Football Economics Latest
American Duo To Share Liverpool
Tom Hicks, co-founder of the US investment firm Hicks Muse, Tate and Furst is dipping into his personal fortune to provide half the equity for George Gillett's purchase of Liverpool FC. The involvement of Hicks turned a flagging bid into one that was a credible alternative to the offer from Dubai. It was Randy Lerner's summer takeover of Villa that planted a seed in the mind of Hicks. An intermediary suggested Manchester City or Newcastle United, but then came up with Liverpool. A source close to Liverpool told the Financial Times, 'Mr Gillett is very wealthy but you need quite a bit of wealth to take the club to the next level. No one is going to do an Abramovich but with this you have more than doubled the wealth of the backers.' Mr Hicks, who owns the Texas Rangers baseball team and the Dallas Stars ice hockey side, has experience in stadium construction and development, another factor crucial for the Liverpool board with the planned move to Stanley Park. The reaction from supporters, who had been sold on the Dubai bid by glowing references from chief executive Rick Parry, has been largely negative. Richard Pedder, chairman of the official supporters club said that he was 'devastated'. One of the more printable comments on the Liverpool fans' message boards was 'I don't want some money making Yank buying our club for profit.' Nevertheless, Liverpool are destined to become the third American owned club in the Premiership within a couple of weeks.
Are Spurs Set To Be The Next Takeover Targets?
Tottenham Hotspur ar being targeted as the next takeover target for private investors, sending shares soaring by 60 per cent in the past four months. Paul Kemsley, the Tottenham vice-chairman, is believed to be among the prospective buyers and has privately expressed an interest in purchasing the 32.7 per cent share held by Enic, the sports investment company that is the largest stakeholder in the club. It is possible to acquire a large stake easily in Tottenham because their shares are not diversely held. Sir Alan Sugar, the former chairman, has a 13 per cent stake through Amshold Limited, while Stelios Haji-Ioannou, the founder of easyJet, has a 9 per cent stake though Hodram Inc. Spurs have attracted a number of potential investors in recent years, but have been put off by an excessive valuation by chairman Daniel Levy.
Transfer Window Spending-Analysed
Total spending in the transfer window was over £62m, only £8m short of the record spend in January last year. However, while the top ten clubs made twenty signings, the bottom ten made 40, with the bottom five accounting for 26. This reflects the financial penalty attached to relegation this year with the new television deal kicking in next season. Remarkably there were only three transfers above £5m. There was also a remarkable lack of activity by the big clubs, especially Chelsea. Manchester United and Arsenal made small profits on transfers of £3.5m and £1m respectively. Arsenal, by contrast, spent £18m in the previous January window and United £11.5m. Only Liverpool seemed to be willing buyers among the 'big four'.
Premiership attendances look set top the 13 million mark for the fourth time in the competition's 15-year history, representing a one per cent increase on last season. However, this is mainly a result of the significant increase in crowds that Arsenal, at their new Emirates Stadium, and Manchester United, with increased capacity, are enjoying. If you removed Arsenal and United from the analysis, the other 18 clubs combined are heading for a 3.85 per cent drop on last season's figures, equivalent to losing 1,222 fans at each game. However, the three promoted clubs, on current figures, will attract 269,000 less fans than the three clubs they replaced. So if you take the promoted clubs out of the equation, the true deficit this season will about 1.6 per cent, or an average loss of 522 fans at every game. One of the more significant fans for the predicted drop is that fewer and fewer fans are travelling to away matches. This has been the subject of recent discussion on football phone ins with calls for reduced ticket prices for away fans. However, given that travel is often the larger part of the cost, and that disposable incomes are being squeezed, it is far from clear that a £15 or even £20 cut in ticket prices would make much difference.