It is the loss/fluctuating revenue that’s the issue, in my opinion
From an article I read but have subsequently lost: The “value” of any company is a multiple of the annual revenue. If a company - e.g. Apple has a stable/increasing revenue its value is about 20x revenue but if your revenue fluctuates e.g. NCFC the “value” is only 5x revenue.
This is about revenue not success. Being there is more important than winning.
The “big four” clubs used to have fairly stable revenue but Chelsea (who without Abramovich are not a big club and to their credit their fans know this) and Man City joined the club and four (CL spaces) into six doesn’t go. You now have Leicester who are more successful than Spurs and Arsenal and other odd interlopers taking Europa League places away.
This mixing means that the revenue which the loans that the Americans have financed their takeovers on is less guaranteed and the multiples fall from 20x to around 5x causing the “value” to crash and the bankers get nervous.
Add in a pandemic and the financiers have probably gone to the owners and say we will lend you X million Dollars if you can get us stable revenue which increases your value within three years.
This can only be achieved with a closed shop - guaranteed income from the global TV audience and a simplified model that the American public can buy into (including their own rules which will be the next step - e.g. drinks breaks, nine substitutes as brought in temporarily for the pandemic becoming permanent).
The American owners are gambling that by having this with “the best players in the world” they will be able to exploit the worldwide image of these clubs and crack the Markets where football is not a major sport (India, Australia, US etc). They are spoiling for a fight with FIFA to build a Franchise model which accepts clubs not by achievement but assets. Why bother clambering up the pyramid when you can buy in with say 800m investment?
Posted By: biffbro on April 20th 2021 at 11:53:30
Message Thread
- This year's Premier League table explains why the Big 6 want the ESL (Other Football) - Kar1, Apr 20, 09:54:50
- It is the loss/fluctuating revenue that’s the issue, in my opinion (Other Football) - biffbro, Apr 20, 11:53:30
- Juve could also miss out this season (n/m) (Other Football) - jamesward, Apr 20, 10:07:03
- How big are the Big Six anyway, or some of the others (Other Football) - Old Man, Apr 20, 09:58:59
- It's all about worldwide fanbase and marketability (Other Football) - mr carra, Apr 20, 10:13:27
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