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Football and the World Economy
Topic Started: Dec 31 2008, 02:15 PM (1,217 Views)
ursus arctos
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And just to show that the richest league in the world is not immune to such pressures, Portsmouth will enter administration first thing Friday morning.

That will mean an immediate 9 point penalty (making relegation a virtual certainty) and a likely 15 to 20 point penalty upon the start of their Championship campaign next season, unless they can agree a Company Voluntary Arrangement (CVA) with all of their creditors, which is a very challenging prospect given that FA rules require that all "football creditors" be paid in full and that the UK tax authorities have already made clear that they are willing to threaten the club with extinction rather than accept less than 100% of the taxes owed.
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Yogi
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From the link ursus provided:

Quote:
 
Andrew Andronikou of accountancy firm UHY Hacker Young told AP: "We made a conscious decision to put [the club] into administration tomorrow morning."

Four undisclosed buyers failed to prove they had the funds to buy the club by today's 3.30pm deadline set by Andronikou.

Andronikou, who will act as the administrator, will issue a detailed statement tomorrow outlining how the club will be restructured and made attractive for a potential buyer.


That may be Portsmouth's last hope to save the club from extinction.

Quote:
 
UK tax authorities have already made clear that they are willing to threaten the club with extinction rather than accept less than 100% of the taxes owed.


Reminder to our British posters, do not owe Inland Revenue any money, they are ruthless!
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Merengue
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haha, because Yogi's last post mentioned Portsmouth's tax problems, the rotating ads below the posts picked up those words and there is an ad for those with tax levy problems! Maybe we should forward that to Portsmouth! ;)

Chester City were kicked out of the Football Conference today, the league just below the 4 divisions of England's Premier and Football League.

http://sports.yahoo.com/soccer/news?slug=r...uters&type=lgns

Meanwhile the administrator for Portsmouth believes the club can be saved and he is, as was discussed in another thread, asking the league to advance Portsmouth season ending payment,

http://sports.yahoo.com/soccer/news?slug=r...uters&type=lgns
http://twitter.com/#!/SocrFutbolForum
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Iceman778
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Playing in smaller markets where they are the only game in town has tremendously helped both clubs. In Colombia I do not believe clubs are franchises as they are in the US or Mexico but Chico FC was a small club in the capital of Bogota which never attracted much interest as it was overshadowed by larger clubs from the city
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Iceman778
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i thinkI have the impression that they are looking the other way to avoid seeing the sad economic and financial spectacle that the league of stars has become.”so what you say....
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Simon
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So this is a C & P of a post I made in the Bundesliga thread, as the article is primarily about Germany. However I thought I'd post it here as well for what will likely be a wider audience. Some interesting issues here IMO about how football should be financed. Things have clearly gone badly astray in England and Spain, but Germany's model is an interesting comparison.

http://www.guardian.co.uk/football/blog/20...-premier-league

This is a top article comparing the Bundesliga with the Premier League (and other leagues). I'd swap 90% of our system for the German system any day of the week. Bits of the article aren't comparing like for like though. German attendances are higher because they have safe standing areas, but for better or worse (I would say for better) we'll never have terraces in England again this side of Hillsborough.

The bloke interviewed in the article reckons the German system isn't damaging their CL hopes, but so what if it is? Your week in, week out league is the most important thing, and in any case it should be that everyone else should bring themselves in line with the system in Germany rather than German clubs matching people like Florentino Perez and getting up to their eyeballs in debt.

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Yogi
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The bloke interviewed in the article reckons the German system isn't damaging their CL hopes, but so what if it is? Your week in, week out league is the most important thing, and in any case it should be that everyone else should bring themselves in line with the system in Germany rather than German clubs matching people like Florentino Perez and getting up to their eyeballs in debt.


Good article thanks for bringing this important subject. Simon's above quote though to me is the essence of any league: competitive, fan friendly venues. I love the idea of fans traveling free to away games by showing a match ticket.
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ursus arctos
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It's a minor point, but German match tickets allow one free local public transport; you still have to pay for the train (almost always) between your home town and the city in which the match is being played.
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enganche
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ursus arctos,Apr 11 2010
06:51 PM
It's a minor point, but German match tickets allow one free local public transport; you still have to pay for the train (almost always) between your home town and the city in which the match is being played.

Well that makes sense, hard to imagine the national railroad permitting free travel between cities as that would be quite an expense to give away. Interesting article, although this linked article does not discuss much about the French league I have read elsewhere that league in general is pretty well run with many of its clubs also avoiding red ink.

But in between stories of English and Spanish clubs running into great debt, it is refreshing to see one talking about a league where the fans are treated well, in general there is competitive balance, the league clubs are in pretty good financial health and a good atmosphere is maintained without persistant crowd problems with hooligans/barras bravas.
Prefiero morir de pie que vivir arrodillado
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Merengue
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I recall somewhere in one of our discussions it was brought up that with cheap travel from England to Germany, many English fans were taking advantage of the lower ticket prices in Germany and making a weekend trip to see Bundesliga matches as the games tickets were easier to get ahold of, and cheaper than they are in England.

With UEFA intending to impose restrictions on European play for clubs in debt, perhaps the German system is the wave of the future?
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Iceman778
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I completely agree with u
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Manzanares
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I think Germany's restriction on ownership, requiring at least 51% ownership by club members is what helps keep stability within the country's clubs. You see in England how the constant change in ownership of clubs like Notts County and Portsmouth has led them into financial nightmares. Bigger clubs like Liverpool and Manchester United have the sponsorship and revenue streams to better overcome their debt problems but I do think there is something beneficial in having fan ownership.
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ursus arctos
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It makes a huge difference (as can be seen in the clubs' policy of restricting the number of season tickets so as to allow for more "walk up" sales.

So does the strict policing of clubs' finances by the Bundesliga (as most recently demonstrated by Bielefeld's loss of four points for a 2.5 million euro hole in their budget).
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Yogi
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ursus arctos,Apr 12 2010
10:34 AM
It makes a huge difference (as can be seen in the clubs' policy of restricting the number of season tickets so as to allow for more "walk up" sales.

So does the strict policing of clubs' finances by the Bundesliga (as most recently demonstrated by Bielefeld's loss of four points for a 2.5 million euro hole in their budget).

Yikes if that policy was in effect in Spain and England, Real Madrid, Manchester United and Liverpool would all be relegated!

I am interested to see if Michel Platini's proposal to limit European participation for those clubs in debt will eventually become a reality. If it does then like the Bundesliga rules it will force teams to be financial stabile. But it also raises the question of is it correct or even lawful to require businesses, as that is what clubs are, to be profitable?

In other news, Liverpool's owners have hired Barclay's Bank to search for prospective buyers for the club,

Barclays to search for Liverpool buyer

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ursus arctos
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The Premier League would be empty!

The German rules allow for some debt, but clubs must demonstrate that they can fulfill the budgets that they file in order to receive a license to play for the season. Bielefeld was 2.5 million euros short as of the end of the winter break, and couldn't come up with the cash.

The Financial Fair Play rules have been undergoing very thorough legal review for more than a year now. I'm quite confident that whatever ultimately emerges from that process will stand up to possible legal challenges. I'm also rather confident that it won't be as stringent as the most recent proposals.
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