Unfit foreign owners make Prem more competitive (at both ends)

When the influx first looked like coming, foreign ownership of

clubs was rallied against as the beginning of the end for English

football — with dire warnings that fans would lose the

connection with their local club as the sport became more about

making money than providing entertainment.

The same was said of foreign players, of course, when they

suddenly began descending on their Premier League around 15 years


The likes of Eric Cantona and Dennis Bergkamp would obstruct

English talent from shining, it was widely believed. In fact, the

opposite has been proven to be true, as the many others who

followed those legendary players to English shores have helped

improved the native technique and ability beyond almost all


Few predicted the Premier League would get stronger with

foreign players but, having contributed Champions League finalists

in each of the last five seasons, that has proven to be the case.

Few predicted foreign ownership would lead to a more

competitive league but, perhaps belatedly, even unexpectedly, that

is suddenly becoming the case.

After all, some of the traditional powerhouses of English

football have seemingly been handicapped by their foreign owners in

recent times, while others from the middle of the English pack have

been able to burst forward under the ambitious direction of new men

in charge.

In the former corner, unfortunately for their long-suffering

fans, is Liverpool. Just this week Rafa Benitez, the club’s

beleaguered manager, attempted to deflect attention away from his

own troubles by admitting publicly what everyone already suspected

about the way the club is now run:

“One of the priorities this year was to reduce the debt so

the club is working very hard to do this and I think that our

position will be much better,” the Spaniard said.

“We were doing a very good job this year trying to

reduce the debt. It was one of the most important things that we

had to manage. Along with football issues we had to manage them


“When I signed my five-year contract [in March] we knew

that we had to work together so we will try to do the best for the

club. Sometimes you can do it and still perform on the pitch and

sometimes you have to wait a little bit.”

For the team, however, such a modus operandi has had obvious

negative effects. Having fallen agonizingly short of a first title

in 19 years last season, instead of providing that final investment

push needed to push the club over the finish line, the club’s

American owners, Tom Hicks and George Gillett, decided to tighten

the purse strings further.

That is the problem with servicing a £280 million debt,

one they placed on the club as part of their takeover in 2007. Xabi

Alonso, a vital cog in the successful Anfield machine, was sold to

Real Madrid for £30m in the summer, but Benitez was only

permitted to spend £20m of that on a replacement—on

Alberto Aquilani—when many other areas of his squad clearly

also needed reinforcement.

Consequently results this season have stagnated, to such an

extent the 49-year-old felt forced to guarantee this week that last

season’s runners-up would qualify for the Champions League come

next May.

“We will be in the top four. I have to be positive. I am

realistic,” the former Valencia boss said.

“I see the players training every day and I can see that we

have enough quality to finish in the top four.”

But, at least according to figures released in June this

year, the Reds’ debts pale into insignificance against those of

some of their major rivals.

Manchester United are saddled with even more debt (around

£699m) as a result of equally opportunistic American owners,

but their manager Sir Alex Ferguson has been careful not to suggest

that has been the reason behind his lack of recent spending:

“The money is there if I want to use it and it was

there in the summer, but I don’t think there is any value in

the market, that is why I didn’t buy anyone,” the Scot

revealed last week.

Despite selling Cristiano Ronaldo to Real Madrid for £80

million in the summer, the 67-year-old only made relatively

inexpensive moves for Luis Antonio Valencia (£17m), Gabriel

Obertan (£3m) and Michael Owen (free) in response.

“I am happy with what I have brought to the

club,” Ferguson said after that transfer window, despite

seeing other clubs spend big money.

“Last summer’s deals did inflate the market. It

was silly season, with the prices paid for players. The prices we

were quoted were not reasonable and that’s why I didn’t

do anything.”

Yet recent events suggest that might not entirely be the

case. The club’s recent decision not to complete a

long-standing arrangement to sign the Partizan Belgrade prodigy

Adem Ljajic for £10m suggests even moderate profligacy is no

longer acceptable at Old Trafford.

Having failed to replace their best player United have looked

less than stellar for much of this season, and it certainly looks

like winning their fourth consecutive league title will not be as

easy as in recent times.

Rounding out the big four, both Chelsea and Arsenal may have

avoided the worst of what foreign ownership can bring, but they too

have their own problems.

The Blues are in debt the most of any Premier League club

(£701m) to their generous Russian benefactor Roman Abramovich

and have recently been restricted from maintaining the sort of

spending that was seen under Claudio Ranieri and Jose Mourinho in a

bid to balance the books.

Abramovich wants the club to be self-sufficient within the

next few years, a target the club admits is unlikely to be achieved

without a further reduction in transfer and wage spending.

“It would be nice to go to the owner and say we don’t need

any more cash, but that’s not where we are today,” Ron Gourlay, the

club’s newly appointed chief executive, said last month.

“I like to operate honestly but realistically.

Self-sufficiency is still the goal. That’s what we’re trying to

attain. Is it going to happen this year? No. I’m not going to make

any claim on that front because, realistically, it isn’t going to

happen this year.”

Arsenal, meanwhile, seem hampered in their progress by a

boardroom saga that looks far from concluding. Both American Stan

Kroenke and Uzbekistani Alisher Usmanov have increased their stake

in the club to very close to the 30 percent that would trigger

takeover proceedings but have so far seemed reticent to go any


That has left the club in something of a state of flux.

Arsenal owe around £416m in various loans, much of that after

the recent move to the Emirates Stadium (due to the economic

crisis, luxury flats on the old Highbury site have not provided the

expected windfall), and while the board regularly insist there is

money to be spent their manager, Arsene Wenger, has been curiously

reticent to make waves in the transfer market.

Consequently, the respective troubles of the big four have

seemingly opened up the competition at the top of the

table—ironically to another set of clubs who seem to be

flourishing under foreign ownership.

Aston Villa are a third Premier League club to be owned by an

American, but unlike Hicks and Gillett or the Glazers, Randy Lerner

did not stack the Midlands club with debt upon his arrival.

Blessed to already have an astute manager in Martin

O’Neill on board, Lerner has proven himself a canny

operator—giving his manager enough funds to strengthen the

squad (albeit with the occasional sale) while not overstretching

the finances beyond acceptable levels.

The rewards have been noticeable, as a core of young and

talented (and, encouragingly for domestic observers, predominantly

English) players have helped the club into the top four at this

early stage of the season.

Even more importantly, the club have beaten Liverpool,

Chelsea, and Manchester United already in the

campaign—lending weight to their claims they are reading to

break the long-held dominance of the big four.

Another club that are equally determined to make such a

breakthrough is Manchester City. Unlike Villa, however, their new

Middle East owners are doing it the old-fashioned—or nouveau

riche —way, speculating to accumulate.

The new owners have spent huge sums acquiring the likes of

Robinho (£32.5m), Emmanuel Adebayor (£25m) and Carlos

Tevez (upwards of £40m, depending on what you believe), with a

determination to become one of the biggest clubs in the world.

So far, big victories over both Arsenal and Chelsea (albeit

both at home) suggest they are on the right track, even if a run of

seven straight draws suggest there is still work to be done.

But the board, led by one of the world’s richest men in

Sheikh Mansour bin Zayed Al Nahyan, seem determined to see their

club reach the the pinnacle of the European games. Few fans will be

surprised if the club is in or around the top four come the

season’s end, and the big clubs are very wary of the new

threat they pose.

With Tottenham—not technically under foreign ownership,

but generous in their spending nonetheless—also looking

strong, for the first time in many years their seem a number of

viable alternatives to the big four at the the top of the table.

By and large, foreign ownership can suddenly be thanked for


That is not to say the league as a whole is more competitive.

All members of the supposed big four, in particular United and

Chelsea, have still enjoyed sizeable victories over many of their

opponents this season.

These clubs, the Bolton Wanderers and Blackburn Rovers (the

last club to deny a big four side the title, in 1995) of the

league, just don’t have the financial clout to raise their

aspirations beyond simply staying in the league each season. Yet

they are also forced to spend beyond their means in order to ensure

they achieve that aim.

Consequently, these ‘middle-tier’ teams have helped raise the

overall debt of all Premier League teams to a staggering £3.1


That is almost twice what the league raised through Premier

League television rights (the clubs’ major source of income) in the

last round of bidding in February, where Sky paid ‘just’

£1.78bn for the rights to live action for the next three


“The live UK rights are the largest contribution to the

revenues we distribute centrally to the clubs and this deal gives

them the stability to plan and invest in the most important aspect

of our business – the football – everything else flows

from that,” Premier League chairman Richard Scudamore, somewhat

worryingly, said at the time.

At the very bottom of the league, unfortunately, are a couple

of examples of what can happen when foreign ownership and

overspending go beyond the limits—examples of what many

pundits feared would be the case when the phenomenon first arrived.

Both West Ham United and Portsmouth are struggling valiantly

after the effects of botched ownerships, as their respective

chairman quickly realised that actually football is not the easiest

business in which to make money.

The Hammers now face crippling debts due to both the

financial problems of their owners and some illegal practices on

the pitch (they owe Sheffield United over £20m after being

found liable for the Blades’ relegation in 2007, after knowingly

flouting league rules to sign Carlos Tevez and Javier Mascherano).

And perhaps Portsmouth’s current struggles are a

warning to the other Premier League clubs currently operating under

huge debt. For so long spending beyond their means to compete under

Harry Redknapp (for which they won the FA Cup in 2008), the South

Coast club are now being passed from owner to owner as they

struggle to pay the staff’s wages, let alone their debts.

On the plus side for casual fans, that has allowed recently

promoted teams like Birmingham City and Burnley the chance to avoid

going straight back down—a fate that used to be the norm but

in recent seasons has become far less common.

Nevertheless, the plight of teams like Portsmouth has many

already worrying about the long-term consequences of foreign


“I think there is an awful lot of expenditure and you say to

yourself, ‘Where is it going to end?'” Sir Alex Ferguson told North

West Business Insider magazine last week.

“This is exactly what was happening in the business world two

years ago. There were warning signs and everyone knew there were,

yet they carried on because it was so easy to access loans.

“In the football world you say to yourself the warning signs

are there, but nobody seems to be bothering about it. You wonder

where it’s going to go and what is going to happen if one major

club were to go, to collapse.”

In the long-run, then, foreign ownership may well cause the

crisis it was always expected to.

But for now, surprisingly, it seems to be making the playing

field—at either end of the table — just that little bit

more even.

Alex Dimond is a columnist for Bleacher Report, the open

source sports network.