Reflections on the "oil money" matter

[aguero93:20]

The Spuds fans have been clinging onto this since we gave them a good spanking yesterday. They even have a thread on their forums asking what they would do it they got taken over and all of them deluding themselves saying they would walk away from the game. It's such bollocks. Every fan of every club in the world would give their left bollock to have our resources, our owners, our manager and our style of football. It's pure jealously that we leapfrogged them while they tread water.

The Everton fans were all going to walk away...

 

[fulabeer]

In spite of Liverpool's dominance in the late 70's, thirteen different clubs won the First Division between 1960 and 1981, including the likes of Burnley, Ipswich, Forest and Derby.

There was a reason for this; the TV and gate money was split along fairly equitable lines. In terms of gate receipts, it was a system that had been in place since the 19th century and ensured that money was redistributed throughout the game in a manner that tried to create a level playing field, as much as possible.

Some clubs were uncomfortable with this. Some clubs thought it was unfair that 'smaller' clubs were benefitting from their larger supporter-base and so they took steps to address it. Five clubs in particular took it upon themselves to reshape the way that finances in football were distributed: united, Liverpool, Everton, Spurs and Arsenal. It started with Football League gate receipts in the early 80's, thereafter allowing home clubs to keep all of the receipts from ticket sales in league games (the old rules remaining in the FA Cup). This clearly benefitted the larger clubs with bigger capacities. The way that TV money was distributed was next, in terms of the terrestrial deal - more money would be kept by those at the top, at the expense of those at the bottom. However this didn't go far enough for some clubs and so a few years later a breakaway league was formed, The Premier League, with the top division keeping all their TV money to themselves. Throughout all those events, certain clubs threatened to go off on their own if their demands weren't met. Principally, the same five that made the moves around gate receipts, although tbf, other clubs, City included, were either compliant or acquiescent with the direction of travel. There was lots of money to be made, after all.

All these moves were designed by the 'top' clubs to concentrate more and more money at the top of the English game. It is concomitant of this approach, that those at the bottom would receive less, at least in relative terms. These clubs sought to enrich themselves by changing the rules to favour themselves, and it is undeniable that for them, it worked and enabled them to 'earn' their money 'the right way' for a sustained period.

More and more money flooded into the upper echelons of the English game, as a serendipitous cocktail of global media and technological advances conflated to create a perfect storm for those who were prescient enough to engineer their own good fortune at the right time. And it worked wonderfully for a number of years. The rich got even richer, on and off the pitch, whilst the rest of the game barely managed to keep its head above water. However, as the Premier League brand and the reflected glory that accompanies it continued to grow, people outside the party started to want a piece of the action. People like Roman Abramovich and Sheikh Mansour. Why wouldn't they? I know I would if I had that sort of dough.

What we are seeing is quite simply the natural outcome of the decisions that were made in the early 80's. Create a sufficiently large honeypot and it will draw attention. Concentrate enough money in a particular area, then predators will circle and want a piece of it. It isn't particularly complicated or unexpected.

Perhaps if supporters of the foregoing 'Big 5' made the effort to research the subject, they would realise that it was their clubs' naked greed and own form of financial doping that created the landscape for the Sugar Daddies they decry to want to (and be able to) enter the fray. If they'd left well alone, and kept spreading the wealth around, the English game would still be wholesome and trophies would be spread out more evenly, which is something I'm sure they'd all greatly welcome - except they wouldn't, of course.

If you change the rules to suit yourself, don't expect that advantage to last forever.

And be careful what you wish for.

For a first post, that was pretty good and accurate....;)

 

[aguero93:20]

In spite of Liverpool's dominance in the late 70's, thirteen different clubs won the First Division between 1960 and 1981, including the likes of Burnley, Ipswich, Forest and Derby.

There was a reason for this; the TV and gate money was split along fairly equitable lines. In terms of gate receipts, it was a system that had been in place since the 19th century and ensured that money was redistributed throughout the game in a manner that tried to create a level playing field, as much as possible.

Some clubs were uncomfortable with this. Some clubs thought it was unfair that 'smaller' clubs were benefitting from their larger supporter-base and so they took steps to address it. Five clubs in particular took it upon themselves to reshape the way that finances in football were distributed: united, Liverpool, Everton, Spurs and Arsenal. It started with Football League gate receipts in the early 80's, thereafter allowing home clubs to keep all of the receipts from ticket sales in league games (the old rules remaining in the FA Cup). This clearly benefitted the larger clubs with bigger capacities. The way that TV money was distributed was next, in terms of the terrestrial deal - more money would be kept by those at the top, at the expense of those at the bottom. However this didn't go far enough for some clubs and so a few years later a breakaway league was formed, The Premier League, with the top division keeping all their TV money to themselves. Throughout all those events, certain clubs threatened to go off on their own if their demands weren't met. Principally, the same five that made the moves around gate receipts, although tbf, other clubs, City included, were either compliant or acquiescent with the direction of travel. There was lots of money to be made, after all.

All these moves were designed by the 'top' clubs to concentrate more and more money at the top of the English game. It is concomitant of this approach, that those at the bottom would receive less, at least in relative terms. These clubs sought to enrich themselves by changing the rules to favour themselves, and it is undeniable that for them, it worked and enabled them to 'earn' their money 'the right way' for a sustained period.

More and more money flooded into the upper echelons of the English game, as a serendipitous cocktail of global media and technological advances conflated to create a perfect storm for those who were prescient enough to engineer their own good fortune at the right time. And it worked wonderfully for a number of years. The rich got even richer, on and off the pitch, whilst the rest of the game barely managed to keep its head above water. However, as the Premier League brand and the reflected glory that accompanies it continued to grow, people outside the party started to want a piece of the action. People like Roman Abramovich and Sheikh Mansour. Why wouldn't they? I know I would if I had that sort of dough.

What we are seeing is quite simply the natural outcome of the decisions that were made in the early 80's. Create a sufficiently large honeypot and it will draw attention. Concentrate enough money in a particular area, then predators will circle and want a piece of it. It isn't particularly complicated or unexpected.

Perhaps if supporters of the foregoing 'Big 5' made the effort to research the subject, they would realise that it was their clubs' naked greed and own form of financial doping that created the landscape for the Sugar Daddies they decry to want to (and be able to) enter the fray. If they'd left well alone, and kept spreading the wealth around, the English game would still be wholesome and trophies would be spread out more evenly, which is something I'm sure they'd all greatly welcome - except they wouldn't, of course.

If you change the rules to suit yourself, don't expect that advantage to last forever.

And be careful what you wish for.

Poetic mate and I love the cross section view of natural selection, football and greed that it correctly implies.

 

[TueartsOHK]

When accused that City are buying the league/financial doping/only good because of the money spent, i just ask them one question.
"Can you explain how else could City have broken the monopoly the United/Arsenal and even Chelsea already had"
I've never once had a sensible answer.

To get to the top (and stay there) these days, you have to spend. Smaller teams don't have the fan base or worldwide exposure. Hence they cannot attract top sponsors.
Add that to smaller stadiums and less prize money, it is near impossible to catch up financially.

To have a chance, you have to treat it like any business. Massive initial investment to get up and running. Have a sound business plan (ahem "project"), and hope to get self sustainable as soon as possible.
What is different to the normal business world is a governing body constantly changing the rules to keep the old guard in business.

So never ever feel guilty for what City's owners have done. They have had to barge in elbows flying, make a lot of noise and fight tooth and nail against a body that was comfortable for how things were. City have a plan that isn't about winning just today. It is about the future (the academy). It will eventually generate massive amounts of profit for them. Cries of "Sugar daddies" "oil/petrol money" will long be forgotten...

Great post

 

[Bellamy's Caddy]

The money argument has always amused me, it's largely championed by bitter rags who are devastated that their dominance over English football isn't destined to last forever like they had all thought it would.

Without investment, how can clubs possibly compete in modern football, particularly in the premier league? Take away investment opportunities and you're left with a league that resembles the Scottish league.

Irrespective of the background to how City and United became wealthy clubs (they had a lot of hand over the years by the way. The approach of the two clubs at the moment could not be more different, whilst both have spent huge amounts we are tactically polar opposites. We aren't guaranteed to win anything but I don't hear many plaudits for United this season and I have noticed a lot more enthusiam from neutrals this season than since the takeover.

Fundamentally football fans are exactly that... they want to watch good football and be entertained, if you win something it should be a bonus. Hopefully it will be for us this season!

 

[ChicagoBlue]

Going further back, all of those clubs were bankrolled in some way by an individual.

United were rescued from impending liquidation in 1931 by a man called James Gibson, who paid the players and suppliers, thereby stopping bankruptcy proceedings. He invested further money, improved Old Trafford then rebuilt it after it was bombed in the war and also hired Matt Busby.

Arsenal received what was then a significant investment of £50m in 1994 from Danny Fiszman. When you think that very good players were changing hands or around £3m in those days and the average fee was probably about 1/25th of what fees are now, that's a very large sum, equivalent to about £1bn in today's values.

Liverpool had the benefit of the Moores family fortune, who owned Littlewoods (as did Everton via different branch of the family).

All these backers helped them pay fees and wages that were higher than their rivals and therefore to build better teams that won more. The CL money then bolstered them, further allowing them to attract the best players.

Well, that saved me an even longer post, thank you!

Every club was dependent on a benefactors money until UEFA decided they wanted to make billions and the TV stations around the world wanted a slice of the action. Then, the PL broke away and the SKY money injection became astronomical.

Looking back at both of those events, which happened at a point in time, there were a small group of teams that reaped exponential rewards from them, and it was leading to a small group of UEFA clubs dominating their leagues, because they had all the lonely and could buy all the players. Look at Germany and you have a virtual 1 team league. Another Bundesliga team gets a good player, Bayern have him a year or two later. They have some of the largest corporate sponsors in the world, one of which built their stadium for them, and the money just keeps rolling in to fund their squad building every year. And, I’m not knocking the Model, because it is the Model EVERY club would like, but in contrast the English game had a few of those teams but City were on the outside, as were Chelsea. So, the ONLY way to break into the monopoly was with OUTSIDE INVESTMENT TO MATCH THE UEFA/CORPORATE MONEY. Chelsea did it with Russia oligarch money, City did it with Arab money. It is no different to the fact that Arsenal have been taken over by two individuals, United has been taken over by an American Sports Franchise family, as has Liverpool. Throw in the myriad clubs who have sought, and received, overseas investment with the latest being Evertom, and EVERY CLUB IN ENGLAND/EUROPE is striving for the same deep pockets of owners and corporate sponsors. The things that have served to complicate this have been the hurdles placed in front of the latecomers, like FFP! If it was about health of the club, they would have concentrated on DEBT, of which City have none, but they didn’t! They simply said you have to be profitable to spend money and your revenues have to be able to cover your debts! The problem, of course, is that if the revenues dip and debt payments become a burden, What then??? Financial penalties?! Crazy!

Anyway, I simply laugh off the “oil money” taunts and tell people they need to look into where their own club got their money and who owns them! Hell, even Huddersfield and Brighton have “monied” owners! It is simply the way it is and always has been. Check yer ‘istree!

 

[crazyg]

If someone supported Altrincham and won the Euro millions and decided to spend his winnings on buying the club he loved, spent money on improving the stadium and training facilities and bought new players to help them get in to the football league would anyone have a problem with it? Even if the club was running at a loss?
The difference between that and City is we are on a much bigger scale, the new owners weren’t local and the club is actually viable business. In my eyes it’s all jealousy and the big boys are desperate to find anything to hold on to power.

You mean like Dave Whelan and Wigan Athletic?

He got the club from non league to the PL by the simple expedient of outspending every other club in the division they were in and buying better players to gain promotion. The higher the division, the more he spent.

Once in the PL, he curried favour with clubs to get loan players in of a higher quality to establish the club and reap the financial rewards, These included (ahem) future England stars such as Tom Cleverley, due to his close links with the GPC, and ensured that his team rolled over for them at every opportunity on a quid pro quo basis. The crowds increased dramatically in a Rugby League stronghold, and were boosted by larger than normal away support (to help fill the ground).

Then HRH bought out Manchester City. Suddenly, bankrolling a club to improve it's fortunes was disgraceful and unfair on the rest. Yes, the amount invested was high, but, on a comparative basis, no more than he had done for Wigan as theirs was from a much lower starting point.

Over the next few years, Wigan, to their credit, won the FA Cup (I forget who they beat - bastards!), whereas City have been far more successful. Currently, Wigan are in the lower reaches of the football league (although doing quite well at that level), and City are.......

The same can be said of Blackburn Rovers and Jack Walker as a benefactor. Where are they now?

Football used to be cyclical in nature, with teams dominating for a period before returning to the "pack". However, with the money now involved at the PL level, this appears unlikely to be repeated, as 6 or 7 clubs have broken away from the rest, and the rest now fight to keep on the "gravy train" by fair means or foul. Fortunately, City are now sitting top of the tree (at the moment) due to sound business dealings and strong management, and are making a profit and are debt free, despite the restrictions placed on them by FFP (which is another story in itself).

This is why supporters of other clubs become xenophobic about the club's owners , when, as you say, they are jealous that their own owners don't want to invest to the same level. After all, most of the owners of those 6 or 7 clubs are billionaires in their own right.

It's just the general hypocrisy of the football supporter - we've all done it.

 

[Easy]

Personally think “oil money” or petrol money has racist undertones.

It wasn’t used with Abromovich was it, even though that’s how he made all of his money.

Money is money whether owners made it on the stock market, took out major loans, sell oil or whatever.

 

[jrb]

United: Owned by American billionaires.(Glazers)
Liverpool: Owned by American billionaires.(Fenway Group)
Arsenal: Owned by American billionaire.(Kroenke - majority shareholder)
Spurs: Owned by a British billionaire.(Lewis - Bahamas)
Everton: Owned by a British billionaire.(Moshiri - majority shareholder-Monaco)

Oh, the irony!

 

[FlemishDuck]

In spite of Liverpool's dominance in the late 70's, thirteen different clubs won the First Division between 1960 and 1981, including the likes of Burnley, Ipswich, Forest and Derby.

There was a reason for this; the TV and gate money was split along fairly equitable lines. In terms of gate receipts, it was a system that had been in place since the 19th century and ensured that money was redistributed throughout the game in a manner that tried to create a level playing field, as much as possible.

Some clubs were uncomfortable with this. Some clubs thought it was unfair that 'smaller' clubs were benefitting from their larger supporter-base and so they took steps to address it. Five clubs in particular took it upon themselves to reshape the way that finances in football were distributed: united, Liverpool, Everton, Spurs and Arsenal. It started with Football League gate receipts in the early 80's, thereafter allowing home clubs to keep all of the receipts from ticket sales in league games (the old rules remaining in the FA Cup). This clearly benefitted the larger clubs with bigger capacities. The way that TV money was distributed was next, in terms of the terrestrial deal - more money would be kept by those at the top, at the expense of those at the bottom. However this didn't go far enough for some clubs and so a few years later a breakaway league was formed, The Premier League, with the top division keeping all their TV money to themselves. Throughout all those events, certain clubs threatened to go off on their own if their demands weren't met. Principally, the same five that made the moves around gate receipts, although tbf, other clubs, City included, were either compliant or acquiescent with the direction of travel. There was lots of money to be made, after all.

All these moves were designed by the 'top' clubs to concentrate more and more money at the top of the English game. It is concomitant of this approach, that those at the bottom would receive less, at least in relative terms. These clubs sought to enrich themselves by changing the rules to favour themselves, and it is undeniable that for them, it worked and enabled them to 'earn' their money 'the right way' for a sustained period.

More and more money flooded into the upper echelons of the English game, as a serendipitous cocktail of global media and technological advances conflated to create a perfect storm for those who were prescient enough to engineer their own good fortune at the right time. And it worked wonderfully for a number of years. The rich got even richer, on and off the pitch, whilst the rest of the game barely managed to keep its head above water. However, as the Premier League brand and the reflected glory that accompanies it continued to grow, people outside the party started to want a piece of the action. People like Roman Abramovich and Sheikh Mansour. Why wouldn't they? I know I would if I had that sort of dough.

What we are seeing is quite simply the natural outcome of the decisions that were made in the early 80's. Create a sufficiently large honeypot and it will draw attention. Concentrate enough money in a particular area, then predators will circle and want a piece of it. It isn't particularly complicated or unexpected.

Perhaps if supporters of the foregoing 'Big 5' made the effort to research the subject, they would realise that it was their clubs' naked greed and own form of financial doping that created the landscape for the Sugar Daddies they decry to want to (and be able to) enter the fray. If they'd left well alone, and kept spreading the wealth around, the English game would still be wholesome and trophies would be spread out more evenly, which is something I'm sure they'd all greatly welcome - except they wouldn't, of course.

If you change the rules to suit yourself, don't expect that advantage to last forever.

And be careful what you wish for.

Quality post, nice read for someone like me who is relativly new to this league.