Hope Tony Fernandes Runs his Airline Better than he Runs his Football Team

The charismatic billionaire bought another charismatic billionaire, Bernie Ecclestone’s, 66% share of London football club Queens Park Rangers in August 2011 for some £35m. He has been hugely successful in growing his low-cost airline, Air Asia, which he is now bringing to India along with Indian partners, the Tatas. He has Indian partners in London in the form of the Mittal family (Amit Bhatia, Lakshmi Mittal’s son-in-law sits on the board) but that’s where the similarities end. Together, the owners have loaned the club some £90m but QPR made a loss of £23m this year. QPR sit second from bottom of the Premier League and are 7 points behind the teams above them. If they finish in the bottom three they will be relegated and it could have disastrous long term effects for the 130 year old club. For 2011-12 expenditure on player wages equaled 91% of revenues and will rise even further this season. For a team with a tiny 18,000-seater stadium, their wage bill is simply too high.

Tony Fernandes (right) poses with English footballer Anton Ferdinand (left) during the launching ceremony of an AirAsia aircraft. Photo Credit: Bazuki Muhammad / Reuters

The hands-on Malaysian, who is chairman of the club, regularly attends matches and genuinely seems passionate about his football team but has financed many baffling pieces of business. Though his Twitter feed is confident, he must be desperate for a strong finish to the season. Harry Redknapp is currently the club’s manager and has a mixed record when it comes to keeping clubs in the Premier League; though he’s managed to pull off a ‘great escape’ with Portsmouth when it seemed they were doomed to go to the 2^nd division (and win the FA Cup), he brought in too many players the small club simply couldn’t afford and when they got relegated the following season, they had to go into administration. They still haven’t recovered. Portsmouth went into administration for a second time and were relegated to the 3^rd tier of English football in 2012. They serve as a reminder to all English clubs of what foolhardy transfer dealing can do to a team.

QPR are in danger of going down the same road. Under Fernandes, QPR have gone through three managers in two years and have spent exorbitant sums of money to bring old, above-average players to a struggling club. Premier League clubs can afford to pay players hundreds of thousands of pounds a week because of the huge income they generate through TV revenue. If they drop into the 2^nd tier though, the parachute payments are considerably smaller and teams often have to sell the core of their playing squad just to make ends meet. Since 2011 QPR have been the busiest team in top division as far as players transfers go, bringing in a whopping 27 new players. Here’s the worrying thing: the average age of those players is 27.

Players like Park Ji-Sung (31), Jose Bosingwa (29), Tal Ben-Haim (30), Andy Johnson (31), Ryan Nelsen (34), Djibril Cisse (29), Bobby Zamora (30) and Robert Green (32) are experienced Premier league players who have had reasonably successful careers with bigger clubs. They seem like panic-buys, brought in to steady a ship. The problem is they’re not that good any more. As players get older, they demand higher wages. When players sign from big clubs (especially to smaller teams), they demand high wages. Fernandes has taken a huge gamble and the signings of Christopher Samba and Loic Remy for £20.5m in January 2013 (who will together cost the club a ludicrous £180,000 a week) sum up this risk. He has invested in hugely overvalued assets that are only going to depreciate and committed vast sums to financing them – money the club doesn’t have. He will have to bank-roll the team like Roman Abramovich did with Chelsea but if QPR get relegated – which they now look likely to do – he will be left with a business that is bleeding money.

Last season they pulled off a series of stunning results to stay up but this year they are a long way from safety. QPR have seven league games left and they have to take each, one at a time. Their home game against Wigan this weekend is a classic ‘relegation 6-pointer’ where a win could see them reel in a direct rival. Fernandes will need his well-paid veterans to earn their wages.

The thoughts and opinions shared here are of the author.