‘Financial fair play’ can’t come soon enough

An odd thing has occurred in the last few years in the world of international football (that’s soccer to us “Yanks”). First, there has been a huge injection of money into once-poor or modest clubs across Europe as a nouveau riche class of buyers snap up teams such as Queens Park Rangers (QPR), Blackburn, Manchester City (Man City), and Chelsea in England, Paris Saint Germain (PSG) in France, or Getafe in Spain. This is to say nothing of the many other clubs who have been taken over by the traditionally rich: Manchester United (Man U) is owned by Americans. All of this has led to a great amount of reshuffling of players and skill. It threatens, at this point, to overthrow the system of national teams and to destroy what little competition there is left in the system. Such a threat has been seen by others which is why UEFA (Europe’s football governing body) is supposedly instituting “financial fair play” rules. The problem is no one really knows what these might actually entail. *(In the interests of full disclosure, I should note that I am a cynical Arsenal fan.)

One thing to remember, however, is that this is, in some ways, not terribly new. Manchester United, back at the turn of the 19th century, was in deep financial trouble. Buried in debts they could not hope to dig themselves out of, they turned to a wealthy individual to do it for them. The cost? He merely demanded they change their colors and name. Everything has a price it seems. (To be fair, football was still cementing itself in the popular culture of England.)

Thus, perhaps the story of rich owners buying out financially and sport-struggling clubs is not unique to today. In this light, the purchase of PSG by a Qatari firm (many of the new owners hail from the Middle East) is nothing more than business as usual. But, this does not take into account the shifting sands of the global political economy (free market globalization) and the financially high-stakes game that international football has become. The bail out of Man U at the start of the 1900s does not compare to the amounts being thrown about today. Man U, for instance, carries 500 billion pounds in debt.

The national team game is under threat from the new system. The amounts of money clubs make off extraordinarily expensive players creates a direct conflict between an employer (holder of the investment, here a player) and the nation-state. For events such as the World Cup, the African Nations Cup, or international friendlies, players are called up from their club teams to play, for a few days or longer, for the national team. This is seen as a great honor, and so far, clubs have not stepped in the way. Yet, questions arise when, for instance, the star of Arsenal—Robin van Persie—gets injured when playing for the Netherlands. Arsenal are down one important player and are likely to be hurt in their various competitions. Arsenal, the private economic actor, picks up the bill of the “public” national team.

Second, the scale is vastly different than before. A unique event seemed to occur in 2009 when Christiano Ronaldo was bought by Real Madrid (an historically rich club) from Manchester United for an unprecedented 80 million pounds (130 million US dollars). His salary clocks in at 180,000 pounds per week. Similarly, since 2008 the new owners of Man City have been purchasing pretty much any good player they see (I’m exaggerating only a little, really). They have collectively spent roughly 262 million-plus pounds on players (not counting 3 undisclosed transfer amounts which I would estimate total somewhere around another 10-15 million). What is the worth of their player sell-offs? A measly 17 million.

Which brings me to Arsenal FC. Arsenal is a club with a perhaps better than average history when it comes to winning things when compared to all the clubs in England (there are a lot). They have recorded a decent haul of trophies, but they’re case certainly does not runneth over. They have won enough that the fans have come to expect at least some trophy every few years (there are roughly 4 that Arsenal could win each year). For example, supporters had to wait 18 years between 1971 and 1989 to win the next first division trophy (and seeing how there are 20 teams in the league, that seems about right in an odd sort of way). Check out Nick Hornby’s Fever Pitch to get a sense of the personal agony and investment involved (reading it is the best; you can watch the English film on Netflix streaming, but please do not watch the American baseball knock-version, please).

Recently, the club has been run—economically—in direct opposition to the likes of Manchester United, Barcelona, Real Madrid, and Manchester City or the roughly 50% of top European clubs that run on net-losses. Arséne Wenger (with a name seemingly making him destined to manage a team named Arsenal), with his masters in economics and six languages in tow, has charted a path for the club that is financially responsible. He knows, and acknowledges openly, that there has been a global financial crisis. Even before the 2007 crash, he has focused on youth team development and financed a new stadium. Transfers going out are equal to more than transfers coming in. Journalists have often hailed his ability to buy cheap and make a handsome profit before the player ages and dwindles in skill. Moreover, Arsenal has instituted a self-imposed salary cap which makes it extremely difficult for them to hold onto world-class players (think top 20 players in the world). Samir Nasri just left for Man City, in part (or mostly if you ask me), for this reason. In sum, Arsenal is, financially-speaking, perhaps the most stable club in the world, and the fans and pundits would do well to remember this. (For some specifics on amounts of spending in England, check this out.)

So what’s the problem then? The problem is the veritable grand canyon-sized gap between clubs, even ones that have traditionally been able to challenge wealthier, stronger opponents. Chelsea, right after being taken-over by the post-Soviet Union oil baron Roman Abromovich (who owns the world’s most expensive yacht) went and won 2 back-to-back Premier League titles (first division). This year, only 3 games have been played in the new English season, but Manchester City just routed Tottenham 5-1.  This came one week after Tottenham had been thumped 3-0 by Man U the week before. Man U, in their next game, beat arsenal 8-2 (no, that is not a typo). Only one game has been played in La Liga’s season (Spain’s first division), and Real Madrid beat their opponents 6-0. At the writing of this post, Barcelona is up 4-0 only 52 minutes into the game. There is no question that the title race in that league will be solely between Barcelona and Real as it has for some time.

I ask, then, what’s the point? Recently, a Man U fan lamented the “difficulties” of cheering for a team that is expected to win every game, every time, even against the best opponents. Thus, for such fans, joy is hard to come by.  A sense of anomie sets in, feelings similar to, we are told, someone who is depressed. I repeat, what’s the point of beating opponents who barely have a chance?

A second problem is a lack of proper competition. For a depressing, purely economic look at the sad state of affairs check out this report. In sport, the whole point is for two opponents to try to beat the other to win. Yet, the sporting spectacle loses all vitality when one opponent ridiculously outmatches the other because it is only through competing that both sides get a chance at achieving something, well, beautiful. Sure, occasionally Wolverhampton beats a Man U, but under these circumstances, a tie or a loss that isn’t embarrassing is all that is dared hoped for. Even Arsenal—that slightly more successful club historically—who spent roughly 28 million pounds this summer just cannot compete with Man U’s spending of 58 million. (This, not even counting outstanding previous years’ spending by the Red Devils and saving by the Gunners. In fact, Arsenal, with the recent sale of Nasri were a net-selling club for the last decade.). But, I want to stress, immediate discrepancies should not force Wenger to break with his financial philosophy. Perhaps one more expensive player is acceptable, but that’s certainly it.

The financial fair play rules, as described here, are not a surety to create greater club equity and better competition. They really aim to control the amount of debt clubs can take on. Thus, Abromovich would have to actually give Chelsea the money instead of loaning it to them. I sense that financial big hitters will find ways around these walls. A better solution would be salary and transfer caps and higher taxes on salaries. Or, perhaps, the suggested “Rooney tax.”

Greater equity is desperately needed if we want to watch better football. With some real reforms, more of a public good might come from the supposed “beautiful game.” As for myself, I’ll be looking forward to the matches between Sunderland v. Newcastle or Fulham v. Bolton this season.

2 thoughts on “‘Financial fair play’ can’t come soon enough

  1. I’d like to quickly note some new thoughts since the post: first, enormous, unstable debt is not only characteristic of the big clubs. Real Zaragoza in Spain, a mid-table team, holds roughly 110 million Euros worth of debt.

    And second, a thought from an established writer Phil Ball who seems to agree with me: “It [Real’s 6-0 win] was one among a number of scary results in Europe at the weekend – scary in terms of how the giants are beginning to stride around so ominously, like Godzilla crushing houses underfoot.” (Soccernet)

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