In football, one day very soon, the dam is going to burst



By Tony Attwood

Last summer Premier League clubs spent £1.91 billion on transfers.  That was a third up on the previous transfer window record.   Add in the January figures and the total was £2.8bn.

In fact not only has the Premier League never seen anything like that before, nor has world football.  And yet this summer it is quite clear that the clubs are going even further.    There are still 15 days left to go, and traditionally some deals last right until the last moment.  

But behind all this looms the financial fair play regulations which seek to prohibit clubs spending more than they earn, meaning that some players such as David Raya are now being transferred on loan to Arsenal with the promise of buying, in order to get around the FFP rules. 

In terms of spending alone (so taking no account of the income from sales) Chelsea are again the top spenders on £278m, with Arsenal in second place on £200m, Tottenham third on £166m, Manchester United fourth on £164m, Newcastle fifth £132m, Manchester City sixth spending £102m, and Liverpool seventh spending £96m.

In short the “big seven” are spending the big money.   As for where is the revenue coming from, it is mostly broadcasting and sponsorship.  

But there are at least two problems on the horizon.  The first is repetitiveness.  Across the last 11 years PSG have won the French league nine times.  In Germany Bayern Munich have just won the league 11 times in a row.  In Spain, the last time anyone other than Barcelona, Atletico Madrid or Real Madrid won the league was 2004. In England, Manchester City have won the league five out of the last six years.

Only in Italy of the major leagues have we had four different winners in the last four seasons – and Italian football is itself mired in its own scandals and problems which have torn clubs apart. 

As we explored earlier, Fifa’s attempt to turn itself into the equivalent of a state has just been given the boot by a German court.  Manchester City as we know are facing over 100 allegations of financial mismanagement.  In February this year we learned that Paris Saint-Germain are under investigation by French prosecutors over alleged undeclared labour, and unpaid salaries.  In June Barcelona were declared technically bankrupt with debts of over 1 billion euros and are facing corruption charges over payments to the vice president of Spain’s equivalent of PGMO.

Real Madrid were accused of recording €122m in unexplained operating expenses last year.  Meanwhile in an investigation by the Italian Football Association’s sporting tribunal, “Juventus have been found to be inflating earnings from transfers.”  A report from France shows that a Uefa report has accused Manchester City of accepting funds from an undisclosed source, against Uefa regulations. 

Meanwhile, Juventus have been accused of misusing amortisation to show a profit on paper that doesn’t exist.  In an example given on it is suggested that “if they are selling a player for €20 million, they show the entire amount as a profit which is not the case as the money is not wholly paid upfront but is spread over years of installments. Whereas when they buy a player for €20 million with the sum to be paid in five years, they record the payment as only €4 million, which is to be paid yearly to the club from which they brought the player.”

Now what is so interesting is the way the media report scandals in English football.  For example, the Bleacher Report’s review of the 10 biggest scandals in football doesn’t include a single financial scandal of the type seen in the above reports, nor the child sex abuse scandals either, nor does it mention the Bradford City fire, and the fact that the stadium was packed with inflammable materials under the stadium seats.

So either one of three things are happening.   Either there are no major financial scandals in English football of the type we see erupting all over Europe, or they are all being covered up, or they are out there and they are about to come to light.

One area that might cause some turmoil is the fact that a BBC investigation has claimed that up to 40% of Premier League football clubs are associating with financial service providers that are possibly not all they might be.  They say, “Some of the companies that have established financial relationships with the clubs have been fined in the past, are  banned, or are currently under investigation by authorities over unfair customer treatment, the investigation showed.”

At the same time, investigations by Untold Arsenal have discovered what appear to us to be extraordinary lengths top clubs might go to in order to stop allegations that children signed to clubs are not treated properly, ever reaching the courts.  We’re trying to work out how to report this. 

And here’s the point.  If something beyond the law is happening either with finances or with child abuse, given the amount of money floating around that the moment, nothing will be spared in attempts to stop it coming to court.  But eventually, the dams will burst.  They always do.

Meanwhile here is the simple fact: football can’t go on like this.

2 Replies to “In football, one day very soon, the dam is going to burst”

  1. Some folks are of the view that if you don’t look at a problem, it doesn’t exist.

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