The financial bubble that football exists within has undoubtedly come under more intense scrutiny since the global recession has left most people pinching their pockets a little harder than in previous years.
It’s easy to pick two teams that survive on a bedrock of debt – Liverpool and Manchester United – and two that have reached the upper echelons of financial swagger as the result of substantial investment from mega rich owners – Chelsea and Manchester City. As Portsmouth face a winding up order in the face of unpaid taxes of over £10m, amongst record numbers of clubs go into administration, whilst Tom Hicks put up Texas Rangers for sale and still promises a new Anfield, and the Glazers continue to be confronted with green-and-gold clad Manchester United protestors, the question has to be asked – is football’s bubble going to burst? UEFA President Michel Platini has been outspoken on his opinion that club spending should be brought directly into line with the turnover of each club. He has made it clear that he will introduce sanctions and possible bans to any clubs that spend more than they earn.
Platini has been accused of being ‘anti-English’ in his pursuit of debt-ridden clubs, but clubs such as Real Madrid, who have debts of around £300m, would also be affected were Platini’s recommendations be put into place. There is an argument that this is not anti-English, it is simply basic economics that everybody learns at a young age – don’t spend more than you earn, don’t get yourself into debt, or risk being in financial trouble. Regardless of whether Platini is right or wrong, and regardless of whether the new laws would put some constraints on football’s financially heavy hitting clubs each signing their own version of the Galacticos every summer, something does need to be done because if things stay as they are the game risks an implosion which would see more Portsmouth’s and fewer Manchester City’s. That has to be detrimental to the game.
If the Premier League does not bail Portsmouth out, surely by extension they would be unable to finish the season. The points accrued against the south coast outfit will be lost, causing an embarrassing and complicated situation for all involved. That logistical nightmare needs to be avoided in the case of Portsmouth, and any actions that would avoid clubs from going under from overstretching themselves financially must surely be put in place as soon as possible. However, although Platini’s ideas would minimize the risk of clubs going bust, they would also punish the smaller clubs with aspirations to further themselves. Obviously a club playing at Old Trafford with 76 000 paying customers are going to turn over more than someone playing at, say, Turf Moor with 22 000. Assuming that, for example 60% of that revenue can be used on transfers and wages, the bigger clubs are in a far better position to attract big names – which in turn will produce more revenue through merchandising and advertising. The risk, therefore, is that the rich will stay rich and the ‘poor’ will get ‘poorer.’
Blackburn Rovers, it can be argued, bought the Premier League title in 1995, admittedly under good management. They have survived, while club other clubs gamble on success when overstretching. If a smaller club thinks that getting a loan to buy one player that could make all the difference to their league position, and hence security and more revenue, should they not be allowed to? Whether these specific plans are installed or not, it is becoming clear that as the rest of the world tightens its financial belt, football risks being left behind to an extent where it will take an unravelling of the game to occur in which football fans will be the biggest victims unless drastic steps are taken. It remains to be seen whether the game has already crossed the point of no return.