Financial Fair Play, Salary Caps & The Polarisation Of Footballs Financial Model
People, it is probably fair to say, are troubled by the current financial imbalance in the Premier League. That only three or four clubs can realistically end up as the champions of England is a situation that has vexed many over the last few years, and even the thin veneer of tightness that the end of last season brought us can mask the fact that both Manchester City and Manchester United finished nineteen points ahead of Arsenal in third place at the end of last season. Coupled with the amount of money that clubs spend on trying to keep up with the Joneses, there has been something in the air with regard to the financial structure of English football for a considerable amount of time.
As such, the news that the Premier League is considering a salary cap is very much a sign of the times. With a new television deal kicking in from the start of next season, some club owners are apparently starting to wonder how it can be that they are unable to make anything like a profit from the businesses with which they have chosen to get involved. For all the money that has sluiced into the league over the last ten years or so, only eight out of the twenty clubs involved managed to turn a profit in the last year for which financial figures are available and the risk of levels of debt becoming unmanageable in the event of a downturn in the popularity of the game remains a real one in the long term.
There are two aspects of the rumours of the proposal for a salary cap, however, which do not invite a great deal of confidence in the idea that competitive balance in the Premier League can be improved. Firstly, there is the timbre of the conversation that the owners of the clubs are having with themselves on the subject. When Peter Coates, the owner of Stoke City, says that “I hope this view is widely shared: we cannot have all the new money going in inflated wages and payments to agents”, it could be argued that he is not particularly arguing for a levelling of the Premier Leagues playing field, but is instead more interested in keeping the extra money from the new television deal for themselves as opposed to seeing it being spent on players and wages. This, to a point, is understandable, but the fact that the focus of the conversation being held seems to be focussed upon how owners can profit from clubs rather than competitive balance is a little troubling.
And this leads us to our second concern with regard to this matter. There seems little indication that clubs’ opinions on this subject are being led by anything other than their own narrow self-interest. Are Manchester United and Arsenal understood to be in favour of a salary cap? We can safely presume that they are, since if such a cap were to limit clubs to spending a set proportion of their wage budgets on wages, then those with a higher annual turnover would be likely be entrenched in positions of privilege in perpetuity. Are Manchester City likely to be opposed to a salary cap? Well, of course they are, because they would likely be forced to slash their wage budgets in the event of such a proposal becoming binding. Little in these opposing viewpoints seems to indicate a desire to work together in order to create a better, more competitive “product” for global consumption.
Where the battle lines on this subject are likely to be drawn on this subject will probably mirror where they stand on the matter of UEFAs Financial Fair Play (FFP) regulations. So much as the briefest glance at the subject sees a familiar circular argument taking place, with things all starting to look particularly tribalistic when supporters of Manchester City and Manchester United start to get involved. It is impossible to say with any degree of certainty what the overall outcome of FFP will be, but it is certainly reasonable to argue that the entrenchment of the “biggest” clubs at the top of the game is only likely to be accentuated if debt limits for all are rigidly enforced. The flip-side to this, however, would be to suggest that building up unhealthy levels of debts in the pursuit of trinkets can have calamitous effects and that if clubs can’t – and the vast majority of the evidence in front of us in recent years would seem to indicate that there’s at the very least an element of truth in this – be trusted to run themselves sensibly, then a degree of financial sensibility will have to be forced upon them.
But herein lays the rub. If there may be a degree of agreement that the money that football clubs raise should be distributed more equitably, how should this be done? If Manchester United (for example) have turned into a global financial juggernaut through their own hard work, why should they be forced to share any of the benefits of this with other clubs? The return of gate receipt sharing, for example, might be a start but it is difficult to see the biggest clubs agreeing to this, and their voices – for all the voting structures within the Premier League, the FA or UEFA – have a tendency to be heard more loudly than most. The Premier League already shares its television money in a considerably more equitable way than they have to, but this hasn’t been enough to prevent the gap between the haves and the have-nots reaching epic levels, so what could ever be agreed upon that everybody would be happy with? It’s difficult to imagine that there could be much.
Rather than hasty legislation in either direction, it feels as if what is needed from all sides of the debate over the financial future of top class football in both England and continental Europe is a change in mind-set. While the Premier League continues to flourish in the way that it has done, there will be little will for this to happen, but should its fortunes take any sort of down-turn, then there is a chance that such a change of perception might just come about. We sometimes look to the NFL in the United States of America or the Bundesliga in Germany for hints as to how this might happen, but realigning professional football away from being about laissez-faire neo-capitalism is likely to be a significant challenge for whoever is charged with the job of convincing people that the long-term benefits could make any upheaval required to make it work worthwhile. Perhaps, though, the financial models of the clubs of the Premier League, La Liga, Serie A, the Bundesliga and all of the rest of them, are now so polarised that bringing them together may prove to be impossible. While self-interest continues to rule – and it certainly has done for the last three decades, whilst we could argue that it has for as long as there has been professional football – it is difficult to be optimistic that any proposed reforms of footballs finances will give us the game that many supporters actually seem to want.
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