Cruel world , I just found out how lonely it can be without

[Sir X]

Dubai set to drop Liverpool interest after bid for Charlton

• <LI class=byline>Matt Scott <LI class=publication>The Guardian,
• Saturday October 11 2008
• Article history

The Valley, home of Charlton Athletic Football Club. Photograph: Tony Marshall/Empics/PA

Charlton Athletic were last night the subject of a takeover bid by the Maktoum family in a deal that would seem to end Dubai's interest in Liverpool.
The Valley club's efforts to play down the deal last night by insisting there is "no certainty" that the "indicative" bid will become a formal offer will not restrain unbridled excitement in south-east London. The involvement of Sheikh Hamdan Al-Maktoum, son of Dubai's ruler, Sheikh Mohammed, through his Zabeel Investments vehicle would make the ascendancy of a club that dropped out of the Premier League with only 34 points in 2007 almost a certainty.
The Maktoum family had been involved in fruitless negotiations with the Anfield club's owners, George Gillett and Tom Hicks, and also turned down the opportunity to purchase Newcastle United. Hicks recently travelled to Dubai with a view to offloading his 50% stake in the club but the talks were inconclusive. Then Mike Ashley and Dennis Wise also paid a visit in an attempt to generate interest in Newcastle but according to sources familiar with the discussions the sums the pair demanded were considered unrealistic.
Their attention then turned to Charlton. Superficially there would seem to be few motives for taking over a club who lie only 14th in the Championship today. But there was an influential link with Liverpool in that Rothschilds, the investment bank, had represented the five-times European champions and also worked for Charlton.
The Valley club have been scouring the market for fresh investment in recent months but few could have considered that the Dubai ruling caste would be interested in a Championship club. One close observer of Dubai's football negotiations expressed surprise at the deal, saying: "They usually go for the front of the grid."
However another explained that as Gulf potentates go, Dubai is the junior partner to Abu Dhabi and the investment by Sheikh Khalifa bin Zayed Al Nahyan in Manchester City has shifted Premier League politics. The Charlton purchase may have been motivated by a desire not to be seen to "outdo" Abu Dhabi United Group by taking over England's most decorated club.
Any notion that Liverpool might still fall into Dubai's hands appears misguided since there would also be the further complication of Premier League and Football Association ownership rules. A single owner may not purchase two clubs in the same competition and the prospect of promotion as well as the chance of them being drawn against each other in a cup competition has complicated the issue. "Everything in Dubai goes back to the royal family," as one insider with knowledge of the deal stated.
A statement from Charlton's board said: "In spite of being approached by various English football clubs as well as a number of well-known clubs in Europe and South America, Zabeel Investments believes Charlton is the right club for them."
Amid a fire-sale of Premier League clubs Charlton have undoubtedly benefited from the effects of their good husbandry in recent years. With their Premier League parachute payments expiring at the end of last season, the board kept a tight rein on spending.
The directors even loaned the club almost £4m in interim funding in an effort to stabilise its finances in straitened times. In contrast to the £100m-plus borrowings of many top-flight clubs, Charlton's debts are believed to have been restricted to seven figures with the sales of players such as the £16m striker, Darren Bent, to Tottenham.
"We feel now is the right time to make a strategic, long-term investment in Charlton and get CAFC back to the English Premier League where they belong," said Zabeel Investments' executive chairman Mohammed Al-Hashimi.
"The passion of the fans at Charlton, the heritage of the club and the unique status it enjoys in the community make it an exciting proposition for us."

[Sir X]

Toxic football debts leave clubs gripped by fear

The current financial crisis will lead to greater problems than ever for teams that drop out of the Champions League and Premier League

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Richard Scudamore predicts that broadcast income will 'at least' be maintained in the next three years. But can he be sure? Photograph: Getty Images

Every day brings more chilling news of the UK banking crisis. The financial markets opened this morning with yet another alarming plunge. This week's £500bn rescue by the government, considered necessary to lubricate a banking system on the brink of collapse, has cost each and every UK taxpayer anything estimated between £2,000 and £13,000. Those figures should scare anyone who seeks to comprehend them: how long will it take to repay that much when UK plc has been running at a loss even in times of plenty?
One financial expert said yesterday that our country had only one world-leading industry — banking — and that the failure of the regulators has let that crumble to dust. This is not strictly true. During the past 15 years of unprecedented growth in the global economy, English football has also blossomed widely to be regarded as the world's best domestic league.
Intriguingly, this week we learn that its "regulator", the Football Association, is seeking to apply stricter controls on the free-market-orientated Premier League. Just as we all wish with hindsight that the Financial Services Authority had curbed the worst excesses of the banks before it was too late, there are interesting parallels with the finance sector here.
The debts run up by clubs - a cumulative £3bn - are considered by the Premier League to be serviceable. This is at best a spurious generalisation.
There are two years' guaranteed income from the current, £2.7bn broadcast deals. Richard Scudamore, the Premier League chief executive, confidently predicts that broadcast income will "at least" be maintained in the next three-year cycle. But can he be sure? Even allowing for growth in overseas markets, can Sky and Setanta continue to pour billions of pounds into his league when consumers start to consider the £49-per-month combined subscription fees an expensive luxury?
It is very interesting that while taking over equity and injecting fresh capital, the government's rescue of the banks has left the so-called "toxic" assets on their balance sheets. What could be more toxic than the, say, £80m debt accrued by a football club whose turnover is less than £100m, whose wage bill is £65m, who hasn't made a profit for five years and who risks relegation from the Premier League - an event that would slash its revenues in half?
The Premier League's most indebted member clubs are gripped with fear. This year, one that has produced greater income for every Premier League club than ever before, will inevitably lead to greater problems than ever in their history for those that end up being relegated. Leeds United were able to survive the catastrophic financial impact of relegation — just. The next time it happens creditors (not least the taxman, who now needs every penny he can squeeze) will not be so forgiving.
Similarly, the problems felt by those "relegated" from the Champions League will also be devastating. With the certain exception of Chelsea (whose owner insulates them from the chill winds of the markets) and possibly Arsenal (whose stadium debts were broadly fixed at very favourable rates; although their success is predicated on the fans continuing to pay for very expensive season tickets) the risks have suddenly become much greater. Failure to reach the Champions League groups would have very dangerous consequences. And this is at a time when Uefa's competition reforms have made qualification for leagues' fourth-placed teams doubly difficult.
Liverpool are very heavily in debt and do not own a cash-generative stadium. If they do not qualify for next year's Champions League group stage - which, even if they do not progress, provides a minimum £10m in revenues - they could not service their borrowings. Similarly Manchester United. Provided buyers could be found (no longer a given as sovereign-wealth funds equivalent to the Abu Dhabi United Group spy far more profitable targets at bottom-of-the-market bargain prices) both clubs would have to be sold. If they were "flipped" in a fire-sale it would probably be at a considerable loss to their American owners.
But few English fans, who themselves are worried about paying their own mortgages, would weep for them.