PSV Eindhoven’s fate to be decided tonight

PSV 

I’ve no time to relate what has happened to my favourite Dutch club and I’ve no interest to regurgitate whatever that has been said in the Dutch newspapers – but the dormant giants of the Eredivisie has fallen into difficult times financially and this situation was obviously not helped by failing to qualify for the Champions League playoffs (which goes to FC Twente Enschede for finishing 2nd in the Eredivisie). There have been numerous stories written about PSV’s financial clout, and I’d name Ernst Bouwes’ excellent article on Soccernet to be the most informative of all. This article is also a good read.

So, it has been reported that the Eindhoven city council would be voting on 28 June 2011 to decide whether to buy the land upon which the Philips Stadion is erected + De Herdgang training centre or alternatively, leave the club to fight for its own fate against severely uneven odds. However, the club has secured the collective investment of €10,000,000.00 from North Brabant firms, ASML and VDL Groep to bolster its finances. Of course, such loan is attached to the proviso that the club’s multi-million Euro restructuring would proceed. Regardless, whatever that has to be done has already been carried out.

asml                                                        vdl_logo

The Eindhoven city council is the legislative council at the municipal level in Eindhoven, of which the mayor comes from the Labour Party (Partij van de Arbeid). So far, we have been informed that the following political parties have been in support of the proposed transaction – Christen-Democratisch Appèl (Christian Democratic Appeal), D66 (Democraten 66) and a “large majority” of Partij van de Arbeid (Labour Party) whereas the People’s Party for Freedom and Democracy (Volkspartij voor Frijheid en Democratie) has been positive about the deal but has not committed anything so far. The parties who opposed the deal are the GreenLeft (GroenLinks) and the Socialist Party (Socialistische Partij). When politics comes into football, though, it could get messy – but it’s not PSV’s call to decide whether to forge ahead in this transaction or not. Such is life – money is king.

Such financial rescue mounted by a city council of the Netherlands is not unique to Eindhoven, nor is bankruptcy a strange phenomenon in the Eredivisie. In Arnhem, the city council had to step in the breach in 2003 to salvage the club via a similar financial rescue package and bought the unique GelreDome stadium. PSV’s provincial rivals, Willem II Tilburg also had to swallow the bitter pill and was ‘bailed out by the Tilburg municipality’.

Dutch teams would look enviously across the British channel where the English Premier League guarantees huge returns for even newly promoted clubs like Swansea City to the tune of £90 million for participating in the august league. The Eredivisie simply does not have the right pulling factors to attract such hefty TV money or other sponsorship deals – a small population for instance, as compared to its neighbours Germany and France, and the other massively populated countries like Italy, Spain and the UK.

Even the other two giant teams of the ‘Top Three’ of Holland – Ajax Amsterdam and Feyenoord Rotterdam have been staring at red figures in their account books in recent history. Other insightful articles on this subject matter can also be found here and here. The consequences of bankruptcy is very real: the following clubs with a rich history in the Dutch football scene have been declared insolvent and have disappeared altogether – RBC Roosendaal and HFC Haarlem. A third club, BV Veendam was almost that close to hell but came back with another name – SC Veendam. More clubs could yet follow – in a list published by the Telegraaf (and reproduced here for the benefit of English readers).

Of course, the 2008 financial crisis have also hit the Dutch clubs hard. The Netherlands was in recession (as were many other European countries, bar Poland and Albania who recorded growth in their GDP for 2009) and it is pretty amazing that some Dutch clubs do continue to exist as they did –  living on modest TV revenue, above average players who are likely to get sold to continental teams if their stock do rise and a depressed public who would be shelving entertainment (that could be pared down) aside in the face of financial uncertainty.

PSV may yet survive this financial scare but if the bleak, overriding factors enveloping Dutch football currently is a crucial hint of the future, we might get a hint of what may come in the future.          

This entry was posted in European Football. Bookmark the permalink.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s