How football is starting to regret becoming dependent on Saudi Arabia

 

 

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By Tony Attwood

It is in one sense rather funny the way something as huge as football is, on the world stage, manages to get itself into positions, where key issues are not even thought about until very late in the day.

Clubs and associations march ahead grabbing the money as and where they can, until eventually somebody asks an obvious question that ought to have been asked years before, such as, “what happens if they don’t pay what they’ve promised.”

When it comes to normal club trading of players that is not really an issue because there are regulations to deal with non-payment.  And one might have thought that someone might raise such issues when the Saudis started to splash their money around.   Not least because so far they have spent three-quarters of a billion pounds this summer and their window still has a day or two to go (according to Business Plus).

But suddenly the question is asked, what would happen if having bought an aged player for some mega fee, a Saudi club simply doesn’t pay because someone somewhere in the Saudi banking hierarchy is on holiday and hasn’t signed the paperwork?

That could mean for the selling club a sudden,  unexpected shortfall in their monthly income, which in turn could mean that they are unable to pay those to whom they owe money… and so it rattles on, down the chain.  Will the banks bail them out?  That’s doubtful because football’s regulation for being financially prudent is almost non-existent. 

Which is why there exists in the rest of the football world a rule that says if a club doesn’t meet its debts on the due date, it will be suspended from competitions.

But there are two problems with this when it comes to Saudi Arabia.   Suspending clubs wouldn’t have any immediate impact because they are only concerned with internal competitions, and so could just go on playing.   And the clubs that would be really affected are the clubs that have sold aged players to the Saudis, and used the promise of the money (rather than the money itself) to go and buy other players.

Such clubs may not now be able to pay their bills, and so the ripple effect goes on and on, thus disrupting the entire transfer system.  But it is typical of the way football is run, that no one seems to have thought about that until this week, now that the window has closed in Europe and the bills need to be settled.

Yet the warning was there as Saudi expenditure accounts for over 10% of the total transfer business this summer.  And with so many clubs already living in debt, if that doesn’t get paid, everyone is in trouble.

There is also a secondary problem in that clubs in Europe all have to agree to have no outstanding debts to their local and regional taxation authorities.  No one has a clue how to impose that sort of regulation on a country run by a single family without democratic balances, such as Saudi Arabia.

Of course, the current situation is the selling clubs’ own fault.  They were teetering on the financial edge, and grabbed at Saudi money as a way out.  A report in the Telegraph suggests that Liverpool, Chelsea, Manchester City, Fulham, Newcastle United and Wolverhampton Wanderers are all in this position of not being paid, meaning that if they don’t get paid very soon, they might well default on their own payments.

Of course with Chelsea and Manchester City that won’t really bother them since they can just draw down more money from their own sponsors, but then FFP raises its head,  Now we know the accusation against Manchester City is that on around 110 occasions they solved this problem by bringing money in from their sponsor but putting it down in the books as coming from another source (the “official tractor sponsor of Manchester City” was one early example that got some publicity.)

And it is not just the clubs actually in the later stages of European competitions that are affected.  There are over 600 clubs that depend on solidarity payments but don’t get into the group stages of the European competitions.  And many of these now depend on Saudi Arabian clubs paying their bills.

In short, the Saudis have bought their way into the heart of football, and now are pulling the strings.

Depending too much on one source of revenue is always a problem.  For most of us there is no way around it – generally speaking one can have only one employer.  But for football to have put itself in such a position voluntarily by trading in the way it has with Saudi Arabia, is starting to look like having given all the power to a group whose adherence to the rule of law and democratic ideals is not well established.  Which is starting to look a bit dumb.