The global economic crunch has struck the seemingly ultra wealthy world of professional soccer and the English Premier League specifically, with the sad news that the Portsmouth Football Club, will now become the first E.P.L. team to go into financial administration as of Friday. Who ever would have thought it would be possible for a team in the big bucks and glamorous life of the world’s most popular sport, to run into this kind of financial trouble ? Other professional sports leagues, including Major League Baseball, the N.B.A., and the N.H.L., have had and continue to have, franchisees that are carrying big debts, and lose money. Until the recent financial crises that struck everywhere around the world, many owners of sports teams could afford to own teams that struggled, because their other businesses were doing well. When the global economy soured, and wealthy sports franchise owners, began losing money on their major business holdings, everything changed. Soccer fans around the world have become familiar with the very public financial struggles of George Gillett, former owner of the Montreal Canadiens, along with Tom Hicks, owner of baseball’s Texas Rangers, and the N.H.L.’s Dallas Stars, in terms of the financial struggles they’ve both had with their joint property, the Liverpool Football Club of the E.P.L.
Portsmouth’s current owner, Balram Chainrai, was quoted on the team’s website through spokesman Phil Hall. “Administration would mean the club re-emerging as a healthy financial entity. The club would then become an attractive proposition for a potential buyer who could invest new funds in rebuilding the club’s future…..The serving of this notice means the winding-up order is automatically suspended. It means the club is safe, it can fulfill its fixtures and as far as possible it is business as usual….Mr.. Chainrai hopes the supporters will get fully behind the team as usual for their Premier League match at Burnley on Saturday, and the following weekend’s FA Cup quarter –final at home to Birmingham.”
Some of the most profound reaction to the Portsmouth peril, came from FIFA general secretary Jerome Valcke, who expressed his surprise and warning to the rest of the football world. “It ( the E.P.L.) is the richest league in the world so this is strange…..It’s because the club was badly managed, they ran it to have a chance of winning titles by buying too expensive players and just getting more in debt every day.” UEFA has new proposals that stipulate that clubs should only be able to spend what they earn, and facing penalties if they go into debt. Apparently, the spending splurges of Portsmouth are disturbingly common in the Premiership. According to the ESPNsoccernet report, the total debt of the Premier League clubs, is 3.4 billion English pounds, 56% of the total professional soccer debt across Europe. Their story stipulates that the total Premier League club’s assets are 3.8 billion English pounds, accounting for a 48% share of the assets among all European clubs. “What is worrying for English clubs however is the total value of the debt is so close to the value of the assets. In Spain, which has the next highest debt of 858 million British pounds, the assets are worth 2.5 billion, three times the value of the debts, while in Italy, the debt is 442 million British pounds, and the assets worth 1.3 billion.”
It is amazing, how many of us ( I’m sometimes guilty too ) get into the easy and undisciplined habit of spending more than what we are taking in. In the pressurized world of competing for success, no matter what the endeavor is, it is easy to over-spend, knowing that to make money, you have to spend money. Maybe the harsh reality facing the Premiership, and the Portsmouth Pompey in particular, is a timely reminder that life is ultimately about finishing the race, and living another day to compete again, as opposed to trying to win at almost any cost, but ending up defeated, through unwise ambition.