The credit crisis spreads to the EPL: Hull City an exception

The most overt sign is the vanishing shirt sponsorship.
However the more troubling effect of the credit crisis is that it is wreaking havoc with the nuts and bolts of running a club. The club that appears to be most in the dock is Portsmouth where owner Arkady Gaydamak is facing mounting losses to the tune of $140 million. Rising interest rates coupled with intense scrutiny of credit worthiness by chary banking institutions hanging onto a shrinking pool of cash have all but scuttled Liverpool’s stadium plans. Even the Glazer’s highly leveraged buy out of Man Utd has left that club deep in debt (approx $1.1 billion) and susceptible to vanishing credit and high bank rates. The EPL has not helped with record setting transfer fees and the highest wages paid to players which whittle down revenues to nothingness.
The warning came from Peter Duffen of Hull City who could speak with authority as chairman of one of the very few EPL clubs that enjoy debt free status.
“We’re not as rich as Croesus as some of our competitors are, but in some ways we’re maybe one of the wealthiest clubs as we don’t have any debt,” he said.
Hull’s climb up from administration began when Adam Pearson took over the club and paid of the debt and wages of the players. Pearson increased turnover from $3.5 million to $23 million, making a profit in all four seasons. During his tenure Hull moved to the state of the art KC Stadium financed with funds generated from the Kingston upon Hull City Council’s holdings in Kingston Communications, their own telecommunications company.
Under manager Peter Taylor, the club began its ascent to the Championships, after 100 years in the FL. On May 26 this year Dean Windass stunning strike against Bristol City earned them a Premiership spot, their first appearance in top flight competition in their 104 years. The present squad includes Boaz Myhill, Andy Dawson, Ian Ashbee, and Ryan France who have taken the club up through four divisions. Pearson sold the club for $21 million in March 2007 before moving to Derby.

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