Go East: How The Footballing West was Won
by Absolute Thai Football
After decades of condescending aid with strings from the UK, India described the latest carrot of £1 billion as “peanuts.” Economic powerhouses have shifted East and the West is caught off balance. In Thailand, satellite company Truevision’s three year EPL deal ends this year and league chairman Sir David Richards says four other companies are in the bidding mix. Richards estimates broadcast rights for the next three years will cost around Bt10 billion (£205 million,) about 30 per cent more than True paid in 2008. Whilst this means that the English rights owners will consider it a great business, this is peanuts to the Thai media. The West doesn’t understand how the deep pockets of the East are now subsidising the reckless debt hangover of the West.
Manchester United’s $1 billion flotation in Singapore was quietly kicked into the long grass. Officially due to “market volatility,” by choosing the Far East for the Initial Public Offering the club expected starry eyed Asians to lap up vastly overvalued shares like the overpriced beers in Manchester United Sports Bars. But Asians thrive when underestimated. Arch negotiators and pragmatists, they understand the West holds football’s Crown Jewels and they have to pay dearly for a glimpse, but they also know the owners are bankrupt, the clubs are diving headlong into financial meltdown, only propped up up benevolent billionaire benefactors and it is only a matter of time before the price comes down. As the J League One Hundred Year Development Plan shows, the West may have the watches, but the East have the time.
Glasgow Rangers’ potential tax bill of £100 million and their 10-point penalty may grab the headlines, but they are not the only club whose use of the complex tax avoidance device, Employee Benefit Trusts sailed them far too close to the financial wind. Up to eight current or former Premier League clubs are facing a similar investigation into their use of EBTs, which were considered an efficient (and legal) means of reducing tax until relatively recently. Under EBTs companies pay money into a trust that then loans the money to the employee for benefits, typically pensions or for the purchase of shares, on the understanding that the loan is never repaid. HMRC alleges that Rangers’ previous owners simply used EBTs to avoid paying millions of pounds in tax and National Insurance on the player payroll.
In the same week Portsmouth applied to enter administration and face a points penalty for the second time in two years, having been issued with a winding-up petition by HM Revenue and Customs over an unpaid tax bill of £1.6million. In February 2010, Portsmouth became the first Premier League club to enter administration and were deducted nine points.
These two well supported clubs with a proud history have, like so many others, overreached themselves. Rangers tried to match EPL clubs with high profile signings like Paul Gascoigne and Dick Advocaat who commanded unsustainable pay for a league where only two teams compete for league honours and any teams outside Glasgow need to feed on crumbs from the rich men’s table.
Saturday’s Leicester and Cardiff City Championship game pitted Thailand (King Power) against Malaysia and Thai script pitchside ads wrap themselves around Premier League games as fans consume 40,000 bottles of the promoted product on Old Trafford match days alone. In Saturday’s game Malaysia beat Thailand 2:1, but off the field Thailand is streets ahead. Malaysian company Mister Potato are the “global snack partner” of Manchester United, but their RM 10 million (£2 million) annual investment is small potatoes compared to the profile enjoyed by Thai businesses. Whilst Malaysia have a Premier League club in struggling QPR thanks to Air Asia and Genting Casinos shirt sponsorship of Aston Villa, Thailand’s profile and, more importantly, influence is much stronger. Big Cola are partners of Everton, Stoke City, West Bromwich and Wigan whilst Chang have been Everton’s main sponsors since 2004 and recently signed a new £12 million agreement. Singha give an annual £2 million to the Red Devils and Chelsea. Things have come a long way since Thaksin “Sinatra” Shinawatra offered a Thai meal on the Eastlands centre circle as a raffle prize.
Chelsea’s Singha sponsored visit to Thailand last July used the jingle ” here to play, here to stay.” That trite phrase disguised the power shift. Chutinant (Nick) Bhirombhakdi, the Executive Vice President of Boonrawd Brewery, calls the shots. Instead of Chelsea bestowing their largess over a second world company, their visit was part of Nick’s strategy bringing over Manchester United next year and then both clubs in two years to play each other in the kingdom. His financial input is an investment, not a fans’ sacrifice. And he expects results, not platitudes. Rather than begging for a place in a team photo he expects a 5% increase in English Singha sales. Straightforward, clear and specific. Chelsea need to deliver.
Everton CEO Robert Elstone understood the developing seismic power shift and planted seeds for the future. As well as the razzmatazz of the Chang agreement, people on the ground in the kingdom train, scout and assess mutually beneficial practical relationships rather than photo opportunities and a fading club pennant. People like Ray Hall know what to look for in Thailand and their assets are not shirt sales and fan club members, but academy players to move both Thailand and Everton’s plans forward.
For decades English Premier League teams would fly East to collect their appearance money, play a half hearted friendly before bolting back to their business class comfort zone. Players could get away with boorish behaviour ( Mister Barton and cigars in a team mate’s eye, for example) as the Gods of Football. But things they are achanging. The AFC slogan needs to be read carefully by The West. It is no longer an empty and over ambitious slogan, but a clear statement of fact.