Level-headed Analysis of the Week

Former West Ham assistant manager Zeljko Petrovic has quickly moved to shed some light on why he parted company with the club yesterday. In the Sun this morning he is quoted saying:

“The Premier League is a crap league, it is nothing. In truth the level is shocking. Every team has just three good players. If you take those players out of the teams then there are only players left who would not be playing in the bottom team in Holland.”

 

Interesting analysis coming from the bottom team in the PL. Sort of makes you wonder why West Ham didn’t bring in a number of average players from the Dutch League. Should have been enough to lift them to mid-table security, at the very least.

 

Negotiations have started

Yesterday all three of my favourite newspapers (Guardian, Telegraph and The Times) were contacted by “a source close to the Glazers” and told that the family have rejected numerous offers for the club. One of those offers amounted to £1.5 billion from a Middle Eastern bidder. The source also insisted that the family is not interested in selling “at any price”.

This is of course rubbish. In the world of business all assets are for sale at a price. The only exceptions are cases where there is a strong emotional bond between owners and asset. I don’t believe for a minute that such a bond exists between the Glazers and Manchester United. If anything, the coordinated leak proves that the Glazers are indeed prepared to sell and have started public negotiations by indicating that they will want a lot more that £1.5 billion.

The rejection of a seemingly generous offer of £1.5 billion has been interpreted as stubborness. I think it’s got more to do with business logic. The family seem convinced, rightly in my view, that the club’s income could soar in the next decade by developments such as individual TV-deals for the big clubs, a European Super League, new broadband-based ways of selling the “product” etc.

My estimate (well, “guess” is probably a more appropriate word tbh) is that it will take a bid in excess of £2 billion to convince the Glazers to sell. I don’t think the Red Knights are prepared to pay that much. But someone in the Middle East or China might be. I look upon today’s stories in the Guardian, the Telegraph and The Times as the Glazers’ opening gambit to those potential buyers.

Glazers likely to push for European league

At the press conference ahead of Arsenal’s CL-qualifier against Celtic Arsene Wenger predicted that a European league will be formed within ten years. I believe he’s probably right, and that the United board would be happy to see such a development.

The main reason is that the commercial possibilities are too tempting to resist, as a European league is likely to significantly increase the revenues of the leading clubs. These clubs today make quite a lot of money from the Champions League (about £40m to the winners), but this would be dwarfed by the potential income, particularly media rights, from a European league. The most likely participants from England are the big four; United, Liverpool, Chelsea and Arsenal. Maybe City could spend themselves into this group.

Officially United are satisfied with the present situation. This is a wise stance in order not to create unnecessary conflicts with UEFA and the Premier League. But in reality the Glazers are most likely working behind the scenes to create such a league sooner rather than later. Again the simple reason is financial. All clubs would like to make more money, but the debt situation puts United under more pressure than most to increase revenues. And a European league would fit perfectly into the “development of club media rights” that is one of the Glazers key strategies.

Pre-season tour full of Eastern promise

I’ve watched three of the games on the Asia tour (Korea, China and the second in Malaysia). I found the opposition reasonably strong in Korea and Malysia, but poor in China, which was also reflected in the scorelines. After just a few pre-season friendlies it’s of course impossible to make any well-founded predictions for the new season.  But this will certainly not stop me from jumping to a number of conclusions.

Michael Owen looks a brilliant signing. Not only because of his four goals in four games, but even more for the movement he brings to the attack and the way he immediatly seemed to click with his team-mates. But for some strange reason he was rarely, if ever, on the pitch at the same time as Rooney.

I suppose most of you were drooling over Berbatov‘s masterclass against Hangzhou, where he had a hand in all six of the goals scored while he was on the pitch. Yeah, yeah, I know the opposition were second-rate, but this was still a glimpse of the true Berbatov combining efficiency with delightful entertainment. When he’s at the top of his game there’s no other player in the world I’d rather watch. Let’s hope he can show this in the PL.

Kiko Macheda wasn’t as impressive in the build-up moves as I remember him from last season, but he took his goals with calm confidence. Very promising.

I’ve read a number of positive reports about the performances of Tosic and Nani, but unfortunately I don’t agree with them. I didn’t find them particularly impressive in Malaysia or Korea, and they “shined” in China only because they were given acres of space. Both of them will struggle against top-class opposition.

And finally, the two players that I predict will have perhaps the most positive impact this season, Welbeck and Valencia, didn’t even travel to Asia. Plenty to look forward to.

A mixed bag of summer shopping

According to Sir Alex Ferguson there will be no more signings this summer, so it’s time to evaluate the four new arrivals. (Even though I wouldn’t trust Sir Alex on this issue, it might just be his way of telling Gremio that they will have to lower their asking price for Douglas Costa.) So anyway:

Antonio Valencia is a great signing. He was very impressive for Wigan last season and is just the kind of player we need. He’s got pace, skill and knows how to get past a full-back. Should provide an excellent supply of crosses for Rooney, Berbatov, Owen et al, something that was often lacking last season. I predict that he will force his way into the first eleven already in his first season.

The signing of Michael Owen is supposed to be a bit of a gamble. In fact it’s nothing of the kind. With no transfer fee and a low basic salary it seems a very shrewd piece of business by Ferguson. I admit that I thought he looked past it at Newcastle, but this season he will be in a team that creates lots of chances for him. And Owen is very good at converting goal-scoring opportunities. Judging from the game against Malysia the day before yesterday he also brings a lot of movement to the attack. My main concern is that he’s been injury prone in recent seasons.

The capture of Gabriel Obertan, on the other hand, sets off all kinds of alarm bells. I can’t recall ever hearing the selling club’s chairman (Triaud) and coach (Blanc) express such a combination of surprise and relief. On the record! They were simply amazed that they were able to sell him to Manchester United. Blanc even said that Obertan needed to “overcome mental challenges”, which seems to indicate problems with discipline and application. Looks great on youtube, though. And please remember that Cantona was considered impossible to handle before he arrived at Old Trafford.

Mame Biram Diouf is unknown to me but he’s top scorer in the Norwegian league. Let’s hope he’ll be as successful as our previous signing from Molde. Edit: Could any of our Norwegian readers provide some input?

Even though I have high hopes for the new signings it must be said that the arrivals of Valencia, Owen, Obertan and Diouf don’t fully compensate for the departures of Ronaldo and Tevez. We have a weaker squad this season.

Premier League clubs face difficult transfer window

The transfer window doesn’t officially open until Wednesday but of course a lot of activity is already underway. The early signs are that the top Premier League clubs are finding it difficult to lure stars from Italy, Spain and Germany. United (Ronaldo, Tevez), Arsenal (Adebayor) and Liverpool (Mascherano, Alonso) are all in danger of losing, or have already lost, star players and are apparently finding it difficult to replace them. While Chelsea are reported to have made a number of unsuccessful recruitment attempts (Pato, Villa). The only exception is City, whose bottomless pockets enable them not only to pay high transfer fees but also offer ridiculous pay-packets such as the reported £200,000 per week after tax to Samuel Eto’o.

The reason for these difficulties is not that the PL is less attractive from a sporting perspective. Remember three out of four semi-finalists in the CL were English. Instead the problem is that the PL is financially less competitive than a year ago.

This is partly because Real Madrid have gone bananas, but also and more fundamentally because of the fall of the pound. Even though the pound has strengthened against the euro in recent months, it is still 11 percent weaker than it was a year ago. This makes it more expensive for British clubs to buy players from euro-countries, and also to pay their wages. Furthermore, the tax rate on high earners (anyone earning more than £150,000 a year) was raised in the latest government budget, meaning that top players (or indeed any first team player) earn more after tax in Spain or Italy compared to England.

This might very well be the summer when the tide turns and more top players move away from rather than towards England. Let’s hope I’m wrong.

The Valencia enigma

Regular readers of Between the Lines will be well aware that I’m a great fan of Antonio Valencia. I certainly hope that he will be one of our summer signings.

There are, however, some puzzling aspects to this proposed deal, partly brought to my attention by some interesting comments by James Ryddel at A Kick in the Grass. If Valencia is such an excellent player (as I think he is), why aren’t more clubs queing up to sign him? The Wigan chairman is doing his best to give the impression that United is not the only club chasing their star player, but it appears that the only other club involved is Real Madrid. The logical explanation for this lack of interest is that many clubs feel that Valencia is a good player, but overpriced.

Secondly: Does it really make sense for Real to be interested at all? In the last few weeks they’ve embarked on an, even by their standards, extreme galacticos strategy. Ronaldo and Kaka are in the bag and Ribery and Benzema possibly on their way. Does Valencia fit into that kind of strategy?

So, maybe United don’t face much competition when it comes to signing Valencia. If that’s the case it should be possible to push the fee down a bit. Even so, my advice to Sir Alex remains; sign Valencia ffs!

The unofficial transfer window shopping list

 United are about to receive £80m for Ronaldo and are therefore linked with just about every top class player in Europe and their dogs. Some of the suggested signings are very tempting but totally unrealistic (e.g. Essien and Torres) while in other cases the fees quoted are very fanciful (Ribery).

The Between The Lines shopping list stays away from the most expensive options and contains just three names:

Micah Richards. Probably the most talented young defender/midfielder in England. Hasn’t played to his potential during the last two seasons but it would be very interesting to see him develop under Ferguson. Could play in central defence or at right-back, but I see him as a future holding midfielder, “the next Patrick Vieira”. Tops my shopping list if indeed City, as rumoured, are stupid enough to sell him.

Robin van Persie. Reports claim that he’s unhappy with the level of ambition at Arsenal. Very skilful and mobile and would work wonderfully with Rooney or Berbatov or both. A bit injury-prone but worth a gamble.

Antonio Valenicia. Impressed me a lot as man-of-the-match against United in January. A fast and direct winger/midfielder who eschewes fancy footwork but can make it look very easy to get past a full-back. Some think he’s overpriced at £18m. I don’t agree.

The Tevez-Glazer Connection

It seems likely that Carlos Tevez will leave United at the end of the season. I believe that this to a large extent is a sign that the Glazer family is tightening the purse strings.

There are a number of good reasons why Tevez should stay. He’s a class player who has greatly contributed to our success in his two seasons at United. He’s also worshipped by the fans for his attitude on the pitch. And the fee under consideration is believed to be “just” £22m.

But the combination of a huge and rising debt and a global recession probably makes it very tempting for the board to increase profits by limiting spending on transfers. This explains why David Gill is apparently haggling with Kia Joorabchian over the fee, even though it was agreed on in the deal made in 2007.

On the other hand one wonders whether any real negotiations are taking place. It doesn’t make much sense for Joorabchian to consider lowering the price to United if he believes he could sell Tevez for £22m or more to another club. Which he probably does and could. Indeed, if Real, Liverpool and City are lining up to sign Tevez it would be in Joorabchians interest NOT to close a deal with United. This is also exactly the reason why Joorabchian might want to spread rumours about lots of other clubs being interested, or encourage Tevez to tell the media that he’s “unhappy” at the way he’s treated. Sometimes it’s difficult to try to read between the lines.

How to solve a debt crisis in four easy(?) steps

As I’ve pointed out in a previous post, the huge and rising debt they took on to finance the takeover mean that the Glazers need United to continue to generate a strong cash flow, while the total value of the club must also increase significantly. To achieve this they’ve designed a strategy consisting of four “key elements”:

1. Maintaining playing success
2. Treating fans as customers
3. Leveraging the global brand
4. Developing club media rights

Let’s have a closer look at each of these four points, the chances of success and the risks involved.

1. United have now enjoyed more or less continous sporting success for the last 16 or so years. To simplify it, the basis of this success has been the leadership of Sir Alex Ferguson in combination with a willingness from the board to provide money to enable him to sign and retain the best players. On both these counts the coming few years involve big risks.

To replace Ferguson is the biggest decision facing the present board. The best they can hope for is that results don’t deteriorate under the new manager.  In reality it’s likely that the successor will not be able to match Freguson’s achievements (who could?) regardless of whether the board choose to play safe but short-term (Hiddink or Capello), go for a younger version of Fergie (Moyes) or, as I hope, pick the controversial but very humble Mourinho.

Until recently I’ve not been worried as to the board’s willingness to continue to finance big-money signings, such as Rooney, Ferdinand and Berbatov. It simply seemed good business sense for the Glazers to continue this policy. But then I read an article about their American football team the Tampa Bay Buccaneers where they have released a number of key players and been outbid for the signatures of several new ones. The Buccaneers now have more of the salary cap unspent than any other club in the league. A recipe for sporting success? The Tampa Bay fans are unimpressed. In 2007 there was a 145 000(!) waiting list for season tickets, now the list has disappeared and anyone who wants a season ticket can buy one.

2. Treating fans as customers is probably a euphemism for trying to squeeze as much money out of us as possible. This makes sense from a short-term business perspective.  Demand for tickets at Old Trafford is much higher than supply, meaning that ticket prices could be raised (as indeed they have been for next season) without attendances dropping. Longer-term I’m not so sure. You tend to get an awful lot more loyalty from “fans” than from “customers”.

3. The United brand is very strong globally, and much of the potential to make money from this is probably as yet untapped.  But four years after the takeover I don’t really see any signs that the club is progressing along this route any faster than under the previous owners. This could be just ignorance on my part. Maybe these activities are much more visible in China and elsewhere.

4. To increase revenue from media rights could happen in two ways. Either by an increase in total demand for English and/or European football, or by United taking a larger part of total revenues. After many years of strong growth in interest from television networks, I find it a bit hard to expect continued strong growth.

The Glazers are probably mainly looking to points 3 and 4 to generate significant increases in revenue. But they hadn’t reckoned with the present severe global recession that will, at the very least, slow down any progress. I believe that Malcolm Glazer and his sons are quite worried at the moment. It remains to be seen in what way this might affect the area of most importance to the “customers”; the playing success. A first indication might be found in United’s activity, or lack of, in the transfer market this summer.