Yes, it’s the business end of the season. The Champions League Quarter and Semi Final draws have just been completed, and the football world is buzzing as there is Inter have an easy passage to the semi final (they face CSKA Moscow–no disrespect to the Russians but they’re facing JOSE MOURINHO), there’s a rematch of the 2006 final with Arsenal facing Barca, a rematch of the 1999 final with United v. Bayern Munich and an all-French draw with Lyon taking on Bordeaux. From a neutral standpoint, I’m very excited about the quarterfinals, but less so about the semis. Let’s break the permutations down:

Quarterfinals

So Inter beat CSKA. Do I really need to say more? I know the Russians won’t be shy and try to nick the tie, but there’s no way that they can match Inter, especially if Wesley Sneijder plays as he did against Chelsea.

Lyon and Bordeaux? Honestly, I don’t know enough about the two sides to make a fair valuation of the tie. I know that Laurent Blanc of Bordeaux is tipped to either take over from Domenech or Fergie in the near future, hell even for Mourinho (allegedly) if he didn’t get past Chelsea. There is certainly no underestimating his tactical nous, especially with Bordeaux once again leading Ligue Un. But Lyon are right in the thick of it domestically, as well. And they did knock out a Ronaldo-inspired Madrid. This is a toss up, and I guess given the current standings in the league, I’d have to go with Bordeaux. It’s a bit of a cop out, but  I have no other metrics to go by, other than the fact that when Lyon were on top for 6 years in the league they never progressed anywhere in Europe.

Arsenal and Barca. Ah, a purist’s delight. Two teams that play the game the right way and thrive on beautiful, attacking football. But let’s be honest, there’s only really one team expected to win this tie. While Wenger’s kids have progressed by leaps and bounds this season, they really are no match for a side with the best player in the world (yes, United fans, while Rooney has been phenomenal this season, he simply cannot create nor score the awe-inspiring goals that Messi scores on a regular basis). This is the precise game where Arsenal need what they’ve been lacking since Viera, even Flamini to a lesser extent, left: a destroyer. Someone like a Mascherano who will just sit in front of the back four and absolutely destroy any attack the opposition throws at them. To be honest, even if Arsenal had someone even approaching a world-class Claude Makelele type player, I don’t think it would be enough to stop Barca. Too many options, too many points of attack, not enough holes to exploit, nor the time to exploit them. Barca play the way Inter did against Chelsea–wave after wave of attack without mercy, just a nonstop threat trying to pick and pull the opposition’s defense apart. Oh, and if you somehow do get a string of possession and make it past our destroyer (Cambiasso for Inter, Sergi Busquets for Barca (very underrated in England because most people have never seen the kid play)), the defense is world class, so tough shit. Overall, I can’t see a way past. A 1-1 draw at the Emirates, followed by 3-0 to the defending champs at the Nou Camp. But at least this will let the boys focus on the title. Every neutral in the country is supporting them, and although I think there is slight injustice in a team who can’t beat the other big teams in the league winning the title, it is a season-long campaign.

I love the cockiness of United fans (read: I hope they crash out after the first leg). Take, from the BBC’s Live Text for the draw, for example:

Ricky in Fife via text: As a Man U fan I’m very happy with the draw. Would say it is a guarantee that we are going to be in the final.

and,

From joefish41 on 606: Get in! Bring on the Germans! Plus Inter, Barca and Arsenal are all on the other side of the tournament……this couldn’t have gone much better for Utd!

Ricky in Fife really tickles me pink. Look, I’m not going to deny that the draw worked out well for United, so I’d have to agree with joefish41. But Ricky in Fife epitomizes what most fans will be feeling, that they’re guaranteed a spot in the final. Me personally? Well, I’m usually a neutral, unless it comes to United and Chelsea. And honestly, all I can hope for is that Bayern avenge their historic loss from over a decade ago. I can only hope that Ribery and Robben simply tear them apart down the wings, and I really fancy the matchup. I can only hope that Klose gets his freakin’ act together and starts scoring for someone other than the national team.

Semi Final

Well, this is where I get distraught. Going by my predictions, I have Inter and Barca in a semi final, which really gets me down. These are two teams that I hoped I would see in the final, as Jose deserves another final, especially in the Bernabeau (where he is rumored to be heading after this season), and I would actually love to see Barca win the Champions League on their great rivals’ ground. Ah, it’s such a lovely thought that Florentino Perez could be eating crow only one season after launching Galacticos, pt. II. On paper, Barca seem simply unbreakable, but I don’t want to underestimate Jose. You just can’t count him out, no matter who the opposition is.

And then there’s the United/Bayern v. Lyon/Bordeaux. Even if United make it pass Bayern, which I think will be a much tougher task than knocking out AC Milan, I think they’ll really face a stiff challenge from Bordeaux. In a short period of time, Laurent Blanc has really shown himself to be one of the best tacticians in the game right now, right alongside Pep, Jose and Fergie. I don’t think it’s wise for people such as Ricky in Fife (or CharlieInABush) to underestimate these sides, as we’ve seen the European competition throw up surprises time and again. But, since I have no idea who will progress in the French tie, nor do I wish to conceive a reality in which United make it to the final, I’ll just have to hope for Bayern v. Insert French Team Name Here semi, onward and upward to a thrilling finale.

Spring is in the air here in DC, which means the best part of the football calendar is here. And in a World Cup year, life is even sweeter.

1. Ryan Giggs of Manchester United is the only player who have scored in all 18 seasons of the Premier League.

2. The 22 inaugural members of the new Premier League were Arsenal, Aston Villa, Blackburn Rovers, Chelsea, Coventry City, Crystal Palace, Everton, Ipswich Town, Leeds United, Liverpool, Manchester City, Manchester United, Middlesbrough, Norwich City, Nottingham Forest, Oldham Athletic, Queens Park Rangers, Sheffield United, Sheffield Wednesday, Southampton, Tottenham Hotspur, and Wimbledon.

3. The Premier League is operated as a corporation and is owned by the 20 member clubs. Each club is a shareholder, with one vote each on issues such as rule changes and contracts.

4. For the inaugural season of the Premier League, clubs were obliged to supply their own match balls, which were usually provided by the clubs’ kit manufacturers. For the 2008–09 season, the official ball of the Premier League was the Nike Total 90 Omni.

5. Seven clubs have been members of the Premier League for every season since its inception. This group is composed of Arsenal, Aston Villa, Chelsea, Everton, Liverpool, Manchester United, and Tottenham Hotspur.

Isn't she a beauty?

6. Five goals is the record individual scoring total for a player in a single Premier League game, and as of November 2009, only three players had achieved this feat, Andy Cole first, followed by Alan Shearer and then Jermaine Defoe.

7. Arsenal is thus far the only team to win the league without defeat. A special gold version trophy was specially made to commemorate the team 2004′s triumph.

8. “I would love it if we beat them. Love it!”, Kevin Keegan, 29 April 1996 was voted quotation of the decade during the 10 years celebration of the league.

9. Former Blackburn Rovers and Newcastle United striker Alan Shearer holds the record for most Premier League goals with 260. Andy Cole is next with 187.

10. No English manager has won the Premier League. Only four managers have won the league in its 18 years since inception: two Scots (Ferguson with 11 wins and Dalglish with 1 win), one French (Wenger, 3 wins), and one Portugese (Mourinho, 2 wins).

The root of all evil is, of course, money. It all started in 1992. In a stroke of genius, the Football League First Division, which up until this point had sit atop league system, decided to separate itself from the league system. The result was called the FA Premier League (now Barclay Premier League). The remain leagues divided itself into The Football League which includes The Championship, League One, and League Two.

The logic was simple. The Premier League comprises of all the top-tier football clubs in England (20 as of 2010), and as a newly formed single corporation (in which the clubs in the league are now shareholders) it can freely negotiate TV rights, sponsor, and license deals. The advantage, of course, is that it has no crappy teams in lower leagues to deleverage itself as in the case of The Football League. It is a la carte deal. Sponsors know what they are paying for. Popularity. History. Name Recognition. Guaranteed viewership. Cantona. Shearer. Beckham. The fans love it. And everybody is throwing money at it.

This fame and fortune brings with them a darker side. As the popularity of the league explodes, more money is poured into the league which attracts top talents from all over the world. However, this further widens the gap between the Premier League and the Football League below it. The reason teams fight tooth and nail to avoid relegation, and the reason why we have those sensational nailbiting 39th match of the season which makes football so great is because staying or relegating from the Premier League can potentially make or break a club’s finance. The financial gap is insurmountable. For teams like Portsmouth which has been yo-yoing in and out the Premier League, it becomes a catch-22. Once you get to the Premier League, you have to pay a hefty price to field a competitive team to avoid relegation at all cost. Team do it by – among other means – leverage itself. But if by bad fortune, you are relegated, you have unload the team of high priced players simply because they won’t want to play for you in a lower league, and you simply can’t afford to keep them. One probably would need a PhD in finance just to keep up with running a club.

The problem is further complicated with the introduction of international businessmen who were attracted to the popularity and the guaranteed riches with being associated with the Premier League. For some of these man, the club is a business or a part of their business empire. And they treat it as such. Granted, the Glazers took over MU, and they have won three league championships and a Champions League. Abramovich has transformed Chelsea into a perennial contender with one FA cup and two league championships triumphs. But those should be treated as exception not the norm.

The reality of this phenomenal is something like Portsmouth. Since August, the club have had four owners: Gaydamak, Sulaiman Al-Fahim, Ali Al-Faraj and Balram Chainrai, none of whom have been able to arrest their decline. Chief executive Peter Storrie, who on Friday announced his intention to resign, recently gave his explanation of what went wrong, saying the problems began when Gaydamak announced he wanted to sell the club in August 2009. Arkady Gaydamak, a Russian-Israeli businessman, was convicted by a French court last year of illegal arms deals, tax fraud, money laundering, embezzlement and other crimes. The pure side of football has been muddled by the stink of money and the shady side of business.

Money was the reason the league was started. Money was the reason the league attracts top talents and becomes wildly popular. Money was also the blood that sent the voracious sharks of business world come swarming.

Now money destroyed a 112-years-old institution.

Let’s hope money won’t destroy the league and football altogether.

(Side note: Of course, the day MU enters administration would probably be the day after Jesus comes back, so don’t hold your breath).

Sorry for the hiatus folks, things got a little too hot and heavy on the work-front. But now I find it’s necessary for a release. The workload hasn’t lightened, but it’s time again to Get Stuck In, for sanity’s sake. And what a way to come back.

Ancellotti strolls into his old ground, once again as an opposing manager of the Nerrazzuri. Awaiting him at the legendary ground that is the San Siro lies the current King of Italian football: Jose (insert other Portuguese surnames here) Mourinho. Heavy lies the crown for Jose, as rumors abound that if he doesn’t capture ol’ Elephant Ears this season, he’s out the door. All the better, I say, as it brings him one step closer to returning back to English shores.

It’s Inter Milan v. Chelsea. Jose v. Carlo. Drama at it’s finest. Oh, and if case you were wondering (I know you were you cheeky monkey), sofa punditry will be back and better than ever for tonight’s match. Be prepared. It’s sure to be the dog’s bollocks.

The only trophy Liverpool can realistically win is the Europa League, with Rafa Benitez’s side out of the Champions League and languishing in seventh in the Premier League.

I hope they have a severance package

Since arriving at Anfield in 2004, Benitez has won 1 UEFA Champions League (04-05), 1 FA cup (05-06), 1 UEFA Super Cup (05), and 1 Community Shield (06) – an enviable record for any football manager. However, the biggest criticism against Rafa has always been his failure to get Liverpool atop the Premier League - losing against the Old Giant at Old Trafford, the Professor at Emirates Stadium, and even the Chosen One when he was still at Stamford Bridge. It seems likely the  second coming of Shankley-Paisley-Dalglish golden age would have to wait for a while. Financial and leadership turmoil from the top certainly does not help -

Regardless of his job status, let’s have a moment and appreciate Rafa and what he has done RIGHT at Anfield the past five years:

1. He managed to keep Stevie G relatively happy at Anfield the past five years against temptations from the likes of AC Milan and Real Madrid. Continue to keep the talismanic captain happy would be paramount to any future success.

2. He brought, arguably, one of the best strikers in the world in El Nino to Anfield. The guy is nothing but money in reds. Keeping him at Anfield would be the biggest task await whoever in charge.

3. He brought in a talented support cast with a mix of young and veteran players like Kuyt, Babel, and most recently Maxi Rodriguez (free transfer, mind you). If the next manager can keep these players and exploit their talents, Liverpool will have a bright future.

4. For crying out loud, he won 4 titles in five years, have a winning pct of 55.7% at Liverpool. And who can forget he led Liverpool to one of  the greatest triumphs in football history – a 4-3 shoot-out win in the 04-05 UEFA Champions League final in Istanbul against AC Milan. One of the greatest comebacks of all time. In ALL sports.

So here’s looking at you, coach. May we always have Istanbul!

LONDON (AP)—Manchester United is planning a bond sale to reduce its massive debts after avoiding an annual loss only by selling Cristiano Ronaldo to Real Madrid for a world-record transfer fee.

United said Monday it hoped to raise 500 million pounds ($808 million) from the issue of the seven-year bonds, which could pay off a majority of the debt burden incurred by Malcolm Glazer’s 2005 takeover of English football’s most famous team.

The Premier League champion posted a pretax profit of 48.2 million pounds ($78 million) for the year ending June 30, 2009, compared to a loss of 21.4 million for the previous 12 months.

But interest payments on its borrowings would have left United with another loss had it not sold Ronaldo to Madrid for 80 million pounds.

The bond sale could significantly reduce the interest payments on its debt, the majority of which is in secured bank loans of 509.5 million pounds ($823.7 million). United released results Monday showing it paid 41.9 million pounds ($67.8 million) in interest on those bank loans alone.

U.K. interest rates have been set at 0.5 percent for the past year as Britain recovers from the global credit crisis, so the 7 or 8 percent annual return the bonds are expected to yield could attract significant interest from investors.

“What the Glazers are trying to do is to give the club a bit more financial security,” said Roy Kaitcer, client director for Brewin Dolphin stockbrokers in Manchester. “If you thought that Man United weren’t going to go bust, that interest rate compares favorably to what you could get from a bank.”

Analysts expect the bonds to be priced at the end of next week.

United said turnover increased by 9 percent to 278.5 million pounds ($449.6 million) in a season in which it won a record-equaling third straight Premier League title and again reached the Champions League final.

The club’s total debt includes a payment-in-kind loan which the Glazer family, who also own the NFL’s Tampa Bay Buccaneers, took out as part of debt restructuring a year after Glazer’s 790 million-pound takeover.

That loan is accruing interest of 14 percent.

The total debt of Red Football Joint Venture Ltd., the club’s trading name, was 699 million pounds at the end of June 2008, according to full accounts released last year. The company did not supply details on the total debt in Monday’s statement.

So boys and girls, what do you think? Do you trust the bonds backed by the full faith and credit of one of the most marketable brand in sports? I think short of the US Treasury, this is as safe a bond as you can get. MU brand is more than football. It’s evolved into a marketing juggernaut that just happens to have a football team. It is getting to a point where – short of getting relegated – the result on the field doesn’t impact the cash flow anymore. Besides, speaking from my own experience, Asians in Asia are fanatic about MU. And there are a lot of us…billions, in fact.

Now I am intrigued to see if individual investors can get into the action (highly doubtful, most likely this will be all scooped up by “institutional investors”). You know, $1000 7-years bonds with 7-8% interest sounds great to me, if I have some money to sock away. But more importantly, for those of us who hated the takeover from the Glazers, this would give you some satisfaction that as bondholders, the Glazers technically have to answer to you……umm…i love the smell of “power play” in the morning.

An overly concerned Liverpool fan Stephen Horner forwarded that piece from the Liverpool Echo the ill-advisedly public email addresses of Hicks Jr. and few other club executives to which the son of the Texan billionaire succinctly responded: 

“Idiot” 

Then, nine minutes later, he decided to “elaborate” a bit on his initial reply - this time with Liverpool’s financial and commercial directors Philip Nash and Ian Ayre copied in – which told Horner: 

“Blow me f*** face. Go to hell. I’m sick of you.” 

Here is the screenshots of the emails, courtesy of deadspin.com (how the hell that people get their hands on things like this is beyond me): 

Of course, hours later, when the effect of alcohol or whatever the hell he was under wore off, Hick Jr went on a PR clean-up duty with you-guess-it another email (so impersonal): 

“Stephen, I apologize for losing my temper and using bad language with you. It was a kneejerk reaction. Tommy.” 

This is not the first time that Hicks Jr has clashed with Liverpool supporters. He was at the centre of a heated row in the Sandon Pub, near Anfield, in February 2008 after the Reds had beaten Middlesbrough 3-2.   

Today, it was reported that Junior (holding the red ball in the picture) also decided to resign from the board which may lead to some significant ramifications for the club. Junior’s presence on the board helped preserved the balance between his father and feuding American co-owner George Gillett. Gillett’s son Foster is also on the board and, up until Monday, managing director Christian Purslow had been the lone ‘neutral’ board member.

My question is how do I get Fergie and the Glazers’ personal emails so I, too, can have a blow-me-f**k-face moment.

"Listen Glazer, just make them an offer they can't refuse!"

Periodically, GET STUCK IN draws back the curtain on the world of football and investigates the business side of the game. When pressing issues arise, or it’s near transfer window time, we look at the money different clubs can spend.

Let’s get the obvious stuff out of the way first: Manchester United are not even close to the side they were last year with Ronaldo in it. And what’s more, Fergie has been very reluctant to strengthen in January. As CharlieinaBush can attest to, Ferguson has rarely splashed the cash in January, preferring to stick to his guns and go with the same team for the second half of the year. But is it simply a matter of personal preference for Old Beetroot, or is pressure coming from the top for him to keep the purse strings tight?

Presenting a must read article from the BBC’s business editor Robert Peston. From the aforementioned comes this great nugget of information:

“The important numbers are these, as of 30 June 2008, the date of the last published accounts for Man Utd’s holding company, Red Football Joint Venture Ltd.

Red Football JV had £519m of secured bank loans, on which it paid £45.4m.

And it had £175.5m of so-called payment-in-kind notes, where the interest is rolled up into the principal rather than paid in cash. The interest rate on these is 14.25%.

So the total annual interest bill was just under £70m (including rolled-up interest).

That compares with a net cash inflow from operating activities (largely profit before interest and taxation) of £88m.

So in that year, if Man Utd did not want to increase its overall level of debt, it had less than £20m to spend on players and other investments.”

I highly recommend that you read Peston’s article in its entirety, as it does raise a lot of interesting and not previously known (to the author of this post, at least) facts about the club’s finances. Specifically, I can’t believe United is paying 14.25% on some of its debt. In a world where LIBOR is floating around 25-50bps, paying 14,000 bps above that is absolutely ridiculous. And what’s more is that with the interest is rolled up into the principal with this “Payment In Kind” (PIK) feature, the juice is most definitely running. They are basically paying 14.25% on an ever increasing amount. It’s like a negative amortization mortgage, where you pay less than the monthly amount each period and the remainder gets added back on to the principal amount until you default because you can’t afford the damn thing anymore. The hedge funds are collecting this money and laughing all the way to the bank, meanwhile the club’s debt burden gets larger and larger, despite record turnovers for English clubs (which is already the richest league in the world, with Manchester United as its crown jewel).

I think Peston does make an error though in his analysis. Specifically, he states that after net operating cash flows, United only had around £20m to spend on transfers and staff upgrades. I think that notion is flawed because, for the financial statements that I can find for other football clubs (Crystal Palace, scroll to page 2 and this Deloitte Report, scroll almost to the bottom to the “Financing the Clubs” section [I know it's an old report but I trust Deloitte's terminology]), operating cash flows is clearly defined separately from transfer activity. Specifically, operating cash flows are accounted for as money coming in from the day-to-day activity of the club, and transfer season only lasts for about 4 months out of the year. Therefore, Mr. Peston’s figures may not be properly accounting for the true financial state of the club and how much residual cash they have on hand. A disclaimer though as every company reports their statements differently, so I could very well be wrong on this point.

Also, United’s finances are in a better position now than the data that Peston analyzes indicates (not a critique of him since the most recently available data is for FY 2008, which ended mid-year 2009 for the club). Especially after the Ronaldo transaction and the lack of summer and probably winter activity, there will definitely be money in the coffers.

However, the level of debt at the club is definitely worrisome, and as Peston’s blog states, the club is probably going to issue more debt to pay off the old debt, and in this interest rate environment, it may not be a bad idea. Why not issue while your funding costs are low? Yes, it will absolutely increase the amount of debt in the capital structure, but if it can be used for paying off these PIKs traps, then more power to them. As long as they keep winning and keep putting people in the seats, and progress further in competitions like the FA Cup…oh wait.

PS- Pompey still can’t pay their players. Yes, it looks like we’re going broke soon. And yes, I’m still pissed.

Edit: Reading this post back to myself I realize how difficult such analysis is with fragmented bits of information from various news sources. I hope you’ll accept my best efforts as far as financial fact-finding is concerned.

Sometimes people forgot I have a master in Economics. Football is child-play compared to econometrics, bro.

Wenger, though, never lost faith in his young Gunners to deliver:

“There are many ways to be successful,” said the Arsenal manager, whose last trophy was the FA Cup in 2005, “I want to show that our way can be successful as well. In the modern game, there is a lack of patience and one response when you lose a game – people say to you ‘buy, buy, buy’.

I believe sometimes when you have players who are 21, 22, that they can only become better. When they are 33, they can only be worse at 34 and that is why we are in a position where we need to have the needed strengths to be patient because we have the quality.”

Buy high and sell low. That has always been Wenger’s modus operandi first at Highbury and now at Ashburton Grove (eh, Emirates Stadium). Thierry Henry? Patrick Vieira? So don’t question “the Professor” because he can kick your ass…economically.