 unday 11th May 2003. West Ham Utd, hanging
onto Premiership status by their fingertips, have just drawn
their last game
of the season against Birmingham City 2-2. Unfortunately
for them, however, Bolton Wanderers, the other candidates
for the drop, have just beaten Middlesborough 2-1; this means
West Ham are relegated to Division 1. Twenty years ago this
would have been unfortunate but not a disaster. But in the
modern game relegation from the Premiership is a disaster.
What has utterly changed this situation is the TV and sponsorship
monies which have poured into the game. Out of West Ham’s
total income of £42 million in the 2002-2003 season
more than half has consisted of TV royalties. Gate receipts
totalled £13 million and other commercial activities
accounted for a further £7 million. Thus relegation
has been a financial catastrophe for the Hammers (as it would
be for anyone) their annual income being more than halved.
That a team replete with such glittering talents, including
full England internationals, England under-21 internationals,
Scottish internationals and one or two outstanding overseas
players finds itself relegated is something of a mystery;
it speaks volumes about the way the club has been managed
at all levels. But that’s another can of worms. The club had reputedly run up debts totalling £60 million.
Ground developments and a high wage bill (at £33 million
p.a. the sixth highest in the Premiership) provide a partial
explanation for this, but most West Ham supporters suspect
this is not the whole story. This view is reinforced by the
fact that in the previous two seasons the sales of Ferdinand
to Leeds and Lampard to Chelsea netted a cool £29 million.
Whatever the explanation for these debts, and the real story
may never emerge, the management used the alleged indebtedness
of the club as a justification for a wholesale downsizing,
selling the clubs most precious assets - its class players.
During the close season the heart of the team was ripped
out with Sinclair, Kanoute, going to Manchester City and
Spurs respectively, Di Canio given a free transfer, and then
the really painful part, Johnson and ‘Wunderkind’ Joe
Cole going to join Lampard at Chelsea. The famous West Ham
youth and coaching system which over the years has produced
players of the calibre of Moore, Hurst, Peters, Brooking,
Ince, Lampard, Ferdinand, and lately Carrick, Cole, Johnson
and Defoe, is increasingly becoming a type of football stud-farm
producing thoroughbreds for the bigger (i.e. richer) clubs.
Of those last seven quoted only Carrick, and Defoe are still
at West Ham. And speculation is rife concerning Defoe’s
continued presence at Upton Park: it is an open secret that
Alex Ferguson at Manchester Utd is very keen. Apart from other developments in the game it was the Bosman
Ruling** which has made it difficult for the middle-sized
and smaller clubs to hang on to their better players. Spurs,
for example, saw their outstanding England central defender
Sol Campbell simply ‘walk’ to Arsenal when his
contract expired for which they did not receive a penny.
West Ham’s decision to sell Ferdinand to Leeds and
Cole to Chelsea, both of whom only had short periods to run
on their existing contracts made a sort of crude business
sense when considered in this context. Effectively, therefore,
the Bosman ruling has tended to exacerbate the polarisation
which was already taking place in both British and continental
European football. Everywhere there is emerging a super-elite
of rich clubs from about three to half a dozen which are
dominating all the domestic and European competitions. In
Italy, the two Milan clubs, the two Roman clubs and Juventus,
in Spain, Real Madrid and Barcelona, in Scotland, Rangers
and Celtic, and in England, Manchester Utd, Arsenal, Liverpool
and most recently, and interestingly, on the other side of
London from West Ham, Chelsea.
At the end of season 2002/2003 the West London club were
also looking down the barrel of a financial crisis. In attempting
to break the Arsenal - Manchester United stranglehold on
English football, they had spent heavily and were reputedly
in debt to the tune of £90 million. Moreover, there
were all sorts of irregularities surrounding Chelsea’s
finances and also there were some rather ‘colourful’ characters
in evidence. It was revealed for example that one of Chelsea
Village’s - this being the company which owns the club
- directors was a certain Richard Creitzman, a former director
at Enron.
Creitzman almost certainly owed his position in the club
to its new owner, Russian billionaire, Roman Abramovich,
36, reputedly the second richest man in Russia, who bought
the club for £150 million in July 2003. Creitzman had
been Enron’s Russian development director before joining
Sibneft, the Russian energy company, which Abramovich controls,
in 2001. Abramovich himself, was one of the oligarchs to
emerge from the Yeltsin ‘shock therapy’ era when
Russian assets were being sold off for a song. His big break
came in 1992 when Boris Berezovsky, then the most powerful
of Russia’s oligarchs, befriended him and then brought
him into the inner circle of former President Boris Yeltsin.
Berezovsky was to fall out of favour with the new Putin regime
and claim political asylum in the UK. This he was granted
and a recent Russian attempt at his extradition was to end
in collapse. No matter, Berezovsky’s departure was
Abramovich’s opportunity. Adroitly stepping into his
masters shoes, Abramovich began building up his financial
empire accumulating 80% of Sibneft, 50% of Rusal, the Russian
Aluminium and Oil company, and 26% of Aeroflot, Russia’s
national airline. He has since liquidated these last two
holdings for £1.8 billion. An ex-governor of Chukotka,
a desolate province in north eastern Russia, he has confirmed
that he will not be standing as a candidate for governor
again. In addition to buying Chelsea, Abramovich has also
bought property in Knightsbridge and Sussex. There is much
speculation that he is about to permanently decamp to the
West.
Like most of the new Russian oligarchy there have been
some rather murky chapters in Mr Abramovich’s past. In 1992,
he was charged with misappropriation of diesel fuel, but
eventually cleared. Abramovich’s takeover of Chelsea
has also occasioned a probe by the Financial Services Authority
(FSA) amid suspicions of insider dealing. Shares in Chelsea
Village rose significantly before the takeover. An FSA spokesman
said : “We’ve only just begun the process of
looking at what might be suspicious trades and, if so, who
the people could be behind them”.
Be that as it may Abramovich made huge funds available
for new players; a spending splurge which exceeded £100
million. Chelsea are now essentially a world XI, where even
the most talented players cannot assume automatic selection.
Abramovich also owns an ice-hockey team in Siberia and has
also expressed an interest in buying the Canadian National
Hockey League club Vancouver Canucks.
What seems to be happening is that big money is recognising
the investment potential of trans-national clubs which command
the greatest TV exposure. Manchester United, up to now reputedly
the richest club in the world, derive their income from their
TV royalties, (domestic and European) branding, merchandising,
sponsorship and gate receipts. It goes like this: Abramovich
will sell the football to Sky and-or the BBC/ITV, and they
in their turn will sell the audience to the advertisers,
or in the case of the BBC try to improve its audience ratings.
East Side, West Side, could the difference be more stark.
Yet in a sense this is the logic of de-regulated global capitalism.
The rich lock in their competitive advantage, take the spoils,
re-invest, strengthen their position … and so on.
This is a virtuous circle of cyclical and cumulative causation,
to use a phrase coined by the famous Swedish economist Gunnar
Myrdal. Meanwhile everybody else struggles to make ends meet.
Many clubs will go out of existence; playing fields and facilities
will be sold off. It is a sad day when one of the oldest
teams in the world, if not the oldest, Notts County, is on
the verge of going out of existence. Yet this is what County,
after nearly two years in receivership, now have to contemplate.
The Chelsea phenomenon illustrates that football is now
transmuting into a branch of the media/entertainments industry,
with
its principal target being sponsors and TV audiences. In
this instance Chelsea Village have become a subsidiary in
a global conglomerate controlled by Abramovich. The globalization
process is thus reaching into football, reproducing the familiar
core-periphery economic structure; haves and have nots. The
global 20/80 society.
Needless to say the elite clubs are losing all connection
with their communities. Chelsea Village, a foreign owned
subsidiary, have virtually given up attempting to produce
its own players, relying instead on outsourcing - buying
ready-made products off-the-shelf, usually from abroad. This
detachment from a national base will go further when a European
super-league is formed. And this is surely on the cards.
Football as we have known it is ceasing to exist. What future
for the beautiful game? Here is as good a prognosis as I
have seen.
‘
Football will gradually become much less of a participation
sport, much more a mere form of TV entertainment. The Football
Association will continue to see its role as helping the
rich to get richer. At the top football will create more
multi-millionaire, shareholders, directors, players and agents … The
future of football is, therefore, much like that of every
other industry governed solely by the free market. Like the
retail food industry which now across the country has 4 superstores
where everybody does their shopping … The banks, four
major ones with some minor players … The Cinemas -
a few multiplexes … Clothes - a handful of chain stores.
In football there used to be custodianship; passing the beautiful
game onto the next generation. But now nothing is more important
than money. Football has lost its confidence, its heart,
and despite the current boom, the atmosphere of the game,
the participation, will dwindle. It will make a few people
very rich and lose its soul.’ (David Conn - The Football
Business)
So it’s goodbye to Notts County and hello to Abramovich’s
All-Stars. But as the base of the game atrophies, its ramifications
will reach all the way up to the top. In the end this Faustian-pact
will be the death of the beautiful game.
** The Bosman Ruling
Jean-Marc Bosman was employed as a
professional footballer by the Belgium club RC Liege. At
that time players who were
out of contract still commanded a transfer fee which would
be set by their current club and such a fee would have
to be paid for any other club requiring their services. In
addition
there was a strict limitation on the number of non-national
players who could be fielded by any by any club. Bosman
challenged this rule at the European Court of Justice which
gave its
verdict in 1995 - the Bosman ruling. From this point onward
players who were out of contract could move to another
club without a transfer fee, and also a club could field
as many
foreign players as they liked from within the region covered
by UEFA. * fl003 appears regularly on the West Ham eForum |
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