Wednesday 24 February 2010

Own goal

UEFA thinks your team may go bust. While the FA and the Premier League have expressed absolutely no concern at all about Manchester United's £716 million debt (this is a sports team, remember, not a pension fund or developing country) and Liverpool's £400 million, UEFA is concerned that debt funding distorts competition and may lead to financial disaster.

The figures are stunning. They looked at 732 European teams' finances and discovered that 18 Premiership teams (Portsmouth and West Ham owe hundreds of millions more, but weren't counted because their financial difficulties led to withdrawal of their UEFA licences) owe more money than all the other 714 clubs put together. These teams owe €4.5 billion - 56% of the European total.

Of course, Portsmouth and West Ham's difficulties mark a significant wrinkle: they owe a small amount compared with Liverpool and Man United, but creditors are going to be much more lenient with a global brand name, whereas smaller teams will be encouraged, then ruthlessly punished for their hubris. This is perhaps the biggest problem: it means that the glamour teams can buy whoever they want and distort competitions whereas aspirational clubs won't be able to invest in players and resources by raising money on the financial markets, and therefore won't be able to challenge top teams.

UEFA's solution is the Financial Fair Play system, which requires teams to break even from 2012-13: this would stop clubs going bust, but wouldn't prevent distortion - clubs could still attract Moneybags to shovel cash in their direction (like Abramovich) as long as a return wasn't expected.

I'd like to institute the purest Marxist system going - that of the American NFL. It's helped by their college draft system of course, but I'm sure we could work something out. They have  a wage cap per team, and the bottom teams get first pick of the new intake - which might make for more interesting seasons too.

I think Stoke's OK - it lost £3m last year, which isn't disastrous. The owner and manager are canny individuals who seem to balance financial responsibility with ambition. Football clubs aren't all financial vehicles like Man U - some will remain community clubs, and others (unfortunately for some) are playthings for rich wankers.

Remember the old proverb: to make millions from football, start with billions and buy a club.

2 comments:

Ewarwoowar said...

The NFL-style draft is a nice idea in principle, but it would involve uprooting the whole scheme of things and the pyramid is just not suited for it. As you mention there, the US is, in regards to their college programmes.

Football is unfair. It always has been, and it always will be. And again, another reason why a draft-system wouldn't work, the big clubs are too powerful, have too big a say.

The Plashing Vole said...

I fear you're right - but we should get used to seeing famous clubs going bust.