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Premier League Club Accounts
- Thread starter billyiddo
- Start date
Sorry mate, I did a long reply to Sheik above if you want to reply to that!This is just a subject I feel very passionate about, and I struggle to control my frustration when people have a view on it that I find unfathomable. Also I think that because people's opinions on this sort of thing are less down to logic and reason, which can be changed, and more down to values, which tend not to be changed, the debate will never really go anywhere.
Again, you and Sheik are referring to what things 'are', whereas I am referring to what I think things 'should be'.
Millions of people are living in poverty. Does that mean we shouldn't try and think of how to lift them out of poverty?
To say 'life isn't fair' just seems absolutely bizarre. Isn't fairness a good thing? If it's possible to make things more fair, shouldn't people try?
Elltrev, I think I understand your view about ÔÇ£what/how football is or should beÔÇØ. However, we live in a capitalist economy and hence everything within our society is dictated by the capitalist culture. Therefore I donÔÇÖt think anything can or should really be done to ÔÇ£level the playing fieldÔÇØ financially (in football) by either taxing the high earners or implementing caps of some sort. Imo this issue requires a lengthy discussion to reflect all the factors in play, but for now IÔÇÖll try and be concise in highlighting why I donÔÇÖt think artificially manipulating the playing field is good or possible.
Maybe 20 years ago, the kind of artificial financial manipulation of the English top flight (Division One at the time) would have been possible. But now, football (not just in England) has become a global business.
There are many people in football now who are in it for the money (players, club owners, sponsors etc etc), as well as those who are in it for the prestige (the likes of Abramovic, but also owners of smaller clubs who do not expect to profit from their position as chairman, and others).
Although this is a huge generalisation, the ÔÇ£taxation programmeÔÇØ within the current football system works basically by bigger clubs giving up a percentage of their earnings to smaller clubs. Ie. this is done through many schemes, but one that imo highlights this the best is the ÔÇ£parachute paymentsÔÇØ that the relegated sides from the EPL receive. Almost certainly the larger sides (ie. the top four) are the main funders of schemes like this, and yet receive the least benefit from it. And if it were up to them (the top four), they would probably get rid of such schemes (as it would be in their financial benefit to do so). However, ÔÇ£parachute paymentsÔÇØ (and other schemes) exist because the other clubs (ie. those not in the top four, who face significant risk from relegation) would benefit from it (if not directly, at least through ÔÇ£expected valueÔÇØ), and therefore these smaller clubs leverage their worth/importance to the bigger clubs (the value of these smaller clubs to the bigger clubs comes from the fact that the larger clubs need them to play games with), and effectively force them to partake in such schemes. Although not football related, a taxation-funded scheme in real life such as the NHS works in fundamentally the same way. The tax received from the richest few percent of citizensÔÇÖ funds basically the whole of the NHS, and yet those that contribute least to it, gain the largest benefit from the NHS. In society, there are more ÔÇ£not-so-richÔÇØ citizens, and therefore they use their electorate vote to force implementation of such policies which benefit themselves. And from the view of the richer citizens, although they may be dissatisfied with the higher taxes that they are subjected to, and the relatively smaller benefits that they receive (which from their perspective is unfair), they opt to remain in the country as it still provides the environment that overall pleases them most. This analogy is obviously very, very crude and generalistic, however it can be used to explain why ÔÇ£giantÔÇØ teams such as Arsenal and Man Utd remain in the EPL despite having to partake in financial schemes in which they lose out from.
Football has become a multi-billion dollar industry in a very short time period, and this has attracted people who are experts at generating and maximising profits (e.g. FSG, Glazers, and arguably even FIFA/UEFA), as the potential earnings from football (especially the English Premier League) is now worth their time and effort.
The extranormal revenues in football are generated primarily by the top clubs and top players (i.e Manchester United, Arsenal, Real Madrid, AC Milan, Beckham, Ronaldinho, Messi etc etc). Even a relative big club like Wigan (who are in the EPL, and have multimillion pound players, and worth a few hundred million (probably?)) for instance and players like Victor Moses, although they are very good, do not attract the worldwide fans/crowds in the same manner that the above mentioned clubs and players do.
20 years ago, Manchester United ÔÇ£neededÔÇØ these other clubs (to compete with/play matches with, ÔÇ£for the Man Utd product to existÔÇØ), however, due to the manner in which football has developed, the increase of finances involved in football, and the addition of ÔÇ£money-menÔÇØ, gradually the importance of these smaller clubs to Man Utd is decreasing. Imo, this is primarily due to the ÔÇ£threatÔÇØ of the ÔÇ£European Super LeagueÔÇØ. This ÔÇ£threatÔÇØ basically removes any need for teams like a Wigan, Norwich to Man Utd, Arsenal etc. However, and importantly, these smaller sides currently benefit from the Man Utd brand and arguably desperately require it (to sustain their current financial model/status).
Imo, the new academy system in the English football system reflects the fact that the bigger sides (not just the top four, but the EPL as a whole in this case) are gradually becoming less reliant of the smaller clubs within England. The fact that the majority of football clubs lower down in the English football tree agreed to the adjustments to the English academy system, despite it obviously representing a worse scenario for them than the previous academy structure did, shows that the relative might of the EPL sides is growing relative to the other English clubs. The ÔÇ£grudgingÔÇØ acceptance of these changes reflects the fact that the EPL sides provide a greater level of benefit to the lower league sides and that they can get away with not providing quite as much to the lower league sides whilst still receiving the same or even more back from these lower league sides.
Within the EPL and the UEFA Champions League, you can see the FA and UEFA are hesitant to act in a manner of implement rulings that would seriously antagonise the giant clubs. This can be seen through the lack of concrete action in implementing FFS or even by the fact that Platini originally wanted more home-grown players but was forced to settle on 4+5 or 5+6 (or whatever it is). Due to the now realistic potential of a European Super League, significant rule changes (which would harm the bigger clubs) such as grave taxation of the bigger clubs, or significant financial handicapping would probably lead to a breakaway league which neither the FA or UEFA want (as the EPL and Champions League are nothing without the likes of Arsenal, Barcelona, etc), and therefore, this explains the current status quo of world football, whereby the largest few clubs have more power and wealth than they ever did.
I think football fans in general are against this current status quo of world football due to mainly nostalgic reasons. Therefore wanting football to be like ÔÇ£the good old daysÔÇØ of how they remember football to have been when they were young kids enjoying football. Nevertheless I feel that the current status quo is neither good nor bad, more so that itÔÇÖs just how it is, and we should come to accept it for what it is, which is a result of being part of a capitalist society. On a side note, I think that a European Super League is inevitable, but thatÔÇÖs a whole different debate. Thanks to whoever has read this.
Maybe 20 years ago, the kind of artificial financial manipulation of the English top flight (Division One at the time) would have been possible. But now, football (not just in England) has become a global business.
There are many people in football now who are in it for the money (players, club owners, sponsors etc etc), as well as those who are in it for the prestige (the likes of Abramovic, but also owners of smaller clubs who do not expect to profit from their position as chairman, and others).
Although this is a huge generalisation, the ÔÇ£taxation programmeÔÇØ within the current football system works basically by bigger clubs giving up a percentage of their earnings to smaller clubs. Ie. this is done through many schemes, but one that imo highlights this the best is the ÔÇ£parachute paymentsÔÇØ that the relegated sides from the EPL receive. Almost certainly the larger sides (ie. the top four) are the main funders of schemes like this, and yet receive the least benefit from it. And if it were up to them (the top four), they would probably get rid of such schemes (as it would be in their financial benefit to do so). However, ÔÇ£parachute paymentsÔÇØ (and other schemes) exist because the other clubs (ie. those not in the top four, who face significant risk from relegation) would benefit from it (if not directly, at least through ÔÇ£expected valueÔÇØ), and therefore these smaller clubs leverage their worth/importance to the bigger clubs (the value of these smaller clubs to the bigger clubs comes from the fact that the larger clubs need them to play games with), and effectively force them to partake in such schemes. Although not football related, a taxation-funded scheme in real life such as the NHS works in fundamentally the same way. The tax received from the richest few percent of citizensÔÇÖ funds basically the whole of the NHS, and yet those that contribute least to it, gain the largest benefit from the NHS. In society, there are more ÔÇ£not-so-richÔÇØ citizens, and therefore they use their electorate vote to force implementation of such policies which benefit themselves. And from the view of the richer citizens, although they may be dissatisfied with the higher taxes that they are subjected to, and the relatively smaller benefits that they receive (which from their perspective is unfair), they opt to remain in the country as it still provides the environment that overall pleases them most. This analogy is obviously very, very crude and generalistic, however it can be used to explain why ÔÇ£giantÔÇØ teams such as Arsenal and Man Utd remain in the EPL despite having to partake in financial schemes in which they lose out from.
Football has become a multi-billion dollar industry in a very short time period, and this has attracted people who are experts at generating and maximising profits (e.g. FSG, Glazers, and arguably even FIFA/UEFA), as the potential earnings from football (especially the English Premier League) is now worth their time and effort.
The extranormal revenues in football are generated primarily by the top clubs and top players (i.e Manchester United, Arsenal, Real Madrid, AC Milan, Beckham, Ronaldinho, Messi etc etc). Even a relative big club like Wigan (who are in the EPL, and have multimillion pound players, and worth a few hundred million (probably?)) for instance and players like Victor Moses, although they are very good, do not attract the worldwide fans/crowds in the same manner that the above mentioned clubs and players do.
20 years ago, Manchester United ÔÇ£neededÔÇØ these other clubs (to compete with/play matches with, ÔÇ£for the Man Utd product to existÔÇØ), however, due to the manner in which football has developed, the increase of finances involved in football, and the addition of ÔÇ£money-menÔÇØ, gradually the importance of these smaller clubs to Man Utd is decreasing. Imo, this is primarily due to the ÔÇ£threatÔÇØ of the ÔÇ£European Super LeagueÔÇØ. This ÔÇ£threatÔÇØ basically removes any need for teams like a Wigan, Norwich to Man Utd, Arsenal etc. However, and importantly, these smaller sides currently benefit from the Man Utd brand and arguably desperately require it (to sustain their current financial model/status).
Imo, the new academy system in the English football system reflects the fact that the bigger sides (not just the top four, but the EPL as a whole in this case) are gradually becoming less reliant of the smaller clubs within England. The fact that the majority of football clubs lower down in the English football tree agreed to the adjustments to the English academy system, despite it obviously representing a worse scenario for them than the previous academy structure did, shows that the relative might of the EPL sides is growing relative to the other English clubs. The ÔÇ£grudgingÔÇØ acceptance of these changes reflects the fact that the EPL sides provide a greater level of benefit to the lower league sides and that they can get away with not providing quite as much to the lower league sides whilst still receiving the same or even more back from these lower league sides.
Within the EPL and the UEFA Champions League, you can see the FA and UEFA are hesitant to act in a manner of implement rulings that would seriously antagonise the giant clubs. This can be seen through the lack of concrete action in implementing FFS or even by the fact that Platini originally wanted more home-grown players but was forced to settle on 4+5 or 5+6 (or whatever it is). Due to the now realistic potential of a European Super League, significant rule changes (which would harm the bigger clubs) such as grave taxation of the bigger clubs, or significant financial handicapping would probably lead to a breakaway league which neither the FA or UEFA want (as the EPL and Champions League are nothing without the likes of Arsenal, Barcelona, etc), and therefore, this explains the current status quo of world football, whereby the largest few clubs have more power and wealth than they ever did.
I think football fans in general are against this current status quo of world football due to mainly nostalgic reasons. Therefore wanting football to be like ÔÇ£the good old daysÔÇØ of how they remember football to have been when they were young kids enjoying football. Nevertheless I feel that the current status quo is neither good nor bad, more so that itÔÇÖs just how it is, and we should come to accept it for what it is, which is a result of being part of a capitalist society. On a side note, I think that a European Super League is inevitable, but thatÔÇÖs a whole different debate. Thanks to whoever has read this.
FFP rules are actually designed to stop any more clubs like Emirates Marketing Project, PSG and Malaga from becoming troublesome to those top clubs which had long been used to enjoying a huge financial advantage over every other club.
In other words, the rules were designed to help the biggest clubs to pull ever further ahead rather than to stop the smaller clubs from falling ever further behind. It was the likes of Real Madrid, Barcelona, Bayern Munich, Man Utd, AC Milan, Arsenal and - irony of ironies - Chelsea who ensured that these rules received a smooth passage through UEFA's committees. Those are the clubs, after all, that will reap all the benefit.
SteveAWOL
Colin Calderwood
This. The FFP rules are there to protect the status quo of the G-14 by making it impossible for any up and coming club to compete with them financially, as their legions of glory hunting fans plus Champions League football every season guarantees that they will always have a much higher turnover than everyone else thus ensuring that they can continue to cherry pick the best players from other clubs by offering them a substantial wage increase.
Chelsea and probably City have bought their way into the establishment at the right time and can now pull up the ladder behind them.
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Spursalot
Jimmy McCormick
It's not like they have huge amounts of debt.. or fail to currently meet with FFP criteria... the exact same thing you assume will protect them..
Or that we finished in the top four this season and will be challenging thusly next season...
Or how Saudi Sportswashing Machine managed to come from left field and challenge for the top four places up until the last day of the season....
It must really be impossible to compete with them...
SteveAWOL
Colin Calderwood
I very much doubt that UEFA will ban a club that have won the Champions League from the competition for failing to comply with their FFP criteria...
How many clubs that aren't part of the establishment or bankrolled by a wealthy owner have won the Premier League... :-k
Spursalot
Jimmy McCormick
Oh this year for sure, i can accept that they won't ban Chelsea, as they are entering as Champions, plus the FFP do not apply yet...
Do you realise how unpopular clubs like Chelsea, City and PSG are in the rest of europe? There are big teams out there that will kick up a fuss if FFP is not upheld...
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SteveAWOL
Colin Calderwood
As founding members of the European Club Association, I'm sure that Chelsea will use their influence to ensure that UEFA impose the minimum possible punishment upon them for failing to comply with FFP at any point in the next few years...
European Club Association sub-group proposes FFP leniency
By which time I'm sure that they will have found enough ways of avoiding the rules to render them worthless...
Ferguson fears loopholes will defeat new FFP rules - Premier League - Football - The Independent
Spursalot
Jimmy McCormick
'Although all UEFA documentation is clear (i.e. non-compliance = no licence), surprisingly, the group proposed that the punishments should be withholding prize money and a transfer ban.'
That doesn't sound so lenient to me.. withholding money would surely mean they had far less money to throw around in the transfer window, and if you have a transfer ban, your money isn't going to get you far at all.
Plus it's only a recommendation, Uefa don't have to change it from no-lisence.
It may take a few years, but every time a club uses a loophole, they will close it until there are none left.
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SteveAWOL
Colin Calderwood
A few ?úmillion prize money is largely irrelevant to the transfer expenditure of a club bankrolled by a billionaire. The transfer ban could be a nuisance to any club but an owner could theoretically just splash the cash on some mega-stars one summer and then leave the squad as it is for a couple of seasons safe in the knowledge that they already have the best players that money can buy.
Considering how many years it takes UEFA' committee to come to any major decision I doubt that they will be able to close the loopholes fast enough and there will always be new loopholes to be exploited, as there are in any financial/legal system. Plus UEFA won't want to upset the ECA just in case they form a breakaway league of their own.
Powers that be don't want to change the top clubs
- Most revenue is either now or will be from tv rights
- TV rights sold to countries full of people who have no history with league (glory hunters)
- The established clubs and FIFA/UEFA/FA/Media have already marketed certain "brands" to those audiences, they don't want the brand changed.
Equalizing or creating a more real competition is not that difficult
- All leagues should distribute the TV rights money evenly (EPL does this)
- CL should be made it to a Cup/League Winners Cup, revives domestic cups and stops a team from sitting in the cash pot 10 years in a row
- FPP should just be income must not exceed expenses where income is defined as tv rights money +gate reciepts (no sponsorship, shady deals, cash injections from your cousin, etc.)
The bigger clubs will still have an advantage via better gate reciepts and more regular participation in CL, but not exponentially bigger and not artificially so via brick like Cheat$ki/City.
- Most revenue is either now or will be from tv rights
- TV rights sold to countries full of people who have no history with league (glory hunters)
- The established clubs and FIFA/UEFA/FA/Media have already marketed certain "brands" to those audiences, they don't want the brand changed.
Equalizing or creating a more real competition is not that difficult
- All leagues should distribute the TV rights money evenly (EPL does this)
- CL should be made it to a Cup/League Winners Cup, revives domestic cups and stops a team from sitting in the cash pot 10 years in a row
- FPP should just be income must not exceed expenses where income is defined as tv rights money +gate reciepts (no sponsorship, shady deals, cash injections from your cousin, etc.)
The bigger clubs will still have an advantage via better gate reciepts and more regular participation in CL, but not exponentially bigger and not artificially so via brick like Cheat$ki/City.
Spursalot
Jimmy McCormick
Assuming they knew the ban was starting after the transfer window had shut they could buy, buy, buy but if the ban came in to effect "immediately" the club wouldn't have time to go on a spending spree. Also, such a spending spree would just exacerbate their failing to abide by the FFP and UEFA could impose yet another ban. A three year transfer embargo, followwed by another, then another each year would stop the problem.
One of the reasons Spurs are able to make reasonable amounts of money (despite a lack of success) is the brand of football we've always been known for.
Stoke, on the other hand, are unlikely to be watched by anyone other than Stoke fans and Tony Pulis's mum.
Sounds pretty fair to me.
FFS, AGAIN, I have no problem with clubs making different amounts of money per se. Your example is in line with how I am saying football should be: Spurs making reasonable amounts of money because we're a popular club with a good history. And Stoke making less money because they're a boring club with a worse history.
AGAIN, my issue is with the disproportionate difference that exists between the CL and non-CL teams, caused by the globalised televisation of and obsession with the Champions League, and the fact that this creates a two-tier system.
But we make a disproportionate amount compared to a lot of clubs.
In fairness you are right, and I would say Spurs are actually an anomaly as they bucked the trend of the rest of the league even before we qualified for the Champions League. In 2009/2010, having finished 11th and 8th the 2 previous seasons, we still made ?ú119m - the 6th highest revenue in the league. Below us:
Villa -------- 91
Everton ---- 79
Fulham ----- 77
West Ham -- 72
Sunderland - 65
But the disparity doesn't compare to the teams above us (in reverse order):
City ----- 125
Liverpool - 185
Chelsea -- 213
Arsenal -- 226
United --- 286
All I am arguing for is some rules by the powers-that-be that reduce the gross inequality that has resulted from the increased worldwide televisation of football and the expansion of the 'Champions' League.
EDIT: in 2009/2010, the difference in revenue between us and Arsenal - the team that we finished one place behind - was about the same as the difference between us and Doncaster Rovers, who've just finished bottom of the Championship.
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