Wednesday, June 8th, 2011 « Untold Arsenal: Arsenal News. Supporting the Lord Wenger; coach of the decade
Tony Attwood on London clubs in the Premier League.
WHU down, QPR up, farewell pornography, hello F1.
David Sullivan and David Gold said when they took over WHU that they budgeted for failure – that is to say relegation.
Whether that is true or not we will find out now the club has gone down – once again. The demise of the club has been well-charted here, since it is primarily a financial collapse involving an Icelandic bank, some takeovers, and a fair degree of legal action against Birmingham City (who ironically also are now in deep financial trouble).
WHU has debts of £80m, and according to Sullivan is in “a worse financial position than any other in the country”. Part of that is caused by the club’s wages bill which is in the top ten for the EPL – as compared to its performance on the pitch which is of course in the bottom three.
But there is a further problem for WHU. “All the debts are football or bank debts secured on the stadium and training ground so there is no route via administration,” Sullivan said. “West Ham really is a football club where the football and bank debts exceed the value of the club.”
That’s a bit of a problem really. No administrator would touch the mess because there is nothing to administer (at least until Revenue and Customs overthrow the “football creditor” rule which means football must be paid first), although I wouldn’t put money on them not owing something to St John’s Ambulance and various small time businesses.
£40m has been loaned by Newham council for the move of WHU to the Olympic Stadium in Stratford which will cost £95m. WHU expect to be in the new ground for the 2014/15 season – although Orient will probably go to the Lords to stop it, and the Tinies are still asking for reviews. Strangely WHU probably hope that either Orient or the Tinies actually win their appeals since it would save WHU a lot of dosh. What makes it worse for the owners is the fact that they have personally guaranteed the money that Newham Council have come up with – although tax payers in Newham might wonder why they have to finance a football club.
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The Olympic authorities might also wonder why they have given a 60,000-seat location to a second division club that will probably be picking up crowds of 20,000. A 60,000 seat ground does cost money to run – and that might mean more input from the local authority – especially if WHU slipped into the third division with another relegation.
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(This is interesting since tax payers in Islington actually benefit from Arsenal being there in terms of new housing – much of it of the social housing kind affordable by local employees of the authority.)
Sullivan also said that the pair of owners need another £20m-£40m to keep the club going. Then they need all the money to finance the move to the new stadium. They will get parachute payments from the TV deal (£16m in the first two season and £8m in the next two) but that is down from the £40 a year they were getting.
But as so often seems to happen as London loses one club at the top table another pops up to take its place.
QPR have been there before (as have many others – remember Wimbledon, who next season will return to the Football League, and could be back in the EPL in a few more years at this rate of progress).
QPR is owned by the Formula One men Ecclestone and Briatore who bought it for £14m in 2007 – although some of it is now owned by the family of Lakshmi Mittal (the 8th richest man in the world) who bought shares from Briatore. It is all done through a Virgin Islands company Sarita Capital, so as with the Tinies we are not going to know what is really going on with its finances behind the scenes.
The F1 Gang have put up £5m to buy some new players and guarantee a £13m debt, which by and large means the going price for a small EPL club is about £20m.
There is some confusion over whether some past debts have been paid off or not, but the big talk is the cost of the tickets (making QPR perhaps the most expensive club to watch in the EPL – certainly QPR v Arsenal is more expensive this coming season than the return fixture at the Ems). The big talk from the owners is that they will use their contacts in F1 to try and get new sponsorship deals.
Whether QPR can stay up depends on the players they can bring in – as we saw this season with Blackpool vim and vitality and lots of interviews on Radio 5 are fun, but not enough to help a club survive. But if QPR are a one-season wonder, will London finally have a season where a local club goes down, but another does not come up? It could be, because the future for WHU and their lovely promised stadium doesn’t look that bright.
Arsenal, Tottenham, and Chelsea look permanent fixtures, while Fulham will stay there if the owner keeps his money in the club. Beyond those names plus QPR and WHU the clubs get smaller – Palace, Watford, Millwall, Brentford, Orient, Dagenham, Barnet and now Wimbledon. Looking ahead over the years Palace could conceivably get themselves back together, and Wimbledon seem to exist in a world of their own which means anything could happen. Millwall have been in the top division briefly, but if they did have a good run I am not sure they, like the rest, could sustain it.
Perhaps in terms of guessing the future we could note that last in 2009/10 WHU were only one place above relegation, and QPR ended up 45 points behind the league winners (Newcastle) but only 10 points above Sheffield Wednesday who were relegated.
We really might see a decline in the number of London clubs in the EPL after the coming season if QPR can’t maintain their status.