Money matters: Turning bad news good

October 29, 2008
By Phil Holland
(Archive)

When is bad news good news? The answer to this slightly obtuse oxymoron is when you are Sepp Blatter, the head of football's world governing body and more specifically when he can boast that FIFA's finances are safe while the rest of the world is in economic turmoil.

GettyImagesSepp Blatter: Putting positive spin on global misery.

While sub-prime mortgages, toxic debt and a decade of over-borrowing might have crippled financial institutions across the world, the thrifty Swiss administrators in charge of football have revealed their immunity to such matters.

The 72-year-old FIFA president has said: ''For the time being, we have not lost money. We are well organised and well equipped to face up to the present crisis.''

The more sceptical might choose to hone in on that slight caveat 'for the time being', but while Blatter has described FIFA's financial position as ''somewhere between privileged and comfortable'' it seems churlish to quibble over semantics.

The positive news came after FIFA's latest executive committee meeting when Blatter explained: ''We are well equipped to face up to the current crisis thanks to our financial policy which involves a diversification of assets and very low exposure to currency or foreign exchange volatilities.

''We also have 95% of our budget already under contract and have managed our costs. The diversification of our portfolios and our television contract partners gives us cautious optimism for the future.''

The proof of the pudding, of course, is in the eating, and for this we will have to wait until FIFA's end of year financial report, but it is highly unlikely that an organisation as politicised as FIFA would make such bold claims without good grounds.

For 2007 FIFA reported revenues of $882 million, expenses of $833 million and therefore a tidy profit outside of a tournament year of $49 million. If at the end of 2008 Blatter can report figures anywhere close to that, it will be very good news indeed.


Could bad news for Charlton Athletic be good news for West Ham United, or perhaps even Newcastle Untied?

That was the question being posed by observers after it emerged that the Dubai-based Zabeel Investments had dropped plans for a £50million takeover of the Championship's 20th placed side.

The answer turned out to be a resounding 'no', and could yet prove to be indicative of a sea-change in the recent trend toward foreign ownership in English football.

There was considerable surprise when Zabeel Investments announced that it was looking to takeover the Addicks, not just because they were struggling in the second tier, but because they had previously been linked with established, albeit embattled, Premier League clubs like West Ham and Newcastle.

EmpicsCharlton are currently second in League One.

However, in what must be extremely troubling news for Premier League clubs scouring the globe for a benefactor, it turns out that Zabeel Investments pulled out of the Charlton deal not because they found a better option, but over the debate surrounding foreign ownership in English football.

Both Charlton and Zabeel Investments were at pains to stress that due diligence did not uncover anything nasty lurking on club's balance sheet, with the club revealing that ''the debate over foreign ownership of clubs and the worsening UK economic climate contributed to [Zabeel Investments'] decision to pull out.''

And it wasn't just a line to extricate themselves from Charlton, with Zabeel Investments confirming it had ''no current intention to acquire any English football club for the foreseeable future.''

While the news is obviously a considerable blow to Charlton, who had hoped the takeover would write-off their £20-million debts and propel them back to the Premier League, but Zabeel Investments' decision could signal a change in the perception of English football to foreign investors.

So bad news for Charlton could in fact turn out to be bad news all round.


Boris Johnson, the Mayor of London, has called on the capital's top flight football clubs to pay their staff a ''living wage'' after a survey found that Premier League clubs pay catering staff, cleaners and programme sellers just fractions more than the £5.52 an hour minimum wage.

GettyImagesBoris Johnson: To sartorial elegance what King Herod was to babysitting.

The survey, by Fair Pay Network, found jobs advertised at Fulham for £6 per hour, at Tottenham for £5.75 per hour and similar rates at other Premier League clubs.

In a letter to Arsenal, Chelsea, Fulham, Tottenham and West Ham the Mayor, who regards the minimum hourly rate in London to be £7.45, said: ''It would set a superb example for your club to agree to pay your low-paid workers - shop assistants, catering staff and cleaners - the London living wage, and I urge you to do so.''

Those outside the UK might not be familiar with Boris (such is Johnson's notoriety in the UK that he has joined the upper echelons of fame who are known to all by their Christian name alone) though you might have spotted a slightly shambolic looking chap in an expensive suit with a shock of blonde hair at the closing ceremony of this year Beijing Olympics during the symbolic handover ahead of the 2012 games in London.

Boris splits popular opinion in the UK, and nowhere more so than in London, where some see an amiable politician others see bumbling buffoon, a liability-in-waiting. And his latest observations will no doubt polarise opinion as well.

In this instance Boris has undoubtedly helped raise awareness of a frustrating but understandable situation; football clubs are rich but only pay un-skilled workers the going rate.

Just because Roman Abramovich is a billionaire doesn't mean that he's going to pay the staff that empty the boardroom waste paper bins over the odds. What next, transfer fees for best meat pie sellers?

While it is true that football's top earners take home obscene amounts and that football clubs can play an important role in social responsibility the fact remains that the task of setting the minimum wage lies with the government, not football clubs.