The Football Shake-Up Q&A, Part Three
What measure, if any, could taken at the top of our game (Fifa/UEFA/The FA) to help prevent clubs falling into financial difficulty?
Gary Andrews: A licensing system would, in my mind, work well. It shouldn’t necessarily restrict the turnover of clubs – uncomfortable as I am with, say Manchester City’s largesse, if they can afford to spunk £40m on a player and can afford it, that’s their prerogative. What’s important is the club can demonstrate that they are solvent and throwing any amount of money on a player wouldn’t send them over the edge. Or, more pertinently, they can demonstrate to the authorities that they can see out the season. This should be checked on a regular basis, minimum every six months.
The Conference are a good example here. Ok, they don’t always get it right but managing a league where a lot of clubs sail close to the edge, they’ve made a huge effort to ensure their members are as solvent as they can be and aren’t doing any dodgy financial practices. Obviously this can’t stop every meltdown, but if you know you’ll get a points deduction or enforced relegation, it makes clubs pay a lot more attention to their finances. It’s something the FA should look into.
Ultimately, you’ve got to start getting the Premier League and the FA talking and coming up with an agreement, which is unlikely. The Premier League has always been very reluctant to get involved in this area and the FA isn’t strong enough. They also need to reward success, not failures. It shouldn’t be right that a relegated club gets millions of pounds in parachute payments for failing.
As for UEFA and FIFA, Platini’s proposals for financial fair play are interesting but I fear there will be some many loopholes and exemptions that they will become unenforceable. It’s good they’re taking an interest, although I think it should be up to individual countries to police their own members.
Matt Tickner: The Financial Fair Play, should it work, is a start. I think that any layperson reading the dossier from UEFA can get lost in the mire of legal language but then I guess it has to be water-tight, at least as a piece of legislation. However, there are some loopholes that are even plain to me. A club cannot spend more than it earns – that is the general précis of the rules. But then certain things aren’t deductible, investment in infrastructure, youth development etc. and so you wonder perhaps if further down the line there are other get-out-of-jail-free cards for the big spenders.
I think there are a lot of reservations about the FFP, whether it will be enforced, whether it will be easily avoided, but it is worth remembering that the FFP was drafted with consultation of the clubs and I think that it the way to go – the rules aren’t there to catch clubs out, but to guide them to a more responsible era. Of course, this may be seen to be applicable to rich clubs in the Premier League, but if it can influence those clubs to change their approach to the way a football club is run, then hopefully the Football League clubs won’t feel the pressure to harness the divide.
Ian Stirling: Football inBritain is at a crossroads. Financially, the game’s never been better off. It’s never had more committed followers both at home and overseas. Yet never have so many clubs been on the brink of financial extinction, nor has the game been so ridden by short-sightedness and self-interest. It’s time to act.
‘The fans’ blueprint for the future of the beautiful game’ calls for a minimum standards of governance, administration and financial control for all clubs to be enforced by the governing body in co-operation with the leagues as a condition of membership and league entry, including an appropriately enforced and managed prospective “owners’ & directors’ test” for all persons owning ten percent or more of the authorised and issued share capital or directing a football club.
Rocco Cammisola: UEFA’s intention to bring in Financial Fair Play is good news, if they enforce it then it could either be very good or awful – if we see the rich staying rich and the poor getting poorer I mean. UEFA in particular could help level the playing field a little acrossEurope by giving out the Champions League prize money in a more egalitarian manner. At the moment, the teams that qualify get all of the cash which means in leagues where there is little money anyway, dominance is almost guaranteed. Instead UEFA could give a percentage to the country’s FA to be shared amongst other teams for that league. This would rewardBelarus as a whole for getting a team to qualify rather than just BATE Borisov.
FAs could help stabilise league situations by demanding the funds for a season be escrowed up front. This would help to ensure that teams are able to fulfil fixtures and play their players and staff – as well as paying any bills for the season.
Mark Pitman: Good advice. The football governing bodies need to become better educators rather than better enforcers and offer educational assistance to clubs in all aspects of finance and administration. It is a two-way thing. Clubs must also ensure they are working to a level they can afford and that financial risks are sensibly calculated with the head and not the heart. There will never be a guaranteed solution to the problem, it is not just football businesses that fail, but if problems can be addressed sooner rather than later then there is a far better chance of recovery for clubs facing difficult times.
Gavin Brightman: It’s difficult to imagine an organisation such as FIFA implementing any sort of financial restraints when they themselves are a money making machine. They banked a record $3.2bn (£2.2bn) in media and marketing revenues from the 2010 World Cup. An example of what could be done and how football would work if finances were put on a level playing field throughoutEurope, is the German model. The Bundesliga went from fans owning 100%, to the 50+1 rule, in order to bring outside backing to aide clubs. The fan is still king, rather than a second thought like inEngland. This approach guaranteed both fan representation and investment, however, my problem with arguing for this to be implemented Europe-wide is the fact that many clubs are already privately owned. Asking a Billionaire to relinquish half the club for the sake of fair play would be certainly be challenged, making it near impossible to implement. A more likely refuge for financially restricted clubs is if UEFA’s FFP can be not just implemented, but actually actively enforced. The next step for the authorities once FFP is in place and shown to be working, is to try to rid the game of the leeches and hangers on currently sucking money out of the game at every turn.
As such, a more plausible issue that FIFA and UEFA could clamp down on and make far more transparent, is the way agents operate and the fees that they are paid. In the summer, we saw Newcastlesign several players on supposedly ‘free’ transfers. Managing Director Derek Llambias moaned at the time that “they certainly weren’t free transfers, there are fees and wages to consider.” These fees were reported to be paid to agents, of whom there were several. This is money simply leaving the game to line the pockets of yet more hangers on, proudly riding the coat-tails of football’s boom. This is all well and good with larger clubs who accrue but can afford high agent fees. When agents are involved with transfers at smaller clubs, however, this disappearing cash has a real effect. Every penny counts in the lower leagues and so should be made utterly accountable. More transparency over the whole approach is needed. Clubs accounts should be an open book. By forcing them to reveal how much they pay agents, as well as perhaps a far lower limit to the percentage fee the agent is allowed to receive, less money will be siphoned off into the glutinous hands of the waiting agents and stay in football, providing much needed cash for clubs to spend actually operating their clubs.
Jimmy Daniel: I think wage caps are necessary, in the lower leagues especially. They are in place in League 2 and if they were brought in at all levels it would ensure a more level playing field, at lower levels at least. The top clubs would still attract the top players, but lower down teams would not be crippling themselves by over-paying for players way beyond their means. This is all easier said than done however, and it is the club’s responsibility to ensure that contracts are drawn up to enable themselves to exist sustainably, and insert relevant clauses should certain scenarios occur.
See Plymouth as a case in point, and the purchase of Damian Johnson in particular, signed from a Premier league club whilst Argyle were a Championship club. Allegedly, following two successive relegations in the 18 months that Johnson has been on the books, he remains on the same wage he was on as a Championship player, despite now being in the bottom tier (albeit now loaned out to get SOME of his wages off the books.) This is utterly ridiculous, and the fault of no one but the (previous) Plymouth Argyle board and management team, who gambled on staying in the Championship by offering a lucrative contracts to aging players. Fortunately that management team and board are now long gone, but Argyle are in a horrible, horrible mess at the very bottom of the Football League
Rich Pye: The most important action that FIFA and UEFA in particular could take is to change the very ethos of their organisations. Both are essentially geared, through the World Cup and the Champions League respectively, to making money. Whilst the money that has flooded into the game, as we’ve discussed previously, is clearly of benefit in some respects, it would seem to be the driving force behind any action these highest of football authorities take. I would like to see a move to a more regulatory method of governing by both. Of course, the World Cup and Champions League are the two biggest and lucrative competitions in the world, so they should continue to control and expand where possible, the scope of these competitions. They should also however, be providing far greater scrutiny to their member associations and applying stricter rules as to how football is run and operates in the business world.
Football is crying out for a strong hand at the helm of its listing ship. Karl-Heinz Rummenigge has been mooted as an alternative to the incumbent bureaucrats; but his appointment would surely only serve to bring the breakaway European Superleague of Europe’s best clubs, that much closer. What is needed is someone in charge, and an organisation overseeing our beloved game, with big enough balls to bring individual FAs to account when club after club are going to the wall. I would like associations to support and advise their member clubs to make better business decisions which lead to a more sustainable future for the game. UEFA and FIFA also need to be working with their member associations to ensure that those national governing bodies themselves are geared towards helping the clubs, as opposed to passively watching them crumble, disappearing into administration and bankruptcy.
In the next part of the Football Shake-Up Q&A we’ll be asking if top clubs should do more to help their smaller, lower league cousins.