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Ben Hayes - Charlton Athletic programme

Football Finance

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Credit Crunch Starts To Hit Matchday Revenues

The standard assumption in the sports economics literature is that demand for tickets at top flight clubs in any sport is relatively inelastic, i.e., relatively unaffected by changes in (real) prices. That may apply in normal economic conditions, but we are now in what is probably the worst economic downturn since the 1930s and football cannot escape unscathed - although that does not mean that the most doom-laden predictions will be fulfilled. Some of the effects have been masked by the fact that season tickets were bought last summer before the economic crisis hit home.

Liverpool Could Be Forced To Sell Players

Keith Harris, the chairman of investment bank Seymour Pierce, and a key intermediary in football takeovers, believes that the American owners of Liverpool could be forced to sell leading players if they are unable to pay off the club's £350m debt. Although George Gillett Jr and Tom Hicks have an option to extend the 25 January deadline for repaying the loan by six months, it is far from certain that an extension will be granted.

Promoted Teams Need Careful Business Strategies

Getting promoted to the Premiership can seem like a bonanza, but getting relegated can bring a cold dose of reality. Once the parachute payments run out, life becomes very difficult, as clubs like Leicester and Southampton have found. Recently we reported in depth on the prudent strategy being followed by Hull City. But what of the other two newly promoted teams? For Stoke City it's a long awaited return to the top flight, but West Bromwich Albion have the reputation of being a yo-yo team.

Intermediary Says There Will Be More Gulf Sales

Amanda Staveley has emerged as a key figure in major deals with Britain and the Gulf States, recently facilitating the purchase of a 16 per cent stake in Barclays Bank for Abu Dhabi's Sheikh Mansour Bin Zayed Al Nahyan. That deal follows the sheikh's £210m purchase in September of Manchester City by means of Abu Dhabi United Group. Dubai's ruler, Sheikh Mohammed bin Rashid al-Maktoum, still harbours hopes she can purchase Liverpool for him.

Figures Don't Add Up At Liverpool FC

Liverpool FC fans will be celebrating today's victory at Chelsea. The club has had its best start to its Premiership campaign for many years. The red half of Merseyside can realistically talk about securing the Premiership title. Off the pitch, things are less rosy. Of course, what with a holding company in Delaware (the state with a reputation for business friendly rules) and a Cayman Islands tax haven link, the corporate arrangements of the current owners would not win a prize for transparency.

Chelsea Aim To Reduce Reliance On Benefactor

Chelsea's chief executive believes that the club will be less dependent on Roman Abramovich next year. The plan is to gradually let go of the lifeline provided by their Russian owner, although how these good intentions work out remains to be seen. However, no money will be made available in the January transfer window for big new signings unless there is a real emergency on the pitch. Plans to move away from the cramped ground at Stamford Bridge have also been put on hold, even though a larger stadium would generate more gate money on the Old Trafford model.

The Financial 'Meltdown' and Football

The International Monetary Fund (IMF) has talked this weekend of a 'meltdown' in the world's financial system which could lead to a further 20 per cent being wiped off stock exchange values. We don't claim to be economic forecasters on this page, but one of the difficulties with statements of this kind is the so-called 'Oedipus effect': making the prediction increases the chances of it occurring. Some of the commentary in recent days has come from people whose agenda is the failure of the Premiership.

Dubai Bid For Charlton

On a day in which global markets have been in turmoil, unfashionable south-east London club Charlton Athletic have received a bid from a Dubai-based investment group headed by His Excellency Mohammed Ali Ali Hashimi. Apparently the group considered a number of football clubs but thought that Charlton offered the greatest potential. In a statement, the prospective new owner has praised the passion of the club's fans, its heritage and its commitment to the community. He also expressed his determination to get the club back to the Premiership.

UEFA Threat To Debt Ridden Clubs

Uefa are threatening to ban debt ridden clubs from their competitions. This is a major threat to leading English clubs to whom Champions League football is a key slice of their income. Some might feel that the move is motivated by continental jealousy at the success of English clubs in the Champions League. Others might feel that Uefa are trying to tackle a genuine problem facing football.

Lord Triesman Blasts Football Debt

Lord Triesman, the chairman of the FA, and Richard Scudamore, the chairman of the Premiership, got in an argument yesterday about the effect of the credit crunch on football at the Football Leaders conference, ironically held at Stamford Bridge. What a lot of this is about is a power struggle between the FA and the Premiership over who has the biggest influence on the game.