The North West's seven Premiership football clubs are about to embark on a season that will bring them unprecedented riches. All of them have been or are the targets of foreign takeovers. Michael Taylor studies the form
As you plan your business for the next year, spare a thought for the executive teams at the North West's seven Premiership football clubs.Without a season ticket being sold or a single piece of tasteless tat from the official club shop passing over the counter, they will be able to add £330m into the income column. It's all thanks to the astonishing television deal secured between the Premiership and satellite broadcasters Sky Television and newcomer Setanta Sports, worth £31.7bn between 2007 and 2010. The upside? The wall of money the broadcasters have stumped up is divided between the clubs depending on where they finish in the 20-strong Premiership table. Even those unfortunates occupying the relegation places will be able to bank £330m.
The downside is the inflow of money may go straight through the clubs without touching the sides, straight into the pockets of players and agents.
This increase in TV income and the anticipation of greater riches to come has sparked a feeding frenzy of acquisition activity in football that has, in turn, put every single one of the North West's top clubs on the block. Once upon a time, club chairmen were paunchy, slightly pompous blokes in camelhair coats, presiding over boardrooms replete with cigar smoke and brandy. But the purchasers this time aren't local boys made good, but a heady mixture of ambitious sports franchise owners from the US, international fugitives from justice and fully paid up members of the international super rich club. It's their ambition that is causing the present owners to think the time is right to sell.
The Glazers, who bought Manchester United, believed their sports management experience could sweat the assets so hard even their highly leveraged purchase could secure a return. And the duo of George Gillett and Tom Hicks who purchased Liverpool from the Moores family believe they too can achieve more financial discipline.
The real test of this balancing act will be whether football can develop as a sustainable and responsible arm of the entertainment industry.
Colin Gillespie, partner with PricewaterhouseCoopers in Manchester, and the man who sold Liverpool Football Club to Gillett and Hicks, says: "It's like pouring hot water into a tea strainer. You look to keep as much as you can.
Their experience of American sports is they can retain more of the money.
It is the job of the chief executives - like Rick Parry and David Gill - to keep costs under control.
"The difficulty is, as long as there is competition for talent, and you are up against rivals with bottomless pockets, then there is inevitable pressure on prices for players."
Dan Jones, partner in Deloitte's sports unit in Manchester, admits he has been proved wrong before when he predicted an injection of sanity into the wages market for top class players. But this time it's different.
"Wages have held at a level of around 58 to 60 per cent of turnover.
These new owners have no choice as they have invested on an economic basis and they need to make a return to service debt repayments. Also, the Premiership will be so far ahead of any other league in the world that it puts even the most average Premiership team way ahead of clubs at the very top in France, Germany, Italy and Spain," he says.
Jones has seen an appetite for international investment, fuelled by these large income streams and sensible financial management at the top end.
So, with the two most valuable sporting assets now sold, what of the others?
"Investors are keen on looking lower down, even at clubs in the Championship and in Leagues One and Two," he says.
With attendance figures still healthy outside the Premiership even clubs lower down the food chain are fair game for foreign buyers. The public nature of these auctions often makes it difficult to separate fact from fiction, investor from front man, genuine buyer from publicity-seeking chancer.
Gillespie says there was huge interest in Liverpool: "In total we received about 30 expressions of interest, five of which were taken seriously but only three were considered in the final decision process, Dubai International, George Gillett and one other."
Manchester City's takeover by Thai businessman Thaksin Shinawatra, now a done deal, will result in a lucrative payday for the local businessmen who owned City, John Wardle, David Makin, Francis Lee and Mark Boler. Shinawatra's forthcoming trial for corruption in Thailand could provide an interesting test case for the FA's "fit and proper person" test, given charges could result in the siezure of his assets, including City.
Regardless, new City coach Sven-Goran Eriksson has already started splashing the cash.
Blackburn Rovers is officially for sale by the trustees of the estate of the late Jack Walker. Chairman John Williams told Insider: "Our shareholders are now willing sellers, but to the right buyer. Rothschilds have been appointed to handle the sale and are looking at various parties."
One potential buyer identified in the press is 30-year-old Daniel Williams, a Lancashire-born businessman who is fronting a bid from US investors. Bolton Wanderers, owned by Isle of Man-based investor Eddie Davies, is the latest club to go up for sale.
Everton, still in debt and badly in need of a new stadium, is still on the lookout for a rich international buyer. Robert Earl, the British-born US resident who owns the Planet Hollywood restaurant, took a stake in the club from Paul Gregg - a man who tired of waiting for a return - in 2006, but he isn't the white knight.
The prize is big, but the cost of getting it is bigger. Just ask Dave Whelan. It cost him £328.2m in accumulated net losses to get Wigan Athletic to where it is now. His stubborn streak says he wants to see it through.
But if his phone rings and there's a rich Iraqi on the line, who knows?