LONDON, July 15 (Reuters) - Soccer players and clubs in Europe need to wake up to the realities of the global credit crunch by reining in their wage and transfer fee expectations, the head of one of England's leading teams said on Tuesday.
As Premier League wages burst the £1billion mark for the first time, Peter Hill-Wood, chairman of Arsenal, said the days of easy money had come 'to a pretty sudden end.'
The warning came despite rising revenues from television
coverage of English and European soccer games and an influx of
overseas billionaires.
'There is an awful lot of talk about big transfers and major
demands of players but you will find throughout the UK and
Europe that money is not quite as easy to obtain as it used to
be,' Hill-Wood said in an interview published on the Arsenal
website.
He also warned against reading too much into reports about
player transfers that were sourced to players' agents.
The most recent three-year television rights deal for the
English Premier League runs until 2010 and brought in £1.7 billion, two-thirds more than the previous agreement.
The country's leading clubs also earn a lucrative slice of
earnings from television coverage of the midweek European
Champions League, leading to rampant wage inflation and fuelling
a record spending binge on player transfers.
According to separate reports by Deloitte & Touche, spending
by English clubs on players during last summer's transfer window
was two-thirds up on the previous year at more than £500 million while player wages among the top 20 clubs topped £1
billion for the first time in 2007/08.
Debt has also played a key role as clubs throughout
Europe, including Arsenal, have built state-of-the-art stadiums
and as overseas investors have taken over English clubs.
In some cases, real estate was used as collateral under
pre-credit crunch assumptions that have become less relevant as
borrowing costs rose and house prices tumbled.
U.S. billionaires Tom Hicks and George Gillett bought
Arsenal rivals Liverpool for more than £200 million,
mostly using debt.
The pair went through tough rounds of refinancing with their
lenders earlier this year, ultimately signing a one-year
extension of their deal. They have also had to mark down the
planned design of a new stadium because of budget constraints.
According to Deloitte & Touche, the collective net debt of
the Premier League's 20 clubs rose by 19 percent to £2.47 billion in the summer of last year.
