- Incompetence or corruption? Why referees in England behave so differently from those in Germany.
- If clubs are to be penalised for fans’ behaviour then Uefa must be penalised for its stadium disasters too
By Tony Attwood
Espn recently ran a story in which it took issue with headlines about the Premier League’s “record TV deal” being worth £6.7 billion, suggesting that the Premier League is bringing in more and more cash.
But as they pointed out, that’s not quite the case as a serious investigation of the figures shows that “the value of media rights, both in real terms and as a percentage of club revenue, are diminishing.”
The piece doesn’t deny that the Premier League is doing better than most leagues, but it is running up toward the buffers simply because there are only so many ways to make money. And that may have caught some clubs out.
In fact what happened with the last “record breaking” deal was that it was a four year deal, not a three year deal. Which when inflation and the number of games offered is taken into account means that match for match the arrangement is only worth two-thirds of the deal covering 2016-19. And that decline is really worrying some clubs that have spent money in the belief that income is going up, when it isn’t.
Sponsors of course are tied in for multiple seasons, but not everyone else is. Amazon as we know have tried it, and seemingly pulled out. That could influence Apple, Meta (that was Facebook), Google… These firms are big enough to try anything and everything – and big enough then to pull out while writing off the loss.
But after that there is the fact that subscription TV itself may be reaching its limits as viewers feel the pinch, and cut the number of extra channel subscriptions they have.
Clubs get their money from sponsors like Emirates Airlines, match day income (season tickets, beer sales…) and broadcasting. Sponsorship deals are long-term, and new ones are harder to get (just think of how long it is taking Tottenham to get a ground sponsor). Likewise, sponsor-type links with organisations such a crypto currencies are hard to pull off – as Arsenal have found. Season ticket prices have risen, and it is difficult to think how much further they might be able to push them (Arsenal have effectively done this by reducing the number of games included in a ticket, but that’s a trick you can only pull off once).
This doesn’t mean that PL clubs are likely to go bust, but it does mean that revenue is growing much more slowly than costs – and will do until clubs stop paying more and more for player transfers and player salaries. We’re not at the end of the transfer window yet of course, but despite the constant onslaught of rumours from the usual websites and newspapers, not that many players are moving.
However it does look as if most clubs have simply expected that the constant rise in income will continue, and continue. And here football clubs are like other businesses. Some are very well run with a clear understanding of where the finances are moving, while others are, well, run pretty badly and a few are run by people with secondary agendas (usually for their own benefit).
There was an interesting article in the Telegraph proclaiming that Everton had become the worst-run club in the country, something that was backed up by the revelation that “the former chief executive, Denise Barrett-Baxendale, and finance director Grant Ingles chose not to co-operate to help clarify the club’s accounts.”
Of course matters were not helped by Manchester City announcing it was spending £400m a year on wages. Players elsewhere demanded more, others tried to keep up. Everton’s wages went up to 95% of their turnover. Some clubs are said to have paid over 100% of their turnover in salaries.
Then, when Russia invaded Ukraine and the oligarchs were sanctioned matters started to fall apart, and the general call was that “no one could have expected this” – and indeed maybe Everton didn’t. But all investments and loans are risks, and the bigger the company the more “due diligence” it has to do.
There is also the suspicion that clubs have been fiddling their own books for years and getting away with it. I have no idea if Everton used money that was shown in their accounts as loans for the stadium improvements, on player transfers, but that seems to be the PL suggestion, based on a certain vagueness in the accounts.
What I suspect also might have been going on (and I stress, I’ve no evidence because I have no inside information other than bits of chit-chat) is that many clubs have got away with being rather vague in their accounts as to what money has gone on players and what has gone on stadium improvements. Certainly huge gambles have been taken on buying players in the expectation of selling them at a profit. But it doesn’t always work out that way – and when it doesn’t the accounts start looking rather dodgy.
That there has been a long list of dodgy owners of football clubs is not by chance. Football has probably been the most under-regulated business area in the UK for at least a century. As a result, gamblers, chancers and quite possibly downright crooks have seen it as a place to do a dodgy deal or three and then get out with the loot. But now the League is frightened by what the promised football regulator will do, and are suddenly decided to clean up the act.
Obviously a well-regulated League would not have within it clubs who when accused of failing to look after child-players properly defend themselves with the story that “the medical records have been lost“. That one scenario alone suggests there has been some very dodgy arrangements going on.
But what we don’t yet know is how many other clubs that have been running the same sorts of scam, and are now running into the same sort of issues as regulation gets ever closer.
Surprise , surprise football is eating itself . It’s always been on the cards from the moment that Roman starting firing his £50 pound notes at David Dein . Clubs have been living beyond their means for some long time and eventually things have caught up . For everyone to keep up , players are imported from wherever and as we are well known as Treasure Island throughout the world we all over pay as the ransoms get higher. Then to persuade players to come, we over pay them too and their agents and the financial merry go round goes on until the day it finally grinds to a halt.
Tony you have run your own business and so have I . We both know that it is important to balance books . Some of us do it fairly and some are creative . Eventually the creative ones are open to scrutiny and this is what will happen to many clubs .
There is little or no point in fining them , because money is the issue and the risk of deducting points is that the competition will become worthless. We could end up with a club winning the title because of purely keeping their books in order.
I fear that it will take time to reset itself and in this period it is quite likely that the public will lose interest and move on to something else.
Shame.
What about a salary cap and if that doesn’t work, a cap on player value? I can already hear the baying of the wolves.