Trust Me I’m A Doctor …………It’s Money For Nothing And The Chicks Are Free !

Trust Me I’m A Doctor …………It’s Money For Nothing And The Chicks Are Free !

Exuberance or just sheer stupidity on the part of the London Stock Exchange and that of the UK Takeover Panel. It could well be that they’ve not been made fully aware, as to the financial maneuvers of many of the prospective bidders for English Premiership League clubs ? And over the last five years there has been a swath of purchases made by prominent US businessman. Many of them viewed their purchases as a safe investment or just as a way of hiding taxable assets away from the prying eyes of the Internal Revenue Service (IRS).

Disgraced financier Bernie Madoff is seen here arriving at US Federal District Court in Manhattan. Madoff pled guilty and was duly sentenced to 150 years in prison for his Ponzi scheme which is said to have defrauded his clients to the tune of $50 billion ($50,000,000,000).

One hundred and fifty years seems too small a price to pay, considering the financial havoc reaped upon families and financial institutions across the globe. But then again, how is that the Securities & Exchange Commission (SEC) could be so unaware as to the extent of this massive financial fraud ? Especially when on numerous occasions it had been brought to their attention that something was indeed wrong with many of Madoff’s financial dealings in the markets. But it’s as I’ve always alluded to, when you have no one with any common sense or a comprehensive understanding of the financial market and its vagaries. Then the abuses and fraudulent acts will continue to be commissioned unabated !

Christopher Cox who at the time of the Madoff saga, as well as the Enron escapade , was the Chairman of the SEC.Cox seen here, addressing members of the Senate Banking Committee up on Capitol Hill,Washington D.C. picture appears courtesy of ap/photo/ Martin Pressman ……..

And it certainly hasn’t elicited the public’s trust when you continually hear the excuse behind the SEC’s mishandling of this all came down to the fact that they were under undue pressure just to look at small transactions to see if anything was awry. But what also is even more preposterous is the excuse that they were under staffed. We can spend billions sending rockets into space but we can’t hire several financial accountants and corporate tax attorneys to the benefit ot this one particular government agency to safeguard the public’s financial health and interests ? If that isn’t asinine, then pardon me for saying this,but the SEC is deserving of the ridicule and the attention that it received .

And while I’m for the free movement of capital and the creation of jobs in order to strengthen an economy. What I’m dead set against are the creation of tax shelters and financial maneuverings that take place in order to circumvent the sovereign laws of the land. Time and time again I here many out there complaining about the government raising their taxes. But I hear, not one complaint when the likes of Bernie Madoff, Allen Stanford, Bernie Ebbers or Andrew Fastow and Kenneth Lay. All have essentially wreaked just as much havoc, if not more on the lives of millions of people. All that bellyaching, as if the government are the only fu_king bunch of crooks out there ? When essentially,you’ve got major corporate boardrooms of Fortune 500 companies littered with ne’r do wells and fraudsters up and down the country doing more harm than any apparent good. And it would now appear that many of them are moving out of the boardrooms and unto the playing fields of nation and beyond.

The NFL, MLB, NHL, NBA , NASCAR, MLS and indeed the English Premiership League (EPL) in Britain, have fairly rigorous financial criteria that has to be met before a prospective buyer can purchase a team. Thereafter, once they’ve met that criteria and the board of governors is in agreement with the prospective sale of the team. Then the purchaser essentially becomes the new owner of a sports franchise. And it now becomes in some respects, nothing more than a petty bauble that they’ll show off to their like minded wealthy colleagues and social acquaintances.

In the United Kingdom (UK) , many of the soccer clubs in the Premiership are actually publicly listed companies. And the directors of those clubs have a fiduciary responsibility to their shareholders to safeguard and act in their best interests. Something that’s not always been done by several of the owners in recent memory. And in order for a team that’s publicly listed to be taken over. The prospective bidder for those shares of the team, has to be in compliance with the act of the Takeover Panel. Wherein,upon purchasing 30% of the shares of a club they have to make the panel and the LSE fully aware, as to their intentions.

I bring this particular topic to the foreground , in light of the fact that a number of teams across a widening array of sports now seem to have found themselves in a severe financial crisis. Much of it brought about by themselves and in some cases, it has merely come down to the fact that the world is in an economic downturn. Which will affect how one spends their discretionary disposable income. It has began to hit home for a number of team in all sectors of the sports world. The NBA and many of it franchises face a severe financial crisis. Albeit, that the league’s commissioner, David Stern would have you believe otherwise. And that the health of the game has never been better in terms of its brand and marketing. That may well be all well and good. But the bottom line for many of the franchises of the NBA isn’t as healthy as they once were. Declining revenues by away smaller attendances for game and less money being spent on concessions and memorabilia at their games. And you have something of a ‘perfect storm’ within your midst.

If you thought that the NBA was only the sport where this was happening, then think again. In the case of NASCAR, supposedly the most fan and media friendly sport in North America. Attendance is down across the board by over 8% and the viewership on a year to year basis, has declined in excess of 23 % over the last four years alone. The NBA has had to delve into the capital markets to the tune of $250 million in the last fiscal year in order to ensure the financial well being of several of their franchises. And the extent of the situation is becoming even more acute by the minute.

Uber-agent Scott Boras, seated left and perhaps his most high profiled major league client, Alex Rodriguez. Over the course of his career Boras negotiated contracts said to be worth in excess of $ 4.8 billion. And he was at the center of the most recent acquisitions made by the New York Yankees ,in that of Mark Teixiera and A. J. Burnett, two more of his clients. Of the ten highest paid players in the game , six of those are clients of Scott Boras. picture appears courtesy of ap/photo/Hugh MacIntosh ………

Bud Selig and Major League Baseball suffer from the misbelief that because the New York Yankees lifted this year’s World Series crown, then the game of baseball happens to be in a healthy state ? What Selig still fails to get , is that the teams in the mid to smaller markets have to scrimp and save every last red cent, merely to make ends meet. Much less survive the ordeal of having to play a 162 game regular season schedule. Hey Bud, So Zach Greinke wins the AL Cy Young Award ? What’s the bet, two years from now he’s gone from the Kansas City Royals ? If not sooner ? Simply put, because of your intransigence and that vulture, Scott Boras. The game of baseball is in a quagmire and in the true sense of the word until you and your hierarchy sits down with the players and resolve the issue concerning the escalating salaries. Then there’ll continue to be distrust amongst the two vested parties. Never mind the fact that the fans of the game can’t trust you or anyone within the MLBPA, to begin with. You keep on blowing smoke up some people’s ass and clearly you and Scott Boras are out of touch with the harsh economic realities of the present. But just you keep on going as you are and you’ll be in for a very rude awakening !

In the UK, where the pre-eminent sport played , is that of soccer. The clubs now are slowly waking up to stark a reality and that essentially applies clubs within the Premiership (EPL). Giants such as Liverpool, Arsenal, Manchester United, Chelsea and Tottenham Hotspur have suddenly began to realize that you can no longer buy way your way to success. Especially when your revenues are declining because of economic and inflationary fears. Teams are now having to be frugal with regard to their budgets.

Tom Hicks (right) and to his business partner George Gillett Jr , owners of the Premiership soccer club Liverpool FC. The co-owners are now said to be feeling the brunt of the anger from Liverpool's fans as they're said to be considering selling the team's best player , Fernando Torres. Much to the chagrin of the team's coach, Rafael Benitez. The coach has let it be known that should the team sell Torres. Then he too will quit the club immediately. Much of this problem has been created by the financial maneuvering of the owners as they've laden the club with an excessive amount of debt. picture appears courtesy of dailymail.co.uk/ Andrew Fogarty ..................

As I’d alluded to earlier a number of teams have seen their fortunes change for the better. While many others have not been as fortunate in that endeavor. Teams such as Arsenal, Chelsea , Manchester United and Liverpool to name but a few,have had a change in ownership over the past five years. They’ve either been bought outright , or used as an investment vehicle for their new owners. However, the financial maneuvers that led to a great many of those deal are now coming into question. And nowhere now is this more apparent now,than with what is transpiring in the hallways and boardrooms of both Liverpool and Manchester United.And the case of Liverpool it is now creating an impasse between the team’s coach, Rafael Benitez and the ownership group of Texas businessmen, George Gillett and Tom Hicks.

Fernando Torres and Liverpool coach Rafael Benitez (right) seen here at Anfield , home of Liverpool FC . picture appears courtesy dailymail.co.uk/ Ian Hodgson ..............

The relationship between coach and owner has become strained as there have been rumblings that the owners who are desperately in need of cash to meet financial obligations to their financiers (bankers) – are seeking to sell one team’s best players in,Fernando Torres. And this has come much to the dismay of Benitez as well as the loyal fans of the team. But what is also becoming more apparent is the financial stability and viability of the club. It has been laden with a great deal of debt and even though Gillett and Hicks bought the club for in excess $900 million. Much of that money was raised through leveraging the assets of the team with a minimal cash infusion by Gillett and Hicks. Payments on that debt has to be made on time and invariably the owners haven’t been forthcoming as to the balance sheet of the club and its present status.

There are no sobering thought processes here, as to the financial mismanagement of a sports franchise. But invariably,whenever there’s said to be a problem. The fans are always the last to know and the first to find out, how much it may well invariably end up costing them.And it is no different,with the situation facing the Manchester United and that of its owners the Glazer family, headed by their patriarch, Malcolm Glazer. The family also owns the NFL franchise, Tampa Bay Buccaneers. Though the legacy of success with the soccer club hasn’t abated. For the NFL franchise , success has been few and far between. At present they may well be the worse ran and possibly the worst team in the NFL. Their futility alone this year, has many reminiscing about the early years of the franchise when they were woefully inept. And mere mention of the Buccaneers’ name more often than not was greeted with laughter.

Tampa Bay Buccaneers Head Coach Raheem Morris and General Manager Mark Dominik discuss the Buccaneers first round selection in the draft room at One Buccaneer Place on Saturday, April 25, 2009, in Tampa, Florida. Photo by Matt May/Tampa Bay Buccaneers

The Buccaneers had seen a great deal of upheaval in the offseason, with the firing of former coach, Jon Gruden and General Manager, Bruce Allen. Installed to replace them were first year coach, Raheem Morris and Mark Dominik, as the new general manager. And the inexperience has shown with the duo Dominik and Morris, by way of the blunders made with the team’s roster , lack of experience,both on and off the field . And the mere fact that there’s no team leadership forthcoming from anyone on the team. And that includes such seasoned veterans as Ronde Barber and Kellen Winslow.

Patriarch, Malcolm Glaze (center) and two of his sons Joel (right) and Brian , far left , seen here attending a Premiership league game at Old Trafford , Manchester United's home venue . picture appears courtesy of dailytelegraph.uk.co/ Anthony Hodgins .................

When the family first bought the Premiership club , it was felt it would be of benefit to both organizations. The universal appeal of United , who are seen as the soccer world’s answer to the New York Yankees. As the success of both franchises is unrivaled and unparalleled . However , what has gone down within the inner workings of both franchise borders on either stupidity, or the mere fact that this is all being done with some sort of greater objective in mind. Manchester United having been bought for $1.5 billion dollars, though much of it was in the form of a leveraged buyout (LBO). It is still saddled with a debt of over $1.15 billion dollars, bearing in mind that there’s accruing interest and the slow amortization of the debt. The family has seen fit to act with a great deal of secrecy that when questioned on their financial situation. The answers have been either fleeting or mono-syllabic.

Things may very well change as UEFA,the governing body of soccer throughout Europe seeks to enact a strong set of rules governing the operational and financial viability of a team. But this will only pertain to teams participating or who in the future seek to participate in any of its club competitions. This may well change the face of soccer not only domestically in the UK but also across the continent of Europe.

As contrived as it might appear to be , I do feel that a number of franchise owners merely treat their teams as a bauble to be paraded as a way of showing off their wealth and ostentatiousness. Never mind the fact that if the franchises are part of a community, then its citizens ought not to feel shutout when they tend to show some interest in the team beyond the field of play. It’s as if some of these sports franchise owners are no different from many of the corporate wheelers and dealers that’ve brought the country to its knees. Almost as if it is crawling on all fours, begging like a homeless vagrant for a morsel of food.

Trust me I’m a doctor and the owners are merely all about the money and the chicks are just free !

Dire Straits’ ‘Money For Nothing’ also featuring Sting. Lyrics by Mark Knopfler.