As it can’t possibly get any lower, and no one can really afford for it to get any higher, it is expected that those people who bear the awesome responsibility of setting the Bank of England’s interest rate are expected to retain the status quo at 0.5% for the third consecutive month. Financial analysts are focusing more on the anticipated statement from the BOE on money circulation, and if any more money would be injected into the UK economy after last month’s announcement that a further £50 billion would be made available.

The Barclay’s pension scheme sage seemed to be reaching a conclusion, with the announcement made yesterday that the bank intended to close its final salary to their existing members. Barclay’s move, if successful, is seen in economic circles as likely to clear the way for other major employers to take a similar step.
Barclay’s group chief executive, John Varley, announced in a letter to group sent to the bank’s employees that he ” had reluctantly come to believe the move was necessary because the current scheme had become untenable” The bank’s pension scheme had reversed from being £200 million in the black to over £2 billion in the red within the space of 12 months.

Varley went on to explain that “allowing the current scheme to continue would threaten not only Barclays’ ability to meet pension promises to its workers but also both the sustainable profitability and the sustainable capital ratios of the group.

Meanwhile, the trade union acting on behalf of the bank’s employees, Unite, announced that the move was being regarded by them as a breach of contract.
When speaking of wage bills and pensions, everything fades into insignificance when we get around to talking about the Premier League. As the season winds down to a halt and wage bills are being added up, it was announced that they have exceeded the £1 billion mark for the first time in the leagues star studded history. However analysts agree that season 2008/2009 may have witnessed a peak for what is currently regarded as Europe’s top soccer league. The weak pound and the forthcoming 50% tax band make plying their trade in the UK a lot less attractive for the superstars of the European arena.

Chelsea who only succeeded in winning the FA cup had the dubious distinction of topping the wage bill league, laying out £172 million on salaries. Champions Manchester United who also won the league cup paid out £121 million to their superstars. Not bad value when compared to the £101 million spent by Arsenal and the almost measly £90 million spent by Liverpool who didn’t manage to take home a single domestic trophy.

The only sanity that can be drawn from these figures is that the wages-to-revenue ratio dipped to 62 per cent, as revenues spread across the twenty clubs that took part in the league grew by 26 per cent in the 2008/2009 season to reach £1.9 billion.

The company handed the responsibility of running the UK’s mainline rail network, have announced that they have succeeded in reducing their operating costs by £360 million in the financial year up to March 31 2009.

Network Rail have been struggling for some time to bring the soaring price of running the system under control, under pressure by the UK regulator, and while the figures are commendable the fail to meet the target set to cut unit costs by 31 per cent over the five years to the end of March. This was the first time that Network Rail has failed to meet the target.

The FTSE 100 had not a bad day on Wednesday rising 41.56 points to close on 4424.98, while the FTSE 250 reached 7688.19
The pound continues to flatter against the dollar but less so against the Euro

Pound/US dollar 1.6393
Pound/Euro 1.1498
Pound/Japanese Yen 157.843
Pound/Swiss Franc 1.7477

US stocks fell on Wednesday as Federal Reserve chairman Ben Bernanke called Congress to immediate action to reduce long-term budget deficits.
The Dow Jones was down 65.59 to close on 8,675.28, while the
NASDAQ fell by 10.88 to close at 1,825.92

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Tags: Bank, Banking, Barclay, Barclays, Financial News, Interest Rates, Recession, UK Banks

Signs that the gravy ridden sponsorship train may be leaving the station were very much in evidence in the United Kingdom yesterday. First of all when the news, albeit expected, hit that the insurance giant American International Group (AIG) will be unable to renew its shirt sponsorship deal with Manchester United world club soccer champions. The sponsorship deal is due to be renewed in May of 2010. The cash strapped group will have no option but to pull out of the arrangement. Not only that, they are also trying to reduce any costs that the can in the current sponsorship deal.

The current four-year $100 million deal provided AIG with tremendous exposure not only in the UK but throughout the World, and the disappearance of their logo from the manly chests of United’s global superstars may yet cost them business, and a lot of it. When you consider that AIG is currently being milk fed by the US Federal Banks to the tune of around $150 billion, then a four year sponsorship deal costing a mere $100 and over four years still seems like a worthwhile investment.

Yet it may herald a turning point for the golden years of sports sponsorship may be over, if only temporarily. UK soccer clubs, from the largest to the smallest depend on sponsorship for around one third of their income, and Manchester United with some of the highest paid soccer superstars in the World on their books will certainly miss that AIG income if they do not replace them.

It is possible to say that all of the Premier League has become slaves to sponsorship, with the financial downturn seeing more and more fans finding it difficult to justify as well as to raise the ticket money to attend league games. With Premier League sponsors Barclay complaining of a severe case of burst balls, it is difficult to imagine them being able to continue their sponsorship activities for the coming season.

Meanwhile Manchester United, who till now have always managed to fill Old Trafford to its 74,000 capacity for every game, as well as having a global following that is the envy of every other club in the World, have been no slouches in their moves at finding a replacement sponsor, and are prepared to go truly international to look for them

AIG are obviously keen to get off the hook, and if a sponsor can be found for season 2009/2010 they would be prepares to forego the privilege of sponsoring for that season.

Apparently very interested are the financial services and real estate Indian based company Sahara who already claim to have received an “elaborate” sponsorship proposal from the club.

Money rich Sahara, who currently act as sponsors the Indian cricket team and are no strangers to sports sponsorship. Other possible suitors for the Manchester United sponsorship deal being suggested are Saudi Telecom, British insurance company Prudential among others.

Not only Soccer has been hit by the sponsorship drain. Even more glamorous and hungry for cash Formula One motor racing has also been hard hit, with sponsors dropping like flies.

The exaltation surrounding the UK’s hosting of the 2012 is becoming increasingly short lived as the credit crunch also appears to be taking its toll on financing even the most basic aspects of staging the games.

Olympics minister Tessa Jowell has been forced to go way over budget by releasing £460m to enable construction of the Olympic Village and media centre to go ahead. It was hoped that a sponsor could be found to finance this stage of the building, but when none was forthcoming, the Olympic committee were forced to dig deep so that building could go ahead.

Fears are that future building projects will also suffer the same fate, and that the Olympic fund will go well over the 9.3 billion pound budget as sponsorships and future property deals are very thin on the ground.

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Tags: American International Group, Barclay, Financial News, Manchester United, Premier League, Soccer, Tessa Jowell