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Sorrell: 'The UK is a league one team'

Robert Peston | 08:44 UK time, Friday, 4 March 2011

There is an interesting analysis of the plight of the mature economies of the West, especially the US, in this morning's results statement from WPP, the advertising, PR and consumer research conglomerate - whose profits before tax rose 28.5% in 2010, to £851m.

Sir Martin Sorrell

This year's motor of growth has been the US, where advertising revenues bounced back much more sharply than WPP's founder and chief executive, Sir Martin Sorrell, had expected.

On a sequential quarter-by-quarter basis, US revenues increased 9.8% in the last three months of the year and by 9.9% in the penultimate quarter. Which is a multiple of the underlying growth in the US (where there are signs of recovery, but not at a rate that is yet making meaningful dents in the high unemployment rate).

So what's going on. Well part of it is simply what Sorrell calls the "dead-cat bounce" from recession-induced levels of advertising in 2009 that were lower as a proportion of GDP than at any time since the mid-1970s.

And for those who worry about the undue influence of big business, especially the banks, over US legislators, it is striking that Sorrell identifies a particular positive factor as "heavy political spending around the mid-term congressional elections, especially following the United States Supreme Court decision permitting freer lobbying".

But what I think is most significant is what Sorrell has to say about the advertising behaviour of the biggest companies. It is worth quoting his remarks:

"Most importantly, post-Lehman and the several corporate crises, we have seen a concern, or even fear, amongst Chairmen and CEOs and in the Boardroom about making mistakes and a consequent emphasis on cost containment and unwillingness to add to fixed expenses or capacity.
 
"Western-based multi-nationals are said to have over $2 trillion in cash on their balance sheets, but unemployment remains at stubbornly high levels, with only increases in temporary employment and limited expansion of fixed capacity in Western markets. Hence, a willingness to invest in the brand and maintaining or increasing market share, rather than increasing capacity and fixed expenses."

In other words, the recovery in advertising reflects nervousness, caution among corporate bosses about what the future has in store. They would rather advertise to sustain the position of their existing brands, than make big investments in new productive capacity or new products.

Unless and until they are prepared to increase investment, the growth prospects for the US - and by extension for the UK too - will remain relatively subdued.

It is worth pointing out that there was also a significant recovery for WPP in revenue generated in the UK. In fact, by region, the UK produced the second fastest revenue growth for WPP (after the US), of 5.9% in so-called like-for-like or underlying terms. This British recovery was also evident in yesterday's results from ITV.

That doesn't however mean that Sir Martin Sorrell has changed his mind about the UK and US becoming less and less important to WPP over time. In fact, with the contribution to WPP's revenues from new markets (ie the likes of China, India and so on) and new media (advertising and marketing on the net, mobiles, social networks et al) each approaching a third of the total, WPP is raising its target for income from these sources to between 35% and 40%.

Again it is worth quoting him at some length:

"The world continues to move at very different speeds, both geographically and functionally. By means of explanation, perhaps an English football analogy is helpful.
 
"First, The Premier League consists of the BRICs (Brazil, Russia, India and China) and the Next 11 (Bangladesh, Egypt, Indonesia, Iran, Mexico, Nigeria, Pakistan, Philippines, South Korea, Turkey, Vietnam) or CIVETS (Colombia, Indonesia, Vietnam, Egypt, Turkey, South Africa), along with new media (personal computer driven, mobile, video content, social networks).
 
"Second, The Championship, the United States, because of its size, immigrant, entrepreneurial culture and human and natural resources, along with an economically well-run and high value-added manufacturing export-led Germany and free-to-air television; third, League One, Western Europe, primarily the United Kingdom, France, Italy and Spain, along with newspapers and magazines; last, League Two, Japan, which has been stagnant for almost twenty years. Perhaps the United Kingdom, with its Coalition Government's emphasis on deficit reduction and long-term growth will gain promotion to The Championship?"

So to extend the metaphor, Brazil, Russia, India and China are - for Sorrell - the equivalent of Chelsea, Man Utd, Arsenal and Man City. Iran is Bolton.

And as for the poor UK, well for Sorrell it's Colchester or perhaps MK Dons, on the cusp of possible promotion, if George Osborne, David Cameron and Vince Cable manage the team properly (as per Sorrell's analysis of what's needed - which, of course, isn't every fan's prescription).

Ouch.

Comments

  • Comment number 1.

    Peston: "Sorrell: "The UK is a league one team""

    As distinct from a "Premier League" team I presume! Robert soccer analogies rely on a common understanding of the league structure. You should have explained the UK position of Premier, One and Two!

    Why does Martin Sorrell suppose that the UK isn't a league 2 economy? I think it is amazing that the British people still do not understand that they are a small has-been country desperately trying to hit far above its weight - we have 72 military aircraft and Libya has 279 and that about is the size of it!

    Sterling is a means for the international banks to thieve the money from the British people. We must get a real currency and be inside the market that uses it - fortunately we could still join the Euro and it is about time that you and the other 'commentators' stopped presenting the UK as some economic leviathan and tell it as it is. We are bust, just like Greece and Ireland and we must do two things, first make sure that the private debt bubble is properly busted and then join the Euro.

  • Comment number 2.

    Using the same analogy the UK might need some investment in new players and a decent manager then?

    Curses - no youth academy - so no assets to sell to raise a few bob.

    Looks like a relegation to the Confernece then...

  • Comment number 3.

    Perhaps Plymouth would be a better analogy for the football team.

  • Comment number 4.

    Way to go JFH, numero uno again.

    [Thinks - 'Will this get moderated?']

  • Comment number 5.

    It's not a very good analogy if it's based on growth considerations - the football league structure isn't based on how fast your team is improving. Perhaps we should think of China and India as Man City (big and getting bigger) and the Next 11 as Crawley Town (small and getting bigger fast). Then Egypt or Iran might soon turn out to be a Leeds Utd or a Gretna...

  • Comment number 6.

    York City? Who's York City?

  • Comment number 7.

    Sir Martin Sorrell of WPP certainly knows what he's talking about.

  • Comment number 8.

    1. At 13:30pm on 4th Mar 2011, John_from_Hendon wrote:
    Peston: "Sorrell: "The UK is a league one team""

    As distinct from a "Premier League" team I presume! Robert soccer analogies rely on a common understanding of the league structure. You should have explained the UK position of Premier, One and Two!

    --------------------------------------------------------------------------------

    To you as well John, there's a "Championship" in there somewhere.

  • Comment number 9.

    2. At 13:30pm on 4th Mar 2011, Gilthead wrote:

    Looks like a relegation to the Confernece then...

    --------------------------------------------------------------------------

    It aint so bad.

  • Comment number 10.

    Ahh, but the FA cup causes upsets in the League structure, so perhaps we will ssee the same :-)

  • Comment number 11.

    Well, they are starting from a lower point.
    And as they are chasing lower spending, perhaps they are trying harder.
    Also, their advertising Dollar goes further than it did.
    More for less !
    This high faluting stuff as little impact on the real world of ordinary people.

  • Comment number 12.

    Isn't part of the problem we're in because advertisers convinced us to buy things we didn't need with money we didn't have.

    Taking advice from them is like taking diet advice from a tribe of cannibals who intend to eat you once you've fattened up a bit.

  • Comment number 13.

    9. At 13:40pm on 4th Mar 2011, NorthSeaHalibut wrote:
    2. At 13:30pm on 4th Mar 2011, Gilthead wrote:

    Looks like a relegation to the Confernece then...

    --------------------------------------------------------------------------

    It aint so bad.

    --------------------------------------------------------------------------

    True but that's JFH's point - no point pretending we're Arsenal when we are in fact Turnip Utd and broke.

    Continuing this theme we should, perhaps, aspire to be Arsenal. Decent morals and structure, sustainable business model, almost there...

    If that means switching to someone elses league and playing with the Euro instead of Sterling then so be it.

  • Comment number 14.


    He did use the expression 'post- Lehman' quite a few times on the 'Beeb' this morning. He used it in a strangely biblical way. Maybe we are on the verge of the ' Age of Hilarious' or some other daft advertising term.

  • Comment number 15.

    Sir Martin Sorrell is one of Britains true business leaders a person who knows his industry and who knows how to position his company most of the time in the right place.
    The advertising industry job is to sell dreams it doesnt force us to buy the goods & services they pedal thats still our choice so I have to disagree with post 12.

  • Comment number 16.

    I don't quite understand what he is saying. It's a bit of a baffling analogy. I guess he's talking about growth rates? Perhaps some kind of analogy that takes into account both current position and speed of movement would have been more appropriate, like maybe the tortoise and the hare, or the tortoise and the arrow or something.

    In any case I don't agree that hacking a great lump out of our economy without making any solid investments, and allowing the banks to go back to gambling away our assets, will shoot us up the league tables. I think there's a massive possibility that the economy is going to tank.

    Or is he just talking about advertising revenues? Or... what?

  • Comment number 17.

    Surely 'twas always so as the stronger trampled the weak. So, after our relegation down Leeds style through two divisions, any climb back would be long, hard and painful. We've lost all our best players during the last thirty years and now rely for any "results" on imported floss, which evaporates overnight. Without total restructuring and entering into a wholly different competition, I feel little real progress can, in fact, be made.

    Start up lots of local leagues, encourage far more widespread junior and village teams with much greater public participation and we'll build a much stronger, better grounded economy, targetted at markets it knows it can supply sustainably. In due course we should put together far better international teams, too!

  • Comment number 18.

    really?

    let's say you own all 92 league teams but you have to get rid of either bolton or colchester. colchester goes obviously.

    now let's say you run WPP and you have to choose, right now (not some hypothetical date some time in the future), to either drop your UK or your Bangladesh revenue stream. not for one second do i believe mr sorrell would drop the UK in this scenario.

    Analogy is weak and laden with hyperbole.

    Growth is only relative to the position you started from. If I grow the value of my company from 1p to 3p, I've grown by 200%. Anyone fancy swapping my company for Microsoft or BP?... didn't think so.

  • Comment number 19.

    So to extend the metaphor, Brazil, Russia, India and China are - for Sorrell - the equivalent of Chelsea, Man Utd, Arsenal and Man City. Iran is Bolton.

    - Russia would be Chelsea surely?
    And as for the poor UK, well for Sorrell it's Colchester or perhaps MK Dons, on the cusp of possible promotion

    - My home team, yay! Come on you Dons!

  • Comment number 20.

    I can see where this man is coming from, it makes sense. Consolidate what you’ve got before moving forward i.e. big business. But this stifles progression and investment and you can understand why the ‘BRICS’ and ‘CIVETS’ are more important to the likes of big business and advertisement.

    These business need to look at the whole picture not just the short term advantages of putting all of their efforts into one basket and forgetting their own? It is about looking after their core western business as well as the wider speculative because the speculative are taking over their core (I hope you understand what I have said). We could end up with a stupid scenario were for example ‘China owns America and America owns China’.

    As for football my ‘justabout’ premier team contains many players from the CIVETS so it is looking good and we therefore should beat Birmingham tomorrow.

    PS. After listening to the radio this morning: Is wotw George Galloway?

  • Comment number 21.

    no offense meant to colchester by the way.

  • Comment number 22.

    Advertising revenues for commercial channels are certainly growing for advertising online gambling - allowed in the UK - but very unwelcome in the United States - for good reason?

  • Comment number 23.

    Of course it's worth noting that of the 20 Premier League teams only 2 made a profit last year (Spurs and Wolves!) the others made losses and the only chance of challenging for top place comes with wealthy backers who made their money through luck (being a oil producing country), exploiting the workers (gaining assets in the transfer from a communist to capitalist country) or just borrowing (plunging the club into more debt).

    There was also a report on one of the UK media sites this week (sorry can't remember which) about how even non-league clubs are going bust trying to chase the dream of making it into League 2.

  • Comment number 24.

    1. At 13:30pm on 4th Mar 2011, John_from_Hendon wrote:

    I think it is amazing that the British people still do not understand that they are a small has-been country desperately trying to hit far above its weight - we have 72 military aircraft and Libya has 279 and that about is the size of it!

    ===========================================================

    not sure where you are getting your figures from i mean the wikipedia page for the RAF says thats they have 1,114 military aircraft so if libya has 279 then i think we should do quite well, plus our pilots are probably A) in much better planes and B) much better trained.

    and i cant really see how joining a failing system (the EEA) is goin to help us. the on thing we still have that puts us ahead of other economies is our strong currnecy so why would we want to go to one where half the countries are going to collapse leaving the eurozon losing any value it had.

  • Comment number 25.

    Poor old "Sir" Martin. Just when his mind conflates economics with football, the government makes cuts in psychiatric treatment.

    Rotten timing, eh?

  • Comment number 26.

    1. At 13:30pm on 4th Mar 2011, John_from_Hendon wrote:

    "...we have 72 military aircraft..."

    We have that many Typhoons. We also have at least 100 Tornado's and 50+ Apaches.

    With things as they are we may have only 72 military aircraft AVAILABLE but not in total.

  • Comment number 27.

    BRICS,CIVETS,NEXT11 buzzwords aka 9/11,Y2K. In a nut shell the UK is a basket case, if on a life support machine it would have been switched off decades ago. But hey-ho ROW will learn from the UK economy woes, if you like how not to run an economy!

  • Comment number 28.

    While everybody is getting all in a twist about the footie-metaphor, maybe it's time to point an interesting thing from the interview which has nothing to do with it:

    - Usually an increase in advertising spending is an indicator that an economy is starting to recover from a recession. This is because it usually signals an increase in confidence in the economy by companies.

    However, what Sorrell is saying is that this time it actually indicates low confidence in the economy: companies are spending money in advertising (which is easier to cut) rather than capital or manpower increases. In fact, he calls this recovery in advertising revenues a "dead-cat bounce".

    In other words, the current increase in advertising cannot be read as an indicator that we've avoided a double-dip recession or a long period of economic stagnation.

  • Comment number 29.

    #24. U14688512 and #26. Catpain_Slackbladder wrote:

    #1. John_from_Hendon wrote: "...we have 72 military aircraft..." ?

    Forgive me for not counting the training aircraft - which we have no use for as we have sacked the trainees and Nimrods! 72 Typhoons vs 279 Migs of various specs. and ages. Next thing we know we'll be hiring Libyan pilots to fly our aircraft for us as we haven't bothered to train any ourselves! But I think both of you got the point even if I glossed over much of the detail.

  • Comment number 30.

    Nonsensical comments from a man who is about as pleasant, as overpaid, and whose industry as useful to society, as a premier league prima donna.

    Ironic that a man whose company’s success is so dependent on clear communication should fail at it so badly.

    He needs to ask his copy-writers to vet his comments before they’re made public.

  • Comment number 31.

    @ 1. - maybe the Libyans have that many aircraft, but a single squadron of Eurofighters could probably deal with the whole lot pretty comfortably.

    Maybe we are in League 1 in terms of growth, but WPP are concerned with getting a foothold in emerging markets where there is a good opportunity to grow their business - as they should be.

    Note that the third biggest economy in the world, Japan, is in League 2, specifically because of poor growth.

    I'd rather live in Western Europe in League 1 than in some of the countries above us in that table...

  • Comment number 32.

    Here is A simple analogy, My Wife dragged me (Kicking & Screaming) Into Primark Yesterday.At the tills their was not one person waiting to get served,Not One! As we made our way out of the shop,A P.A Announcement informed us of the many offers throughout the store,Something else my wife informed me she had never ever Witnessed in Primark before.
    Moving further down the City (Newcastle) It became apparent as to how quite it was.With many shops been virtually empty. We are not out of recession ! and it is wrong to judge the whole country,by the odd green shoot in The South East!

  • Comment number 33.

    29. At 15:21pm on 4th Mar 2011, John_from_Hendon wrote:

    https://en.wikipedia.org/wiki/List_of_active_United_Kingdom_military_aircraft

    this is a good link for you to check your facts regarding th air power of the RAF Fleet Air Arms and Army Air Corps

  • Comment number 34.

    "Well part of it is simply what Sorrell calls the "dead-cat bounce" from recession-induced levels of advertising in 2009 that were lower as a proportion of GDP than at any time since the mid-1970s."

    If this is accurate.....then we're all doomed as this would be the biggest dead cat bounce ever.

    Good to see some honesty at last - I mean it's getting a bit tiring hearing the CEO's of companies come on the TV and tell the 'presstitutes' how things are up by X% - but forgetting to mention that the basis of that rise is from the lowest point in most companies history.

    Just like the mortgage lending - how many times have you heard in the past 2 years that 'mortgage lending is up' reported by the media - but the reality is the overall picture looks like this.

    https://www.housepricecrash.co.uk/graphs-mortgage-approvals.php

    You can see the m-o-m rises - but these are totally insignificant - this is also how many results are being reported in a positive light when the truth is very, very different.

    Still - it keeps all those sheeple in their pens......so it's time to decide, stay in the pen and suffer a slow and painful demise - or come out fighting.

    https://www.coalitionofresistance.org.uk/2011/01/tuc-national-demonstration-against-cuts-26-march-london/

    Be there - standing around moaning is no longer a viable option people of Britain.

  • Comment number 35.

    19. At 14:28pm on 4th Mar 2011, Lindsay_from_Hendon wrote:

    "My home team, yay! Come on you Dons!"

    I knew you were living in Milton Keynes all along - it's where all depressed accountants go to see out their careers.

    Still dreaming of the Swiss alps? - never mind, maybe one day with mountains of hard work and exploitation you might be able to afford a Swiss bank account - I believe the starting requirement is £100,000.

    ...considering you were a Spurs fan earlier this week - I would suggest you are not the most trustworthy source of information - in fact you appear to be a pathological liar.

    ...you're not Tony Bliar are you?

  • Comment number 36.

    Get real. Sorrel is not going to pass disparaging remarks now is he?

    He is busy busy busy building folks confidence up into spending loads of advertising money on his company.

    See through him. Heck. Advertising is what he does!

    He is hardly likely to come out with the truth.
    Where is the money in that?

  • Comment number 37.

    12. At 13:48pm on 4th Mar 2011, HardWorkingHobbes wrote:

    "Isn't part of the problem we're in because advertisers convinced us to buy things we didn't need with money we didn't have."

    Ah the old laws of supply and demand - in the olden days we used to work out the demand through market research - then we produce the product to fit the demand.

    These days you come up with an idea (let's say a plastic cucumber cover) - borrow money from an 'all to eager' bank (pre-2008 of course) and then we spend a fortune of that borrowed money to advertise the product to convince people they need it.

    If it doesn't work - well it's a limited company and you walk away with the debts being picked up by the poor old taxpayer or consumer (you didn't think the banks take the hit did you?) - if it works you're paraded around as a genius.

    Even better if you can make money on the first couple of years and flog it to someone "even greedier" - who borrows more money from the bank to buy your company - which goes bust later down the road because the demand was merely a 'fad'.

    Hey the banks can even help out by making sure the consumer is 'well tooled up' for the purchasing by lending more money to them too!

    ....and people still wonder where it all went wrong?.....and better still, they claim the banks had very little to do with it!

    Henry Ford said:

    "It is well enough that people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning."

    ...and STILL people DON'T GET IT!

    Henry Ford had no '2008 crash' axe to grind - but he seems to have come to the same conclusion many others have long before we had our most recent financial crisis.

  • Comment number 38.

    Why is he involved in China? That's Libya with a pretendy capitalist face. No morals these advertising types.

  • Comment number 39.

    Martin Sorrell is drawing our attention to the growth consequences of his company's strategy of buying up marketing services and advertising agencies in BRIC and other emerging markets. It's his familiar song that is as well sung as you'd expect from a group that also owns the Burson-Marsteller Group of PR agencies.
    Sorrell is an excellent leader of his group, and a truly consummate publicist

  • Comment number 40.

    #28. Ricardo wrote:

    "In other words, the current increase in advertising cannot be read as an indicator that we've avoided a double-dip recession or a long period of economic stagnation."

    Recessions are measure in GDP - that is essentially spending in the economy. This is all well and good but it takes no account of the source of the spending that is the spending from income or savings or financed by borrowings. The first is OK the second is OK'ish provided the savings draw-down is light to moderate and does not damage future ability to spend, but the latter spending from borrowing is dire as what is happening is that we are spending today money we hope to earn in the future.

    Essentially my point is that dip and double dips in GDP are a poor indication of economic health as if spending is all or mostly from borrowings this mortgaging the future effect will inevitably cause a future downturn, and indeed an amplified future downturn.

    The chicken's entrails do I am very sorry to say that we are not recovering but fooling ourselves and this is the just the start of a deep and long lasting depression. This is the way that we are being seen, not just by me but by Martin Sorrell and even our thick (glassed) Bank of England Governor! All three of us are not likely to be wrong, are we? (Indeed this is also the historical precedent of the 1870s Long Depression - which was also caused by a property bubble.)

  • Comment number 41.

    • 29. At 15:21pm on 4th Mar 2011, John_from_Hendon wrote:
    #24. U14688512 and #26. Catpain_Slackbladder wrote:

    #1. John_from_Hendon wrote: "...we have 72 military aircraft..." ?

    Forgive me for not counting the training aircraft - which we have no use for as we have sacked the trainees and Nimrods! 72 Typhoons vs 279 Migs of various specs. and ages. Next thing we know we'll be hiring Libyan pilots to fly our aircraft for us as we haven't bothered to train any ourselves! But I think both of you got the point even if I glossed over much of the detail.

    - You are funny. You are happy to count grounded Libyan aircraft in their number. I have a question though, how does the number of military aircraft have anything to do with the rate of economic growth?

  • Comment number 42.


    An increase in advertising revenues could also be due to:

    - Spending up of old budgets (to justify new ones)
    - Spending of new budgets (to justify departments existence and status)
    - Desperation to sell (is anyone buying?)
    - Increase in advertising rates per second / board etc, (ie the actual volume could be unchanged)
    - Contraction in the number of suppliers in the advertising marketplace leading to increased revenues for some, also leading to oligopolistic tendencies and a level of price understanding between "competitors"

    Companies on the way down need to advertise, as well as companies on the way up.

    Commercial departments need to spend money or else they wouldn't exist.

    But anyway, in a world where Peter Ridsdale seems to get new work to help save football clubs, things don't always make much sense.

  • Comment number 43.

    29. At 15:21pm on 4th Mar 2011, John_from_Hendon

    Love this bit....

    "With things as they are we may have only 72 military aircraft AVAILABLE but not in total."

    I bet if you count the spitfires in the museums and the aircraft at biggin hill we could probably stretch the numbers even further!

    You are of course 100% correct john, some people are still living the colonial ages - they think the UK is a world superpower - when actually we're seeing the demise of the 3rd (or is it 4th) superpower (the USA) - since the British power came to an end.

    (I'm counting the USSR and Germany...and possibly Japan in that count)

    Don't underestimate the dellusion of some people - they still think we're winning the Boer war - when I guess the UK empire showed signs of serious decline.

    ...and interestingly where the UK introduced concentration camps to the world!

    Doesn't it make you proud to be British?

    I can live with the mistakes of my ancestors - but I will not glorify them and no cat calls of traitor will make a difference.
    Shame the rest of the country is blinded by it's ignorance and arrogance so desperate are they to relive the 'good old days'.

    The british had better get good at negotiating from a position of weakness - maybe some of the countries we've screwed over in the past might give us some tips on that.....then again maybe they won't.

  • Comment number 44.

    31. At 15:40pm on 4th Mar 2011, goggyturk wrote:

    "@ 1. - maybe the Libyans have that many aircraft, but a single squadron of Eurofighters could probably deal with the whole lot pretty comfortably."

    ...and here's one right now - because of course OUR fighters are superior to the FOREIGNER's fighters - aren't they?

  • Comment number 45.

    I don't think that the UK is like Colchester or MK Dons. Its more like Portsmouth - massive overspending by the previous management leading to huge debts that can't be repaid and a new Administration having to cut costs to clean up the mess.

  • Comment number 46.

    Interesting that today the Feb 2011 figures are out showing that the number of people responding to advertising fell in February and, if the trends of the last couple of years are any guide the cyclical fall in response from now until September look like it will be more like 2009 than 2010 (ie a steeper fall). This is after good results for the Christmas period.
    Ad spend is, therefore, more likely to have to be justified more in terms of investment spend than revenue generation. Figures are from The British Marketing Survey, Feb 2011 Channel Trends.

  • Comment number 47.

    Is this anything to do with Banker Bashing?

  • Comment number 48.

    Anyway, UK is probably more like Sheffield Wednesday:

    - Founding member of the elite
    - Been up and down over many years but generally stayed around the top table
    - Spent all of it's money when it had it and then kept on spending
    - Found that it could not afford to stay with the elite and declined
    - Has been overtaken by younger better run clubs
    - At the moment in the third tier with little hope of promotion,
    - instead warily looking over shoulder at potential of relegation
    - Didn't produce any home grown talent, instead relied on "cheap" foreign imports
    - Keeps trying to change the menagement but found it made no difference to declining status, so changed again, and again
    - Desperately seeking overseas investment
    - Now owned by foreign investors after being bought on the cheap
    - Manager employed is previous employee with doubtful track record

    Yikes!

    Milan Mandaric's wikipedia entry states "has owned a string of successful businesses and football clubs"...

  • Comment number 49.

    34 WOTW

    Well said. It's all relative. Everything is being compared to a very low baseline, and let's be honest, with bank base rates the lowest they've been for centuries, on top of all the 'stimulus' etc. Traditionally we should be experiencing an over-heating economy not desperately clutching at straws for indicators of recovery.



  • Comment number 50.

    35. At 16:08pm on 4th Mar 2011, writingsonthewall wrote:
    19. At 14:28pm on 4th Mar 2011, Lindsay_from_Hendon wrote:

    "My home team, yay! Come on you Dons!"

    I knew you were living in Milton Keynes all along - it's where all depressed accountants go to see out their careers.

    - Hahahaha, I put that in for you. Right, it's Wolves vs Spurs this weekend - do you fancy a little wager? If Wolves win, I won't post any comments next week for the entire week. If Spurs win then you won't post any comments next week for the entire week.

    ...you're not Tony Bliar are you?

    - I thought you were! You're stealing my jokes now. Well imitation is a form of flattery.

  • Comment number 51.

    Battle of Britain memorial Flight should be sufficient, so long as there is some .303 ammo around for the machine guns. Trouble is getting there, but Spitfires and Hurricanes are relatively stealthy (made of wood etc).....Back to the deficit Robert, football and the RAF just excites the masses to miss the point.

  • Comment number 52.

    Anyone who has tried to do business in Nigeria might have a thing to say about their relative position in Martin Sorrell's 'league' (we are just about at the fourth anniversary of waiting to be paid for a signed/due process certified contract). They have been sitting on great wealth for years but it has done nothing for that country - there is not one institution left that is trusted by the average Nigerian.

  • Comment number 53.

    "29. At 15:21pm on 4th Mar 2011, John_from_Hendon wrote:
    "Next thing we know we'll be hiring Libyan pilots to fly our aircraft for us as we haven't bothered to train any ourselves!"

    Good idea John - in fact we could get the London School of Economics to offer pilot training courses to Libya, oblige them to take out student loans from RBS and Lloyds and thus help the banks and University funding at the same time!! brilliant!!

    I'm surprised they didn't think of that already!

  • Comment number 54.

    Iran is Bolton.

    How true. Sometimes it's difficult to see the difference.

  • Comment number 55.

    Who was it who said recently that arriving at Heathrow is like arriving in a third-world country....?

    Now Sorrell has put the boot in...!

    Funny thing is, I don't disagree with either of them...

  • Comment number 56.

    I think you'll find that Libyan pilots are overrated. Two of them were told to aim for Tripoli and ended up in Malta.

    The others seem to get to the right area but (luckily for the rebels) it seems they couldn't hit a cows botom with a banjo.

  • Comment number 57.

    So it's just the bigger companies spending some of their QE derived incomes on attempts to clear old stock?

    Then we'll all be relegated together!Actually I think that there'll be something like a one-way valve system with no way up again subsequently. A non-league team, I guess!

  • Comment number 58.

    #41. Lindsay_from_Hendon wrote:

    "You are happy to count grounded Libyan aircraft in their number. I have a question though, how does the number of military aircraft have anything to do with the rate of economic growth?"

    That's really good coming from Switzerland! I know every Swiss has to keep a gun, but I don't think that has anything to do with economic growth either. If you bothered to think perhaps you might have grasped what both Martin Sorrell and I (and even Mervyn King) are saying - we are deluded in seeing ourselves (sorry the British people - as you aren't one in residence) as a World economic power. We are in fact just some mugs being ripped off by bankers. The bankers have taken advantage of our national hubris to steal the remainder of our national wealth, and like you, salt it away in Switzerland, or some other tax haven!

  • Comment number 59.

    'The UK is a league one team' ... Sorrell is probably right ... the question is 'why'?

    1)The BRIC's operate protectiinism and some deliberately target the UK with their protectionism ... and Sorrell is directly or indirectly part of that racket as his business benefits from promoting some of that 'protectioniism'.

    2) The BRIC's are large countries, with large populations, with large agricultural bases and natural resources with massive domestic economies

    3) The BRIC's will all line bankers up a against a wall and shoot them if they do not toe the line

    4) Another really important point is that the BRIC's have hybrid economic structures and do not have a naively over exposed bent over privileged market economy like the UK ... the BRIC's have strict control of their national capital and have strategic control over how most of their private and other capital is invested.

    5) The BRIC's all have strict control over foreign interference in their country and strong national identities ... and even their worst criminal fraudsters all have pride in their own countries.

    6) The BRIC's tend to have strong leadership and politicians' with guts who will persevere with difficult policies that have good national effect on economic statistics.

    7) The BRIC's all have bent national statistics and apply their best strategic minds on their national strategic problems.

    8) The BRIC's have no problem bending the rules on world trade ... copyright and intellectual property theft, protectionsim, arms dealing, sanctions breaking etc

    9) There are other reasons but this will do for now ( UK devolution mess, lack of a UK energy policy, UK constitutional mess, excessive UK immigration/population levels, UK inactive population etc)

    The truth can hurt and often shocks ... but Britain is a loser in decline and needs to find its own way forward and identity in an increasingly danegrous and difficult world.

    Unless our politicians can forge a new way and mindset for Britian and start protecting what needs protecting in the UK ... we're heading for 'non-league' status in the very near future!

    Sorrell will not help us beyond this ... he just likes to gloat ... and be sarcastic ... I haven't any time for his type at all

  • Comment number 60.

    58. At 19:18pm on 4th Mar 2011, John_from_Hendon wrote:
    .... we are deluded in seeing ourselves (sorry the British people - as you aren't one in residence) as a World economic power. We are in fact just some mugs being ripped off by bankers.
    -------------------------------------------------------------------------------
    If we are so tiny and insignificant, please explain why half the world catches influenza when we have a mere cold after the USA has sneezed?

  • Comment number 61.

    re #51
    Fubar and one or two others are hot stuff on current RAF kit but Snuffy can jump in here and point out that you are thinking of the Mosquito. The Spitfire had a lot of aluminium in it and the Hurricane made do with angle-iron or some such, which made it a terrific weapons platform and tough as old boots when the Luftwaffe were filling it with holes ...

    ... not that I was around then ... honest.

    Mind you, if I was that old, worrying about UK Plc's current plight would be considerably reduced.

  • Comment number 62.

    #58. At 19:18pm on 4th Mar 2011, John_from_Hendon wrote

    The UK has quite a number of inherent advantages that can make and keep this country being successful (and I say this as a foreigner living here):
    - The country's language is the most spoken 2nd language in the world.
    - It sits in a timezone which is conveniently between the Americas and Asia (great for global companies).
    - It has a long tradition as a trading power, with all the legal and economical infrastructure associated with it.
    - It has a reasonably well educated workforce.

    Unfortunately (certainly in Services) it has a management tradition that is a bit of a joke compared with other countries (and I say this from experience in other countries), especially at the top (and that includes government, both the previous one and the current one).

    Before the recession the country seemed to be in path of success but decision makers were just making it up as they went along, patting themselves on the back for momentary success and playing it by ear, all the while the stresses of mortgaging the future for momentary success were accumulating in the system.

    That Future is now and we're paying for those years of "success". To add insult to injury, those that most gained from that "success" are not the ones now having to pay the bill.

    The potential for real success is still there, though more strategists and fewer reactive-shoot-from-the-hip-problem-solvers are needed to make it happen.

  • Comment number 63.

    Anyone interested in why the current big countries are not in the top flight should read How the West was Lost by Dambisa Moyo - a combination of a lack of R&D and a sense of entitlement amoung its workforce. Unless these issues, the west shall continue to lag behind compared to the east

  • Comment number 64.

    What utter gibberish from "Sir" Martin. Talking in tongues, was he? Never mind autocracy, the world's in the grip of the cretinocracy.

    34. At 16:04pm on 4th Mar 2011, writingsonthewall wrote:
    https://www.coalitionofresistance.org.uk/2011/01/tuc-national-demonstration-against-cuts-26-march-london/
    ---
    Got my coach ticket today!

  • Comment number 65.

    John_from_Hendon. Its the sterling what saved us john if we joined the euro we would of made greece look good!

  • Comment number 66.

    56. At 19:10pm on 4th Mar 2011, EazilyGrizly wrote:
    I think you'll find that Libyan pilots are overrated. Two of them were told to aim for Tripoli and ended up in Malta

    Sensible chaps, if you ask me !

    As an add on, this march on the 26Th of march, it could be a good start to kick off the 'big society'. If each marcher picks up one piece of litter on route and places it in the nearest bin, it will help clean up Britain...remember we are all in this together...sorry ..except for those old buffers in the house of Lords, they exists to mess up Britain. March for the 'Big society !'

  • Comment number 67.

    Ouch - I think not. We don't need a reality check to remind ourselves that UK plc is a lop-sided economy overly dependent on services, and financial services in particular, and a geographic tilt towards London and the South East. This isn't going to be fixed quickly.

  • Comment number 68.

    To move on, we would do well to look at what we excell at as a country - We have a great education system - better or equal to any of the countries in the leagues above us. But after school or university, jobs and careers are hard to find. I would love to see us harness this educated population much more effectively. I work with universities to help my business, but much more could be done to co-ordinate resources... Too much to write in this blog, but we have resources as a country that we are wasting, or at best, under utilising.

    (The people from the premier league countries send their children to our country for education, etc..., so we do have a good training school, but do not use our new graduates well ourselves...)

  • Comment number 69.

    Flying off at a tangent - for longer term success we need to motivate our young people. When I was in my late teens, my father and I used to watch the Open University programmes on BBC2 on a Saturday morning. They were interesting and inspiring. Alas, now we have Dick and Dom's Funny Business simultaneously on both BBC2 and CBBC.

    ⚡☠☹☁⚡!!

  • Comment number 70.

    It's really just a question of who's first for hyper inflation, USA or UK. Price inflation, and real asset deflation, the real housing price correction is yet to come, the precious metals would be even higher valued if it wasn't for the blatant market manipulation in that sector, as many people see PM's as the only real store of value in the coming months and years.

    The analysis by Peter Schiff, of Euro Pacific Capital. the man who predicted the financial crash at the Las Vegas mortgage bankers dinner in 2006 , is worth watching. He was ridiculed at the time, but everything he said then has already happened now in 2011.

  • Comment number 71.

    I doubt if we can include the UK as a league one team when we are so disorganised.

    There has been a lack of consistency between the policies of the different administrations over the years such that things implemented by one administration are undone by the next with a consequent waste of public money.

    Because of the adversarial nature of Parliament the governing party attempts to assert its policies over the opposition seemingly without any real effort to build consensus with the result that there is no agreement on a core strategy that the next government will address when it takes over.

    The most damaging consequence of this has been the development of a greatly unbalanced economy heavily dependent on the financial sector to the detriment of the commercial, industrial and agricultural sectors.

    As a result we have to import more than we can produce ourselves, which surely presents a national security risk given that foreign countries decide the price we will pay for essential commodities like food and fuel or could simply cut off our access to them.

    Our economy needs to be more balanced and we need to be more self-sufficient.

    Our short-term and long term strategic planning needs to be massively improved and our government, business leaders and the unions need to be collectively involved in the formulation of national policy as it seems pointless to have policies that create strikes and damage the economy for want of discussion and planning to find a strike-free solution.

    As it is, I think that the coalition will probably massively reduce the deficit but because of the angst they have created in the process, it does seem likely that they will be voted out at the end of their term and we will be back to square one with Labour and another different and opposing set of policies.

  • Comment number 72.

    re #69
    Try BBC R4's 'The Bottom Line' instead. An excellent programme - just not long enough - needs an extra half hour. The Beeb should be promoting it, especially to youngsters.

  • Comment number 73.

    Advertising agencies have confounded the critics who said they would be eradicated by the recession and the internet. Wow, here's a problem that I never foresaw; I thought adertising could adjust to anything, selling used socks with holes in them if that was targetted as the product.
    Sir Martin Sorrell now sees the light: advertising acceleration.
    Sorrell, it follows, has raised WPP growth expectation. It just proves that if you got a product, business feels a compulsion to advertise the thing because most products will not sell themselves. I just have to interject that I wished advertising was more honest - no half-filled packages, no artificial claims. There ought to be a law called 'TRITH IN ADVERTISING"!
    Traditional advertising and media-buying were WPP’s strongest sectors last year:
    - sales 5.3% to £9.3B
    - pre-tax profits 28.5% to £851.3M.
    - dividend from 15.47p to 17.79p.
    Rivals such as Omnicom and Publicis had reported better than expected results for the fourth quarter, so what was Sorrell's big worry?
    I guess he foresaw challenges in adaptation to the digital world; accordingly, he has set a new target for “new media” to make up 35 to 40% of WPP’s revenues, but these revenues already stand at @ 29%.
    WPP is also setting targets re faster-growing markets - India, Brazil and China.
    I liked Sorrell's comparison to English football:
    - “Bric” markets and others, such as Indonesia and Turkey, in the Premier League, with the US in the Championship and the more sluggish western Europe – including the UK – in the next division down. But I think he's wrong about positioning. I would put these performances in a different order
    1. Bric
    2. EU, including UK and
    3. then the free-falling fast, in serious jeopardy, the United States of America.
    Sir Martin's logic however is almost the same as mine: The UK could “perhaps” be promoted, thanks to the government’s emphasis on deficit reduction and long-term growth, contrasting with the severe financial problems of the United State (a country which seems in total denial that 14 TRILLION-dollars is an unsustainable debt).

  • Comment number 74.

    UK = Sheffield Wednesday. Winning past, but you have to be at least an octogenarian to remember it. Good side in the 60s and 90s, but under-achieved. Now in danger of becoming irrelevant.

  • Comment number 75.

    This just goes to show how differently some people view life. The UK is still one of the 10 biggest economies in the world. It's still one of the best places to live - if it isn't then why are so many people queuing up to come here (and before the Daily Mail brigade start flaming I'm talking about people wanting to come here to work and pay their taxes, not scrounge benefits, although admittedly there a few of those too).

    The problem is that some people view economies only in terms of growth because that's all they care about, rather than quality of life for the average citizen. Well of course we're not growing, we're a mature economy, unlike others who are growing quickly but from a small base. And unlike others we've learned to stand up for ourselves and not be exploited, that's why the capitalists see better opportunities elsewhere.

    Well, our esteemed "business leaders" may well see better investment opportunities in emerging markets but what do real people see - would they prefer to live in the UK, which may not be perfect, or would they prefer to be living in a slum in India or be a peasant farmer in China, shut out of the communist party engineered capitalist boom. We may be falling while they are rising but to call us division 1 is ludicrous.

  • Comment number 76.

    Right, it's Wolves vs Spurs this weekend - do you fancy a little wager? If Wolves win, I won't post any comments next week for the entire week. If Spurs win then you won't post any comments next week for the entire week.

    And if it's a draw neither post all week?

 

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