x Abu Dhabi, UAEWednesday 26 July 2017

Even champions felt the pinch in 2009

Just as in every aspect of life, sport was heavily affected by the economic downturn, with everyone from Jenson Button to Manchester United feeling the pinch.

Formula One world champion Jenson Button, centre, shares a joke with the rest of the drivers on the grid earlier this year. It was a rare moment of laughter in a sport that was full of turmoil.
Formula One world champion Jenson Button, centre, shares a joke with the rest of the drivers on the grid earlier this year. It was a rare moment of laughter in a sport that was full of turmoil.

When Jenson Button left Brawn GP, a team with whom he had just won the Formula One drivers' title and constructors' championship, it was said he was unhappy with the wages being offered to stay. Button had taken a 50 per cent pay cut at the start of the year to ensure he could continue in the sport. Brawn GP - now Mercedes - were formed out of what was left of the Honda team when the Japanese manufacturer decided safeguarding jobs back home was more important than the glamour of Formula One.

Do not feel too sorry for Button though, as he crossed the line in Interlagos, Brazil, and screamed "I'm world champion, baby" over the team radio, he earned £4million (Dh23.5m) before individual deals with sponsors were taken into account. He can expect to earn double that at McLaren next year. Button's apparent haggling over money is yet another reminder that sport is no fairy tale; where honest endeavour and talent can see people and teams overcome the greatest obstacles. Money makes the world go round: this is never more omnipresent than in F1, a sport that almost split in two as it bid to deal with the impact of the recession.

On one side of the stand-off was Max Mosley, the FIA president, and a string of teams who wanted to join the grid but could not afford the massive costs. On the other side were the established order, teams like Ferrari who have deep pockets and are not afraid to dip into to buy their way to success. Mosley's proposal would have seen teams who spent less than £40m a season granted more technical freedom than those who spent more. While the recession had brought reduced spending and forced some teams to fold completely, outfits like Ferrari were never likely to give up the advantage their finances gave them without a considerable fight. It led to an unseemly game where neither side wanted to back down. Leading teams - Toyota, McLaren and Red Bull were among those aligned with Ferrari - said they would form their own breakaway series. Many of the teams looking to come into the sport warned they could not do so with the proposals. Lola, one of the teams looking to enter the series for next year but who did not make the list, said: "The cap is prudent, it also takes into account the need for new teams to compete credibly against established entrants."

The dispute had blown over well before the Abu Dhabi Grand Prix, a race that at one point could have marked the end of Formula One as we knew it. Mosley ended up backing down and was only able to safeguard his position within the FIA by agreeing not to stand for re-election. That first Grand Prix at Yas Marina Circuit proved memorable as Sebastien Vettel roared home first in the darkness. Attracting corporate partners for the biggest sporting event held in the country was never going to be a problem for Abu Dhabi Motorsport Management (ADMM), organisers of the weekend.

However, Richard Cregan, chief executive of ADMM, is well aware that the race must continue to live up to its hype to keep on board major backers like Etihad Airways - who are title sponsors . "There is more scrutiny in terms of sponsors than there was two years ago, at the height of the spending," he says. "Sponsors are looking for more. They want exposure that can be measured, when you can link in programmes around the community. Sponsors will actually spend more because they are looking for stable and proven brands."

There was plenty of branding on display as Lee Westwood won the Dubai World Championship (DWC) and the Race to Dubai, the European Tour's renamed Order of Merit, last month. As well as a payday of US$2.75m (Dh10m), Westwood collected two golden trophies and a watch from Rolex, one of several tournament sponsors. Westwood's trinket for winning the tournament, which looks like a miniature golden Eiffel Tower, was far too big for him to lift single-handedly and he needed assistance to do his obligatory celebratory poses.

It was not the first time the Englishman had won a golf tournament, but this time the post-match talk was all about one thing: money. The tournament was created with the headline-grabbing intention of being the richest in the world: by the time it came to be held it no longer had that accolade, but all the talk of innovation and revolution throughout the year was more to do with the prize cheques than renaming the Order of Merit and adding a tournament to the end of the schedule.

As Westwood gushed about Dubai, sponsors Leisurecorp and his plans to spend some of the money on his wife, his agent Andrew "Chubby" Chandler had scampered off with the watch. Chandler threw the watch up to a friend on the balcony of the media centre that looked over the 18th green: clearly when you receive as much money as Westwood did you do not need to worry about damaging a designer watch. Talk of the tournament revolutionising golf was scant once it came to be held. The European press saw the unfinished villas that surrounded the Earth Course at Jumeirah Golf Estates, added it to the talk of projects being cancelled and declared the sponsorship a white elephant. This was before Dubai World's call for a standstill on debt repayments earlier this month which led to further questions in the West about the future of sponsorship. The European Tour had allowed Leisurecorp, who put up the money to rename the Order of Merit and create the DWC, to reduce financial backing in the first year of a five-year agreement by 25 per cent from $20m to $15m. George O'Grady, the Tour's chief executive, flew from the Tour's headquarters in the UK to seek assurances that Leisurecorp could meet their reduced commitments. They believe they can, although O'Grady has suggested the Tour would compromise further should it be necessary, and the 2010 Race To Dubai is already under way.

The reduction in prize money did not seem to bother the players too much. It was still a "huge purse" according to Henrik Stenson, and the players qualifying for such a tournament already boasted bank balances that would leave Leisurecorp looking on enviously. There has been one sport that put on a good front, suggesting it has avoided the recession: football. This was a year when Cristiano Ronaldo became the most expensive player in the world, with Real Madrid paying Manchester United £80m to secure his services. Real's purchase of Ronaldo was merely the grandest of their latest "Galactico" spree: Kaka, Raul Albiol, Karim Benzema, Xabi Alonso and Alvaro Areblo were all bought for substantial fees.

Manchester City, funded by Sheikh Mansour, set the pace in the Premier League's transfer market: Emmanuel Adebayor, Kolo Toure, Joleon Lescott, Roque Santa Cruz, Gareth Barry and Carlos Tevez all arriving at Eastlands in the summer. City also had a very public courtship with John Terry, the Chelsea and England captain, with the West London club reportedly offering their stalwart a new contract worth a staggering £160,000 a week to ward off interest.

Even the Pro League has shelled out some lofty fees: Al Jazira paid ?15m (Dh79.3m) for Ricardo Oliveira, a player unveiled amid fireworks at the Mohammed bin Zayed stadium in the capital. City, like Chelsea before them, appear ready to gatecrash the top table of English football. Of the big four English Premier League sides, only Arsenal do not have a non-British owner. Liverpool and Manchester United's ownership traces across the Atlantic Ocean to the US, while Chelsea's Roman Abramovic made his fortune in Russia. Arsenal could well be poised for a takeover bid by the American Stan Kroenke, who has steadily been increasing his shares in the club.

City's new manager Roberto Mancini has been told to steer the club into the top four. This may be easier than you think: both Liverpool and Manchester United are loaded up to their eyeballs with debt. In both cases, the debt stems from American-led takeovers. United's debt brought some protest out of fans when Malcolm Glazer and his brothers bought the club in 2005, using loans of £518m secured against the club for much of the purchase. Some supporters even formed a breakaway club, FC United of Manchester, but the fizzle went out of protests when the club continued winning things. The club can service their debt (according to their most recently published accounts, they owe £699m) so long as they keep lifting trophies like the Premier League and Champions League.

But what happens when they don't? They already trail Chelsea in this year's title race and, weakened by the loss of Ronaldo, would not be favourites against teams like Real or Barcelona should they be paired with them in European competition. They would become the next Liverpool. Liverpool are floundering in the Premier League and have been knocked out of the Champions League. They need to sign players but have no money to do so: a large part of their income now goes directly to the banks.

United fans may enjoy gloating over Liverpool's struggles, but with debts, secured against Old Trafford that far exceed those of Liverpool, they should be braced for something similar happening to them. For the 2007/08 financial year United proved one of the best money-making organisations in sport, with a net profit of £66m. All of that, however, was swallowed up in paying off loans owed by the club's parent companies. Interest payments alone accounted for £68.8m. In layman's terms, United make more money than anyone else but still did not break even solely because of their heavy debts.

It was thought the popularisation of Twenty20 would bring unimaginable riches to cricket: there is no doubt it has made some people very rich, but not to the extent initially thought. The Indian Premier League's (IPL) second season, held in South Africa due to security concerns in India, could not match the excitement of the first. The first Champions League Twenty20 competition barely registered on the world's media as peoples' interest began to wane.

The arrest of Allen Stanford arrested thoughts that because Twenty20 attracted more fans than the longer format of the game, it would be a gravy train for all. Back in 2008 Stanford had cut a deal with the England and Wales Cricket Board (ECB) for annual games between England and the Stanford Superstars, a team made up of players from the West Indies. The first game, held in 2008, was won by the Superstars, who shared US$20m between them.

Things changed in February when Stanford was accused of fraud. The ECB cut ties with him and he was arrested by the FBI on June 18. He is not due to stand trial until 2011. This year also saw the advent of the first so-called freelance cricketer. Andrew Flintoff turned down a central contract from the ECB, ensuring his ongoing availability for the IPL where he could earn much more. Will Flintoff be a one-off or a trend-setter? According to a recent survey by Cricket Australia, 22 per cent of Australian professional players said they would turn down a central contract to play a full season in the more lucrative IPL.

Although 2009 should be seen as a year when sport's financial bubble was pricked, it has still not fully deflated. Next year should be a year when sport learns the lessons individuals have learned throughout the recession: nowhere is this more starkly displayed than in England where Liverpool and Manchester United, two of the most famous football clubs in the world, are arguably at risk of becoming another mortgage repossession statistic.

lthornhill@thenational.ae * Additional reporting from Zoë Griffiths