Post by timofte on Aug 2, 2006 21:05:48 GMT
Interesting article from this weeks Sunday Business Post. Its ridiculous that Chelsea have made such losses (€84m) on players since Abromovich took over. They'll have to put transfer caps on players soon enough if Chelsea keep this up.
DT
Kicking off in a deluge of cash
30 July 2006 By Linda Maher
It is a sign of the times that in a week when Roman Abramovich’s Chelsea sold Damien Duff to Newcastle United for a bargain stg£5 million (€7.3 million), Manchester United manager Alex Ferguson was haggling with Real Madrid over a couple of million pounds for striker Ruud van Nistelrooy.
United, until recently the world’s richest club, has had to tighten its belt since US tycoon Malcolm Glazer took over the club and it has yet to make any significant foray into this summer’s transfer market, although a stg£15 million (€22 million) bid for Tottenham midfielder Michael Carrick was being tied up last Friday.
This is despite Ferguson’s constant refrain that his team needs to strengthen its midfield.
It was thought that the club was awaiting the outcome of the Italian corruption trial to pick up some players cheaply, but United has failed to swoop.
Abramovich’s apparent disregard for losing money is in stark contrast to United’s penny-pinching. The sale of Duff to Newcastle brought the Russian’s total transfer losses to €77.9 million. Three more players bought before his takeover but sold afterwards take the club’s total losses in that time to €86.4million.
Chelsea bought Duff from Blackburn for €25 million in 2003 and he generally performed well for the club, despite not playing much towards the end of last season.
The 70 per cent depreciation in his value over a three-year period appears excessive, and Chelsea’s decision to sell him to Newcastle for €7.3million is stranger still, as Tottenham Hotspur had bid €15 million for him just last week.
Duff claims the decision not to go to Spurs rested with him.
‘‘There was one London club in for me, and that was Spurs,” he said. ’‘But when I go to a club, I put my heart and soul into it and for the past three years I’ve been a Chelsea fan. So I couldn’t go to Spurs. It was as simple as that.”
The Newcastle deal is expected to earn Duff €90,000 a week. Another plus is the prospect of regular first-team football, something he had not been getting at Chelsea.
Chelsea will argue that through amortisation, Duff’s book value had diminished to just €6.22 million because he only had one year left on his contract. While this may make some sense in purely fiscal terms, fans will wonder how Duff, who is in his footballing prime at 27, could have lost almost three-quarters of his value in such a short time.
Chelsea’s summer spending spree began with the purchase of Andriy Shevchenko from Milan for €45 million. It faces huge losses on the deal as it risks losing the 30-year-old striker for nothing at the expiry of his contract in2010 - or for a fraction of the fee - should he be deemed surplus to requirements in the meantime.
If Ashley Cole joins the Chelsea from Arsenal this week for a fee of €30 million, as appears likely, it will take Chelsea’s summer outlay on transfer fees alone to more than €100 million, after the arrivals of Shevchenko, Salomon Kalou, Hilario and John Obi Mikel.
Despite the fact that its other big signing, German midfielder Michael Ballack, cost no fee under the Bosman ruling, he has signed a deal worth more than €30 million in wages over four years. And even though Mikel never played for Manchester United, Chelsea had to pay it €16 million (and another €6 million to Lyn Oslo of Norway) to end a long-running saga over his transfer.
Chelsea’s big-spending antics are unnerving other clubs, with Reading chairman John Madejski searching for a buyer for the club, despite the fact that the Royals kick off in the top league this season for the first time in their history. He blamed the bankrolling of clubs for his decision. ‘‘Naively, I thought that when we got to the Premiership we would be able to balance the books, but it is becoming all too apparent to me how costly it will be,” he said. ‘‘The whole thing is ratcheted up with agents and it is obscene that everything is so darned expensive.
‘‘If we could just get back to playing old-fashioned football with people who want to play football and are not just interested in having a bigger car or a bigger house and more and more money...”
However, the money-grabbing culture is not confined to the Premiership. In the Championship, the league that Reading dominated last season, Niall Quinn’s takeover of Sunderland has been grabbing the headlines. Quinn is now chairman and manager of the club.
The consortium, led by Quinn, finalised its takeover of Sunderland last Thursday. The former Republic of Ireland striker and his Drumaville consortium agreed a deal for ex-chairman Bob Murray’s shares earlier this month. It then had 21 days to acquire the rest of the shares, which it has done, giving it full control.
On July 3, Quinn made a €15 million cash offer for a majority stake in the club, representing 72.59 per cent of the club’s shares. The Drumaville group’s offer was dependent on it gaining 90 per cent of the club but, despite falling short by less than 1 per cent, it has decided to waive the conditions of the agreement.
Another former Republic of Ireland star, David O’Leary, also made the headlines this summer when he quit his job as manager of Aston Villa. The Birmingham club is in turmoil as several bidders fight for its control. Lifelong fan Michael Neville is hoping his local background and support of the club will persuade chairman Doug Ellis to look favourably on his consortium’s bid, believed to be in the region of €96 million. Neville was originally part of a consortium that included Irish property developers the Comer brothers.
The consortium expressed an interest in buying the club before Christmas. However, US billionaire Randy Lerner’s on-again off-again interest is likely to be carefully considered by the club, as the businessman and owner of NFL team Cleveland Browns has a reported €2.1billion fortune.
A third consortium has also been linked to the club, as Sven-Goran Eriksson’s agent Athole Still was spotted leaving Villa Park last Wednesday. The meeting sparked rumours that Eriksson would be the club’s new manager.
The Swede, who stepped down as England coach last month after the World Cup, had previously said he would be interested in becoming manager at Villa. He made the comments in January to a British tabloid reporter posing as an Arab sheikh.
Whatever the final decision of the Villa board, it is clear that money talks when it comes to affairs of the Premiership.
DT
Kicking off in a deluge of cash
30 July 2006 By Linda Maher
It is a sign of the times that in a week when Roman Abramovich’s Chelsea sold Damien Duff to Newcastle United for a bargain stg£5 million (€7.3 million), Manchester United manager Alex Ferguson was haggling with Real Madrid over a couple of million pounds for striker Ruud van Nistelrooy.
United, until recently the world’s richest club, has had to tighten its belt since US tycoon Malcolm Glazer took over the club and it has yet to make any significant foray into this summer’s transfer market, although a stg£15 million (€22 million) bid for Tottenham midfielder Michael Carrick was being tied up last Friday.
This is despite Ferguson’s constant refrain that his team needs to strengthen its midfield.
It was thought that the club was awaiting the outcome of the Italian corruption trial to pick up some players cheaply, but United has failed to swoop.
Abramovich’s apparent disregard for losing money is in stark contrast to United’s penny-pinching. The sale of Duff to Newcastle brought the Russian’s total transfer losses to €77.9 million. Three more players bought before his takeover but sold afterwards take the club’s total losses in that time to €86.4million.
Chelsea bought Duff from Blackburn for €25 million in 2003 and he generally performed well for the club, despite not playing much towards the end of last season.
The 70 per cent depreciation in his value over a three-year period appears excessive, and Chelsea’s decision to sell him to Newcastle for €7.3million is stranger still, as Tottenham Hotspur had bid €15 million for him just last week.
Duff claims the decision not to go to Spurs rested with him.
‘‘There was one London club in for me, and that was Spurs,” he said. ’‘But when I go to a club, I put my heart and soul into it and for the past three years I’ve been a Chelsea fan. So I couldn’t go to Spurs. It was as simple as that.”
The Newcastle deal is expected to earn Duff €90,000 a week. Another plus is the prospect of regular first-team football, something he had not been getting at Chelsea.
Chelsea will argue that through amortisation, Duff’s book value had diminished to just €6.22 million because he only had one year left on his contract. While this may make some sense in purely fiscal terms, fans will wonder how Duff, who is in his footballing prime at 27, could have lost almost three-quarters of his value in such a short time.
Chelsea’s summer spending spree began with the purchase of Andriy Shevchenko from Milan for €45 million. It faces huge losses on the deal as it risks losing the 30-year-old striker for nothing at the expiry of his contract in2010 - or for a fraction of the fee - should he be deemed surplus to requirements in the meantime.
If Ashley Cole joins the Chelsea from Arsenal this week for a fee of €30 million, as appears likely, it will take Chelsea’s summer outlay on transfer fees alone to more than €100 million, after the arrivals of Shevchenko, Salomon Kalou, Hilario and John Obi Mikel.
Despite the fact that its other big signing, German midfielder Michael Ballack, cost no fee under the Bosman ruling, he has signed a deal worth more than €30 million in wages over four years. And even though Mikel never played for Manchester United, Chelsea had to pay it €16 million (and another €6 million to Lyn Oslo of Norway) to end a long-running saga over his transfer.
Chelsea’s big-spending antics are unnerving other clubs, with Reading chairman John Madejski searching for a buyer for the club, despite the fact that the Royals kick off in the top league this season for the first time in their history. He blamed the bankrolling of clubs for his decision. ‘‘Naively, I thought that when we got to the Premiership we would be able to balance the books, but it is becoming all too apparent to me how costly it will be,” he said. ‘‘The whole thing is ratcheted up with agents and it is obscene that everything is so darned expensive.
‘‘If we could just get back to playing old-fashioned football with people who want to play football and are not just interested in having a bigger car or a bigger house and more and more money...”
However, the money-grabbing culture is not confined to the Premiership. In the Championship, the league that Reading dominated last season, Niall Quinn’s takeover of Sunderland has been grabbing the headlines. Quinn is now chairman and manager of the club.
The consortium, led by Quinn, finalised its takeover of Sunderland last Thursday. The former Republic of Ireland striker and his Drumaville consortium agreed a deal for ex-chairman Bob Murray’s shares earlier this month. It then had 21 days to acquire the rest of the shares, which it has done, giving it full control.
On July 3, Quinn made a €15 million cash offer for a majority stake in the club, representing 72.59 per cent of the club’s shares. The Drumaville group’s offer was dependent on it gaining 90 per cent of the club but, despite falling short by less than 1 per cent, it has decided to waive the conditions of the agreement.
Another former Republic of Ireland star, David O’Leary, also made the headlines this summer when he quit his job as manager of Aston Villa. The Birmingham club is in turmoil as several bidders fight for its control. Lifelong fan Michael Neville is hoping his local background and support of the club will persuade chairman Doug Ellis to look favourably on his consortium’s bid, believed to be in the region of €96 million. Neville was originally part of a consortium that included Irish property developers the Comer brothers.
The consortium expressed an interest in buying the club before Christmas. However, US billionaire Randy Lerner’s on-again off-again interest is likely to be carefully considered by the club, as the businessman and owner of NFL team Cleveland Browns has a reported €2.1billion fortune.
A third consortium has also been linked to the club, as Sven-Goran Eriksson’s agent Athole Still was spotted leaving Villa Park last Wednesday. The meeting sparked rumours that Eriksson would be the club’s new manager.
The Swede, who stepped down as England coach last month after the World Cup, had previously said he would be interested in becoming manager at Villa. He made the comments in January to a British tabloid reporter posing as an Arab sheikh.
Whatever the final decision of the Villa board, it is clear that money talks when it comes to affairs of the Premiership.
