For those begging for a debt fuelled investor to come along I think taking note of football history and economics may be wise before jumping on the bandwagon.

We had a revenue of £78 million last season, somewhere in the top 8 of revenues last year. Out of that we have a huge wage bill taking up 65% of revenue, plus about another 15% on transfers. That’s 80% of our revenue gone on players and other staff costs already. On top of that we’ve got taxes, health and safety, insurance, stadium and training ground maintenance, marketing etc. Hence you get the 8th highest revenue club in the league, with record revenues, run at it’s absolutes limit barely breaking even.

People are now asking for an added £30 million investment this summer, assuming our revenue drops to £70million due to the recession and no European run, that’s 43% of revenue. On top of that, assuming two of the players bought with that will be top earners, the wage bill will rise by £5million, so our wage bill would be 74% of our revenue, add onto that the £21million of other costs, we’d be spending 147% of our revenue. Such a level of expenditure is not sustainable or safe for our secure future.

Considering we’re in the top 8 in revenues, for other clubs not only to be outspending us, but blowing us out of the water, shows that too many clubs are spending at unsustainable rates, operating a spend now fail to be able to pay later attitude.

People are forgetting football history and basic economics. Firstly no league has remained dominant indefinitely, eventually the league will lose it’s place as the top league around. There have been sounds of “it’s different now, it’s a global market, we’re growing worldwide now”, somehow believing that this means the Premier league is an ever growing market. As in the basics of economics, this isn’t true, what comes up must come down. The very same words about a global market were told to Groucho Marx just before the Wall Street crash, and were buzzed around the investment banking world before the current crash, going global does not prevent an end to growth.

Also on top of this, the football media industry will follow the way of the music industry. At the moment football in England is being propped up by the TV revenues and the theory that TV revenue will always increase or at least be maintained. However as technology is improving, football finds itself in the same position as the music industry when downloading began to take off, it’s in denial, assuming it can prevent it. However it won’t be able to stop it, the technology will continue to improve, the internet streams will continue to improve, the satellites picking up foreign channels will be cheaper and more accessible and people will inevitably opt away from the expensive TV packages. This means the TV revenue will significantly decrease and the Premier league will have to offer a far cheaper pay per view service over the internet. Within the next 10/15 years, the TV revenue will significantly fall and the sand foundations the debt fuelled clubs are being built on will collapse and loans secured against the theory of these revenue streams remaining will go unpaid.

The inevitable fall in the TV revenues and the weakening pulling power of the Premier league will see many clubs with huge debts be forced to sell off many of their assets to service the loans, and situations similar to the Leeds United fire sale will happen, and as more clubs are forced to sell, the standard and attraction of the Premier league will further decrease, and the problem will obviously get worse and drag more clubs in to the fire sale. The unsustainable credit phase of the Premier league will end in economic disaster for English football. We’re at the height of an economic bubble and it will burst sooner rather than later, and many great clubs will suffer.

I wish people would direct their anger and frustrations in the right place. We don’t need someone to pile more debt onto our club, we need someone who’ll buy up a share issue and give the club a cash boost, we need our retail and merchandising to improve, we need to improve our exposure to make us more attractive to sponsors, we need an improved stadium, we need to improve our revenue streams and improve as a money generating club. We need to improve our revenue for the long term future of the club, not join in Russian Roulette with the debt fuelled clubs in a game where there will be far more losers than winners.

Pressure the board and campaign for the future success of the club, not the end of it.

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