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Bright financial future spied amid gloom Posted: Sunday August 18, 2002 5:24 PM
LONDON (Reuters) -- The English premier league elite remain defiantly bullish about their financial prospects as the new season gets underway this weekend despite a sense of doom and gloom among the country's lesser professional clubs. The 72 clubs in divisions one, two and three are reeling after the demise of ITV Digital last season cost them 178.5 million pounds (US$272.4 million) in broadcasting rights revenue for the remaining two years of a three-year contract. That deal was dwarfed by the three-year 1.65 billion pounds contract the 20 premier league clubs struck for their rights, the bulk of which comes from satellite broadcaster BSkyB. The contract expires at the end of the 2003-04 season and premier league officials say negotiations are likely to commence about a new deal after the coming campaign. They remain confident that the market for their product is still strong. "The future for the premier league is bright," a League spokesman said on Wednesday. "The new broadcast deals are secure and the overseas and new media markets have huge potential growth. "The success of the World Cup in South Korea and Japan has only served to reaffirm this optimism." Dire consequences In the three lower divisions, the consequences of ITV Digital's collapse have been dire. Clubs are in administration and an estimated 600 players are out of work. Some respected players like Nicky Summerbee and Billy McKinlay at Leicester City, are playing for nothing in the hope of securing some kind of contract. Others, like former Coventry wing-back Marcus Hall at Nottingham Forest, are operating on a pay-as-you-play basis. It is hard to see the likes of David Beckham, Thierry Henry or Michael Owen ever being forced to suffer such indignities. The bite is more likely to be felt among fringe players in the huge squads that many premier league clubs maintain. A 40 percent fall in the value of pre-season transfers is the most notable sign of a new mood of realism at premier league clubs. Previous big-spenders like Chelsea, who forked out over 30 million pounds on new players this time a year ago, have spent nothing over the close season. Even Double winners Arsenal have been relatively frugal, with a net spend of around 3.5 million pounds after signing Brazilian Gilberto Silva and Frenchman Pascal Cygan but selling goalkeeper Richard Wright. Bates optimistic Manchester United, the world's richest club, and Middlesbrough have bucked the trend, although United have only ventured once into the marketplace, securing the services of England defender Rio Ferdinand for a British record 30 million pounds. Ambitious Boro have spent over 20 million on the likes of Massimo Maccarone, Juninho, George Boateng and Franck Quedrue. Promoted pair Manchester City and Birmingham City have also invested considerable sums in the hope of staving off an immediate return to the relative poverty of division one. In total, spending this close season is about 150 million pounds, fully 100 million pounds down on the previous year. Before that, the total had been rising by 50 million pounds a year. Despite that negative trend, a report by accountants Deloitte and Touche in June painted a robust picture of the finances of premier league clubs compared to their European counterparts, with the growth in player wages slowing. Chelsea chairman Ken Bates says he is glad the days when players' agents could hold clubs to ransom over wages have gone and he is optimistic about the prospects in the medium term. "I believe it will take one or two seasons before we are back to normality," Bates said in a column for The Times newspaper on Monday. "Chequebook management is out of the window and the coaches have an opportunity to prove their ability by rising to the challenge." Copyright 2003 Reuters Limited. All rights reserved. |
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