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Nicole Carroll: A one woman mission to make a name in football

Football and financial regulation: Will there ever be answers?

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I was quite keen to watch the Panorama programme about Manchester United, as I’ve written a few times about the Red Knight group and a possible fan led takeover to get the Glazer’s out of power.

It was a good documentary. Quite obviously programmes like this have to take a slant of some sort, and they did present the roles against the Glazer’s ownership at United succinctly, and did do enough to get the cogs turning in my mind about Manchester United’s problems, as well as the bigger financial issues in football.

Season tickets at United for next season appear to be slow, with an uptake that is so far 12,000 down on the same point last season. The clubs renewal cut off point is only 5 days ago, and renewal numbers are down by a third. Although it would be quite easy to blame the whole downturn in season tickets on the Glazer’s ownership, you do need to consider the people who are letting go of their season tickets for other reasons such as financial or social issues. There will always be a certain amount of “wastage” in terms of season ticket holders at any club, but for a club of Manchester United’s stature, this should send some sort of warning signal to the Glazers.

They should be already worried, with the green and gold campaign picking up the PR pace in the media, the Glazer’s should no longer dismiss these angry fans as a vocal minority. With a club as big as Manchester United, even if 5% of the fans are angry, that is no small amount of people.

At Manchester United, the financial problems appear to be there due to the massive amount of debt placed upon the Glazer’s during their ownership, rather than ruthlessly pumping money into the club in the pursuit of trophies and titles. Clubs who have spent masses of money, whilst accumulating vast amounts of debt, should probably worry at a time when football finances are being scrutinised on a daily basis, as it appears that there could be a time in the future where measures are put in place to prevent clubs being bankrolled to success.

If a salary cap was to be imposed just in England, then players would simply play abroad where they could be higher earners. If a cap was issued across football as a whole then I don’t think a massive amount would change. Players, I would assume, would be inclined to go to those clubs who already have some sort of history and a decent financial backing for other things, such as training facilities and new stadiums. There is always the argument as well that salary caps can be worked around, with financial packages including image rights and bonuses according to how the team perform.

In European competition however, some measures are being taken. From 2012 onwards, teams who wish to compete in the Champions League cannot spend more than they earn in a season. It would be silly to say that it is as cut as dried as I’ve just written, but there is further information in The Guardian which explains the finer points on how this system is intended to work.
This seems to present itself as a massive problem to those top teams who have owners who can keep pumping money into clubs without any need for a substantial return. Without meaning to sound like a broken record, on first glance it appears that there are ways around this, for example, what if an “advertiser” (someone associated with the owners of the club) wants to pay an excessive amount for “advertising” which will then boost the clubs income, allowing them to spend further on there own squad?

An issue I picked up on within the article was the issue of clubs not being immediately removed from European competition, and rather facing sanctions. Without any idea of what these sanctions could be, and whether they are going to be harsh sanctions, then surely clubs could risk qualifying for European with debts knowing they won’t be too harshly punished for being in this debt.

Although some sorts of guidelines seem to be slowly coming into play in European competition at least, its lack of clear guidelines which seem to undermine the whole process. We need to know as fans how clubs will be punished for being in debt in the Champions League and whether clubs will be thrown out of these competitions for outliving their means. How can you stop measures being flaunted somewhat to get around the rules? European football seems to be murky in terms of the bigger teams being funded. The ownership of Real Madrid and Barcelona have to present problems to these new ideas due to being fan owned and running at huge losses, and countries which have clubs with state bought stadiums, such as France, surely have already received a financial advantage over everyone else.

Bringing it back to our own league, there is an absolute tonne of work to do. I’m not talking about bringing things completely even so everyone has the same chance to win the league – simply because that isn’t going to happen. Premier League clubs simply have to live within their own means, Portsmouth are just the first example of what crazy spending can do to one club. Anyone on the outside could see there was no way that Portsmouth could really fund the squad that won the FA cup, but nobody official questioned what was going on. The way forward in some form, I envisage will include a notion similar to the European ruling that clubs need to spend within their means. Clubs would not be able to continue working on a loss, or bargaining on money for qualifying for competitions which simply do not happen. Clubs could be free to pursue other revenue streams, but would need some sort of proof that it was a legitimate revenue stream, and not some fiddling of the books to allow further mass investment in transfers for the club. However, that’s just my theory.
Would clubs be scared of being given the same amounts to spend each season? Is the notion of an mid table club having the same financial muscle to spend on transfers as for example Chelsea, such a bad thing? If money was capped as to how much each club could spend on players and wages, then perhaps those who are sitting on scary amounts of debt such as Manchester United and Liverpool, could focus any profits of success on paying back these debts and getting to a stage where the club can sustain itself. Clubs could even focus on investing money on the training grounds and the stadiums to create further revenue, allowing for money to be spent in the future, and to entice a better standard of player by having the best facilities available to you.

I don’t have the answers because if I did, I’d be at FA headquarters implementing the measures needed. If 34 clubs have disappeared in recent years, then it becomes a fairly conceivable notion that a high profile Premier League club could disappear from existence without proper financial regulation which can guarantee the future of many debt ridden football clubs. Although a lack of answers probably makes this blog post irrelevant in some peoples eyes, I think we need to continue answering the questions until we get some solid answers telling us how the game as we know it is going to continue in our current financial climate.

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