English football is walking financial tightrope, says infamous trader Nick LeesonThe Premier League’s ‘Fit and Proper Persons’ test for prospective club owners has always appeared to be as taxing as those set by daytime television programmes which offer a multiple choice answer to questions such as ‘what colour is the green grass on your lawn?’
Thaksin Shinawatra, the deposed prime minister of Thailand whose human rights record was questioned by Amnesty International, was somehow allowed to take ownership of Manchester City in 2007, a subterranean low-point for those charged with maintaining the Premier League’s global reputation.
The disturbing financial situations of Manchester United, Liverpool and, most perilously, Portsmouth have led to questions over the morals, if not the integrity, of the owners of each of those clubs.
But with recent figures suggesting that the combined debt of the Premier League’s 20 clubs now exceeds £3.1bn, few of the chief executives and owners in charge of English football’s elite operations could sit through a screening of the movie 'Rogue Trader' without seeing themselves in Ewan McGregor’s portrayal of the subject of the film, Nick Leeson.
Yet Leeson, who earned notoriety - and a six-and-a-half year prison sentence - as a result of his gambling on the futures’ market which caused the 233-year-old investment bank, Barings, to collapse with $1.3bn of liabilities in 1995, is witnessing the football’s financial meltdown from within as chief executive of League of Ireland Premier Division club, Galway United.
Leeson’s ‘previous’ would ensure his inability to pass the Premier League’s ‘Fit and Proper Person’ test, but as the personification of a financial poacher-turned-gamekeeper, he fears that English football is walking headlong into a Barings-style collapse, with even Manchester City, the club he has supported since childhood, providing cause for concern.
Leeson said: “I do fear for some of the clubs in the Premier League and I would be would be surprised if Portsmouth get out of the situation they are in at the moment.
“Manchester United, under the Glazers, are obviously in a really difficult position with their debt, but United’s identity will always be their saving grace.
“Somebody will always come to the rescue of clubs like United or Liverpool, but those down at the other end don’t have that global identity to save them.
“Clubs cannot continue to operate with such debts. The only way to stem the losses is to cut the wage bills, but that is very difficult when you have players on four and five-year contracts.
“Even City must be careful, despite the backing they receive from Sheikh Mansour. His money has placed City into a different realm to everybody else and, although he has recently written off his loans and made them debt-free, how could the club service its wage bill if the sheikh pulled out?
“I remember the days of former chairman Peter Swales when City overspent on fees and wages. It took the club 10 years to recover.”
While Abu Dhabi’s petrodollars continue to fund their ambitions, City appear immune from the cashflow problems affecting many of their rivals.
Across Manchester, United are straining under the heavy burden of their £716.5m debt, and Leeson admits that the club’s recent bond issue to raise £500m should set alarm bells ringing.
He said: “We dealt with bonds at Barings in Singapore and they are all well-and-good for raising funds, but they are really only a measure that forestalls the inevitable.
“Virtually everything that United generate goes towards servicing the interest on the debt and the situation they are now in is no surprise based on the Glazers’ business plan.
“There was something fishy about it right from the start and all they have done is raised even more debt. They aren’t dyed in the wool United supporters, so what is their motivation?
“If the fans stop buying season tickets and the income streams begin to slow, then the Glazers will have to go back to basics and look at their wage structure, but that will not be easy.”
Leeson, whose marriage to the County Meath-born Leona, his second wife, prompted his move to Ireland, has been running Galway’s affairs from his basic office at Terryland Park since 2006.
With Ireland’s once-vibrant ‘Celtic Tiger’ economy on its knees, he admits that Irish football is suffering as a result - a possible early warning for those clubs on this side of the Irish Sea.
He said: “Some clubs in this division are paying wages of £3,000-a-week which is ridiculous. Our top earner last year earned £700-a-week and I will have to reduce that this year out of necessity.
“Galway is an affluent city, but the property boom has bust and there is no money around.
“Would I want to work in English football? My name works for me and against me, but I am enjoying my lifestyle in Ireland and, although it is an uphill struggle, it is one we can overcome.”
