Archive for October 8th, 2008


“Transparency lies in an unmarked grave”

Jesus Christ people, get a grip.

I listen to the Beeb on the radio every morning because, well, because I get up at 4am and there’s nothing else to listen to at that hour. Besides which it’s a habit and human beings are creatures of habit.

Human beings are also, apparently, herd animals and European human beings are, apparently, easily spooked herd animals. Because according to the Beeb, you folks are going nuts over this “credit crisis” over there and it’s starting to creep into my enjoyment of football.

I’m not saying that the world isn’t in a financial mess, a mess caused by greed (the world over, not just in the USA) but what I am saying is “DON’T PANIC!” Do you know what the “credit crisis” comes down to?


If we believe it, so it is.

The facts are that every penny, pence, cent, ruble, yen, and yuan is essentially a belief instrument. The herd believes that this stuff is worth more or less and, et viola, it is. Same thing with credit. Sure, we have all these complicated formulas that we use to try to “predict” stuff, but by and large credit is a belief system: I loan you money on the belief that you’ll pay it back.

So, banks believe that Arsenal will pay back their $600m in loans because, well, because Arsenal has shown them that they can by presenting an argument based on what they call “income” (ticket sales, player transfers, television revenues, Gunnersaurus lunchboxes, tee-shirts, concessions, etc) and by agreeing that if they don’t then the bank can take what creditors call “assets” (players, stadiums, managers, and fans — well, they can’t have me!).

See, football teams couldn’t get these loans if the banks didn’t believe that they would get their money back. If a team, like United, does fail to pay back their loans then the bank takes their assets and well, you know the rest. It would be a horrible thing to have happen to your team and I will feel a tremendous sadness and loss when Chelsea are sold off and relegated to the Third division.

But what we don’t want is a corrupt organization like UEFA or the FA mucking around in the finances of football teams in order to determine who is taking on good debt or bad debt: make no doubt about it, that is exactly what they want to do. Why? Because, ostensibly they want to ensure “stability” in football and “fair play.”

UEFA’s David Taylor now believes it is his job to ensure that Man U are a stable organization.


He also wants to ensure that football teams have “fair play” in terms of teams taking on debt in order to build themselves up and thus win trophies.


Debt is only one source of instability in the football market. Obviously, a team like Tottenham has a problem that’s bigger than just their debt. They continuously overpay for overrated players, does UEFA want to regulate that as well? Honestly, I think they would. The more they can get their greedy little fingers into the pie the happier they will be.

And what about “fairness?” Are they going to force Real Madrid to limit seat sales? Set ticket prices? Put caps on the number of tee-shirts Arsenal can sell? Because, and here’s something for Davie to consider, big teams are always going to have a bigger fan base and thus generate more revenue and thus have an “advantage” monetarily over little teams. If you strike down borrowing, Man U will still have the largest revenue stream in the UK and second largest in the world. They will always have an advantage over the Everton’s of the world.

I say all this as a supporter of a team which essentially is doing all the right things: they have a self imposed salary cap, a prudent business plan, an international fan base, jaw-droppingly beautiful football, and a great youth program to keep feeding the pipeline. My club is going to do just fine, regardless of the draconian rules UEFA impose in the name of “fairness” and “stability.”

In the end, I think UEFA and the FA should concentrate on footballing matters; making sure their refs aren’t on the take, stamping out racism, and getting calls right. Leave the financials to the banks, because from what I can tell the herd has slaked its thirst at the lake of easy credit and is bolting as fast as it possibly can toward a long winter’s sleep. And if that’s the case, the market will take care of itself and no amount of ex-post-facto regulation is going to stop the bubble from bursting.

In fact, all this mucking around in club finances could only make things worse.

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October 2008