- How support of distant clubs is wilting away, as Arsenal secure their position.
- How has the financial doping of both ManC and Chelsea affected Arsenal…
By Tony Attwood
The ultimate job of sorting out Manchester City falls to the Independent Football Regulator: David Kogan. He’s said he will resign if he faces any political pressure on how how deals with the ManC case.
He is Chair of the Independent Football Regulator, an appointment was endorsed by the Media and Sport Select Committee. Some political parties objected to his appointment seemingly on the grounds that he wrote a history of the Labour Party. He has an OBE and has worked for multiple broadcast organisations ranging from BBC to Reuters.
He recently said he and his fellows have the power to review “not only owners, directors and senior executives, but also whether those owners are fit and proper people to run clubs going forward.” Which is quite sweeping.
Owners and operators of football clubs in the upper leagues are subject to a “fitness test” which examines what he described as their “integrity, honesty and financial soundness”, and in the event of the committee not being satisfied with the responses gained, the regulator could force the club to be sold. So a lot of power!
He also suggested that the committee had looked at “issues of this type” (ie similar to Manchester City’s current disputes) “much more frequently than you might realise,” which is encouraging.
And then he added, “if any decision by the regulator became the subject of legal action then clubs would be asked to foot the bill through a funding levy.”
Now that is a very important point, because when the cases against ManC were announced there was a suggestion that appeared to emanate from the club that if the football authorities attempted to sue the club then the club would sue them until the authorities ran out of money.
This relates to a headline from Reuters that “Man City could face years of legal battles after Premier League verdict, experts say” And this would not be the first time as the decision of the Premier League to order Everton to pay Burnley around £35 million in compensation for the impact of their breaching financial rules in 2022 when Burnley were relegated. The appeal on that case is to be heard in January.
In the ManC case the regulator can impose any sanction or fine he feels is fit. But the media has been keen to point out that Abu Dhabi’s rulers could have a word with the UK government who might feel financially obliged to intervene if that were the case!
As we have noted, around 95% of the football clubs in the top five leagues make a loss each year. Some even make a loss before the cost of player salaries are removed from the calculation!
But it would appear however that the secretary of state for digital, culture, media and sport, Lisa Nandy, was not aware that the vast majority of clubs in the top five national divisions are so hugely in debt. She suggested that football managements should “consider these findings for the good of the game, for the fans, and for the communities of which they are so often the bedrock.”
And yet it appears that the League is now losing, or will soon lose, over £1bn a year, despite their being in profit around a decade and a half ago. Some lower league clubs would be making a loss even if they didn’t have any players to pay! But for most clubs it is wage growth that is the absolute problem.
Now in many reports you will read about the gap between the big six and the rest of the PL. But one of the six big debtors is Tottenham Hotspur whose debts are astronomic and there are some worries just how much more Tottenham can borrow to keep on making these losses. For even outside the “big six” wages make up just over half the club’s income. For the big six including Tottenham, it is over 75%. Meanwhile operating costs are rising year by year.
Short term solutions are found – like transfer financing where the club sells the expected income on a transferred player to another club for a cut price, so the club with the player gets immediate money to pay its bills, but then doesn’t get the full transfer fee.
And so once everything else is sold the only extra source of money available to the club is a loan from the owners – or another club that the owner also owns. Clubs find they can borrow record sums (Tottenham is a perfect example) and then report record losses and have problems paying the debts off.
The great hope is then to sell off the club to another person with more money than sense, or to stumble across some brilliant youngsters who can be sold for a profit. But in an ever competitive market both are becoming hard to do.
So what happens? Clubs vanish…. Bury, Chester, Darlington, Halifax, Hereford, Macclesfield, Maidstone, Rushden & Diamonds (who I used to watch when Arsenal were not playing), Scarborough, and Wimbledon. I found that list on a website – there are probably many more.
And here’s a final thought – at the way some bigger clubs are losing money I wouldn’t be surprised if some more famous names might slip away soon.
