For sale: Football clubs!

Keith Harris is the intermediary between football clubs and the billionaires who want to buy one. A tough job in this crisis era…

What exactly does Keith Harris say to a billionair entering his office, saying “I want to buy a football club”? Harris: “I pick a imaginairy pack of smokes from my pocket and tell them buying, owning and running a club is more dangerous to their health than smoking…”

But, the billionaires keep on knocking on his door… Harris was once a poor lad. But the Man United fan became the top dog at HSBC Investment Bank. He brokered five deals in the English Premier League.

He helped Abramovitsj buy Chelsea while he seconded Shinawatra in his bid for Man City. Now, he’s on the prowl for buyers for Newcastle and Everton.

Harris was speaker on an International Football Arena conference in Zurich to talk anonymous investors about the state of the union in football-ville.

Recently, Lord Triesman – chairman of the FA – that the total debt of English football is 4 billion euros. People were shocked.

Harris: “Those numbers are off. I think the debt is “only” 3 billion. But even that is exaggerated. 1.2 billion are loans from the owners to their own clubs.”

“I think the real debt is less than 2 billion. The revenue per year is 2.56 billion. Most of the debt is at clubs like Arsenal, Liverpool and Man United. I’m not fussed about the Gunners and the Red Devils. Man United has huge revenue streams and the loans to Arsenal have a 20 year running time.”

“I am a bit worried about Liverpool. They need to repay a loan in January between 260 and 450 million euros. They can extend the loan with six months, but the people behind the loans (Wachovia and Royal Bank of Scotland) are in trouble themselves, so they could well demand their cash back.”

Harris: “These days, banks need to be very courageous to loan money to clubs. At the same time, you need even more balls to allow clubs like Liverpool and Real Madrid to go under. I spoke to a Liverpool insider last week, and he said Liverpool is not in trouble and can repay. So…”

The credit crunch has put pressure on most rich institutions. Not just American investors but also Russians and Middle Eastern investors are hurt. Still Harris is negotiating with two parties for a stake in Newcastle. “It’s harder to find a buyer for Everton. They play second fiddle to Liverpool and Liverpool as a city is not a rich enclave.”

Why would an owner of a club, say Martin Edwards of Manchester United, want to sell his shares? “Well, it’s about wanting to enjoy your riches I guess. I’ll tell you a story. I sat next to Edwards in the 99/00 season. The first match against Sheffield Wednesday. Man United showed the three prizes they won the season before to the fans and then they went on to trash Sheffield 4-0 in a demonstration of raw power and football skills. And still, the fans abused Edwards en masse. Why would someone like Edwards want this?”

Do investors do this to show the world how rich they are, is it an ego trip? Or do they actually see it as a sound investment? “Normally, clubs can be self sustainable. After having paid for the shares, normally a club should return 7 to 10% per annum. Owners can later on sell their shares with a healthy profit again. It’s like investing in real estate…. Although… I shouldn’t use that comparison anymore, I guess….”