2010: A Year in Football's Financial Folly

The Greater Fool

On a BBC football forum over Christmas, a Plymouth Argyle supporter greeted the news that Peter Ridsdale was set to take control of the club as “good news”. It reads like perfect irony, yet the comment appeared entirely sincere. That the arrival of the man whose overspending pushed Leeds United towards oblivion could be seen as a positive step says everything about the dire state of affairs at Home Park, and indeed across English football, as 2010 draws to a close.

The year has been dominated by the persistence of the ‘greater fool theory’, a simple and reckless strategy of buying an asset in the belief that someone else will eventually pay even more for it, regardless of the spiralling debts accrued in the meantime. It is a theory that underpins the ownership models of some of the biggest clubs in the country.

At Manchester United, the Glazer family appear to be banking on just such a fool emerging to take the club’s enormous debts off their hands. Chief Executive David Gill continues to deny the severity of the situation, but supporter groups rightly keep the pressure on. The club’s owners have six years to find their saviour, and the sovereign wealth of a state like Qatar might be their only realistic hope.

Tom Hicks and George Gillett discovered the limits of this theory at Liverpool. They were unable to find anyone foolish enough to let them exit Anfield with a profit, their disastrous reign ending with the club sold to New England Sports Ventures. The duo stand as prime examples of how rampant ego and flawed business models fail when applied to football. They were not alone, with Southend United’s Ron Martin providing them with stiff competition in that particular category.

An Ego Has Landed

Not every chairman with a reputation for self-regard has overseen a disaster this year. Ken Bates at Leeds United appears, for now, to have avoided financial catastrophe, though his plans for a Yorkshire version of ‘Chelsea Village’ mean judgement should be reserved. It was Bates, of course, who found the ultimate ‘greater fool’ in 2003 when he sold Chelsea to Roman Abramovich.

The Russian oligarch continues to bankroll enormous losses at Stamford Bridge, funding his impatient desire for success and paying off a succession of sacked managers. The club’s reliance on his wealth is absolute; should he ever tire of his expensive toy, Chelsea’s ability to compete at the top or achieve self-sufficiency would simply vanish. Mike Ashley at Newcastle United and the new owners at Blackburn Rovers, Venky’s, have challenged Abramovich for sheer gormlessness in 2010. The Indian poultry firm made their mark by sacking Sam Allardyce, a move celebrated by many who found his team’s style of play depressing. The sight of El-Hadj Diouf clattering opponents like a pinball was a particular lowlight of the season so far. Allardyce, so the claim goes, guarantees Premier League survival. That law of physics may soon be tested if he takes the job at West Ham United, where relegation threatens financial meltdown.

Life on the Precipice

West Ham are not the only club whose existence is threatened by the drop. Co-owners David Gold and David Sullivan have sent contradictory signals all year, one minute warning of £100m debts and the next offering huge wages to ageing French strikers. The loss of television revenue would be a fundamental blow. Fulham, too, face an uncertain future. For years the club has been supported by Mohamed Fayed, but he has now sold Harrods, a key source of his wealth, to Qatari interests. With his family’s fortune transferring to a younger generation less interested in football, Fulham will struggle to survive on Championship broadcast money.

The Football League remains a repository of financial basket cases. Portsmouth seem more at home there, both on and off the pitch. They are joined by a long list of clubs spending far beyond their means: Watford, Preston, both Sheffield clubs, Leicester, Port Vale, Southend, Plymouth, Charlton, Cardiff and Ipswich Town, among others.

Sheffield Wednesday may have found their own ‘greater fool’ in Milan Mandaric, whose takeover has cleared out a fractious boardroom. At Cardiff, new Malaysian owners Dato Chan Tien Ghee and Vincent Tan are now paying off the significant debts run up by their predecessor, Peter Ridsdale. He was hired to ‘save’ the club. There are some flickers of hope. New regimes at Leicester, Preston and Notts County may bring stability, while Charlton’s ownership is changing as the year ends. Over at AFC Bournemouth, the club is paying its bills, though the business history of chairman Eddie Mitchell gives cause for concern. It was refreshing, at least, to see Paul Newman in The Independent name the club’s former manager Ernie Howe as his manager of the year.

The recent arctic weather threatened to push more than one club over the edge. Plymouth Argyle were especially relieved their derby against Exeter went ahead; without the gate receipts, staff would still be waiting for their November salaries. A year ago, Argyle were planning a five-year mission to reach the Premier League. Instead, they were relegated from the Championship after focusing on a new stadium as part of England’s failed World Cup bid. Now their future rests in the hands of Peter Ridsdale, appointed as a ‘Football Consultant’. What Ridsdale knows about financial stability would fit on the back of a postage stamp. His appointment is a perfect, pithy personification of football’s financial ills in 2010. And in 2011?