Arsenal News from Untold Arsenal » 2009 » September » 03

It seems that West Iceland United might not get a fine over what happened in the match against Millwall, because the footballing authorities fear it will send the club into total collapse.  Instead, the club will just get a telling off.

As one footballing official might have said, “If UEFA can get away with banning Eduardo using retrospective legislation, I am sure we can save West Ham.”

He didn’t say that of course, I just made it up, but since everyone else makes stuff up about football, why can’t I?

Anyway, West Iceland’s problems are not just with the people who turn up and watch.

For West Iceland is not only four stops from Barking (on the District Line), it is also the home of the insane financial model upon which much of the rest of football is based.

The club is owned by a subsidiary of one of the banks in Iceland that failed, so is in fact insolvent, and up for sale.  The only thing that keeps it going is the fact that the creditors think that they can get more money for the club in the future than they can now.

Except…

the club continues to hemorrhage money like there is no tomorrow, probably because in West Iceland’s case there is no tomorrow.

In this world there  are levels of insanity, and then there is football finance.  West Iceland Utd are bust, bankrupt, insolvent, kappuit.  So what did they do last year?  They managed to lose another £37m (according to figures just published in the Guardian).

To cover this, they then, in January last year, got another £17m loan from the banks!!!!!!!!!

Which raises the question, which is the more insane?  The banks (most of which you and I own) which hand out £350m to Liverpool Insolvency and yet another £17m to Totally Barking Mad Inc, or the clubs themselves?

It is all getting so bad that the accounts for the year up to May this year have not been filed, and we are all waiting to see whether the auditors will sign to say that this is a going concern. If they don’t it is another nail in the heart.

Now the reason for that is that when clubs are in this sort of debt (as indeed when any company is) the banks make the company agree to things.  In the Liverpool Insolvency case the club has agreed to repay something like £65m a year of its debt to the banks.  Which is why that awfully nice Mr Ben E Tez can’t spend the £30m he usually manages each season – on top of the stuff he gets for people he signed who actually don’t know one end of a football from another.  Break the rules and the banks can ask for all their money back now.

Actually a football has no end, but you know what I mean, and even  if you don’t I am going to carry on writing.

Now WHAM as sky used to call them at the top of the screen, have been very naughty and broken the rules and spent more than agreed on wages.

Annoyingly the banks (our banks) didn’t wind the company up.

Of course West Iceland and Barking Incorporated have special problems.  Like the fact that when their Icelandic owner took over he spent around £20m on players (remember he bought Freddie whom we love because he has got red hair) even though at the time even I, with no real insight into the world of money, was telling anyone who would listen, “don’t put your money in an Icelandic bank”.  The bank then failed, although Freddie was not responsible for that.

The club’s disgraceful and devious tactics over Tevez meant they had to keep paying people money to get them off their backs (£21m to Sheff Untidy)

So debt upon debt, and the end is now almost upon us.

But in conclusion spare a moment to compare and contrast the situation among the Barking Mad, with that at the Ems.  Our debts are bigger… but we are paying them back each year as part of the mortgage at a very modest rate of interest.   Compare and contrast the squad, the style of play, the results, the stadium…

One of the in-debt clubs in the EPL is going to fail very soon, and when it does that will be the hump that broke the camel’s back.  No, erm, the eye of the needle in the storm.  No, the Dutch boy with a finger in the dyke.  No, sorry, my metaphors are all mixed, but believe me it won’t be good.

(c) Tony Attwood 2009.