Leveraged Buyouts, Salary Caps and the Premier League


An interesting comment on the Glazers and Hicks-Gillette at the Guardian:

Article

Comment 1:

What I question in the article is the assertion that the Glazers and Hicks-Gillette don’t know what they’re doing.
Of course this is not the US but they’ve ran several sports franchises/clubs with little questioning of their stature.

Comment 2:

All of those several sports franchises were in leagues which were financially regulated, with salary caps etc. This leads to predictable cash flows, does not rock the financial boat, and a leveraged buyout should (or at least might) be viable.
The Premier League is not financially regulated, and thus the loans accrued for a leveraged buyout along with the mighty cash spend required year on year just to maintain status quo (and this keeps increasing every year, remember), makes it rather untenable.
While the Glazers and Hicks-Gillete are not stupid and have experience in running several sports franchises, the Premier League is an animal they have no experience in handling.

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s