The overwhelming majority of league clubs are loss making. Does it matter?

 

• Talk Sport argues that ManC should not be punished for financial crimes

By Tony Attwood

In my last article, I reported on the fact that a regular Talk Sport commentator had argued that ManC should not be punished at all for the financial crimes of which it has been found guilty.  Given how long we have been waiting to hear the punishment the club will suffer, and the fact that the club has threatened the League with bankruptcy through an unending stream of court cases if it is challenged, it is hard to see how this confrontation ends.

If nothing happens, and ManC are seen to get away with their financial procedures, some clubs are going to be very angry.   If ManC are punished and then sue the League as they have threatened, we could be in chaos for years.

But there is a problem, because we have been hearing about the financial crimes of ManC for so long, we have become habituated to the story.  ManC probably think they are too big to be brought to heel.  Journalists and editors obviously believe that football fans have had enough of the story, so they don’t mention it any more.  No one even puts an asterisk next to ManC in the league table, leading to a footnote saying,

*Subject to points deduction for 110 breaches of the financial rules the club were charged with in February 2023.

But then again, if we finally conclude nothing will happen, we are left with the disturbing knowledge ManC can get away with anything they like.  This itself stops any “new deal” for the Premier League clubs to share some of its income with the rest of the Football League.  ManC gets away with it, and nothing changes.  

And this has implications.   For just as ManC ask “why should we give away money given to us by our sponsors?” so the rest of the Premier League ask, when facing the Football League, “Why should we give away any of our money to the Football League, when we are faced with monstrosities like Manchester City?”

And all that is before anyone faces the fact that clubs promoted from the Championship are most likely to go down again within a season or two, because they daren’t risk buying the players they need to stay up, then having to pay them or sell them at a loss, if the club goes down after one year.

Plus, gradually, the clever-clever schemes of Premier League clubs to find ways around the regulations (Chelsea are a prime example) are failing, and club debts are rising.   While some Championship clubs exist on around 1% of the average Premier League club’s income.    

And it is getting worse, and the Premier League starts forming its own TV companies around the world to broadcast or sell the rights to PL games while boasting that they give away ten per cent of their income to the Football League (which the FL says is not nearly enough to help prepare Football League clubs for the Premier League).   The Premier League seem to be saying, the rest of football needs the PLs ability to generate money more than the PL needs the rest of football.   Maybe, but a lot of us still hold our local lower league side in affection, and get very upset when it finally gives up the ghost.  

So, giving over £100m a year to community and equality activities and the like is good publicity for the Premier League, until we all start asking why our seats in the stadia are going up in price year after year, when our salaries are not.

Of course, there is also the levy on transfer fees paid by all clubs, which is put in the players’ pension pot, and the income from selling the fixture list (which the leagues claim is their copyright, although that is pushing the Copyright and Patents Act of 1988 further than its creators ever imagined. 

As a person who has made most of his income from writing, I know a bit about that Act for it does a wonderful job ensuring that books, music, articles etc can’t just be copied without agreement and payment.  But does that include a list of games being played on certain dates?   No one has ever tested that, so those who print lists of fixtures pay up without arguing.   But one day, someone might sit down and read the Act.

But in this situation, there is a problem because at the moment, through various different mechanisms, the Premier League clubs are giving the Football League Clubs (ie the Championship and League 1 and 2) something like the same amount as those three leagues make from their own efforts.

So if the Premier League suddenly demand that the three lower leagues change in some way, in relation to dates of matches, transfer fees, or anything else, and the leagues say “thank you but no” the Premier League has the trump card, which, put simply, is, “We’ll stop paying you”.   At once, something like 80% of the clubs in the three Football Leagues would go into liquidation.  Not because you can’t operate a club outside the Premier League, but because, like any dependent, it has become utterly and totally reliant on the handouts.

And when we remember that earlier this year, The Athletic ran the story that nine out of ten league clubs outside the Premier League are loss-making, we can see what a catastrophe that would be.  The overwhelming majority of league clubs are dependent on handouts.

The trouble is that there are no easy solutions here.   TV wants the Premier League because it is the most popular football league in the world and so attracts the best players.   It attracts the best players because TV pays more for Premier League matches than for any other sport.   Which takes us back to the Premier League being what people want to watch.

The Premier League needs the Championship to exist for one reason: relegation can frighten the living daylights out of the likes of Tottenham Hots, and any other clubs that believe they are too big to fail.  It might be horrifying for Tottenham supporters, but it’s a barrel of laughs for the rest of us.

Of course, the biggest problem is that clubs that want to be better keep spending more and more money on players.   Then they find that those players haven’t done the job, so they sack the manager.   The next manager says, “Well, some of those players should never have been bought” and the club starts trying to sell the last manager’s purchases at 50% discount.  And then that new manager fails to make an impression, and he gets sacked.  Meanwhile, clubs get relegated, can’t afford to pay the players whose reputation has been trashed by being part of a relegated team… it all starts to look rather fragile.

So where are we now?  Waiting for the Independent Football Regulator to report on what should happen to football.   But that certainly does not mean that report will ever arrive, of it is does, that anyone will like or accept what he says.   And if the regulator says X and the clubs say “no” then what then?   I am not sure anyone has a clue where any of this will end up.