TOO GOOD TO BE TRUE
Printed in the Southern League South and West game v Windsor and EtoN 24th January 2009. Windsor’s 18 match unbeaten run came to and end with Slough winning
3-2 in front of 385 people.
If something seems too good to be true then it probably is. This is
what the investors with Bernard Madoff are finding out, after he recently
confessed to the worlds largest ever fraud. US Investment manager Madoff
was the ultimate Wall Street insider, the financial wizard to the A-list who
everyone wanted to know. But Madoff established what is called a
“Ponzi scheme” and swindled up to $50 billion from investors from big
banks to charities. But how could he have fooled so many people for so
long? Ponzi schemes are relatively unsophisticated frauds in which the
organisers repay old investors not with genuine gains but with money
from new investors. Madoff gave much better returns than anyone else,
but while the money rolled in few questioned how it was possible.
Too good to be true also sums up the Premiership. Football fans have
been too easily dazzled by money; turning a blind eye to anyone who
flashes the cash, no matter where that money comes from or the dubious
motives of the investors.
West Ham are the Premiership club in the most precarious position.
Owner Bjorgolfur Gudmundsson has put West Ham on the market in order to pay
back debts exceeding £50 million after the collapse of an Icelandic
bank in which he had a 41% stake. Gudmundsson, who bought the club for
£85 million in 2006, is struggling to finalise a deal having initially
expected to raise £250 million, a figure that, surprise surprise, is
proving unrealistic in the current financial climate. If he doesn’t
sell by early March, his company will be declared bankrupt and
stripped of its assets, which includes West Ham. Should that happen
the Hammers could be placed into administration with an immediate
point’s deduction. Sources close to Gudmundsson admitted "It is very
difficult to sell any football club right now, it is hard to maximise
At Blackburn, relegation could finish the club – with wages accounting
for a staggering 85 per cent of turnover. Portsmouth and Liverpool’s
plans for new stadiums look to be going nowhere. Even money-bags
Abramovich has been hit by the collapse of the Russian stockmarket.
Infact Chelsea and Man Utd have a combined debt of £750 million! The
Mr.Big of football take-overs Keith Harris, said "We're in the
toughest economic situation anybody has endured in our lifetime, and
that means we are unlikely to see much activity on the football
takeover scene." An American investor ready to buy the ever troubled
Newcastle United had to pull out after they lost hundreds of millions
of dollars thanks to the Bernard Madoff fraud.
Of course it’s not just Premiership clubs that are feeling the pinch –
football clubs up and down the country have over-stretched themselves
and are in financial melt-down as sponsorship dry’s up.
In the week when Man City made a ridiculous £100 million bid for AC
Milan’s Kaka, Berkhamstead Town went to the wall after their
electricity was cut off because of an unpaid bill. With it go another
community asset and ninety years of history. Meanwhile Lewes,
Northwich, Grays, Weymouth, Workington, Salisbury, Folkestone,
Eastleigh, Stafford, Worcester, Leigh Genesis and Fisher are just some
of the non league clubs in financial trouble.
Football clubs are not just companies or rich men’s playthings, but
run properly can become part of the social glue that binds communities
together. It’s time more football fans took control of their clubs and
became a lot more questioning about the way football is run before the
game is ruined forever.
• Excellent website on football economics http://www.footballeconomy.com/