The Premier League’s Voodoo Plan

By on Oct 21, 2011 in English League Football, Latest | 3 comments

Now really, what’s so bad about this Elite Player Performance Plan that’s put so many in a tizzy? This weekend, there will still be hundreds of thousands of fans filling English Premiership stadiums eagerly cheering their clubs on to victory or putting two fingers up at their opposition just as always, as football yobs are wont to do these days. There will still be millions around the world tuning in to watch football powers in Manchester duel with some of the best players foreign money can buy, Chelsea’s millionaires show their class under the hot new manager’s system, or watch Liverpool’s talent-laden midfield demonstrate why Kenny Dalglish is considered a king. They might even check up on Arsenal to see if Arsene Wenger’s squad can put a lowly side like Stoke City in their place, even though they have little interest in Stoke City or know why they’re even called the Potters in the first place.

Because Tony Pulis looks nothing like a boy wizard, that’s for sure. And what the hell’s an “Albion,” anyway?

For these consumers of English football, the decision by the Football League to reluctantly vote in favour of allowing the Premiership clubs easier and cheaper access to talented youth, either is a welcome notion or they have no opinion. For this vast swath of humanity, if their favorite clubs are granted an ability to snatch up a young player that shows potential without having to pay an exorbitant price for the privilege, such a change is a bonus. That way, if he fails to turn into the British Messi (as he most likely will), then their club will not have spent too much so that they can go buy the real Messi or some reasonable facsimile thereof with the money still available under this new plan. If their club does find a pure diamond that they only paid a cubic zirconium price for, then he could be sold on in a Cristiano Ronaldo-esque transfer bonanza in order to buy up all the competitor’s best players. In a sense, this is an absolute win-win scenario for fans less tied to the concept of England as a footballing nation and more so to following one of the larger, more successful clubs in the top flight. To be honest, the majority of these fans–and we’re speaking now principally of those in overseas markets Richard Scudamore and the league crave more than ever–might only pay have eyes for six or seven of those regular participants in the top flight, as clubs such as Blackburn or Wolverhampton fly too far below their radar.

Odds on there being international supporter groups for Wigan Athletic are pretty low as well.

So, for those feeling that giving the Premiership their Christmas turkey means that this game isn’t your game any longer, you are partially correct in this emotion. What looks to be transpiring is a supply-sided application of macroeconomic theory onto your game, and you just happen to be on the wrong side. To paraphrase American President Ronald Reagan when he discussed what brought about fiscal policies during his time in office, there are too many pounds chasing too few goods. The Three Lions have stagflated when compared to the likes of Spain, Holland, and Germany in the production of quality young players. In order to prime the Premiership pump and get England’s top flight clubs back into the production of comparable players, several adjustments are required.

To begin, reduce the tax on the transaction of players to these clubs to increase their growth potential. Cap the transfer fee of a U-17 player at £100,000 to avoid any excess “English surcharge?” Check. Push for deregulation in certain areas so that there is a freer flow of goods and services. This decision eliminates that pesky catchment area provision where youth had to live within a ninety minute drive of the club that signs them. Another check. Prevent the possibility of further inflation by tightening up the supply of money, thus restricting the amount of variance in the price levels. Well, UEFA and the European Club Association has already seen to that with Financial Fair Play regulations. On top of a check, perhaps this deserves two thumbs up. Finally, by reducing the tax revenues to the system, thereby starving out the prime generator for youth talent, more Football League clubs will fold under the pressure of operating overhanging deficits, causing a market recession and forcing Premiership clubs to seek some type of bail out whereby the means of continued production are shifted overseas. This in turn leads to an erosion from within and possibly a hike in inflation as players are purchased from abroad.

Checkmate.

Here is where fans of those clubs that seem to reap a large benefit of the approved Elite Player Performance Plan should recognise that in the larger scheme, it is unwise, even for them. Much like Reaganomics, the EPPP will likely have a few boom years for those Premiership clubs that can poach youth players from Football League clubs for considerably less than they have in the past, but over time, those lower league clubs will simply stop uncovering those lads for the large clubs to swoop up. With their transfer fees capped, their reserve squads might cease to exist due to lack of funding, and as too many of the clubs in the Football League already operate on such thin margins financially, their now decreased ability to profit off a player sale to the larger clubs might severely jeopardise their very existences–particularly those financially mismanaged and in considerable debt to begin–and this will create upward pressure on Premiership sides to produce the goods themselves at a higher cost. In short, the top flight organisations will have to invest even more in their scouting and recruiting than under the previous system whereby they could pluck a young player or two from some lower league academy. Premiership clubs will have to bear the price of discovering and training not only the players with the talent to progress professionally but also the ones that will never be world-beaters in their lifetimes. The costs for youth development, then, will increase as the market shifts to a smaller group of clubs rather than being more widely distributed up and down the league pyramid as it has been.

Now, while UEFA’s regulations stipulate expenses on the youth system do not count negatively against a club’s break-even ratio, this might have the knock on effect of restricting what money a club has left to spend on quality players outside its own academies if more of their actual money is being diverted in this fashion. Considering the Premiership has its own homegrown regulation, the league’s members must continue to fill their squads with domestic players in some way, and having to run an individually-expanded method of producing these names runs these clubs into deficits hidden for UEFA’s purposes but real for a club’s bottom line. There will perhaps come a time when the boom previously enjoyed goes bust like a propped up savings & loan association. Should this come to pass, then Premiership clubs might have to look abroad ever more urgently for some sort of bail out to the system, whether it be for player recruitment to bring to the UK to make them “homegrown” or potentially dodgy overseas owners willing to invest only if there was no threat of relegation and a more positive rate of return than the clubs had been experiencing. There might be other strategies undertaken as well, such as increased ticket prices or greater reliance on television revenues, but both have considerable pitfalls attached such as Scottish Premier League sides have been experiencing over the past few years.

Granted, this argument might be as flimsy as a fit and proper persons test, but there should be real concern for this direction in the youth system, not just for fans of those clubs it appears to slight but to those top flight clubs it sets to benefit greatly. Over time, the advantage this provides to those clubs from Manchester, London, and Liverpool will be marginal but the costs might be considerable, plunging these clubs into an unintended recession not only of cheaply available future stars domestically but a recession in their ability to compete regularly with the European continental heavyweights of the time. Rather than this plan resulting in a win-win scenario for those bigger clubs, upon closer inspection of that Laffer Curve the EPPP’s worth might be a greater actual loss. England’s top flight is betting–much like supply side economics in the Reagan years did–that this plan stimulates the growth of youth talent and this will be positively realised for English football.

Then again, much like Reaganomics, it could result in a relatively unchanged increase in the labor force or productivity but at a significantly greater public cost to everyone.

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    3 Comments

  1. As a fan of a club that constantly loses players from our Centre of Excellence, this is utterly disastrous news.

    Our most promising players are always moving to other clubs before they turn 17 because certain clubs (*cough*Man City*cough*) turn their parents’ heads. They then get the players to put in a request to leave, join this big club, and their development stops because they’re no longer receiving the coaching that made them a good player in the first place, and just becoming another face.

    Those players don’t progress at the Premiership clubs, the ones we have left aren’t good enough to make it with us. There is absolutely no point to our youth system any more.

    Sean

    October 21, 2011

  2. The question is, apart from the immediate financial incentive of the £5m the Greedy League was threatening to withhold, is there any positive side for Football League clubs?

    There certainly doesn’t appear to be, begging the question: Why the hell did the Football League chairmen vote the plan through? I just can’t get my head around it.

    Tim Vickerman

    October 21, 2011

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