that in the home of
capitalism (er... the USA) only one or two baseball clubs have been
floated.

(But now we're indanger of going off topic...)

Jeremy