THE global financial crisis may not appear to have affected football much yet, but as with every other aspect of the economy, the worst is yet to come.

We have already seen West Ham’s owner, Bjorgolfur Gudmundsson, under pressure to sell, following the collapse of Landsbanki where he had a 45 per cent stake. Mike Ashley’s sale of Newcastle has been delayed while crowds decline. And although Amanda Staveley is rumoured to have a queue of Arab billionaires wanting a new plaything, even the Dubai economy is in difficulty.

Football may be a global sport with massive media appeal, but all the key financial supports will come under pressure in the next year.

First, consumers are struggling. Retail sales are dropping at an alarming rate and much of the world economy is already in recession. This could have at least three significant effects, on: attendances; sponsorship; and TV revenues.

Negotiations for the new Sky/Setanta contract from 2010 start in January, BSkyB needs to borrow to replace £800m of corporate bonds maturing early in 2009 and there are already forecasts that they will lose customers as the crunch bites.

Pressure

West Ham, West Brom and Villa have no shirt sponsor. Manchester United’s sponsorship by AIG is also likely to end but there is apparently a queue of replacements.

Attendances will come under pressure. Newcastle have lost 5,000 supporters but they aren’t alone. The Times reports that one in four supporters will watch fewer Premier matches this season and they are spending less on match day. Season ticket sales have disguised unoccupied seats. Corporate spending is slumping.

But the biggest threat will come from the collapse of the banking sector. Banks are already slashing corporate lending and massively hiking overdraft rates. With club revenues projected to fall, banks will first refuse to lend more and then start to call in debt.

The consequences for clubs are likely to start at both ends of the hierarchy and squeeze into the middle. Dozens of non-League clubs are struggling. League clubs have relied on selling players to richer clubs, but these will have less to spend. Meanwhile, sterling’s collapse has increased the cost of foreign players by 10 per cent since the summer.

Some thought Manchester United would be first to fail, having been financed by now struggling US banks, but their debt does not have to be renewed for some years and Far Eastern revenues are booming. Roman Abramovich on the other hand is reputed to have lost billions in Russia and other Premier League entrepreneurs are much poorer.

With the global economy not forecast to recover before 2010, things will get very much worse for football clubs before then. Revenues will fall; transfer markets will be much quieter; fees and salaries may fall as the global economy deflates. Several clubs may fail and well-known Premier Leauge clubs may not be immune.

What do you think? Have your say.

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