Tuesday, September 30, 2008

Bailout Plan Rejected

The world of football was rocked to its very foundations last night, when the controversial proposed bailout of Tottenham Hotspur FC was unanimously rejected by the Premier League.

The Spurs crisis began in 2006 when the Board inexplicably began to invest substantial sums in so-called subprime footballers, each of whom is now effectively worthless.

"No-one bothered to check if these players had any ability to pay back the enormous sums that had been invested in them," said one anguished fan, "...the club just assumed their value would keep on rising."

With pressure growing from nervous creditors, Spurs were obliged to sell their remaining valuable players like Berbatov and Keane, leaving behind only 'toxic assets' like Bentley and Pavlyuchenko. "We spent £29million on that pair....seems crazy now doesn't it?"

It is impossible to tell what they're worth now, because demand for such expensive mediocrity has completely dried up.

Spurs had begged the Premier League to create a bailout fund to purchase their entire first-team squad, thus freeing up the club's finances to re-invest in more competent replacements.

As confidence in Spurs began to evaporate meanwhile, other richer clubs became increasingly unwilling to lend to them, except on prohibitively stringent terms.

"We were rather hoping for Carlos Tevez from Manchester United," confirmed a club insider, "...but they'd only lend us Frazier Campbell."

However administrators were unrepentant, adamant that Spurs were not after all 'too big to fail'. After a weekend of often emotional deliberations, they voted not to set a dangerous precedent.

"We refused to bail out Derby County last season," admitted a Premmier League spokesman, "...though to be fair they had more points at this stage than Spurs do."

Monday, September 29, 2008

Palace preview

Tomorrow night's fixture at Selhurst Park is the most eagerly-awaited of the season so far, but Saturday's defeat will have left fans feeling flat.

A team that has taken a first-half lead six times in eight matches ought to have more than ten points. This consistent failure to convert leads into wins is worrisome, and does not bode well for those inevitably more regular times when we start to concede a first goal instead of scoring it.

I contemplated writing a somewhat negative early-season assessment of Pardew's stewardship, but resisted knowing full well that three points at Selhurst would ensure all was rosy again, and thus I risked looking stupid.

However I can't ignore that nagging feeling I have that behind the media-savvy image, there is less top-quality management than he might have us believe. When I look at the 16 that comprised the squad on Saturday, I think he'll soon be running out of excuses if our form doesn't improve, or at least become somewhat more consistent.

The Reading game proved how good we could be, yet five games and just four points later we've reverted to script again, and it's very frustrating. Has Pardew's tinkering with tactics, and implictly preferential team selections helped or hindered our points total?

Of those 16 that started on Saturday, three were home-grown but largely brought through by Pardew (Elliot, Sam, Basey), fully ten were signed by Pardew, whilst only Holland, Ambrose and Youga were legacies of an earlier era.

Perhaps I'm falling into the classic trap of believing our players (because I know them best) are better than they really are, but we've won just 9 of our last 33 Championship games. That's 33 times that Pards has prepared, selected and attempted to motivate a team, yet has managed to better the opposition on just 9 occasions.

There have been certain mitigating factors at times, but that's a pretty damning statistic unfortunately. I'm not suggesting he be sacked or anything silly, but am simply drawing attention to the facts (because sometimes his post-match comments like to detract from them).

So what better time to prove that he's more substance than style, than tomorrow night against his old club Crystal Palace? He's hinted at changes from the team that lost to Wednesday, so he will lose credibility if he doesn't carry through his threat.

The players most at risk would appear to be Youga (for Basey), Sam or Bouazza (for Ambrose) and Gray (for Todorov). His most radical choice may be to utilise both Todorov and Gray upfront to add a greater physical presence, whilst preferring Varney over Sam on the right.

As has been made clear previously, I would also far prefer to see Moutaouakil at right-back, but if the gaffer lacks confidence in the Frenchman at the best of times, he certainly won't risk him on an occasion like this one. Meanwhile if Primus is genuinely not 100% fit, is he really likely to do a better job than say Semedo or Cranie at centre-back?

When all is said and done, I would expect Pards to select as follows: Weaver, Cranie, Youga, Hudson, Primus, Holland, Bailey, Bouazza, Ambrose, Varney, Gray. Subs: Elliot, Basey, Semedo, Todorov, Sam.

NY Addick predicts Palace 0, Charlton 0. Att: 18, 281.

Friday, September 26, 2008

Wednesday preview

An important seven days for the Addicks begins at home to Sheffield Wednesday, although most fans will find minds already drifting towards Selhurst Park and Tuesday night.

The two away games at Doncaster and Forest are rightly being seen as successful trips, a pair of clean sheets never something to scoff at. However am I alone in wondering why Pards couldn't help himself, by tinkering with a winning line-up at the City Ground?

His lovefest with Luke Varney thus continues unabated, with Andy Gray strangely dropped to the bench despite six goals in his last nine starts. Meanwhile since Varney's brace at home to Palace, his record reads two goals in 1,393 minutes of football. Over the course of a full 46-game season, that would imply a six-goal total haul - does the rest of his contribution make up for this?

The crazy lack of central defensive cover was only partly rectified with the arrivals of Primus and Cranie. Thus every time Messrs. Hudson or Fortune limp or sneeze, the Addicks faithful take a collective deep breath. Unfortunately our worst fears have come to fruition with news of Fortune's injury, and with Cranie apparently also struggling.

Pards will choose between Cranie (if fit), Youga or Semedo at centre-back, with Youga the most likely to move inside in my opinion. As we know, Pards has not yet fallen completely for the charms of Moutouakil, even if many of the fans have but he may have little choice but to give him another start tomorrow.

Semedo meanwhile remains the forgotten man despite very solid right-back performances in the opening two games. The strange choice of Grant Basey as the holding midfielder at Forest suggests he remains well down the pecking order, and frankly I've no idea why. His attitude and his ability seem to present no issue.

Wednesday have made a steady but unspectular start, their home form offsetting their dire form on the road. Heavy defeats at Wolves (4-1) and Reading (6-0) bode well for the Addicks, as would the possibility of facing Francis Jeffers, although he is struggling for match fitness.

The seven games so far have left us in a solid enough 9th place, but the top two are already threatening to pull away from us. There have been enough signs of promise, but our rather flimsy squad threatens to hold us back from expecting much more than a mid-table finish.

I remain far from convinced that Pardew's team selection and tactics are maximising our prospects at this point. Some of his post-match comments are rather odd, and I don't get a good sense yet for what his 'grand plan' is for this season, if there is one. Declaring that last week was a good one including the Wolves game, conflicts with reports I have read that had us well-beaten.

My feelings towards him are also not helped by a dream I had earlier this week where I shared a conversation with the gaffer, and he was an extraordinarily arrogant man especially when giving my views on Varney short shrift. He was also buying the house next door to my parents, which surprised me as it's not even for sale.

Straightforward looking fixtures like tomorrow's will define whether I am being too pessimistic about our prospects. I think Pards will select as follows: Weaver, Moutaouakil, Youga, Hudson, Basey, Bailey, Holland, Sam, Bouazza, Varney, Gray. Subs: Elliot, Semedo, Ambrose, Dickson, Shelvey.

NY Addick predicts: Charlton 1 (Gray), Sheffield Wednesday 0. Att: 18, 991.

Thursday, September 25, 2008

Crash Course

"A sound banker alas is not one who foresees danger and avoids it, but one who when he is ruined, is ruined in a conventional and orthodox way along with his fellows, so that no-one can really blame him." (John Maynard Keynes)

"This is the one. This is the one. This is the one. Oh this is the one. This is the one, I've waited for." (The Stone Roses)

Both Keynes and The Stone Roses might be considered influences in my life, so it's apt that the quotes of the former and the lyrics of the latter, should merge so perfectly to sum up the incredible events of last week.

If you can't face reading my ramblings on this topic (and frankly I couldn't blame you), then at least read this excellent short piece by John Kay in the Financial Times. I had been desperately hoping to read a brief first-hand experience of where it all went wrong, and amongst all of the verbosity, Kay provides it eloquently.

It is difficult to overestimate the enormity of last week's financial implosion. Indeed today seems an appropriate day to try to write something intelligent, because it was the first trading day in the last seven that the S&P 500 index of US shares didn't move at least 1% in either direction. A temporary calm after the storm.

During a brief window last week, the 3-month US Treasury bill posted a negative yield. In other words, participants were so fearful they were willing to pay the US government for the right to lend it money. Meanwhile on Wednesday the gold price registered its largest ever price rise on record, again fear driving investors to the ultimate yield-free asset.

In the space of a single weekend, the remaining 'big Four' independent US investment banks became the 'big Two'. A lesson for Premiership football perhaps? However over the course of the whole of the past year of so, the story has been one of false optimism and the gradual recognition of the scale of the global credit bust. Last week represented a sudden and cumulative acknowledgement.

The collapse of Lehman Brothers was a scandal. A scandal for its employees, clients and to a much lesser extent its shareholders. Someone is probably already penning the story of how this once fabled Wall Street institution with a reputation as plucky outsiders, collapsed thanks to the hubris and arrogance of its management.

Having seen its closest competitor (Bear Stearns) forced into the hands of JP Morgan, it had fully six months to find an alternative to bankruptcy, yet turned its back on them all.

AIG was a catastrophic failure of internal control and risk management, and unlike Lehman was truly 'too big to fail'. Just a few weeks earlier (although it feels like a lifetime), Freddie Mac and Fannie Mae were bailed out, their collapse after all would have brought the already broken US mortgage market to a shuddering halt.

For decades Fannie Mae served a valuable role as a low-cost provider and guarantor of mortgage finance, yet inexplicably was privatised in 1968 (Freddie Mac was created on similar lines in 1970). Not surprisingly the conflict between its responsibility to homebuyers, and its responsibility to shareholders proved impossible to reconcile in the end. Its 'implicit' government guarantee became an 'explicit' one, an inevitable conclusion.

I've written extensively elsewhere about how we got here. I would urge people to understand however that the problem of subprime mortgages was merely the proverbial 'canary in the coal mine'; global lending had got so stretched that by definition it would eventually reveal itself somewhere.

The estimated losses arising directly from subprime lending in the US is 'only' $250billion or so. Yet the total consensus losses from all bad lending exceeds $1trillion, as the extent of the stupidity comes to light across credit cards, leveraged buyouts, commercial property etc..

The 'virtuous cycle' that permitted the bubble to go on longer than many expected (me included) has now clearly turned 'vicious'. Until last summer, rising asset prices (especially residential property) bolstered bank balance sheets, thus permitting more lending thus further driving up asset prices.

Like any asset bubble, the cycle was aided by a good 'story' that the public can get their arms around. The theme of globalisation was central to the story, emphasising the popular idea that inflation was dead, interest rates could remain low, and thus support asset prices seemingly forever.

The economist Hyman Minsky described the moment when such credit-driven asset bubbles pop. Eventually investors reach a point, where the cash generated by their assets is no longer sufficient to pay off the mountains of debt they took on to acquire them. And thus the vicious cycle begins.

Falling house prices, combined with the sheer complexity of many mortgage-backed securities, has meant that liquidity for these instruments has all but dried up. In short, nobody can work out what they're worth, so nobody is willing to bid for them.

Given the extent to which certain banks overloaded on these so-called 'assets', it is little wonder that so many have failed and find themselves under such stress. Their lending is thus curtailed, leading to lower house prices, and thus even greater balance sheet strain.

As the banks have been forced to make enormous write-offs on their 'toxic assets', they are required to find new injections of equity capital. During the first wave of write-offs in late-2007, the banks found willing contributors in the form of the oft-feared Sovereign Wealth Funds (SWFs), certain Asian banks, and to a lesser extent private equity and the usual public markets.

However, having been stung first time around by being early, they will wait for a more attractive entry point this time around. This was the biggest mistake Lehman made....its opinion on an 'appropriate entry point' was different from those with the cash.

If $1trillion represents the total losses that banks will have to write-off (I suspect $2trillion will be closer to the mark), then there is still an approximate $700bn funding gap between amounts raised so far from the sources above, and the amounts that will need to be raised.

There are only three ways that the banks can rebuild in this context. Firstly, they can earn the $700bn required, essentially impossible in this environment. Secondly they can raise the funds, although as mentioned above those with cash are increasingly picky (witness the outstanding terms Berkshire Hathaway obtained in its negotiations with Goldman Sachs).

Thirdly, they can sell assets until their balance sheet shrinks back into their already shrunk equity base. Some of the market panic last week, can be viewed in the context of this third unpalatable option becoming 'consensus', with the much-maligned short-sellers concluding that they simply wouldn't have enough time to do so without an equity-destructive firesale.

In the end, Hank Paulson and his Treasury will instead seek to bail them out with initial plans for a $700bn government-backed purchase of troubled assets. A panacea surely? Not so fast. Firstly, the Treasury will expect to buy assets at knock-down prices, perhaps requiring further write-downs to carrying value on already-strained balance sheets.

Second, their proposals so far appear only to address mortgage-backed assets, but there is likely an enormous wave of corporate defaults (and other losses) coming down the pipe. The spectre of Ford, General Motors and their huge pension liabilities looms large at this point. Will they be bailed out too? Assuming the value of the US Dollar is of some import to someone in authority, the resources are far from limitless.

The Paulson plan should instead be viewed in buying Wall Street even more time (Lehman clearly could have done with more), in order to clean up its act and seek a private sector solution that avoids failure. In just the five days since his announcement, both Morgan Stanley and Goldman Sachs have found new equity investment, and both have agreed to become (more regulated) banks, not merely broker/dealers.

Most importantly however, the very muted market response to the Paulson plan reflects the unavoidable truth that someone has to take the losses. Whilst equity holders in some of the failed and stressed banks have certainly taken their hits, either the US taxpayer will bear the brunt, or else there must be further failures of financial institutions to come (my view).

Wherever the losses end up being realised, the banking sector has changed forever. In return for the philanthrophy of the Fed and the Treasury, regulators will demand stringent new constraints upon banks, most notably their leverage ratio. The days when the likes of Lehman Brothers can leverage a tiny sliver of equity 30 times with highly unstable sources of funding, are over.

It is thus difficult to escape the unfortunate conclusion that the developed world faces a grinding deleveraging, where asset prices fall back to 'normal' levels, and credit is highly constrained for the foreseeable future. Inflation is yesterday's story.

To put some scary figures on it, imagine if the remaining 'stressed' banks could not raise a penny of the required $700bn of new capital.

They would thus be forced to sell the assets that $700bn of equity used to support. Using the 30x example of Lehman (and others), that's $21trillion of asset sales (mortgages, commercial property, corporate loans etc..) into an already highly stressed market. In such an environment, prices can only go in one direction.

The prospects for the most indebted economies of the world are thus rather unappetising, and whilst I've mainly addressed the problems in the US, the equivalent credit bubbles in the UK or Spain were considerably greater. For a taste of what's coming, read this excellent article by Martin Samuel.

As I wrote in my last post, the natural knee-jerk reaction of the media and the public is to seek a scapegoat, the short-seller being the choice du jour. My inclination is to blame regulators and central bankers, whose primary role surely is to dampen the natural urges of bankers to end up as Keynes suggested above.

Bankers do not arrive at their desks in the City or on Wall Street with the intention of bringing economies to their knees. They can all be acting perfectly rationally on an individual basis, yet the sum result can be (was) calamitous.

Yet all the while the general consensus of central bankers (especially the Fed's Alan Greenspan) was that asset bubbles cannot be identified ex ante, so best to deal with their consequences ex post. This is proving harder than they thought.

Nor is the equally maligned bonus system to blame either in my view. Although things are imminently going to change for its mediocre performers, one is forced to accept that banking (like football, Hollywood etc..) is simply an exceptionally scaleable business, and will continue to be so (though its activities will now be curtailed).

Revenues and profits do not rise in a linear fashion with costs. Imagine for example if the transfer system did not exist in football, and thus players were permitted to move to a competing club at any time of their choosing. Would you not expect clubs to create complicated (yet ultimately lucrative) bonus systems to tie their top performers to their clubs?

Speaking specifically about the UK, the disproprortionate influence of the City does represent however a grotesque misallocation of resources, to the detriment of the country's long-term economic prospects.

The shift to a more diverse economy (perhaps one with manufacturing back at its core if the pound continues its descent), will be to our eventual benefit, even if the near-term will be painful.

I have many friends and acquaintances who work in the financial sector despite seemingly having no ability (nor inclination), to maintain an intelligent conversation about finance. This does not make any sense, particularly when you read about chronic skills shortages across entire swathes of the engineering sector for example.

I'd be delighted if my own kids in due course find the idea of working in the City to be exactly what it should always have been......intellectually-demanding, but very hard work and only highly rewarding if you deliver. With any luck, they'll look elsewhere.

The investment banking model of an expansive balance sheet, earnings growth driven solely by said leverage (not productivity), and then the distribution of 50% of total net revenues as remuneration, will now be challenged by shareholders at this time of weakness. Valuations have never been lower as a result of this ephiphany.

It's taken a long time coming, but this really 'is the one'.

Sunday, September 21, 2008

A Short Story

(not Charlton related)

Last week as outright panic characterised the world's financial markets, the public and its media were on the lookout for a handy scapegoat.

Strangely opting to overlook the wanton negligence of management teams and their regulators, attention instead focused on the 'spivs and speculators' otherwise known as short-sellers.

I've met many of these people and trust me, you'd be delighted if your daughter brought one of them home, especially the one that made $1.7billion last year I suspect. One of the media's favourite targets is so polite and softly-spoken, you'd easily mistake him for an altar boy (except that he's Jewish). Speculators for sure, but definitely no spivs.

Short-selling is a way of betting upon the fall in price of a security (typically a stock), usually undertaken by hedge funds but also by more sophisticated individual investors. The short-seller borrows the stock (in order to fulfil the sell order), and hopes to be able to buy it back at a lower price, return it to the lender, and profit from the difference.

The vast majority of short-selling is not undertaken with the intention of driving a company into the ground (some management teams are more than able to do this themselves). There are hardly any funds that solely short stocks because it is so extraordinarily risky (see below), although you wouldn't know it from the headlines.

Instead by building a diverse portfolio comprising traditional 'long' positions, as well as 'short' positions, an investor can reduce his correlation to overall market movements, and hopefully generate positive returns in different types of environments, particularly bear markets. There are no guarantees of course as many failed funds have discovered.

Some very successful hedge fund managers with long-term records have lost money overall through 'shorting', including some of those so vilified in the media this week. They welcome however the reduction in volatility that their short positions offer them during market sell-offs.

Interestingly various 'hedged' products have been launched recently, aimed squarely at the very same retail investor that the media would have us believe is the victim of such activities.

In an exuberant bull market such as those of 1999 or 2003, the short-seller would typically not even expect the stocks he is 'short' to fall, but would hope they would simply not rise as much as his 'longs'.

As it transpired however, particularly during the tail-end of the technology bubble of the 1990s, most outright short-sellers went out of business as the ridiculous valuations of Internet companies spiralled even higher (before they eventually did collapse, albeit too late).

Short-selling is very far from a one-way bet. Indeed it is so risky that most brokers will not permit its clients to undertake it unless they can demonstrate above-average financial sophistication and resources. Here are some examples why:

1. The maximum loss on a 'long' position is 100%, and the maximum return is infinite. The maximum loss on a short position is infinite, but the maximum return is only 100% (at best, the stock can only go to zero).

2. When a long position begins to move against an investor, it becomes a smaller problem. When a short position begins to move against an investor, it becomes a bigger problem.

For example, if an investor with a £1million portfolio buys £50,000 of Vodafone and it halves in price, then all other things being equal, his original 5% position is now an approx 2.5% position. The investor has less money of course, but his exposure to Vodafone is relatively lower too and he can sleep soundly.

However if an investor had sold short £50,000 of Vodafone and it doubles in price, the investor's risk has doubled too (the investor now owes £100,000 worth of stock). For this very reason, sensible investors build far smaller initial short positions than long positions. Thus not only can an investor make no more than 100% on any given short position (see 1.), he will likely have taken a smaller bet to begin with.

3. Stock prices usually go up (although it's a timely reminder in the current environment). The short-seller is not only battling the mathematical biases explained in points 1. and 2., but he is also battling the inherent ability of companies to make profits, the fuel of capitalism.

4. In the absence of leverage, a long investor cannot be 'forced' out of any of his positions. A short-seller meanwhile is using leverage by definition (he is borrowing stock), whilst the lender can typically demand back that stock without reason or notice.

Although it's thus risky and best left to experts, the short-seller provides a vital market role in enhancing market liquidity and efficiency. In a rising market, the short-seller dampens riotous enthusiasm by acting as a rare seller of stock.

In a falling market, the short-seller will be closing out his (profitable) positions by buying back the stocks he has borrowed, thus acting as a rare and welcome buyer. As a result, markets are likely less volatile and stock prices more reflective of fundamentals than sentiment, thanks to short-sellers.

The case of those financial stocks which were headline news last week do perhaps warrant some special treatment in such extraordinary times, although plenty of regulations already existed to prevent the worst excesses. For example, the spreading of (knowingly) false rumours has always been illegal, and rightly so.

The enormous leverage inherent in financial companies, makes them unusually vulnerable to a sudden collapse in their share price. But this leverage had clearly become excessive, funding increasingly crappy assets with increasingly short-term liabilities. This should never have been allowed to happen (by the regulators) , but it did happen and the short-sellers rightly suspected the true equity value might be zero for them too.

Yet as the share price falls, eventually it reaches a point where the risk/reward of remaining short worsens, whilst fundamental 'long' investors might be tempted in. On Wednesday afternoon for example, investors were offered the chance to buy shares in Goldman Sachs, the world's premier investment bank, at just five times earnings. or $98. As enticing a proposition for a long investor, as it was dicey for a short-seller (the stock closed on Friday at $130).

It is important to note that the share prices of Bear Stearns, Lehman Brothers, Northern Rock or HBOS did not collapse by virtue of 'spivs and speculators'. They collapsed through chronic mismanagment, and bets on rising house prices, all of which were lost. Each management team had opportunities to sell the business or at least reduce its risks, yet hubris told them to push on.

Short-sellers are absolutely entitled to signal to the market that the chronic asset/liability mismatch that each of the above demonstrated, was not yet reflected in its share price. Other better-run banks or those with more sustainable business models (eg. HSBC, Lloyds TSB, JP Morgan Chase) have not faced any discernable pressure from short-sellers at all. As I mentioned above, a handy scapegoat, but the wrong one.

In 2007, the US regulators removed something called the 'uptick rule' which would have prevented most of the problems observed last week. It required all short sales to be undertaken at a price higher than the price of the most recent trade, thus preventing short-sellers from adding to the downward momentum of a stock already experiencing price declines.

The reinstatement of the 'uptick rule' would seem a balanced and welcome response to some of the emotionally-fuelled nonsense written in recent days. Expect to read more about it.

Friday, September 19, 2008

Forest preview

During the week, I asked whether Charlton were 'streetwise' enough to pick up three 'ugly' points, especially when undeserved. The performance at Doncaster suggested that they might be after all.

After the game, Pards suggested that, "We made a conscious decision to concede possession to them..." which sounds a lot like management-speak for 'they were better than us', but full credit to the defence for holding out (Mark Hudson increasingly looks an inspired summer signing).

The lack of draws is causing fans emotions to be as volatile as the stock markets, but whether by accident or design, the extra two points on offer for a win justifies a more cavalier approach. We find ourselves just a point behind unbeaten Cardiff for example, and with the top two setting a cracking early pace, any hopes of automatic promotion will surely die if we approach games happy with a point.

We've taken the lead in five of our six matches, a statistic which suggests we are not lacking in confidence. The 'front six' are beginning to look settled which should bode well for continued productivity in the attacking third, and with Zheng and Todorov apparently available shortly, the additional competition for places should be beneficial too.

Pardew's fourth game in charge for Charlton saw a disgraceful FA Cup exit at Forest, so there are some obvious scores to settle now that the two division gap between the sides on that day has (unsurprisingly) closed.

We last won at the City Ground in October 1998, an early Eddie Youds goal securing a vital away win. However both sides would find themselves relegated by the end of that season, Charlton bouncing back immediately whilst Forest began a decade of decline.

Two other visits to the City Ground remain in the memory. In 1999/2000, about 4,000 Addick made the trip wearing yellow in the hope that we'd secure our promotion, but we were forced to wait after a 1-1 draw. And then in 1988/89 after securing Division One status for another year with a 3-0 win Selhurst Park win at home to Derby, there was a similar party atmosphere for a final day 4-0 defeat at Forest with chants of 'we don't care' echoing around the ground.

With confidence presumably high after Tuesday's win just 48 miles up the M1, and with Forest's season having started poorly, this looks on paper at least an outstanding opportunity for the Addicks to tuck into a play-off position with four home games from six on the horizon.

Despite Pardew's suggestion that he may make changes, it's hard to imagine he'll alter a winning side. Thus I expect them to line up as follows: Weaver, Cranie, Youga, Fortune, Hudson, Holland, Bailey, Sam, Bouazza, Varney, Gray. Subs: Elliot, Basey, Moutaouakil, Dickson, Ambrose.

NY Addick predicts: Forest 0, Charlton 1 (Varney). Att: 19, 233.

Tuesday, September 16, 2008

Doncaster preview

I was thinking of writing about the Lehman Brothers collapse this evening, but it's difficult to focus upon the implosion of the entire global financial system when there's a tricky visit to Doncaster Rovers looming on the horizon.

Rovers were a non-League team as recently as 2003, and the teams have not met at this level since 1957/58 when the Addicks secured a Boxing Day away win.

They earned the sobriquet the 'Arsenal of League One' last season, referring to their free-flowing passing football, rather than implying that their team had no English players, or that their manager never saw any controversial incidents. This does not bode well, because Charlton under Alan Pardew have never had a settled enough side to compete consistently on this basis.

Losing two consecutive matches having led at half-time is both unusual (about a 500/1 chance), and worrying at the same time. Our new-look team has plenty of youthful exuberance, but is it 'streetwise' enough to close out matches and secure three ugly points, especially whilst on the road?

Doncaster have secured seven points despite only scoring three goals, which suggests they've got the hang of it. As Swansea proved on the opening day despite defeat, promoted teams begin their campaign full of confidence and with only an improved squad by definition.

Pards implied he saw some positive elements on Saturday against a strong Wolves side. As a result, an unchanged side seems relatively likely although he may well opt for Ambrose for the first time this season, most likely in place of Lloyd Sam. If he heads north meanwhile firmly with a plucky draw in mind, perhaps Grant Basey will be preferred too for the volatile Bouazza?

Plenty of fans (me included) have bemoaned Pardew's unwillingness to give the talented Yassin Moutaouakil the type of continued run in the team that his confidence needs. The immediate introduction of Martin Cranie (two months younger than the Frenchman incidentally) brought back uncomfortable memories of last season's tinkering.

With Danny Mills, Greg Halford and now Cranie all brought on loan at right-back, Moutaouakil must be wondering why he's sticking around, and frankly who could blame him (though Mills was an injury-forced loan)? It'd be our loss not his, and suggests as a club we don't yet fully embrace the whole concept of recruiting young foreign prospects.

The League table suggests our opening fixtures have not been kind to us though, which serves as some degree of comfort in light of our three defeats. All five of our opponents so far are currently in the top half of the table, although the nine points we gave up to three of them is not entirely coincidental.

By 5pm on Saturday, we will have a much better idea which end of the table we can expect to be competing at. Last season we only had seven points from five games, but the fixture list presented us with two home games in four days rather than away, and we turned over Norwich and Leicester to kickstart our season. This time around, four points would be an excellent haul let alone six, though I'd probably settle for three, or even two.

I expect Pards to line them up as follows at the Keepmoat Stadium: Weaver, Cranie, Youga, Fortune, Hudson, Bailey, Holland, Ambrose, Basey, Varney, Gray. Subs: Elliot, Primus, Bouazza, Dickson, Shelvey.

NY Addick predicts: Doncaster 2 (Guy, Wellens), Charlton 1 (Ambrose). Att: 9, 772.

Friday, September 12, 2008

Wolves preview

The football world has seemingly been turned upside down since Charlton last played a competitive match.

Manchester City are now the richest club in the world, Curbs is out of work, Mike Ashley has gone from hero to zero, whilst it turns out England are quite good after all. And if if all of that wasn't enough, Charlton signed Martin Cranie.

The first international break offers an early chance to take stock of our season so far. Certainly the positives outweigh the negatives even if the results suggest a clear balance.

The players we have sold have not been missed, at least yet (one suspects most never will be). The new recruits meanwhile have shown plenty of promise, particularly Hudson and Bailey, but also Bouazza for one game at least. Zheng Zhi meanwhile feels like a new signing, even if I sense he will be available in the January sales.

Losing away games whilst winning home games makes a certain amount of marketing sense, but if like me you feared our young squad may lack 'bottle', the evidence from Watford and Preston is somewhat concerning. Two away games next week against promoted clubs will tell us more, but in the meantime we face high-flying Wolves at fortress Valley.

Wolves were solidly mid-table all of last season, only occasionally threatening the play-offs. As a result, few so-called pundits picked them out as likely promotion contenders this campaign. Thirteen goals in their first four games however has refocused minds, although it's still very early days. The 3-2 defeat at the Valley in March virtually ended our play-off hopes, and the pace particularly of Ebanks-Blake will remain in the memory of the Addicks faithful.

Charlton fans will doubtless warmly welcome back Chris Iwelumo whose effort was never found wanting, even if the quality often was. His roaring start to the season has doubtless also won the affection of Wolves fans too, but it's not as if we sold him for nothing. The more cultured approach of Andy Gray meanwhile has offset any loss we may have felt, with Iwelumo's fellow Scot scoring in his last four home games, and five in his last seven games overall.

The most disappointing aspect of our defeat at Preston for me, was learning that Nicky Bailey had inexplicably been started on the right side of midfield having utterly dominated during our highly impressive win over Reading. With Ambrose available on the bench, or Holland an equally versatile option, it seemed managerial tinkering of the very worst kind.

The return of Lloyd Sam should put this right (no pun intended), with Bailey returning to the centre, presumably to partner Holland (Zheng is not mentioned on the official website, so I guess he is unavailable although it's unclear why). Darren Ambrose may be a surprise pick however on either right or left, although he has rarely impressed on either flank.

Pards has never seemed entirely sure about Moutaouakil at right-back, so Cranie could very well make his debut in his stead. At left-back meanwhile it seems a toss-up, although Youga rather than Basey would be the more 'progressive' option.

Hence I predict Pards will go as follows: Weaver, Cranie, Youga, Hudson, Fortune, Bailey, Holland, Sam, Bouazza, Varney, Gray. Subs: Elliot, Basey, Ambrose, Dickson, Shelvey.

NY Addick predicts: Charlton 3 (Varney, Bailey, Dickson), Wolves 2 (Ebanks-Blake 2). Attn: 22, 018.

Tuesday, September 09, 2008

Roger and Out

I came to Flushing Meadow on a beautiful sunny evening to see history made, and I wasn't disappointed. In light of our hopes for Murray, and Federer's unprecedented Grand Slam target, I certainly had the bases covered as they say.

With an exceptional display of near flawless tennis, Roger Federer became the first player to win both the US Open and Wimbledon on five consecutive occasions.

This year's US Open witnessed the 18th consecutive Grand Slam in which Federer has reached at least the semi-final. That's 90 times that a collection of qualifiers, wannabes, and lower-ranked seeds have drawn the Swiss before the semis, and 90 times that they've been found wanting. Indeed only 3 of his 18 semi-final opponents have triumphed over him.

He really is a phenomenon and surely the greatest player to have played the game. The similarly-heralded Pete Sampras won the last Grand Slam he competed in at Flushing Meadow in 2002, and whilst his 14 titles still betters Federer's 13, they were accumulated over a 12-year period with plenty of dodgy early-tournament defeats in between.

Even on the much-maligned clay of Roland Garros, Federer's three runners-up compare far more favourably than Sampras' single semi-final in 1996 (he failed to even reach the 4th Round thereafter). Given that few can name let alone remember recent winners of the French (Gaudio, Bruguera, Costa etc..), it's understandable that neither is greatly bothered, but at least Federer competes.

Andy Murray was brave tonight, but well-beaten. He was not lacking support though in a nearly full stadium, despite the unusual television-created start time of Monday at 5pm. Our patriotic attempts to drape a Union Jack over the seats however was met with condemnation, a particularly jumped-up steward declaring that we would be ejected unless we removed our 'banner'. "It's not a banner you pr*ck, it's a flag," declared my mate, although luckily he wasn't understood as his accent is far more Burnley than Bronx.

Murray had the humility in his post-match stadium interview not to blame his play, but instead to acknowledge Federer's greatness and how much he still needs to improve. He made too many unforced errors tonight against an opponent for whom they are always costly, whilst he palpably lacked a 'killer shot', at least compared to Federer's awesome forehand. If Murray bulks up then presumably the power will follow, but will it be at the expense of his renowned speed?

It's been terrific to watch a Brit that many narrow-minded Americans claim never to have heard of, almost go all the way in the cauldron of the US Open. In the cold light of day however, one wonders whether Murray may see fit to use part of his $1million cheque to invest in a razor, a hairbrush and a new clothing contract that doesn't require him to wear shapeless grey t-shirts. Image is everything, and I suspect that the Fred Perry brand may have taken him as far as it can go.

Monday, September 08, 2008

Hail Murray

"...the career of Andy Murray has just begun and based upon what I have seen he could well be basically anything he wants to be; his shot-making abilities are phenomenal. ......I have every confidence he will be going head-to-head with the very best for the next decade." (New York Addick, Sep 2006)

The shot-making abilities that I identified two years ago, are now aligned with exceptional speed and deep reserves of stamina. As a result, we have a truly world-class sportsman to be proud of, and his finest moment has just occurred in a stadium visible from my building's rooftop.

Those who continue to bemoan his alleged anti-English sentiments really need to get a life; his hardly earth-shattering comments after all were meant as a joke, and were made whilst he was a opinionated teenager.

He's one of ours, a damned talented sportsman and for once has the killer instinct that we've been crying out for. Just deal with it, just like you did when Chris Hoy (birthplace: Edinburgh) brought home three golds from Beijing.

The scoreline suggests that the match against Nadal was considerably closer than it really was. In truth, Murray dominated from start to finish, generating an incredible number of break points, and never allowed the Spaniard to play from the front foot (as he had done in great style at Wimbledon).

Tennis purists meanwhile, regardless of their patriotism, can surely simply enjoy watching one of the most naturally gifted players of a generation. In a game that is so often dominated (ruined) by big servers with zero panache like Andy Roddick, we can now witness a Grand Slam finalist whose most potent weapon is arguably his drop shot.

When rallying from the baseline meanwhile, Murray demonstrates the type of variety which can unnerve even the likes of Nadal, eking out unforced errors by preventing opponents from attaining a rhythm.

With the inevitably dull women's final about to start, it's just a shame that no-one in their game (at least since Henin retired), has realised that there are other ways to win than merely walloping the ball from both flanks.

Luckily thanks to the talented likes of Murray, but also Djokovic, Gasquet, and Ferrer amongst others, men's tennis is currently as interesting as it has ever been. Keep a long-term eye out too for 18-year old Japanese player Kei Nishikori, as talented a prospect as Murray.

It is appropriate that Andy Murray's attire is adorned with the name of the last Brit to win a Grand Slam, Fred Perry in 1936. With many fans hoping for a Nadal/Federer final, combined with the odd 5pm start on a Monday, plenty of re-sale tickets are available for the final. It's highly tempting despite the lofty asking prices, although I intend to wait until at least lunchtime incase any cheeky free corporate tickets miraculously find their way to me.

As the rain poured down here on Saturday night, it was curious to investigate the odds on both the rest of the Nadal/Murray match, and the overall men's singles. Murray was considered a 4/6 favourite (not surprising given his two-set lead), but Nadal was still considered a more likely overall winner than Murray was. This reflected of course the belief (incorrect in my view) that Federer would far sooner face Murray than Nadal.

Despite having only played each other three times, Murray has a 2-1 win/loss record over the amazing Swiss, and with Nadal having brought Federer's 5-year winning streak to an end at Wimbledon, it'd be a brave man to bet against Murray's momentum ending his 4-year streak at Flushing Meadow.

Thursday, September 04, 2008

Alan Curbs his Enthusiasm for West Ham

"If his name was Alain Curbishlée, he'd probably be planning a Champions League campaign quite literally as we speak..." (New York Addick, Sep 2006)

I wrote the above whilst Curbs was enjoying a well-earned break from management, and several weeks before he made the unfortunate decision to join the 'Newcastle United of the South'.

At the time, I suggested that his Cockney twang and uncommon modesty would ensure he would remain underappreciated, at least outside of the safe surroundings of SE7. Less than two years later, I've been proven right but it gives me no pleasure.

It seems a miraculous escape from relegation, followed by a creditable 10th position, and now two wins from three this season, was not enough for West Ham's board and its demanding fans. Those same fans have witnessed no major trophies since 1980, yet have now seen off seven managers since the similarly decent John Lyall was sacked.

At least Curbs had the honour to resign before he was pushed. And moreover if he was given the inevitable generous payoff, it seems odd that he was free to give exclusive interviews to Sky Sports within hours of his resignation.

After the euphoria of his opening win over Manchester United, he found himself under early pressure as fans questioned the signings of BoaMorte, Quashie, Neill etc.. Although the club had a new Icelandic-backed penchant for paying top wages, his universe of available players was surely limited by their uncomfortable league position?

Moreover, he needed to find players both with the stomach for a relegation battle, and a willingness to wear the shirt in the Championship if required. As I suggested to a West Ham-supporting pal this afternoon, that probably ruled out the likes of Kaka.

Some cynical fans claim West Ham avoided relegation in spite of Curbs, rather than because of him, pointing instead to the late-season influence of Carlos Tevez. Certainly the Argentinian was influential, but then again Curbs was forced to begin 2007/8 without his best player, yet still managed a 10th place finish.

Having secured Premiership football, I was surprised however to see him potentially create trouble for himself by opting for the likes of Ljungberg, Dyer and Bellamy whose character and desire were surely in question. However in fairness to Bellamy, he may well truly be a misunderstood character.

Those West Ham fans who point to his mixed transfer record, conveniently forget that he acquired decent value for a succession of players whose careers have since hardly exploded (Benayoun, Zamora, Konchesky, Reo-Coker, Harewood).

He clearly however continued to maintain his near-obsession with functional versatile players, to the detriment of his image in the eyes of those who merely wished to be entertained.

Having perhaps developed this trait the last time he managed a club based at Upton Park (Charlton from Aug 1991-Dec 1992), he thus resembles a war survivor who continues to hoard food, despite a sudden post-war abundance of choice.

The brilliant Martin Samuel wrote yesterday (in light of the Man City takeover) that, "..the most thankless job in football is to be in charge of a club who believe they should be big..." He was referring to the owners of the clubs in question, but he may just as well have been referring to the managers, because therein lies the tension now clearly evident at both Upton Park at St James' Park.

West Ham fans claim they accept the reality, but it's in their footballing DNA to be entertained, and Curbishley simply couldn't deliver. As more humble Charlton fans, we happily accepted Premiership finishes of 7th and 9th that seem even more amazing now, in light of our present reduced circumstances.

Unfortunately for Curbs his lack of charisma (in public at least) ensures he will never be fully accepted by any fans with unrealistic expectations. As I've written countless times in the past, his success with Charlton created his own career 'glass ceiling' because the only clubs bigger than us when he left didn't want him as manager.

Sadly it's that lack of charisma that did for him more than the lack of entertainment. Which teams outside of Arsenal, Manchester United and perhaps Spurs truly play entertaining football as a matter of choice, rather than as the occasional accidental result of circumstances (similar to those that produced the Charlton vs. Reading spectacle)?

If Martin O'Neill expressed a sudden desire to manage West Ham, the Eastenders would be overjoyed yet the Irishman sets his teams up to play the same 'functional football' that Curbs did, albeit slightly better. He does jump higher in the air when Villa score however.

For seven years the Hammers had one of the few managers who seemed to combined the two traits so much in demand, but Harry Redknapp was shown the door in 2001. It seems West Ham managers have to be both charismatic and successful all of the time. Good luck.

West Ham fans are clamouring for Slaven Bilic, but they may be disappointed. Other than the same ex-West Ham connection that Curbs himself enjoyed, why the appeal of the Croatian? Undoubted charisma of course, allied with a limited but impressive track record, which may be questioned as soon as next Wednesday if a new-look England gets its way.

But their emphasis on charismatic managers is prone to huge selection bias, because three of the managers of the 'big four' are hardly the most engaging characters (Wenger, Ferguson, Benitez). Certainly charisma and success are not mutually exclusive (Mourinho, Clough etc..), but yet perhaps the most charismatic of them all is about to walk way from Newcastle again.

In my view, the issue comes down to unrealistic expectations on behalf of a club's fans, allied with a preference for the mysterious foreigner rather than the predictable Brit.

My often single best friend likes to opine that, "...you can't have a laugh with foreign birds." Although I encourage him not to rule out 99% of the world's female population (particularly those carrying a Scandinavian or South American passport), he actually inadvertently makes a serious point. There are cultural differences, and you can embrace them or reject them.

When Curbs speaks, West Ham fans can tell he's not the brightest bulb in the chandelier. When Bilic speaks they simply can't tell, so they give him the benefit of the doubt. When Alex Ferguson speaks you can't understand what he's saying, but he's just brought home the Champions League. Juande Ramos meanwhile doesn't speak at all.

Curbs is a very good manager, a decent man, but limited at the very highest level. Luckily for Curbs, West Ham don't operate at the highest level, nor are they likely to do so any time soon thanks to their Board's scattergun approach to governance.

A club like West Ham (and Charlton before them) needs a manager who can deliver regular midtable mediocrity. Their fans demand more of course, but they ought to be careful what they wish for. As we have since found out, it may be midtable mediocrity in the Championship.

Tuesday, September 02, 2008

Premiership Sheikh Up

The events of the last couple of days have once again proved what a ridiculous circus the Premiership has become.

However lest one conclude that the stories concerning Manchester City and Newcastle are independent of each other, they are potentially hugely interesting in light of their concurrence.

When I was in Abu Dhabi in April 2008, I stumbled across a Premiership chairman in the lobby of my hotel. Given that it's not typically a place one would choose for a holiday, it was fairly apparent to me what might have brought him there, because the wealth being generated in the emirate is unprecedented.

If the club in question was for sale then unfortunately for their fans, they appear to have been trumped by Manchester City. It would be inappropriate to name the Chairman, although I would hint that he represents a London club, a little peeved by the actions of one of its (now former) players.

The financial position of Abu Dhabi and its ruling families is mind-boggling as I will attempt to elucidate upon, and thus indirectly those Premiership clubs presently owned by less deep-pocketed (and often leveraged) investors are potentially at deep risk in ways that are not yet fully understood.

Abu Dhabi is the largest and by far the richest of the seven states that comprise the United Arab Emirates (UAE). It comprises the bulk of the land area of the UAE, as well as the eponymous capital city sitting on a surprisingly attractive sliver of land in the Persian Gulf.

Like much of the Gulf region, it was dirt poor until oil was discovered in the late 1950s. Today, with oil production of nearly 3million barrels per day, and with approximately 100 years of proven reserves still in the ground, the wealth being transferred every single day from oil importers is extraordinary (approx $300m per day at $100 per barrel).

With just half a million citizens to keep educated, housed and healthy, there is plenty left that can be saved and invested around the globe to ensure future prosperity. As a result, the emirate is today somewhat misunderstood if seen simply as one-way bet on the oil price, and thus we unfortunately cannot affect City's chances simply by driving a smaller car.

The Abu Dhabi Investment Authority (ADIA) and other related entities exist to invest the state's oil surpluses, and are believed to have as much as $1,000billion under management. Thus even if the oil price was to fall much further, the negative impact is likely to be materially outweighed by their returns on investments. Today it is truly an 'asset-based' economy.

As a Charlton fan, it is a shame so far that one of those related entities, the Abu Dhabi Investment Company (or ADIC for short) has not seen the obvious synergies with its South East London-based namesake. Now I don't know about you, but I'd be willing to tolerate a slight misspelling of our nickname in return for a enormous cash injection.

During the current credit crisis various sovereign wealth funds have been amongst the 'investors of last resort' for capital-constrained banks around the globe, for example Abu Dhabi invested $7.5bn in troubled Citigroup in November 2007. Ironically it was a Saudi prince (Al-Waleed bin Talal) who had made billions out of a similarly distressed investment in the bank in the 1990s.

Abu Dhabi has also been accumulating 'trophy assets' around the globe, such as New York's iconic Chrysler Building. It is in this context that the purchase of Manchester City ought to be viewed, notwithstanding any jokes about how they may inadvertently have confused City with United.

It is not clear how (or even if) they intend to make money out of such trophy investments. However with the aforementioned surpluses being added to at such rapid rates, they simply have to reinvest some of the capital in 'hard assets' somewhere, because simply owning financial assets such as government bonds or foreign-denominated cash have clear inflation and currency risks.

Thus in the same way that land and prime property in unique locations holds such appeal to them in this context, football clubs hold an appeal simply because simplistically, 'they're not making them anymore'.

In the particular case of Abu Dhabi, they are also keen to be seen as a true 'global city', and thus to put both its government-owned and local privately-run businesses firmly on the map, as they seek to slowly diversify their economy.

It is certainly possible that their desire to be seen as investors that the West can trust, will outweigh the profit motive, particularly for their higher-profile (and frankly immaterial) 'feel good' investments like Manchester City.

One need only look across the coast to Dubai to see an example of the model at work, although Dubai is considerably less wealthy than Abu Dhabi, which explains their own more frantic attempts to build a regional tourism, finance and trade hub virtually from scratch.

Abu Dhabi can thus afford to take its time and learn from some of Dubai's mistakes; the traffic and public transportation options for example are both dire. Where Dubai has gone for the spectacular, or spectacularly crass depending on your point of view, Abu Dhabi will instead build the first offshoot of the Louvre museum outside of France.

Abu Dhabi meanwhile has now secured a Grand Prix, a nice reposte to Dubai's lucrative horse racing tradition, whilst to further emphasise its more sophisticated goals, there is now an annex of Paris-Sorbonne university situated there. Its national airline (Etihad) meanwhile has just ordered more than 200 brand new planes, one of the largest orders in aviation history.

Like its neighbour, Abu Dhabi too has a liking for offshore developments, its answers to the better-known 'Palms' in Dubai including Reem Island and Saadiyat. And unlike those Western commerical developments being postponed due to funding difficulties, these developments will be completed come what may.

So I think it's fair to say that Manchester City are now comfortably the richest football club in the world. If their new owners want them to win every trophy on offer, then they will do so, timing to be determined. The more interesting question is what this means for the other clubs, the Premiership and English football in general.

As usual the biggest winners (other than City itself) will be the top players and their agents. The obvious losers will be those clubs lacking a similarly deep-pocketed backer and/or those that were sold before the credit crisis, and which now find themselves potentially both leveraged and now firmly outmuscled financially.

How would Arsenal's finances look if City steal 4th place this season or next? Is there anything worse for West Ham, than being owned by an Icelandic consortium after the Icelandic economy has virtually collapsed? How else do you explain the sudden sales of Anton Ferdinand and George McCartney, two of their most promising young players?

And shouldn't the shenanigans at Newcastle be viewed in terms of a pure money-maker suddenly realising he's not going to make any money? If you've visited the jumble sale currently masquerading as Lilywhites, you'll know that Mike Ashley has little room for sentiment. And if the self-proclaimed and barcode-wearing 'best fans in the world' had left 5,000 seats empty at the opening home game, I'd also be concerned.

The stakes for these types of clubs are now enormous and their very survival would be in question in the event of relegation, or in the case of Arsenal even a failure to qualify for the Champions League. Those flats at the old Highbury don't look quite so attractive in the teeth of a housing crash. Meanwhile just how committed are Liverpool's new owners? Not committed enough it seems to find an alternative way to finance the new stadium.

The future of well-run clubs with plenty of home-grown talent (Everton, Middlesbrough etc..) looks fairly secure however, even if they will struggle to compete for silverware at least in the near-term. The likes of Villa and Spurs meanwhile will seemingly muddle along just as they always have, their concurrent aims to develop the best English talents worthy, but challenged ultimately if any of them actually turn out to be any good.

The current structure of English football unlike its American sporting equivalents, is that the relegation system exists as an omnipresent threat of total wipeout, particularly for those clubs not quite in the financial super-league. The example of Leeds is real and also relevant, both domestic champions and Champions League semi-finalists in recent memory.

In this context, the answer seems obvious for those less well-endowed clubs. Simply cease seeking to compete on transfer fees and wages, and accept one's place in the new hierarchy, try to balance the books and hope for the occasional Cup success to appease the fans. Aren't Spurs seemingly already going down this route?

But of course the fans of these clubs won't allow it, and most owners don't have the nous to encourage patience and give managers time. The ridiculous treatment of Alan Curbishley by fans of West Ham, proves how poorly understood are the new realities. Perhaps only Everton supporters can presently compete for fickleness.

Meanwhile the lack of a salary cap and the crazy transfer system (to be discussed in a later post) ensure that clubs are structurally unable to be both successful and make profits on a consistent basis.

None of this appeared to matter during the boom times however, because there was always a Mike Ashley around the corner ready to pay sillier money for a club. As Martin Samuel of The Times puts it, "..the time to invest in English football was half a century ago, when there was a maximum wage and a 60,000 walk-up every week.."

Manchester City got lucky, but the Arabs don't want to own every club because that ruins the point. However they also know that they need the opposition to maintain some reasonable degree of ongoing parity, for therein lies the very essence of sport.

The very clear answer to both these dilemmas is that the biggest clubs will doubtless slowly push for a relegation-free top division, an outcome poetically described by Garry Cook (City's executive chairman) as a 'central entity'.

The very biggest clubs will surely push for a European 'super league' even though the stadia will be half-full. If you want to know why that one won't work, simply count the minimum number of clubs that each country would reasonably demand.

As Cook puts it, "Do Saudi Arabians want to buy - and no disrespect to these clubs - Stoke City or Derby County?.....The sport will change and the fans will find a way to get passionate about a piece of it."

Current fans will find a way to 'get passionate' about something else of course. Perhaps some new fans would take their place, but not at £50 per ticket they won't. Meanwhile the much-claimed uniqueness of the Premiership brand internationally is grossly overstated, benefiting just a handful of clubs (and only then at the margins).

I've travelled extensively and have never seen someone proudly wearing an Everton or even Manchester City shirt. When the mighty Manchester United played Portsmouth in a pre-season friendly in Nigeria in July, the 60,000 stadium was only half-full (and most of them didn't pay). There goes their chance of a 39th game then.

If the Premiership becomes a 14-club league with no relegation then Charlton would presumably go part-time and survive, albeit without it being clear what for? Then again, one wonders whether some of the problems already being experienced by the likes of Luton and Rotherham, are down to the fact that their ilk should have gone part-time years ago. How many commercial entities with their limited revenues seek to support such a lengthy full-time payroll?

Potentially it might even be highly positive for Charlton if our finances are now back in shape. It's easy to complain about the gap meanwhile, that now exists between us and the big clubs, but then again it's always been the case. After all, we last won a major trophy in 1947, fully eleven years before Abu Dhabi discovered its oil.