Copa América: Martinelli plays. Football’s finances: who knows?

 

 

• Why the media won’t raise the issue of just how different each referee’s performance is.
• Hacker offers documents in Man City case suggesting criminal activity

By Tony Attwood

“Punchless Brazil held to goalless draw by Costa Rica” is the headline in the Guardian   Gabriel Martinelli came on as a sub but did not get a mention in reports for doing anything to lift the team.  “Didn’t provide much in the attack,” is the verdict.

But drawing any conclusion on Martinelli’s form in terms of this Brazil team is unreasonable, for this is Brazil but not as we know them, and if your are in England, not worth staying up to watch..

The result, a goalless draw, between Brazil (population 215 million) and Costa Rica (population 5 million) tells you pretty much all that there is to no.  This is Brazil, but not as we know them.  It is a bit like going to watch Wolverhampton Wanderers and expecting to see a team challenging for the top honours.   Yes they did that in the 1950s but not now.  Brazil likewise were great once, but certainly not now.

Gabriel Jesus is probably rather pleased he wasn’t picked for the squad.  Gabriel Magalhaes is probably pleased he wasn’t playing and Gabriel Martinelli is maybe wondering why the standard of the Brazil team is so much below that of the arsenal team.

So if staying up to watch the South American matches is no longer a priority we can think instead of the Premier League’s Profit and Sustainability regulations which are being trialled this season on a “non-binding basis” (whatever that means given that Man C appear to feel all regulations exist on a non-binding basis).  

So we now have the Squad Cost Rules (SCR) and Top to Bottom Anchoring Rules (TBA) along with VAR which the clubs voted to keep.

SCR reduces  on-pitch spending to 85% of revenue; TBA is designed to make leagues more balanced and stop one club winning the league year after year.  (I can’t imagine who they are thinking of).  PSR remains in place for one more season.

The rules as they stand say that the cost of a transfer is to be spread across the length of the player’s contract, which means that clubs are often still paying for a player after he has come, played and left.

The problem is that revenue for PL clubs exceeded £6bn for the first time in the last accounting period – the highest of any league in the world. But Championship clubs, which upon promotion have to abide by these rules, are massively loss-making as they risk everything to get a season or two in the top flight.   The Championship’s income went up by ten percent, but their costs went up by far more which meant owners pumped in more money.   Everyone is gambling on going up, for even one season in the top flight can pay off all the debts and then some.

But failure to rise leaves the club with massive debts that are unsustainable which is why the whole system is about to change.

The big problem is that Premier League profits went down in the last accounting period by a whacking great 18%.   Much of this can be accounted for by projects such as that of Tottenham Hots where the building of a new stadium (rather amusingly claimed by some of their supporters to be the most profitable stadium in the world) has laden the club in massive debts.   

Stadium costs are not taken into account om ter,s pf sustainability as they are usually written off over 25 years, but clubs expecting to pay their stadium debts out of profit, found in the last accounting round that the drop in profit has left them with a big hole in the accounts.   And there was a ten percent rise in salaries too.

So the Premier League’s income went up because of commercial and broadcast revenues, but its losses went up too.  Worse the Premier League’s revenue is rising more slowly than that in the rest of Europe.

And although there were revenue increases in the top leagues these quickly decline as one goes down the league.   League One’s rise of 9% was only a little above inflation and League Two’s rise of 1% was below inflation.  None of the League Two clubs generated a profit.

Wrexham who we considered recently are of course the grand exception – but their case is very special and based on the wishes of the new owners.  It is not a model that can be replicated.  (See Wrexham sign Arsenal goalkeeper Arthur Okonkwo as Wrexham give Man C a lesson in ethics)

PSR will remain in place next season while new financial regulations are trialled in shadow form.

The squad cost rules (SCR) will limit spending on items such as wages, agents, and transfer amortisation fees to 85% of revenue, while top-to-bottom anchoring (TBA) caps the amount any club can spend on squad-related costs at five times the forecast lowest central payment to a club in that season.

Clubs in the top five tiers of the English game also remain set to be subject to licensing conditions imposed by an independent regulator.