Wednesday, February 11, 2009
TWO TIER LEAGUE?
The idea of a two tier Premiership has been revived by Bolton chairman Phil Gartside. He proposes two divisions of 18 teams each, but controversially no promotion or relegation from the Football League, an arrangement that is usual in American sporting competitions. He argues that smaller leagues would solve the problem of the winter break and the England team. Given Bolton's situation, his views may not be entirely disinterested. However, he points out, 'It would even everything out and make it more competitive on that basis.' In the context of current criticism of the Premiership, it is a response that might appeal to the competiton's leadership. However, to make it acceptable there would have to be some promotion and relegation from the lower level to prevent the creation of a self-perpetuating elite (although some would say we have that already). However, it could be one or two clubs rather than three as at present.
UEFA DETERMINED TO LIMIT CLUB SPENDING
AS PLATINI PLANS TO REIGN IN BIG GUNS
Uefa boss Michael Platini is determined to level up the playing field in football by introducing restrictions on spending. He wants to revamp the rules to exclude clubs that failed to meet certain financial requirements from participating in lucrative European competitions. Platini denied that he was targeting Premiership clubs, arguing that many clubs across Europe were in a similar financial position, Nevertheless, the Premiership would be disproportionately affected. Under a plan put forward by the European Club Association, clubs would be allowed to spend no more than a certain percentage - yet to be decided but thought to be between 50 and 70 per cent - of turnover on wages and transfers. For example, if the limit were set at 60 per cent, a club with a turnover of £50m and a wage bill of £25m could then spend only a further £5m net on transfers. Given that most Premiership clubs have wage bills well in excess of two thirds of turnover, they would be bound to take a big hit. However, unlike a proposal floated by Uefa general secretary David Taylor, the current plan does not include a provision about clubs carrying excessive debt. Long-term capital borrowing would not figure in the calculations.
Paradoxically the rule change could strengthen the relative position of the current top four clubs. Because they have large turnovers they would be effectively able to outspend the opposition. They would not be threatened by the risk of a Sheikh Mansour coming in and bankrolling an upstart. However, despite his insistence that he wants to give every club a chance to win, it is people like the Sheikh and Roman Abramovich who seem to be Platini's real targets. He described City's bid for Kaka as ridiculous and said that clubs should invest in their academy and grow their own players rather than 'waiting for an Arab sheikh to bring in €150m.' It is thought that any rule change that was agreed would be phased in to give clubs time to adjust.
Uefa boss Michael Platini is determined to level up the playing field in football by introducing restrictions on spending. He wants to revamp the rules to exclude clubs that failed to meet certain financial requirements from participating in lucrative European competitions. Platini denied that he was targeting Premiership clubs, arguing that many clubs across Europe were in a similar financial position, Nevertheless, the Premiership would be disproportionately affected. Under a plan put forward by the European Club Association, clubs would be allowed to spend no more than a certain percentage - yet to be decided but thought to be between 50 and 70 per cent - of turnover on wages and transfers. For example, if the limit were set at 60 per cent, a club with a turnover of £50m and a wage bill of £25m could then spend only a further £5m net on transfers. Given that most Premiership clubs have wage bills well in excess of two thirds of turnover, they would be bound to take a big hit. However, unlike a proposal floated by Uefa general secretary David Taylor, the current plan does not include a provision about clubs carrying excessive debt. Long-term capital borrowing would not figure in the calculations.
Paradoxically the rule change could strengthen the relative position of the current top four clubs. Because they have large turnovers they would be effectively able to outspend the opposition. They would not be threatened by the risk of a Sheikh Mansour coming in and bankrolling an upstart. However, despite his insistence that he wants to give every club a chance to win, it is people like the Sheikh and Roman Abramovich who seem to be Platini's real targets. He described City's bid for Kaka as ridiculous and said that clubs should invest in their academy and grow their own players rather than 'waiting for an Arab sheikh to bring in €150m.' It is thought that any rule change that was agreed would be phased in to give clubs time to adjust.
PREMIERSHIP TRANSFER RECORD BROKEN
MANCITY AND SPURS LEAD THE WAY
the premiership is awash with cash and they sure know how to burn it.
Spending by Premiership clubs on new players in the January transfer window has hit a fresh all-time high of £160m according to Deloitte's sports business group. The amount may still go up because the transfer window was extended because of the bad weather so that deals in progress could be completed, but the total is already well above last year's £150m. Spending between Premiership teams made up around £105m of the £160m. Manchester City and Spurs have been the two biggest spenders. Deloittes said Manchester City have spent more than £50m during the transfer window and Tottenham around £45m. Total spending by Premiership teams in the January window again far exceeded that in other European leagues. Peter Rawnsley, director in the sports business group at Deloitte, commented. 'With the majority of their revenue streams already secured for the current season, whilst [Premier League] clubs are not recession-proof, they are relatively recession-resistant. Looking ahead, while the clubs will not be complacent, the latest transfer activity re-emphasises the financial strength and global appeal of the Premier League competition.'
the premiership is awash with cash and they sure know how to burn it.
Spending by Premiership clubs on new players in the January transfer window has hit a fresh all-time high of £160m according to Deloitte's sports business group. The amount may still go up because the transfer window was extended because of the bad weather so that deals in progress could be completed, but the total is already well above last year's £150m. Spending between Premiership teams made up around £105m of the £160m. Manchester City and Spurs have been the two biggest spenders. Deloittes said Manchester City have spent more than £50m during the transfer window and Tottenham around £45m. Total spending by Premiership teams in the January window again far exceeded that in other European leagues. Peter Rawnsley, director in the sports business group at Deloitte, commented. 'With the majority of their revenue streams already secured for the current season, whilst [Premier League] clubs are not recession-proof, they are relatively recession-resistant. Looking ahead, while the clubs will not be complacent, the latest transfer activity re-emphasises the financial strength and global appeal of the Premier League competition.'
NEW WAYS OF FUNDING TRANSFER DEALS
AS CREDIT CRUNCH FORCES CLUBS TO DO FINANCIAL ENGINEERING
We are in a credit crunch and an impending global economic slump where even the most solid businesses are having a hard time acquiring credit to fund their operations so it call for innovative ways for the spend-crazy premiership clubs to sustain their business model.One of such inventions is BESPOKE FINANCING. this is where a transaction is financed using tailor-made financial instruments.- a sort of a custom-made financing arrangement.
The January transfer window was marked by the increased use of bespoke loan facilities and debt trades to make deals happen. Spurs have struck lucky and have been the primary beneficiaries of 'debt forgiveness' meaning that their spending is closer to £20m than the reported figure of £49m. In Robbie Keane's case Liverpool still owed Tottenham around £11m of the initial £19m fee they agreed last summer, meaning his £12m move to White Hart Lane was completed with less than £1m in cash travelling in the other direction. Defoe's return did have a net cost to Spurs who notionally paid £15.75m for a player they sold for £9.2m last January, but with Portsmouth still owing outstanding fees for Defoe, Younes Kaboul and Pedro Mendes, only £6m in cash changed hands.
While Spurs have benefited from specific circumstances, the now-commonplace payment of transfer fees in instalments has seen an increase in the use of football-specific facilities to keep the transfer market moving. These niche products have boomed in the last year, driven by changes in the way that transfer deals are done and the pressure on cash flows. Where once deals were done on fairly straightforward cash terms, the size of modern transfer fees - there were six worth more than £10m in January alone - have left even the largest clubs having to pay in tranches. With selling clubs keen to get their hands on all the money up front, a small number of banks, specialist football finance houses and at least one player agency have developed bespoke loan products for football. Banks are increasingly being asked to provide facilities that allow the selling club to receive the full transfer fee up front, with the debt effectively being repaid by the buying club.
This could be explored here in Ghana even though our transfer market is not even matured and we don't need to reinvent the wheel.it fosters a less acrimonius relationship among our clubs and works to the benefit of club owners
We are in a credit crunch and an impending global economic slump where even the most solid businesses are having a hard time acquiring credit to fund their operations so it call for innovative ways for the spend-crazy premiership clubs to sustain their business model.One of such inventions is BESPOKE FINANCING. this is where a transaction is financed using tailor-made financial instruments.- a sort of a custom-made financing arrangement.
The January transfer window was marked by the increased use of bespoke loan facilities and debt trades to make deals happen. Spurs have struck lucky and have been the primary beneficiaries of 'debt forgiveness' meaning that their spending is closer to £20m than the reported figure of £49m. In Robbie Keane's case Liverpool still owed Tottenham around £11m of the initial £19m fee they agreed last summer, meaning his £12m move to White Hart Lane was completed with less than £1m in cash travelling in the other direction. Defoe's return did have a net cost to Spurs who notionally paid £15.75m for a player they sold for £9.2m last January, but with Portsmouth still owing outstanding fees for Defoe, Younes Kaboul and Pedro Mendes, only £6m in cash changed hands.
While Spurs have benefited from specific circumstances, the now-commonplace payment of transfer fees in instalments has seen an increase in the use of football-specific facilities to keep the transfer market moving. These niche products have boomed in the last year, driven by changes in the way that transfer deals are done and the pressure on cash flows. Where once deals were done on fairly straightforward cash terms, the size of modern transfer fees - there were six worth more than £10m in January alone - have left even the largest clubs having to pay in tranches. With selling clubs keen to get their hands on all the money up front, a small number of banks, specialist football finance houses and at least one player agency have developed bespoke loan products for football. Banks are increasingly being asked to provide facilities that allow the selling club to receive the full transfer fee up front, with the debt effectively being repaid by the buying club.
This could be explored here in Ghana even though our transfer market is not even matured and we don't need to reinvent the wheel.it fosters a less acrimonius relationship among our clubs and works to the benefit of club owners
PREMIERSHIP IS POWERFULL DESPITE ECONOMIC SLUMP
>>>>as rights yield 1.8bn pounds per year
Forecasts that the Premiership bubble would burst in the credit crunch increasingly look premature, if not misplaced altogether. The Premier League has secured a record television deal that will be worth almost £1.8 billion over three years. The 5 per cent increase over the last deal will bolster finances of clubs until 2013 when the deal ends. By that time, even on the most pessimistic estimates, the recession should be over. With the overseas rights for 2010 to 2013 still to be distributed, the Premier League is on track for another record for its total broadcasting rights, surpassing the £2.7 billion it achieved in the 2007-10 round. The Premiership has also been canny in its current overseas deals, signing contracts to be paid in dollars. With the value of sterling falling against the dollar, it is thought that payments from overseas broadcasters have become worth millions of pounds more over the last few months.
Sky won five of the six packages available, the maximum it is allowed under EU rules. BSkyB paid £1.62bn of the £1.78bn total the Premiership will pay over three years. It is paying just under £5m a game at £4.7m and getting 115 games a season. Tony Syfret from Enders Analysis told the Financial Times 'I estimate that Sky may make £20m more annually in increased advertising and revenues from pubs and clubs, but they are paying £103m more, so it is not absolutely clear what the benefit is for them, except putting Setanta in its place.' However, if Sky had cut back on what it paid, the quality of English football would have suffered. There is already strong consumer demand for Sky subscriptions and by seizing the Monday night games - coupled with extended Champions League rights from next season - it will have enough matches to strengthen its appeal.
Irish broadcaster Setanta Sports is the big loser. It won a single package of 23 matches that will be aired at 5.15 p.m. on Saturday evenings. Analysts are sceptical whether it will reach break even point on its subscriber model. It's an open question whether Setanta's 1.5 million paying customers think it will be worth paying between £8 and £13 a month for the reduced service, including some football free weekends. It has saved more than £200m over the next three year deal and could use the cash to buy into other sports, improving its weak summer schedule. It could always try to sell itself to EPSN, the American sports broadcasting giant owned by the Walt Disney company, which was unsuccessful in the rights auction. EPSN could afford to buy into Setanta, providing the venture with real firepower with which to fight Sky.
Forecasts that the Premiership bubble would burst in the credit crunch increasingly look premature, if not misplaced altogether. The Premier League has secured a record television deal that will be worth almost £1.8 billion over three years. The 5 per cent increase over the last deal will bolster finances of clubs until 2013 when the deal ends. By that time, even on the most pessimistic estimates, the recession should be over. With the overseas rights for 2010 to 2013 still to be distributed, the Premier League is on track for another record for its total broadcasting rights, surpassing the £2.7 billion it achieved in the 2007-10 round. The Premiership has also been canny in its current overseas deals, signing contracts to be paid in dollars. With the value of sterling falling against the dollar, it is thought that payments from overseas broadcasters have become worth millions of pounds more over the last few months.
Sky won five of the six packages available, the maximum it is allowed under EU rules. BSkyB paid £1.62bn of the £1.78bn total the Premiership will pay over three years. It is paying just under £5m a game at £4.7m and getting 115 games a season. Tony Syfret from Enders Analysis told the Financial Times 'I estimate that Sky may make £20m more annually in increased advertising and revenues from pubs and clubs, but they are paying £103m more, so it is not absolutely clear what the benefit is for them, except putting Setanta in its place.' However, if Sky had cut back on what it paid, the quality of English football would have suffered. There is already strong consumer demand for Sky subscriptions and by seizing the Monday night games - coupled with extended Champions League rights from next season - it will have enough matches to strengthen its appeal.
Irish broadcaster Setanta Sports is the big loser. It won a single package of 23 matches that will be aired at 5.15 p.m. on Saturday evenings. Analysts are sceptical whether it will reach break even point on its subscriber model. It's an open question whether Setanta's 1.5 million paying customers think it will be worth paying between £8 and £13 a month for the reduced service, including some football free weekends. It has saved more than £200m over the next three year deal and could use the cash to buy into other sports, improving its weak summer schedule. It could always try to sell itself to EPSN, the American sports broadcasting giant owned by the Walt Disney company, which was unsuccessful in the rights auction. EPSN could afford to buy into Setanta, providing the venture with real firepower with which to fight Sky.
COLLAPSE OF GBS (GTV) AND ITS IMPLICATIONS FOR AFRICAN LEAGUE FOOTBALL
COLLAPSE OF GTV
Last week, GTV announced it would no longer broadcast to its 100 000-odd subscribers. It closed its doors after a two-year campaign to wrestle as much of the African pay-TV market away from the domination of South African-owned MultiChoice.
GTV is an outgrowth of Gateway Communications, the Pan-African telecommunications company that is also London registered. The two entities separated legally two years ago and Gateway Communications' telecommunications business was bought by mobile network operator Vodacom late last year.
GTV subscriber base was in Botswana, Kenya, Cameroon, Gambia, Gabon, Ghana, Lesotho, Liberia, Malawi, Swaziland, Tanzania, Uganda, Zambia and Zimbabwe.
MultiChoice, which has a total of about 1.4 million subscribers across the continent, is still to issue a statement about GTV's liquidation.
However, MultiChoice executives are privately not happy about the situation.
“There is a danger that we end up looking like the bad guys because many think we can just capitalise on the situation. This is not true – GTV built up expectations and now dashed them, and we are the company that is expected to pick up the pieces, even though we had nothing to do with them,” says one MultiChoice executive.
GTV under the broadcast name GBS initiated a massive shake-up in the pay-tv industry in Africa with an aggressive and positive image strategy. Their offerings, while extolling their own good virtues were simultaneously taking swipes at Multichoice who had a monopoly over the industry in most African countries.
Using the magnet of premiership football they gambled hugely and pay huge sums to acquire the premiership right for Africa. The football crazy part of the population rushed for their bouquets and abandoned their DSTV. Within weeks GBS was up and flying in Africa and in Ghana their subscriber base swelled instantaneously. As a business model it was too good to be true. And to add to the excitement many subscribers discovered that GBS was much cheaper than their DSTV subscriptions.
Many DSTV subscribers berated them for leaving them out of the action and excitement of the premiership.
GBS adopted a woo-strategy that was to convince the football authorities across Africa that it was not just in to take money out of the football fans but also to invest in football both locally.
GBS signed agreements with local leagues in Uganda Tanzania, Ghana and Zimbabwe to become broadcast sponsors for these leagues. These contracts were so lucrative that they were unprecedented in the history of professional football in Africa outside North Africa and South Africa. Huge sums of money were pumped into these sponsorship deals , allowing the clubs to plan and invest for the first time in some of these countries. This sponsorship money has revived some of the beneficiary leagues turning them into competitive leagues with even some of them staring to poach players from neighboring countries. This is especially true of Tanzania where the sponsorship deal has revived the league and even boosted the performance of the national team.
In Uganda GTV was to invest over US$5m in Ugandan football for five years, according to their contract with the local soccer body. This would support the development of the game at all levels.
In Ghana GTV invested $1m in the first year of their 3 year contract with the Ghanaian league and had started paying up another $1m for the second year before they collapsed. During their association with the Ghanaian league, television coverage (even though it was largely restricted) became far better, one aspect that had been missing from the local game. The TV production became much more professional and in effect sold the game beyond our borders.
Many local players boosted by better wages and organization were prepare to give our local leaguer a shot instead of the mad rush to seek contracts in the likes of Vietnam and Malaysia. What is refreshing is the many African leagues are becoming more professional with each passing year and with the right partners and more will be achieved. Many of the continent’s clubs arte not so dependent on sponsorship money, and I am sure they will survive this as they have done in many perilous years of pursuing excellence in the game they love most
THE COLLAPSE OF GBS WILL HURT BUT IT Is REFRESHING TO KNOW THAT IT WILL NOT KILL OUR LEAUGES IN AFRICA.
Last week, GTV announced it would no longer broadcast to its 100 000-odd subscribers. It closed its doors after a two-year campaign to wrestle as much of the African pay-TV market away from the domination of South African-owned MultiChoice.
GTV is an outgrowth of Gateway Communications, the Pan-African telecommunications company that is also London registered. The two entities separated legally two years ago and Gateway Communications' telecommunications business was bought by mobile network operator Vodacom late last year.
GTV subscriber base was in Botswana, Kenya, Cameroon, Gambia, Gabon, Ghana, Lesotho, Liberia, Malawi, Swaziland, Tanzania, Uganda, Zambia and Zimbabwe.
MultiChoice, which has a total of about 1.4 million subscribers across the continent, is still to issue a statement about GTV's liquidation.
However, MultiChoice executives are privately not happy about the situation.
“There is a danger that we end up looking like the bad guys because many think we can just capitalise on the situation. This is not true – GTV built up expectations and now dashed them, and we are the company that is expected to pick up the pieces, even though we had nothing to do with them,” says one MultiChoice executive.
GTV under the broadcast name GBS initiated a massive shake-up in the pay-tv industry in Africa with an aggressive and positive image strategy. Their offerings, while extolling their own good virtues were simultaneously taking swipes at Multichoice who had a monopoly over the industry in most African countries.
Using the magnet of premiership football they gambled hugely and pay huge sums to acquire the premiership right for Africa. The football crazy part of the population rushed for their bouquets and abandoned their DSTV. Within weeks GBS was up and flying in Africa and in Ghana their subscriber base swelled instantaneously. As a business model it was too good to be true. And to add to the excitement many subscribers discovered that GBS was much cheaper than their DSTV subscriptions.
Many DSTV subscribers berated them for leaving them out of the action and excitement of the premiership.
GBS adopted a woo-strategy that was to convince the football authorities across Africa that it was not just in to take money out of the football fans but also to invest in football both locally.
GBS signed agreements with local leagues in Uganda Tanzania, Ghana and Zimbabwe to become broadcast sponsors for these leagues. These contracts were so lucrative that they were unprecedented in the history of professional football in Africa outside North Africa and South Africa. Huge sums of money were pumped into these sponsorship deals , allowing the clubs to plan and invest for the first time in some of these countries. This sponsorship money has revived some of the beneficiary leagues turning them into competitive leagues with even some of them staring to poach players from neighboring countries. This is especially true of Tanzania where the sponsorship deal has revived the league and even boosted the performance of the national team.
In Uganda GTV was to invest over US$5m in Ugandan football for five years, according to their contract with the local soccer body. This would support the development of the game at all levels.
In Ghana GTV invested $1m in the first year of their 3 year contract with the Ghanaian league and had started paying up another $1m for the second year before they collapsed. During their association with the Ghanaian league, television coverage (even though it was largely restricted) became far better, one aspect that had been missing from the local game. The TV production became much more professional and in effect sold the game beyond our borders.
Many local players boosted by better wages and organization were prepare to give our local leaguer a shot instead of the mad rush to seek contracts in the likes of Vietnam and Malaysia. What is refreshing is the many African leagues are becoming more professional with each passing year and with the right partners and more will be achieved. Many of the continent’s clubs arte not so dependent on sponsorship money, and I am sure they will survive this as they have done in many perilous years of pursuing excellence in the game they love most
THE COLLAPSE OF GBS WILL HURT BUT IT Is REFRESHING TO KNOW THAT IT WILL NOT KILL OUR LEAUGES IN AFRICA.
I BELONG TO MONEY
What is pushing Kaka to even consider moving from a high flying club like Ac Milan to a lowly and struggling club with no compelling history like Manchester City? Well some will say Man city with its new status as the “richest club” in the world has what it takes to become as big as big as the Milans of this world in a matter of years. After all look what Abramovic’s money did for Chelsea over the last few seasons. Kaka, one can argue is making a logical decision to become the fulcrum around which a team of world beaters will be built at Mancity and go into football folklore as the one that led a revolution that turned minnow into a giant; just like Maradonna did for Torino and Johan Cryuf for Barcelona in the 1970s and 1980s.
Again Mancity as a team doesn’t look that bad with the likes of Robinho, Elano, Wright-Phillips, Richards etc Kaka will find teammates with the ability and talents to help him in this project. And undoubtedly the arrival of Kaka will convince other world class players to decide to join. In a matter of two seasons Mancity will undoubtedly be competing for the Premiership title and appear in the final stages of the champions League. Furthermore at 26 Kaka has managed to achieve what any players could dream to achieve in their lifetime. He has won all the that there is to be won-two champions League titles, a clutch of Scudettos ,a FIFA World Cup ,a South American Continental Championship , a host of individual honors, the ultimate of which is the FIFA World Player of the Year that he won in 2007.surely he can relax on such laurels or if his ego is still big he could devote the rest of his career seeking a new challenge elsewhere- and what better challenge is there for a footballer than to do what everyone thinks is counterintuitive and totally crazy. There is enough purely footballing reasons for Kaka to move to Mancity.
However the obscene sums being bandied around makes it difficult to defend the legitimate reasons enumerated above. I am well informed that apart from the record £94?(compare this to the 2007 to budget of the republic of Sierra-Leone of $88m ) transfer fee , the personal terms are hard to comprehend. Kaka is reported to be demanding a daily wage of a staggering $120,000 which works up to about $900,000 per week (which works up about $45m per year).
In addition Kaka has negotiated a series of exit and conditional clauses that does little to betray his skepticism and commercial motives behind this unprecedented move. Some of such clauses include a strong commitment from the “deep pocket “Gulf owners of Mancity to commit long-term to the club as well as a steady stream of investment in playing and infrastructure assets. Also kaka has demanded assurances that other world class players will join Mancity as soon as possible failure of which could lead to his exit. It is also reported that Mancity will pay Kaka large sums of money any season they fail to qualify for the UEFA champions League.
The motivation is money and it is not only Kaka who is in to benefit. all sorts of people including the inevitable agents, advisers, financiers deal brokers/makers,lawyers etc. stand to benefit lucratively if the deal pulls through.
A lot of money is at stake a lot of poeple stand to gain so enormous pressure is being exerted on the "innocent" Kaka to sign the deal.
And what do i hear about the other Premiership managers complaining of the sums involved? this is all sour grapes. if they had the kind of money City has i can bet my last dollar on it that they will spent it to get Kaka in their teams. if Spurs spent $30m on Bent , Liverpool spent $50m on Torres, Man U spent $60m on Berbatov and even Arsenal are prepare to spent $30m on Arshavin ;what is wrong with City dolling out a few "quids" on one of the worlds best players?
if kaka signs for city as we all agree is likely to happen , it will not be such a bd thing after all.
Subscribe to:
Comments (Atom)
