West Ham need to look at Corinthians tale
Posted by DavidM in West Ham | 12 September 2006
Big bids from enormously wealthy foreigners are becoming a trend for Premiership clubs. Hot on the heels of Aston Villa's takeover by Randy Lerner is the probable bid for West Ham by Kiavash Joorabchian.
Feelings among Hammers fans (and even the manager himself judging by his post-match remarks on MOTD2) are mixed. Who wouldn't love to get a £100m injection of funds but could the deal damage the club you love in the long run?
A lot of the focus has been on where the money is coming from. Rumours abound that Media Sports Investments Ltd - the company Joorabchian headed until he resigned earlier this year - is bankrolled by Russian and Georgian billionaires.
Abramovich has been mentioned as an investor though there is no evidence of this. The main names bandied about are Boris Berezovsky and Badri Patarkatsishvili.
Berezovsky is a Russian oligarch who was granted political asylum in the UK. He is wanted on charges of fraud at Russian carmaker AvtoVAS, as well as being the main suspect in a major embezzlement case at Aeroflot. He is also under investigation having told Russian radio station Ekho Mosky that power in Russia could be taken by force and he was working on it. Not too friendly for someone who supposedly helped Putin to power.
Berezovsky's relationship wth Joorabchian goes back to 1999 when the latter bought Russian newspaper Kommersant. The owner was struggling with debt and apparently wanted to sell to a foreigner to avoid political interference with the newspaper. However, only months after the sale, Joorabchian sold the business on to Berezovsky.
Berezovsky is reported to have recently sold the paper and other assets in Russia to long-time business partner Patarkatsishvili, a wealthy Georgian who is also on the wanted list in Russia.
Stories are rife that these two are the principle bankrollers of Corinthians through MSI, but again there are no details confirming this. Joorabchian has never revealed his investors and claims the funds for any purchase of West Ham are coming from the Middle East.
West Ham only need to worry aboout these aspects of the deal if there is proven to be criminal wrong-doing (MSI answered questions at a Brazilian anti-organised crime hearing and no charges were brought) or if the backers are breaching FIFA regulations by having stakes in other clubs.
I think the danger signs for West Ham are more visible when you look at what's happened to Corinthians since MSI took control.
Within a year of MSI's takeover and $50m of player signings, Corinthians were crowned league champions. They secured their biggest ever sponsorship deal - £6.5m with Samsung - increased television audiences by a third and doubled attendance. Overall, within a year revenues rose 500%. Joorabchian certainly improved the club as a business.
However, this season Corinthians lost 12 of their first 20 games and as of two weeks ago were 18th out of 20 teams - in the relegation zone.
They have had 7 managers in 18 months and at one point all but 5 of the players were owned by MSI, not Corinthians. MSI paid their wages and as Tevez and Mascherano showed, that makes players beholden to MSI, not the club. Before moving to West Ham, both players apparently went back to Argentina informing MSI and not the club of their movements.
MSI don't have full control of Corinthians. They have a 10-year deal whereby they invested $35m and covered all losses in return for a 51% share of future profits. The club is run by a board comprising two from Corinthians and two from MSI. In the event of a dispute, Joorabchian has the final say. So in effect MSI makes the decisions.
The fans were never happy about the deal and views are mixed as to whether MSI are bringing the problems on themselves or if they are being undermined by the Corinthians president and fans.
Whatever the answer, 2 years into a 10-year deal and Corinthians aren't looking so healthy.
We don't know at this stage what Joorabchian proposes for West Ham, but any club should be worried if they don't own their players, if management turnover is high and if there are ongoing rifts in the boardroom. The injection of money is great but should bring stability - as Abramovich has done at Chelsea - rather than disruption.
Comments
I keep hearing about the positive impact Joorabchian had on Corinthians financially but then there fall from grace but I still don't know if this has anything to do with Joorabchian at all…
West Ham shouldn't be worries if there fall from grace is just down to a poor performance from players and management
The implication in this article is that, despite all warnings to the contrary from Indipendant Financial Advisors, past performance is a good indicator of future performance and hence West Ham need to be fearful on the basis of what has happened at Corinthians. If that were so, I would be more concerned being a Newcastle fan as, on the basis of Glenn Roeder's record, they are sure to be relegated this season (like West Ham and Watford before them; both with 7th place finishes followed by relegation the subsequent season). What is the worst that could happen to West Ham? Squander a wealth of young talent never seen in the club's history and then get relegated...that has already happened. How could this possibly rival the depths that we have plumbed already? What is a more interesting question is that with the injection of outside capital into Man Utd, Portsmouth, Aston Villa, Chelsea, Fulham etc in the past, why is it that the 'neutral' media and other 'top 4' clubs find what is happening at West Ham so distasteful? There seems to be a very patronising attitude towards West Ham and a desire to maintain the status quo. Well, I can tell you that for some of us, West Ham is our first and only club, not the one we look to second when the results come in and we are a unique brand. If we have rattled a few cages, then great. The premiership was dominated by a Man Utd mafia to the detriment of football, long before Abramovic and his Chelski came along. The Irons are a breath of fresh air to football and everyone knows it. We have nothing to fear in the future...but maybe everybody else does.
Hi Iron Man,
I certainly don't mean to be patronising about the West Ham bid though I can see why you think other media are.
In general I think now the trend has started (with Chelsea) it'll be better if more clubs have big financial backers who can inject funds into the team, the stadium, etc. It will make the top of premiership more competitive though could widen the gap between the top and lower teams.
I certainly don't see any reason why the Hammers shouldn't benefit like anyone else.
For me the difference is that Joorabchian has form (the Corinthians experience) and his approach is unusual - especially the signing of players the club doesn't actually 'own'.
There is much for West Ham fans to be excited about with this interest, but there are also warning signs that things may not be all rosy.
I do hope though that things turn out well and we have a more exciting competition with more clubs challenging the 'big four' for honours.
TIME FOR A NEW STORY DON'T YOU THINK?
