Doomed dreams

Tony Fernandes should have measured clothes against his own personal size. It is obvious that Tony Fernandes is a complete loser, for his over ambitious personal greed to participate in sports at global level as a team owner.

AirAsia chief’s EPL venture may suffer huge setback as QPR faces RM310m fine

BY LEE SHI-IAN
NOVEMBER 17, 2013

Fernandes enjoying a game at Loftus Road last season when QPR were in the English Premier League. - November 17, 2013.Fernandes enjoying a game at Loftus Road last season when QPR were in the English Premier League. –

November 17, 2013. AirAsia boss Tan Sri Tony Fernandes’s Queens Park Rangers (QPR) is set to pay the price for last season’s excessive spending with a potential £60 million (RM310 million) fine looming, the Daily Mail reported.

If the fine is imposed on QPR, it will be the biggest in British football history and the first under the Football League’s new Financial Fair Play (FFP) rules.

QPR has racked up huge debts and massive annual losses largely due to the signings of dozens of players on huge contracts in recent seasons, the Daily Mail reported.

The expensive signings include Christopher Samba (£12.5m), Loic Remy (£8m), Stephane Mbia (£5m), Samba Diakite (£4m), Esteban Granero (£3.5m) and Park Ji-sung (£2.5m),

There were also a number of players who were signed by QPR without a transfer fee but have contracts worth up to £100,000 (RM517,000) a week.

The FFP was introduced by the Football League in all three of the divisions it operates from the beginning of the 2012/13 season.

The purpose of the FFP is to reduce the levels of losses being incurred by clubs and to establish a league of financially self-sustaining professional football clubs.

The £60 million fine is being imposed because of the massive amount of losses QPR are reporting, believed to be £80 million (RM413 million) for last season.

In a worst case scenario, the Daily Mail reported, if the fine is imposed on QPR, it will compound the club’s financial malaise and may even spark a meltdown.

The Daily Mail added that if QPR were to gain promotion to the English Premier League (EPL) this season, the fine would be levied by the Football League in January 2015 under their new FFP rules.

The new FFP rules will see clubs which overspend get “taxed” on their losses. QPR are currently third in the League Championship and are among the favourites to win promotion.

If they fail to get promoted, they could avoid the £60 million fine or at least postpone it. However, the club will still be hit with a lengthy transfer embargo in this scenario.

The Daily Mail explained that while the situation was complicated, in layman terms, Championship clubs have to pay a £1 fine for every £1 they lose over £18 million in the 2013/14 financial year.

Club sources told the Daily Mail that the club is expecting to post losses of about £80 million for 2012/13.

However, the club is not obliged to publish its accounts until next spring and have declined to comment on its losses.

Tony owns two-thirds of QPR while the remaining one-third is owned by the Mittal family, who are among the UK’s richest people. Tony has estimated that he has ploughed £50 million into QPR since taking over in August 2011.

Due to his majority shareholding, Tony has the ultimate power at the club and he was responsible for sanctioning the hiring of Mark Hughes as manager and the spending spree which followed.

It was also Tony who fired Hughes after QPR failed to win a single league match in the first half of the 2012/2013 EPL season, then hired former West Ham, Portsmouth and Tottenham Hotspur manager Harry Redknapp, who also bought more players.

Ultimately, the hiring and firing of Hughes and Redknapp along with the large turnover of players was in vain as QPR were relegated last season.

The Daily Mail reported that the club expects to record another massive deficit for this season, and it is the losses in 2013/14 that will be measured in the calculation of any fines.

“If QPR’s losses for this season are £80 million, the fine will be about £62 million or the equivalent of all of the club’s EPL income for next season (if they are promoted).”

“Even if the 2013/14 losses are as low of £60 million, the club still faces a potential fine of £40 million,” the Daily Mail reported.

The last publicly available accounts released by QPR was in the 2011/12 season, when they reported losses of £22.6 million.

During that time, QPR also revealed that they had debts of £89 million and a wage bill which had doubled from £29.7 million to £58.4 million.

The Daily Mail said it was pertinent to note that the doubling of the Loftus Road club’s wage bill had been reported before the influx of expensive signings made by Hughes and Redknapp.

The English daily reported that the wage bill for QPR’s relegation season was expected to be around £90 million, or about 150% of the club’s total income of £65 million.

Most clubs in England are tried their best to keep a sensible wage ratio of close to 50% of their turnover to remain in the black.

Following their relegation, QPR have offloaded some of the top earners at the club in an effort to slash their wage bill.

Christopher Samba was sold back to Russian club Anzhi Makachkala for £12 million while Loic Remy joined Newcastle for £2 million. Park Ji-sung has also returned on loan to his former club in Holland, PSV Eindhoven.

QPR’s income this season has plunged due to relegation from the EPL, most of the lost revenue being due to the massive reduction in television money. – November 17, 2013.

************

The fine is for the amount of losses QPR faced factored to the value of players acquisition the club did. Tony Fernandes is a 67% owner of QPR.

Fernandes personally ventured into QPR in second half of 2011 and getting Malaysia Airlines to pay for it was part of his calculations, seemingly when the ‘Malaysia-AirAsia Share Swap’ which was unprecedentedly materialised on 9 August 2011. However, the scheme short-lived and QPR is without Malaysia Airlines’ sponsorship.

Fernandes was over ambitious with Formula 1 too. It doesn’t look like he has enough funds to go the distance with a Formula 1 team. Thus he was hoping that GLCs like Petronas and Proton to go along with him in this project.

Current season F1 teams standing

Current season F1 teams standing

It is proven that Formula 1 isn’t for dreamers and low caste teams.

The strategy for his dreams in global sports is almost so crystal clear; start a team, get others to pay for it and then maximise benefit from the branding. It is not about his love for the sports. Probably if he could, he would start a sail team and compete in the highly coveted America’s Cup.

America’s Cup

Had Fernandes was serious about the sports, he ought to have started smaller. Probably with a Malaysian team. However, it was the branding at a bigger market that his sights are aimed for.

For the record, AirAsia was fined by the Malaysian Competition Commission of RM10 million for the ‘Malaysia Airlines-AirAsia Share Swap’ scheme. Fernandes should have been made accountable for this fine, instead of the company.

It is time that Fernandes fire himself, once and for all. Apparently, he flunked exactly if not worse than each of the AXN Apprentice Asia’s Season 1 aspirants that he fired on the show.

Published in: on November 17, 2013 at 23:00  Comments (4)  

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4 CommentsLeave a comment

  1. Maybe –

    1. Too fast too furious. Booming business in low fare, later turned him high on Speed, the prestigious Formula One and finally, to be The Soul Field Player with over ambitous dreams – fulfilling Recognition as the No 1 in the world business ranking. Own effort thats what people said.

    2. In business, the fact is, to grow big is to grow with the government policies of that countries. Since Tony was established in Malaysia, our government already gave in him full support through out the years with glorious achievements.

    3. Well, big businesses are always associated with political dominants. A must being Local. A must being Global. A must being self interest. No one can deny that.

    ” Once you consider yourself above all, your choices, even politically ‘ – then its no more you, but the money will do all the talking…. ” – self abasement.

  2. Tony Fucker wanted to be Richard Branson.

    However, Branson was far smarter than Tony Fucker. Branson didn’t go into sporting teams and compete in series of tournaments where he neither hv the competency nor ability to command.

    So he bite more than he could chew. Now, he’s choking becoz of these big bites.

    Serves him right!

  3. I thought Bernie and Co was smart to bail out of QPR at the right moment with a freshly minted tycoon !

  4. […] projects and schemes actually did not bring about the desired results if not completely failed and doomed. What is worse than all that he did not own up when these projects were […]


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