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Keeping up with the Abramovichs

Not to be outdone by the likes of Manchester Untied, Aston Villa and Liverpool, perennial underachievers Manchester City have become the latest Premier League club to be linked with a takeover by investors from the United States.

Just as a broken metatarsal seems to have become the most fashionable injury a player can aspire to, 'American investors' are now the suitors of choice for clubs hoping to keep up with the financial might of Chelsea.

While there is no confirmation on the exact identity of the 'third parties' City have admitted they are talking to, the BBC reported on Wednesday that businessman Philip Anschutz is in the frame.

Some readers will already be aware of Anschutz for he is a man with his fingers in myriad pies.

The Anschutz Entertainment Group owns several sporting venues from the Staples Center in Los Angeles, to the Millennium Dome in London and the MEN Arena in Manchester, not to mention stakes in a variety of sports teams including five MLS franchises, and is also involved with David Beckham's soccer academies in LA and London.

Perhaps most importantly Anschutz is extraordinarily rich, the 31st richest person in America in fact, according to the Forbes 400; a net worth in excess of $7billion makes Anschutz the sort of prospective benefactor of City fans' dreams.

The other name mentioned by the BBC is that of Michael Neville, of who little is known. His name might be familiar to Aston Villa fans because he was linked with the midlands club before Randy Lerner got his hands on Doug Ellis' pride and joy.

However, according to a Villa fan site Neville is in his early fifties, started his working life as an electrician and went on to make his millions through some shrewd investments and now has interests in a variety of publicly-listed companies.

Now, with the best will in the world, if one of these two gentlemen were sniffing around my club and I had a choice, based on such scant information I think I'd be leaning towards the American option.

Understandably City are playing there cards close to their chests. On Thursday an announcement to the Stock Market aimed at countering the mounting speculation confirmed 'preliminary discussions with third parties' were ongoing which 'may or may not lead to an offer' being made for the club.

Fair enough, no point spoiling potentially important discussions by revealing more information than necessary. Particularly as City's two main shareholders, Chairman John Wardle and David Makin, who own nearly 30% of the club, are insistent that any deal must be in the club's long-term interests.

Although by no means certain, it appears likely that any investor would first buyout Wardle and Makin before acquiring the stakes held by other groups, including Manchester-based businessman Mark Boler who holds an 18.75% stake, the UK pay-television giant BSkyB which has a 9.9% holding and former City chairman and goal-scoring legend Francis Lee who owns around 7% of the club.

Any deal to buyout Wardle and Makin is expected to cost around £30million with a total takeover of the club expected to cost around £70million, and with cash needed to invest in Stuart Pearce's playing squad any potential owner is going to need deep pockets, so what's the attraction?

Well, without putting too finer a point on it, the new three-year television and media rights deal which will generate £2.7billion over the three seasons starting in August.

The deal means that even a relegated side will earn a minimum of £26million, while the winners will receive £50million; and that's without factoring in income from sponsorship, merchandising, match-day revenues and pre-season tours, which, in the hands of a shrewd operator, could generate at least half as much again over a season.

Buying a football club represents a costly and risky investment but such is the potential payout that if you're a billionaire and have the wherewithal to take a punt you might actually make money.

It is left to football fans to hope that the integrity of their cherished clubs remain intact as they become the playthings of the mega-rich.

If there are any Arsenal fans still questioning the virtue of moving from Highbury to their new home at Ashburton Grove then the release of the club's latest financial figures will surely have put their minds at rest.

In the first four months of the season, the first four months in the 60,000-seat Emirates Stadium, match-day revenues and gate receipts more than doubled to £38million.

While Highbury was rich in heritage, with just 38,000 seats the club was unable to match the income clubs like Manchester United can generate with over 70,000 fans attending every home game.

The problem is that moving stadium cost the Gunners quite a lot. The club took out £260million in bank loans to fund the development, the terms of which have just been extended to 25 years, thereby incurring a one-off charge of over £20million; although this will end up saving the club about £10million a year in repayments.

Perhaps this goes a little way to explaining why a Minced Beef & Onion Pie at the Emirates will set you back £4 a go.

This week Chelsea announced pre-tax losses of £80.2million, the third-largest in English football's history.

For most normal clubs this would be tantamount to a total disaster but for Chelsea it is actually something of an achievement because it represents a 42% reduction in losses, equal to £60million over 12 months, which is pretty good going.

Taking all his spending into account this means that since Russian oligarch Roman Abramovich took control of the club in 2003 he has parted company with around £500million as he cleared the club's debts and acquired the services of some of the biggest-name players in the game.

Chelsea's off-field objective is to breakeven by 2010 and therefore ensure that it is not solely reliant on the extraordinary wealth of Abramovich.

The club have made an encouraging start, but losses of £80million in just one year remains an enormous sum.

  • Any thoughts? Then you can email Phil Holland.