The S word

SVEN-GORAN Eriksson was guarded about Manchester City’s January transfer targets today at a press conference ahead of Sunday’s match at Tottenham. Owner Thaksin Shinawatra, though, has been rather more open, according to reports from Hong Kong.

Reuters appears to have been the source for the Thaksin quotes on a move to bring Adriano to City in a swap deal (although it’s very heard to tell with the web these days). Those quotes confirmed an earlier story that Chris Bailey wrote in today’s Manchester Evening News, which named both Adriano and Palermo’s Australian midfielder Mark Bresciano as January targets.

But it was a few paragraphs of Thaksin quotes further down the Reuters piece that caught my eye.

The City owner is reported as saying that he is considering ‘securitisation’ as a way of increasing the club’s revenue.

Exactly what that would involve, I don’t know, but mention ‘securitisation’ to any football fan, and they will instantly think of Leeds United, borrowing millions against expected future income in the early 2000s to chase their Champions League dream, and subsequently toppling all the way down to League One. (This Observer article from March 2004 is the best insight I’ve read into what went wrong there, and what mistakes other clubs should avoid.)

Thaksin’s comments in the Reuters article are certainly not those of a man with bottomless pockets.

He reportedly said: “The fact is I’ve just found out that running a football club, especially at the Premier League level, is very expensive.

“Normal revenue from TV, sponsors, kit sales, ticket sales is never enough. That’s the reason why Premier League clubs keep changing hands; you need to find deeper and deeper pockets all the time.

“So if we want to own and manage Manchester City football club forever, we have to find other sources of income. You have to know how to use modern financial instruments, that’s what we’re planning.

“Securitisation is the name of the game they are playing in Western countries. We have to work on that.

“If we manage clubs in the old style, it’s not going to work. The Premier League is global by nature.”

Thaksin is right to point out that securitisation has not been played out solely at Leeds. It has happened elsewhere, with mixed results.

Arsenal borrowed £260m against future tickets sales last year, and are doing just fine on the field. Leicester borrowed £28m in the early 2000s, and found themselves in administration after relegation from the Premier League in 2001.

Manchester United’s owners the Glazers considered a similar move to borrow around £500m against future ticket sales last summer, but it didn’t happen.

Thaksin is also right to point out the sheer cost of running a Premier League club heaps huge financial demands on the people responsible for finding the cash.

But it’s not only the mention of securitisation that may have City fans – and English football -wobbling. Thaksin is also quoted as saying that TV revenue is never enough to run a Premier League club. If that’s the case now, when the latest global television contract is worth £2.7bn to the league over three years, then what on earth is keeping the top flight afloat? And how long will it be able to do so?

In the light of those comments, it may not be the end of the world if Eriksson keeps his spending low in the January transfer market.

Asked about his transfer budget talks with Thaksin today, Eriksson said: “We have never discussed how much money will be available, but once he sees what kind of player we want, he will decide whether to put that money in.

“If he thinks it is a good investment for the club, than I think he will do it.

“If they are young players, he is willing to spend. If they are old players, he is rightly not willing to spend a lot of money.”

At this stage, surely prudence is a more sensible way forward than securitisation. And if that means City miss out on one or two of the really big names, so be it.


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