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Will an England win really boost the economy and do football clubs actually make money - the answer is not the one you want to hear
ITV recorded 27.6 million viewers for the England v Denmark football match in the European Nations tournament last week making the advertising breaks some of the most valuable to firms since the early 1980s when there were only three channels.
Deliveroo benefitted in particular as they recovered some of their losses from the slump in share price earlier this year. However public transport was down in numbers during the game as were cab fares so not everyone benefitted. Betting shops Ladbrokes and Corals will benefit from the estimated £17.5 million expected to be placed in bets on the final while publicans believe that that around 13 million pints will be sold on Sunday afternoon and evening although more pints would be pulled if Covid wasn’t around.
Statistics show that after the 1966 final between England and West Germany resulted in a 1.5% rise in GDP and similarly the economy was boosted immediately after the London Olympics in 2012. What the optimists don’t like to tell us the slight slump following the boost as the economy returned to normal. There’s no denying an England win boosts public moral south of Hadrian’s wall and east of Offa’s Dyke – and inevitably that results in more sales in the shops. An England defeat – to look on the darker side also results in more domestic violence which has a negative effect on business.
Output, or gross domestic product (GDP), climbed by 1.4 per cent in 2012 and 2.2 per cent the next year. And in 1966, GDP edged up by 1.5 per cent.
However despite the hype football at club level isn’t the lucrative cash cow it likes to think it is. Just remember the European Super League (ESL) fiasco. Six English football clubs threw their hats into the ring for the new ESL and when fans, managers, players and even the Government objected they quickly withdrew their support for the league.
Pic: TalkSport
One of the motivations to join the was the huge amount cash on offer. Morgan J Stanley in America were thought to be offering millions in a welcome package as the bank prepared to bank roll the league with the prospect of increased TV revenues. It had the added attraction of being a closed league with no relegation meaning clubs always knew how much cash they would get each season and could plan ahead without fear of failure. And yet the money on offer is nothing compared to debts most so-called super rich Premiership clubs have accumulated. Chelsea owe £1.3bn, Spurs £384m, Manchester United £271m and Liverpool £157m. Most businesses with that amount of debt would be on the brink of collapse – like Liberty Steel is today with their debts of more than a billion pounds.
Normal business practices go out of the window when it comes to football clubs as egos get the better of the owners and directors as they spend ever more money on players to chase elusive glory. If the richest clubs in the land cannot balance their books then there’s little hope for those further down the league. Surprisingly the smaller the club the more likely there is to be fiscal discipline as they are run on a shoestring budget with players often playing for free or very little.
Newport County FC in 1980. The club had played in Europe with the best but went bust and it took 30 years to reform and eventually gain entry in the Football League
Since the 1980s Newport County, Bury, Rushden & Diamonds, Chester, Wigan, Mansfield. Wimbledon, Maidstone, Aldershot, Middlesborough, Tannmere Rovers, Walsall, Northampton, Kettering, Maidstone, Hartlepool, Barnet, Exeter, Gillingham, Doncaster, Millwall, Bournemouth, Crystal Palace, Chester, Portsmouth, Hull, QPR, Halifax, Notts County, Barnsley, Leicester, Port Vale, Derby County, Wrexham, Cambridge United, Rotherham, Crawley, Leeds, Luton, Southampton, Stockport, Northwich Victoria, Salisbury, Plymouth argyle, Rhyle and Coventry City have all hit the buffers owing collectively millions to suppliers, landlords and the taxman. Some entered administration and found buyers almost straight away, others lost everything including their ground and have been reformed by the fans and others have been able to negotiate a CVA with creditors. In each case suppliers – from the local printers of the match programs to the caterers supplying burgers and chips – were left unpaid. And yet most have either managed to trade their way out of administration of in effect done a phoenix.
Ian Carrotte of ICSM gives this sage advice to potential suppliers: “If you decide to trade with a club then don’t go in too deep, stick to your payment terms of 30 days maximum and be prepared to suffer if they go bust. It’s best to be a supporter of the team as at least that way you could argue you have invested in the club and could solve your conscience that way if the worst happens. My advice is treat clubs like you would any other business – and don’t let them fob you off with late payments.”
About ICSM Credit
ICSM Credit has more than four decades of experience as a credit intelligence group whose members gain inside information about firms in trouble allowing them to avoid bad debts and rogue traders. To join costs less than a tank of fuel – while at the moment there’s a special free temporary membership offer during the Covid-19 crisis which gives access to free legal letters. ICSM also has an effective debt collecting service which has a global reach – ask for details from Paul.
For details about ICSM Credit call 0844 854 1850 or visit the website www.icsmcredit.com or email Ian at Ian.carrotte@icsmcredit.com on how to subscribe and to join the UK’s credit intelligence network to avoid bad debts and late payers. Follow ICSM Credit on FaceBook, Twitter and YouTube and Ian Carrotte on LinkedIn.
To keep up to date subscribe to the FREE ICSM Credit Newsletter to hear all the latest insolvency news and to see who has gone out of business click on the orange panel on the top left of the home page of the website www.icsmcredit.com or send an email to Ian.carrotte@icsmcredit.com
For details for the work of the journalist Harry Mottram visit www.harrymottram.co.uk