Filed: Wednesday, 3rd September 2008
On the topic of the new commercial realities that are arising in English and European football with the arrival of sovereign wealth funds into the game...
My conclusion is that, just as the arrival of Sky created a Big Bang that brought about the Premier League, the arrival of the wealth funds, or more specifically the disequilibrium they will cause to English football and thence to European football, will bring about a Second Big Bang and the result, whether instigated by domestic clubs shut out of the Champions League or as likely, European clubs shut out of English football, all oiled by UEFA's likely response, will be a European superleague.
There are probably only one, two or three other sovereign wealth funds that may be ready to take the plunge. All are likely much, much more capitalised than Roman Abramovich, and they are likely all Arab. One is waiting for Liverpool (Dubai International Capital), and the other one or two (the Qataris are probable), well those are the scarce golden tickets which are about to be bestowed on a lucky club or two, offering salvation from The Great Lock-Out that will occur when the superleague plans crystallise.
Only a handful of clubs have the status to be considered for salvation from The Great Lock-Out. They are Spurs, Everton, Newcastle, Aston Villa, West Ham and maybe a dark horse like Cardiff City or somewhere else geographically opportune. Only one or two of these clubs have a future in top level football. The rest will end up as true feeder clubs, locked permanently in the equivalent of NFL Europe. The top line clubs like Man City, Chelsea, Man Utd, Arsenal, Liverpool and maybe one or two more, will enter into the footballing equivalent of the NFL.
I understand that plenty of fans would rather see West Ham as a structural feeder club, permanently in a lower league system than the clubs which have the money, the players and the best football. They would prefer to see West Ham atrophy rather than compete. I know where they are coming from, but this article is based on the desire to see West Ham not getting locked out, but rather surviving and competing with the other top English clubs.
The only way that is going to happen is if Gudmundsson sells the club to a wealth fund. The race is on, one senses; the likes of Mike Ashley and Bill Kenwright are probably already checking out Doha on their atlases. There are rumours that Gudmundsson may wish to sell, that Icelandic banking is in trouble, just as Shinawatra was in trouble, just as Chelsea were in trouble after Matthew Harding died. In my view he should sell, given that the new commercial realities entering the game are likely not just to thwart his ambitions to take West Ham into Europe, but also to destroy the value of his asset once The Great Lock-Out transpires.
But even if Gudmundsson does want to sell, that is just half the battle.
The rest of the battle is simply, getting picked by the remaining wealth fund or two that are going to enter English football this season. The Abu Dhabi mob did not even look at West Ham; they looked at Arsenal, Newcastle and Liverpool as well as Man City.
So, how to get the Qataris or whoever to look at West Ham and identify the catchment, the fanbase, the location, the opportunity? The answer is simple. We have one massive unique selling point. West Ham is the natural football club to occupy the 2012 Olympic Stadium. With all the attendant status, development opportunities and capacitisation.
The Olympic stadium issue looked like a dead dodo a while back, when the incompetent politicians failed to move swiftly and identify a way to accommodate West Ham United. Possibly, the Icelandic takeover happened a year too late. Surely with more time a Stade de France type coverable running track design could have been implemented. Whether it was cost, time, incompetence or Sebastian Coe's Chelsea supporting temperament, it was declared a non-runner. Promises had been made to the IOC and IAAF that there would be an athletics track legacy.
But, recently, something changed. And that something leads to the one person who may be able to save West Ham from the Great Lock-Out that will surely arrive with football's Second Big Bang a few short years from now.
You may all laugh at the thought of writing to the club, of getting Gudmundsson to listen to you. What's in it for him? How are we going to get the Qataris to realise what a passionate, historical, fantastic, deserving, massive club West Ham is? Why would the bigwigs listen to the little people?
There is only one reason why a bigwig would listen to what we have to say. And that is if that bigwig is in a tight spot, and urgently needs creative solutions in order to meet expectations he is obliged to meet. Yes, the one man who may be able to save West Ham from being permanently locked out of top level football and who may, accidentally, be highly motivated to do so, is Boris Johnson.
Boris Johnson recently declared that in the light of the credit crunch, for a finite period of time he was going to reopen the issue of whether the Olympic Stadium might be tenantable by a football club capable of making it financially worth the while of the LDA. This potentially puts him in conflict with Seb Coe and the promise to leave an athletics legacy. Johnson said in respect of the athletics legacy that that promise was made at a time of plenty, which does not exist now. Johnson has committed publicly, repeatedly, that the Olympics will come in under budget. He has been out to Beijing and has been briefed on the continuing income that will arise from future use of the Bird's Nest.
At present, the only income likely to be forthcoming from the Olympic Stadium is negligible annual rent from Leyton Orient in a scaled down 25,000 seater athletics stadium. That, is, over time, hundreds of millions of pounds lost from a prospective freehold sale or tenancy income from the stadium. There is no other single budgetary saving that measures up to making a deal with a major football club over the stadium. And yet Johnson faces serious resistance from Seb Coe; and the practical problem of the money, way beyond Gudmundsson's available resources, that would be required to adapt the stadium, to ensure an athletics legacy - either external to or inside the stadium (moving a football club into a stadium with a permanent track is a non-starter).
There is a real confluence of opportunity here. Boris Johnson is under huge pressure to find cost savings for the Olympics, and has publicly said that he sees a major football club at the Olympic Stadium as a way to tackle the problem.
The solution to the problem lies with an examination of why the Abu Dhabi people decided to invest in the Premier League. They did not do it to make money out of football. They did it as a way to build the grandest global calling card they could. They did it to declare to the world that Abu Dhabi is open for business. Yes, Manchester City is a sporting hobby for them, but more than that it is a way to attract attention, to promote Abu Dhabi as a global financial, real estate, cultural and sporting hub. And that is why the Qataris are likely to follow in their footsteps. That's exactly what they and the Dubaians are trying to do.
When that is your motivation, and when money is no object, how attractive would it be to become intimately involved with a project integral to the next Olympic Games? To finance the redevelopment of the new Olympic Stadium and to install your own club in that stadium? Are the Qataris interested in the Olympics? You bet your life they are. Check out the list of applicants to hold the 2016 Olympic Games. Doha is one of the applicants. Qatar won't get the games because Doha is too hot in summer and the IOC has refused to consider moving the Olympics to the autumn. The next best thing is to own the London Olympic Stadium and to own the club that plays there.
This is a global trend at the moment. All the capital resides in the east, in Arabia and in Asia. Like a bowl that has been tipped to one side, all the water has run across and there is a capital drought on the other side of the bowl, in the west. It is happening in all sectors - the orientals are snapping up western assets and businesses. The latest example: Lehman Brothers is about to turn South Korean. It's a synergy - the parched west gets liquidity and the lubricated east gets something and somewhere to apply its copious liquidity. We've seen it before, with Japanese investment in the west, but the bowl has never been as out of balance as it is now.
So, this is what I envisage: the Qataris, or whoever has deep enough pockets and similar intentions as the folk from Abu Dhabi, step in and purchase both West Ham and the Olympic Stadium, with attendant redevelopment rights in the Olympic Park and further south. They foot the bill for providing an external athletics legacy (ideally) or a burrowed-down covered over internal athletics track. In return, they get their marquee calling card, their Olympic promotion, their Premier League football club, and massive real estate development concessions courtesy of the LDA, right slap bang on the doorstep of Canary Wharf and the City, which are arguably the world's key financial locations and precisely the places that the likes of Abu Dhabi, Qatar and Dubai, with their global business ambitions, need to tap into.
Boris Johnson gets hundreds of millions of pounds into the kitty to keep the Olympic Games under budget, and a quite sensational coup - a creative way to tie in multiple current trends to ensure that a white elephant becomes a cash machine. And West Ham ends up surviving and competing with the other top clubs in England, rather than being forever locked-out.
Ideally, people like Johnson, Gudmundsson and the Qataris would work this all out for themselves. But West Ham United is not the most obvious target club. The fact that our fanbase rivals those of Newcastle and Manchester City is not as well known as the fact that West Ham is a grand and historic club with passionate fans. And without the sovereign wealth fund element added into the equation, the Olympic stadium option looks beset by critical hurdles at the moment: the athletics legacy issue (soluable by a section 106 agreement with the Qataris) and the lack of adequate stadium conversion resources within West Ham's current ownership.
The Greater London Authority website provides contact details for the London Mayoralty, and I intend to send this article and some other thoughts to Boris Johnson at the following address:
By email: email@example.com
Mayor of London
Greater London Authority
The Queen's Walk
London SE1 2AA
Telephone: 020 7983 4100
Fax: 020 7983 4057
I would be more than happy if other fans wish to send this article or similar ideas of their own to Boris Johnson and to other relevant parties such as Bjorgolfur Gudmundsson and the major investment institutions, in order to raise the profile of this cross-sectorial political and economic synergy proposal, so as to start the ball rolling that will secure West Ham's future.
Postscript: if you intend to contact Boris Johnson's office I would strongly recommend referring him to Amanda Staveley, senior partner at PCP Capital Partners LLP, who brokered the Manchester City deal and advised Dubai International Capital on the Liverpool negotiations.
Please note that the opinions expressed in this article are those of the author and do not necessarily represent the views of, nor should be attributed to, KUMB.com.
12:13PM 16th Sep 2008
''Great piece, well laid out, thought provoking. I like every one else love WHUFC, the style of play is unique to West Ham, but the top boys? How many times has the Iceman been over to the Boleyn in the last 12 months? Do they really care?''
10:24PM 7th Sep 2008
''Well that was amusing for last thing on a Sunday night. A different take on a potential future no doubt.
The problems are plentiful however, if there really is a plan to create a "European Super League" of sorts how would the make up be decided? Current Champions League teams? The ones in the season before? So a max of 4 English teams? Certainly nothing run by UEFA would contain as many Premier League teams as there could be "big" English teams.
Look at it we have our normal top 4 now Man City/Chelski at their worst in disguise so that's 5. If you throw in even 2 more English clubs with massively wealthy owners that would be 7. I can't see any new league containing more than 20 clubs - probably fewer to maintain "quality" and ease "stress" on the poor £500K a week darlings, to say that 7 would be English would be madness, especially with an England/Premiership hating Frenchman in charge of UEFA.
In short such an idea is a non starter. The players whine about having to traverse a country as small as ours, imagine if they had to play in Scotland one week and the south of Italy the next. Preposterous.
That said we are certainly a second (if not third) tier English club as it stands, the Icelanders have burned all goodwill with their communication or lack thereof and the startling contradictory reports form ex players and now manager against the board's version.
If one player does it it's their word against his, if 2 or 3 do then it's a little odd. We've now had Ferdinand, McCartney and Curbs all say that the board have release statements that do not tally with what they know. It mounts up.
I've forgotten where I was...
Point was (I think) there will be no Euro super league. It's a tale told to supporters of 2nd and 3rd tier clubs to frighten them into allowing the big boys do whatever the hell they like.
New investors would be nice, this lot seem to be taking the Michel. Olympic stadium could be possible, as you say sunken track, don't take all the seats away say 90K down to a comfortable 40-45 with the structure in place to add if they want later. Will it happen, will it fook.
An interesting read, but a bedtime fairy tale for battle weary Hammers is all it is. Nothing will happen, we'll bitch and moan and pour more money in and one day it will all just die.''
10:14PM 6th Sep 2008
''Extremely well written, eloquent and erudite. Very astute ... disequilibrium ..and no mention of kicking a ball around a park.
Sorry to say that it sounds as if you typify the new age football fan that never kicked a ball and doesn't really have an insight as to what really matters.''
03:45AM 6th Sep 2008
''....and when the oil runs out? WHU should not sell out. Nice read though.''
01:12PM 5th Sep 2008
''Great article - well written and very thought provoking.
I'm 40 and have been a Bristol-based fan of WHU since watching them on the Big Match as an impressionable 8 year old. For me following WHU is like being on a roller coaster, the thrills of reaching the top can only be fully appreciated when you've experienced the lows of hitting the bottom. To me following a "rich" club like Man U, Chelski etc is like being on a roundabout, season after season of Top 4 Prem, Domestic Cup Finals/Semis, Champions League knock-out...compared to that give me life on the roller coaster anyday.
Call me a romantic or foolish but I'd rather WHU stay as they are, a people's club, than sell out. Also, however fantastic the new Olympic stadium may be, I can't imagine I'd ever get the same buzz of excitement there as I get every time I visit Upton Park. ''
by Tony Papworth
12:18PM 5th Sep 2008
''A really well written piece but it does seem to be based on the assumption that football will just keep growing. I personally think that football's own greed will cause it to implode before it gets that far.
These super-rich groups that supposedly want to throw billions into top English clubs have had their appetites whetted by seeing our national game at it's peak. Full stadiums, great football, noisy crowds and dominance in Europe. Makes a great TV spectacle.
But, evidence that the game here has already peaked-out is clear to see. There's never been more obvious disillusion amongst the public here at the "soul-less" nature that clubs are "selling-out". The shameless behaviour of mercenary players, the credit crunch, the housing market, the buffoons running world football and an embarrassing national side.
Attendances are falling in the Premier League, people are just not prepared to part with such large percentages of their salaries just to line the pockets of super rich ego-maniacs.
This means that, no matter how much money these mega rich groups have, they will still want to see serious return on their investments. This will be principly through television, merchandising and gate receipts. If you are a Sky/Setanta executive, you will NOT be hood-winked into paying billion-dollar contracts for the rights to televise football matches at half-empty stadiums. Quite rightly too, the matches look and feel utterly dull and will tempt most viewers to switch over . Because of this, your merchandising sales are affected round the world as millions of armchair fans lose interest in "the spectacle".
AND, just having bums on seats won't save "the spectacle". Up and down the country, we’re hearing the same mantra or “quiet fans”, “getting funny looks if you swear” etc etc.
You need passionate, noisy bums on seats. And those are just the ones that are beginning to turn away in their droves.''
09:15PM 4th Sep 2008
''What a nightmare vision for professional football. So we should all submit to being little more than playthings for super-rich capitalists and dodgy despots who exploit their own people and leave them in poverty a la Abramovich or the new mob at City? No thanks. ''
by David Bennett
07:55PM 4th Sep 2008
''What a really well written aticle and I very much enjoyed reading it and trying to visualise a West Ham with bags of money and endless foreign talent... but... I dont think they would have the same effect on me as they do week in week out with how they are now.
I enjoy the normal West Ham who drive me insane everytime they play, that's how it has always been and I dont think I would ever want that to change. And anyway, we will only be as bad as Chelsea if we we should out to a company or person like that!''
05:38PM 4th Sep 2008
''We all love our club, we're not all thick! We all want success, we all want the money so we can buy better players, so we dont want to win trophys now? We want to play in the bottom tiers of football? I'm 41, loved WHUFC scince the age of 4, still do - now often tell the wife if it's them or me it's them!
Get real, when the new owners came in we were all saying it's the new reveloution, whats so different about an Abu Dhabi group to a bunch of Icelanders? IMO, not a lot apart from miles. The dosh is the same, aint it. And I'm a thick welder!''
10:46AM 4th Sep 2008
''What exactly is the point in getting pots of money to be run by people who could not give a jot about WHUFC? Before you know it games will be played in the Middle East/Far East and US. I would rather do a FC Wimbledon - I've had good times watching us in the Championship and would be prepared to do that again rather than lose any affinity with a club owned by Qataris or anyone else who knows FA about football.
At least with the Icebergers we had the acceptable face of Eggert, although I'm sure he was used by the man with the power and the money. As we Irons should know, it's not all about winning trophies and, like Curbs, I'd rather walk away with a bit of dignity rather than sell my soul to whoever has the most money.''
09:13AM 4th Sep 2008
''Works for me!
Great piece of writing by the way, loved the suspense that built up to... BORIS JOHNSON!''
08:14AM 4th Sep 2008
''This may well be the best article on this topic that I have read! Any more comments on it would look daft...''
by madrid hammer
08:00AM 4th Sep 2008
''Very astute article - I have been working in Qatar for the last couple of months - the money being spent on building a financial centre with a skyline like Singapore or Hong Kong's is absolutely staggering. Will have to give Boris a call...''
07:45AM 4th Sep 2008
''A nice idea...but I don't see it happening!''
03:03AM 4th Sep 2008
''Surely 'selling out' like this would make WHUFC as much to blame as every shark out there intent in getting their claws into football? I think that "football" in Britain is far too undervalued on a social level and should be a sport that every man can follow without being pushed out the way by corporate non-football people who are just sucked in by modern day hype and bull? Let's keep it real and watch the fun and fireworks when these billionaires get bored like they did with their art collections!''
by Big Hammer
12:13AM 4th Sep 2008
''An extremley well written and a well stated view with only one flaw - WHUFC.
Sorry just thought of another - Boris Johnson. Sorry just thought of one more - Chelsea. And another - Blackburn. And another - Man United.
Who really wants our beloved club to become a "Jonny come lately" member of Billionaires row? Can you really buy success or do you see it in our history?
I will always vote for history personally, recent and distant.''
by Diving Moleman
12:13AM 4th Sep 2008
''Excellent and thought provoking article Ironball. Torn between tradition and the need to compete and survive, but more importantly, not missing the proverbial big red bus whilst thinking about what to do.''
11:30PM 3rd Sep 2008
''Ironball - as usual there's some sage stuff in there, but it takes a true sage to sift it out. A specialised term like 'soveriegn wealth funds' needs to be explained to the regular KUMB reader, some of whom may be able to make an informed guess at it, but many of whom may be too young to know what it means and lose the thread of your article at the very beginning.
'Disequilibrium' sounds pure WC Fields. You do not seem too aware of your audience or the way they might react to such rarely-seen 9 bob words.
Your focus is eventually global and very interesting, but the last bit of unasked-for advice I will give is organise it better and use articulate but not inaccessible language, without 'dumbing down' of course. We ain't PHD students on here!
Overall, you did not state the purpose of this article in your introduction - it meanders and is therefore difficult to read. I gave up after Para. 3 and skipped to the conclusion.
As for what you're saying, yeah, football as we knew it is being wrecked by branding, efficient moneymaking and what some people call 'globalisation'. ''
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