Big business playing ball

Patrick Tooher reports on the changing face of British football
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The Independent Online
Gone are the days when the local second-hand car dealer, dressed in a sheepskin coat, could run a top football club on an extended overdraft or pay a player's win bonus by gently massaging the attendance figures.

Football is big business today with money pouring into the game at an unprecedented rate from television, sponsorship and marketing deals. Only last month, the satellite broadcaster BSkyB paid a record pounds 670 million to secure the rights to broadcast live Premier League action over the next five seasons.

The deal effectively quadruples to pounds 10m the annual income each club will generate from television. That may be loose change compared with the potential cash bonanza from the introduction of pay-per-view television in two years' time. A recent poll of 4,000 respondents by the market research group Harris found Newcastle United could earn up to pounds 114m a season from couch potato fans paying pounds 10 a time for games screened at different times.

It is small wonder that investors are rushing to take advantage of opportunities in under-developed leisure assets. Shares in Manchester United and Tottenham Hotspur, the only two clubs quoted on the main London stock exchange, have soared this year, pushing United's worth to pounds 266m while Spurs has a valuation of pounds 86m.

Chelsea, Celtic, Millwall and Preston are also publicly quoted companies, and Leeds United are set to join them after Caspian, a media group owned by leading London finance houses, recently bid pounds 20m for control. Arsenal, Everton, Liverpool and Newcastle are also heading in the same direction.

With so much new money chasing a limited number of star players, inflation in the form of higher transfer fees was inevitable. The problem for leading clubs is that paying top dollar for the best does not guarantee success on or off the field.

Buying Shearer will boost sales of black and white replica shirts, and may even clinch the Premiership title and a lucrative run in the European Champions League. But the signing will plunge Newcastle into the red this year, making the club less attractive to potential investors.

And Kevin Keegan, who has spent pounds 60m during his tenure at St James' Park, needs no reminding that Manchester United won the Double last year after spending a mere pounds 400,000 during the season - the lowest of any Premier League club.