Saturday, 30 January 2010

John Terry's scandal stories - a victory for tabloid bell-ends, not for free speech

Really, do we have to know all the details of John Terry's infidelities?  No, not really.  It's not like he threw a game or killed a neighbour and disposed of the body with acid is it?  He hasn't fiddled homeless Haitian eathquake victims out of powdered milk in order to buy a gold plated Rolls Royce. It's no big deal.  But here are the tabloids, supported by the "World's biggest bell-end" Max Clifford, claiming that the lifting of an injuction brought out by John Terry to keep the story out of the papers is in some way a victory of free speech over draconian privicy laws.

It is not. It is simply purient tittle-tattle.

There is no free speech justification for this, there is no public interest argument.  The tabloids exist on the back of the misadventures of people in the public eye, alternating with contrived, exaggerated or simply made up stories protraying the same people in a more sympathetic light.  Both of these types of stories are either supplied by, or fuelled by "the World's biggest bell-end" Max Clifford and his PR ilk.  Why do the tabloids keep regurgitating this rubbish?  Because they think that people enjoy reading about this sort of thing.  I would prefer they did some actual journalism from time to time, but they don't because that would cost money.  

Clifford has reported already signed up the lady involved with Terry, he said so on a radio interview on Five Live this morning that was two parts hypocritically damning of Terry and how he has brought it on himself, and one part smarmy in justification of his trade.  If you do not know his trade:  his trade is in the public humilation and misery of others and how to get make money out off it.  What an absolute arsehole.

The next time you hear about the papers moaning about how their sales are down, or how the internet is killing them because its free, consider this:  without the tabloids "the World's biggest bell-end" Max Clifford would not have any clients to buy his stories.  The world would be a finer place if Clifford was out of work

Whilst Terry's actions may be morally dubious, the reason the papers are going for him is for revenge for applying for a high court injunction.  They know that these injunctions are killing them, since thier trade is in the kind of idle tittle-tattle that these injunctions prevent them from publishing, so they are trying to teach Terry and any other public figures watching what will happen if you don't let them have their slice of salactiousness.  The outrage is driven and supplied entirely by the tabloids, not by public opinion.

Monday, 18 January 2010

Manchester United 0 - £1 Billion The Shysters

Manchester United are £700 million in debt, all of which was incurred when the Glazer family "bought" they club using leveraged finance, meaning they loaded the club up with the debt they had to raise to buy the club from the previous shareholders.  This has left the Glazer family debt free and owning the richest football club in the World.  They were then free to appoint themselves as directors, and pay themselves handsomely for sitting on board and occasionally attending matches on expenses.  They also reportedly charged the club £3 million for management consultation last year, on top of an estimated £28 million pounds spent on financial advisors, bankers and hedge fund managers who organised the deal. Theoretically the club will pay off it's debt in ten years time, at which point the Glazer family will have paid themselves somewhere in the region of £50 Million in management fees, and own a debt free asset worth approximately £1Billion, which is not bad for organising a few loans amongst your friends in the banking and hedge fund community and taking no personal risk yourself.

Of course it's not all good.  it appears that the club will now have to repay this debt (I know, who would have thought it?), and that as the Glazer family were borrowing money that they would not be personally liable for, it also turns out that the banks and hedge funds that funded the deal wanted rather higher interest rates than would normally have been available on a loan of this size, with reports that several hundred million pounds of the loan were lent at rates of 15%.  On £200 Million that is £30 Million a year, or in other words, all the money that manchester United earn from getting to the latter stages of the Champions League.

So now Manchester United are in trouble.  Ticket prices have raised every year since the Glazer familiy took control (11% last year alone), but that is not raising enough money.  They are trying to issues a bond and refinance the debt, the prospectus offers a number of money making schemes to ring more money out of the club: there are reports that the training ground (or even Old Trafford) could be sold and rented back, or the naming rights to the stadium could be sold.   They may need to sell more assets to finance the debt, and the after the training ground and Old Trafford the only assets they have left are the players.  If they start selling people like Rooney then the club is finished, and a Leeds United style plummet and bankruptcy beckons. Ronaldo was sold for £80 million, but Man. U. have no more Ronaldos to sell.

This type of takeover has been happening across all levels of business and commerce over the past ten years, and it's plain old fashioned shyster-ism, rampant speculation leaching of the hard work of the majority.  Each time it happens, it benefits only a tiny cabal of the super rich, but impacts on thousands of ordinary people who either work for the company in question, or have a pension fund with holdings in the company that can no longer reap dividends.

There is a positive side to this story:  the fact that this has happened to Manchester United  means that it is happening in the full spotlight of the media.  Now hundreds of thousands of people now know what a "leveraged buyout" is, and what a negative impact it can have on a previously extremely well run company.  It's clear that the only winners in the boardroom manouverings at Old Trafford are the Glazer family.  The club, the players, the manager, the staff and the supporters have all been royally buggered.  But since this is happenening all over the stock exchange, the more people that understand it, the more likely we are to force the govenment to do something about it.

This sort of rampant risk free speculation should be outlawed immediately.  Manchester United were probably the best run football club in the World before the Glazer family took over, now they are crippled by debt that should be encumbent on the Glazer family, not the club.

Saturday, 2 January 2010

Goodbye "the Noughties", hello "the Wanties"

So that is another decade over, a decade in which life for the average person has consistantly got slightly worse year on year.  A decade in which for the first seven years bankers and economist's repeatedly told us that the boom would go on for ever, "or at least plataeu", then claimed that "no one could have know this crash was coming" when it finally came, despite the fact that many academics, investors and even whole books had been prediciting it for years.

And these people are still in a job.  A nice, highly paid job, with a lucrative bonus scale and fat pension.  They did not pay for what they caused.

They should be in jail, but instead the likes of Sir Fred Goodwin "retire" on a £750,000 a year pension.  This man can be considered to be singularly responsible for the downfall of the Royal Bank Of Scotland, due to his obsession with mergers and aquisitions.  But instead of being pursued by the law for criminal malfeasance, he walks free and enjoys the finer things in life.  I would not be surprised to see him re-emerge in the media in a few years time, as an "expert financial advisor", he could complain about how the pension funds of PLCs are dragging the country down, how we all need to tighten our belts, how we should be happy with teh fact we even have a job in these trying times, and that pay cuts should be all the rage over the public sector.

There has been a lot of debate over what this new decade should be known as, but I think I have the answer: "the one-ties" (pronounced "wanties").  Thanks to Sir Fred and his ilk, we will all be wanting this decade.