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Lord Alan Sugar has delivered a biting analysis of the financial
state of global giants Manchester United and Liverpool.
Lord Sugar, who headed the Labour Government's taskforce on
business affairs, forecast a doomsday scenario for both elite clubs
and the former Spurs chairman also had his say on the controversial
issue of foreign owners.
''If you are asking me if foreign owners are good for football
then I would have to split them into two categories,'' Lord Sugar
told ESPNsoccernet. "There is Roman Abramovich and that
bloke from the Middle East [Sheikh Mansour bin Zayed al Nahyan at
Manchester City]. To a certain extent [Fulham's] Mohammed Al-Fayed
and, although I was not a foreign owner, I would include myself in
this category of owners who use their own money to buy football
clubs.
"How can you say anything about these foreign owners? Roman
Abramovich is passionate about Chelsea and football and he is
putting up the money to buy the best players in the world, and now
Manchester City are doing the same. Yes, it might be unfair to
everyone else, but that's life, and it hasn't done much harm to
their football clubs, now has it?
"But there is another type of foreign owner: The Glazers and
those guys at Liverpool, Hicks and Gillett. Now, I am sorry to have
to say this, but they are done. They are gone. They have big
problems ahead.
"When you buy big clubs like Manchester United and Liverpool
without using your own money and lumber the club with enormous
interest repayments on the debt, then you are asking for problems,
and both clubs have got them."
Manchester City posted the second highest one year loss on
Friday (at £121 million), with Abramovich's Chelsea the top of the
list in 2004-05 (at £141 million), but as Lord Sugar maintains it
is meaningless in terms of the clubs' business plan, as they are
supported by their owners own cash.
"Reckless lending caused the demise of the banking industry
throughout the world, and banks were irresponsible in lending to
these guys to enable them to buy such big football clubs,'' he
said. "They have used the club as an asset against the loans and
that has resulted in big interest repayments on the debt.
"Here's the bad news: One day the Glazers, the Gilletts and
Hicks's will find its payback time and, when that day comes, if
they haven't got the money, they default, and it's a nightmare
scenario for the clubs.
"A bank somewhere is going to own the football club and hope
desperately that some investor will take over the debt. But why
would they? I wouldn't. Absolutely not. Football is not good
business. An electrical company, a food chain, yes, why not, but
football, you've got to be joking.''
With his own experiences of owning Tottenham behind him, Lord
Sugar has nothing but fear for United and Liverpool's current
situation.
"Manchester United is funding £50 million a year in interest
repayments with a debt of £700 million plus,'' he said. ''If it
didn't then that £50 million a year would be spent on players and
the club. Same at Liverpool, £40 million a year on interest
repayments. That leaves me really, really worried for those
clubs.
"What a great institution Liverpool is, what a great football
club, but my forecast is that the owners will inevitably default on
their loans, it puts the bank in an embarrassing position, and the
bank will write off a large chunk of the debt to make it viable for
an investor to step in and take it over.
"Liverpool don't need to build a stadium straight away, that's
not the priority, the priority is to find the right business model
to enable it to buy players and stay where they are, and challenge
for the top four places. To do that they need to wipe their debts
clear of the bank.''
Lord Sugar cites the example of Leeds United, who dropped to
League One because of their financial problems as a warning from
the past, but thinks that history could repeat itself.
"It would be an unbelievable travesty if Liverpool would slip
away like Leeds and end up in the second division,'' he said.
''That will happen if they are not careful. Manchester United have
more time, the Glazers have given themselves more breathing space
as their loans are not up until 2016.''
Manchester United fans have protested strongly against
the Glazer regime
However, he does not believe that the Red Knights' bid to save
United from the Glazers is the answer to their problems.
"This Red Knights fiasco, well that is rubbish,'' he said.
''Supporters might have passion and love their club but it would be
out of the frying pan into the fire, with other debts to the banks,
as I doubt whether it will be their own money.
"It's all very well saying the Glazers are horrible people with
no passion and they borrowed far too much money, but the Red
Knights are not the answer.
"I can see the Glazers selling up and they must be waiting until
the world economy improves or some mad Russian or Chinese comes
along and gives them £2 billion for the club. I cannot believe they
turned down £1.5 billion, as they would love to get themselves out
of their debt, I am sure.
"They realise now that whatever prompted them to buy Manchester
United they got it wrong, They need to find someone with many
billions to spare who just wants to own Manchester United."
So we'll find out Pools fate on
Oct 6 & ManU doomsday is on 2016. So much for building
up.
