Does Baggies shirt saga signify Premiership slowdown?

By Simon Atkinson Business Reporter, BBC News

A shirt sponsorship deal - when secured - can be lucrative for clubs

As the Premier League season kicks off this weekend, many lower league clubs will be looking on at the action enviously.

Besides the opportunity to compete against many of the World's best players, the top flight brings many much-publicised financial benefits such as ticket and merchandise sales and the even more lucrative income from sponsors and broadcasters.

On Saturday West Bromwich Albion will make its return, bouncing back after a season in the Championship. The promotion is estimated to be worth �60m.

But the West Midlands club is going into the match against Arsenal in the unusual position of not having a shirt sponsor.

So could the failure of the Baggies to complete an agreement to replace its previous deal with T-Mobile be a signal that the attractiveness of the game to sponsors has begun to fade?

Or could it be just a small sign that English football clubs, like the rest of the economy, have been bitten by the credit crunch?

'Not immune'

That is the view of business advisory firm PKF, whose annual survey of football club finance directors showed that more Premier League teams expect to make a loss this season, with about a third saying they had faced problems getting finance.

"Outside the so-called Big Four (Manchester United, Chelsea, Liverpool and Arsenal) there are some difficulties facing the clubs financially," said Keith Morgan a partner at the firm.

The credit crunch is there and everybody has been affected by it. We don't get away just because we are a football club Peter Storrie, Portsmouth FC chief executive

And Philip Long, PKF's head of corporate recovery agrees.

"Even the Premiership is not immune," Mr Long said.

"Given the present economic climate, it is understandable that banks are more reluctant to lend, but this may also reflect a deep-seated unease about the financial viability of some Premiership clubs."

He added: "We have so far only seen the beginnings of the credit crunch ripple effect.

"It is proving to be a reality check for the big teams who are having to look at ways of tightening their belts, which should ensure the long term future of the game."

Transfers trimmed

The PKF survey also indicates that clubs feel they are being over-stretched by costs - especially player wages.

That is perhaps not surprising given that a report by Deloitte earlier this year put the total 2007/8 wage bill of the Premier League at well over �1bn.

Has the credit crunch eaten into Portsmouth's signings?

And the high wages combined with tougher market conditions meant the majority of clubs ensured at least some elements of player wages were performance related, PKF said.

"This will almost certainly help clubs gain control over their finances and focus resources on their best players," Mr Long added.

Portsmouth appear to be one club whose spending plans have been curtailed by the state of the economy.

The south coast side had been vocal about their intent to buy three big name players in the close season, but have secured only two - Peter Crouch and French defender Younes Kaboul.

"People have to be realistic. A few (more) players might arrive but not for big money," said chief executive Peter Storie.

"The credit crunch is there and everybody has been affected by it. We don't get away just because we are a football club.

"The banks are now tighter and not prepared to put debt on. You just cannot continue to increase debts."

There's not a good track record of clubs going up and staying up and sponsors are looking for a long term deal Nigel Currie, Brand Rapport

But while the clubs are looking at managing their spending more carefully, it appears that some firms who pump money into clubs are evaluating what constitutes a good investment.

'Slight embarrassment'

Nigel Currie of sports agency Brand Rapport added that clubs which were not expected to fare so well in the top flight, had to fight harder for their commercial interests.

He conceded that West Brom did not want to sell sponsorship for less than its worth - but also said that sponsors were "wary".

It's an unusual sit to be able to buy a traditional shirt after all these years without a garish logo on it John Homer, WBA Supporters' Association

"They don't want to attach themselves to a club which, with great respect to West Brom, may not be in the Premier League within 12 months time," he said.

"There's not a good track record of clubs going up and staying up and sponsors are looking for a long term deal, so this may be where it got a bit tricky for them."

While West Brom, are not commenting on their shirt sponsorship scenario, chairman of WBA supporters club John Homer admitted there was a "slight twinge of embarrassment".

But in an age where sponsorship is seen as integral part of the game, he added that the new shirts seemed to be selling pretty well.

"It's an unusual situation to be able to buy a traditional shirt after all these years without a garish logo on it," he said.

"A lot of people really quite like it."

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