COULD Boro be lined up as a target for a big money foreign takeover? Liverpool have joined the fast swelling ranks of clubs who have made a Faustian pact and sold their soul to remote corporate capital in order to live the dream. Is a bid for Boro a possibility?
Don’t be daft. Boro don’t tick all the boxes. Yes, the club is an established member of a club soon to be engorged by an influx of television cash and is riding high after a profile boosting fairytale run to the UEFA Cup final but in so many other ways it doesn’t measure up – and I for one am glad.
First let’s get one thing straight: foreign investment is not an altrustic act based on the passion we feel as fans. A swath of gridiron and ice-hockey magnates have not swooned over the asthetic properties of the beautiful game. Cash rich Russian oiligarchs have not been captivated by the emotional impact of the Shed End and Fratton Park. The arrival of global big-hitters is a series of calculated business moves by shrewd investors who see a quick return in maximising profits in a sector of the leisure/entertainment industry that has historically been badly run in business terms.
The new football magnates aim to change that. They want to increase profitability and maximise revenue streams – that is, one way or another get more money out of fans and out of the anciliary operations and the assets attached to their new purchase. Not neccessarily through gate money as even the most rapacious owner must know that ticket prices have reached a ceiling and any attempts to push them higher would be counter-productive, nor even through the increased television income from the new deal bonanza which sadly will just about cover the wage bill for most clubs. But there are other lucrative areas that make clubs attractive – and thankfully Boro are pug ugly where it counts.
Many of the clubs who have been snapped up are sited slap bang on prime real estate. The Chelsea Village complex that Roman Abramovich bought for ÃÂ£17m is worth ten times more and can only appreciate as capital land values soar. West Ham’s Upton Park is two miles from a the 2012 Olympic Village and the area is about to be transformed with new leisure and residential developments plus transport infrastructure that will send land values rocketing – and they have already opened talks on a move to the centre-piece new stadium that will allow the sale of their old ground for a hefty profit. And even Liverpool could be quids in as they move to a new site in Stanley park just as the area around Anfield gets a massive cash injection through the government ‘Pathfinder’ scheme, similar to the Gresham rebranding, which will boost the value of the land they are vacating.
Boro have little to offer in that respect. Even if the Middlehaven project realises the dream of a new leisure quarter, digital village and plush residential areas and forms the beating heart of a new City of Teesside Boro do not own the land on which the stadium sits. It is leased at a peppercorn rent from the quango which controls the residue of the TDC. The jewel in Steve Gibson’s crown could turn out to be Hurworth, which has planning permission for a top notch golf course and hotel which has incredible potentail but that nestles within the broader Bulkhaul empire rather than the football club portfolio.
The clubs that have been taken over – and Manchester City and Newcastle which are both targets – also have a far greater potential in future broadcast terms. The influx of businessmen schooled in the US market and the need to make a quick return on ‘leveraged’ buyouts based on loans secured against the new purchase will swing the momentum within the Premiership towards the notion of clubs selling their own individual TV deals. It has long been resisted here so far because of a lingering belief in the concept of ‘a league’ and the idea of collective strength but foreign businessmen with no feeling for tradition or history and a compelling need to maximise revenue streams may see things differently.
Manchester United put bums on seats across the planet. They are a global brand with their own
TV operation that sells via pay-to-view satellite channels to acolytes from Brisbane to Bombay and Bangkok to Belfast so they already have the market in place. Chelsea are not far behind. Liverpool and Arsenal will follow while other big brands like Spurs, Newcastle and Villa will give chase, albeit from a far lower base and in a global market already carved up.
Boro can’t hope to do that. In terms of international profile we are well down the rankings. The failure of Boro TV – the first club specific channel generating editorial content and at times a half-decent product, albeit one without broadcast rights for games – shows the limitations of the market. Even in the club’s heartland, with a head start and no opposition it wasn’t viable so battling with the big boys for subscriptions out in Asia is a non-starter, even with the Lion King.
And lastly there is the question of merchandising. Man United have shops and RedCafes all across the world exploiting the need for glory-hunting fat lads everywhere to slip into a Ronaldo replica top while no news footage from a war-torn dysfunctional nation or scene of natural disaster is complete without some cheeky urchin in the background wearing their shirt.
The big two – that’s Nike and Adidas not United and Chelsea – have a global presence shifting shedloads of shirts from the G-14 superbrands like United, Chelsea, both Milans, Juve, Real, and Barca. Look a bit further along the rack in the tourist shops and you might find Bayern, Roma, Ajax, even Newcastle. But there will be no demand for Boro shirts. And no mechanism to deliver them. The exclusive deal with Errea recognises that and it would take a seismic shift in status to change that reality.
The only other concievable target for asset-strippers raiding a club is to quickly cash in on the players but given the age of the experienced core at Boro and the time it will take to see the highly-rated kids to profitable maturity the only real prizes are Stewy Downing and Yakubu. No-one is going to come in and buy the club for ÃÂ£100m just to sell that pair.
One other factor is the corporate structure. Those clubs that followed the floatation route in the nineties are the most vulnerable. Having sold shares and voting rights to faceless speculators they are open to aggressive takeovers and subject to the normal money-making machionery of the Stock Exchange. Most have ended up with substantial segments of the sharebase held by investors rather than fans and they are more likely to succumb to the lure of the quick profit than a dyed in the wool supporter. At Boro have one of those in charge – and he owns all the shares. There are no divisions to exploit, no minority holdings to buy, no two for one rights issues to open doors to new money. It is all down to Gibbo and he shows no sign of cutting and running. Besides, the club is an integral part of the far bigger Bulkhaul corporate structure of Gibson O’Neill and has distinct tax and financial advantages within that set-up that will take some unravelling and outweigh the prospect of a quick buck from a sale.
A small town in Europe structure is a strong brand identity for us as a passionate fan-base who know that really we are not a big club. They same factors will scare off the venture vultures circling the game. No one will want us, we don’t care. Boro are not for sale.