As long as spending isn't financed by debt I don't really know what the risk is to the clubs themselves. Just have a rule limiting how much external financing a club can have.
Football Finance
- Thread starter King Binny
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I don't disagree with the principle @peterhague puts forward from a financial security perspective. There'd be some difficulties in practice, but that will be the same with any scheme.
My personal view is that cementing the power base in football wasn't a purpose of FFP, but it has undeniably been an effect. I think that power base was pretty well established already. There'd been an Arsenal / United monopoly over the title for years. Prior to the PL era, Leeds won the league then went bust due to financial impropriety. Blackburn doped their way to a title (when it was still allowed) and are nowhere now. Chelsea doped, still going. City doped, still going. Leicester had a fairy tale season and are nowhere now. No-one else has won the league in the PL era.
The clubs who have consistently been in the power base are United, Arsenal, Us, Chelsea, City. Each of those clubs has a pulling power - a combination of history, prospects of success, glamour of the club's identity. Historically we also allowed ourselves to be a springboard for the likes of Suarez and Mascherano.
Think about Wirtz. Most teams in the PL could have afforded him this summer (they have the financial means and in most cases the leeway in their financials), but only those in the power base could have realistically attracted him.
And that's the reality of a loosening of the financial purse strings. If Newcastle, Villa, Forest etc were allowed to spend more, they'd still struggle to attract the very top players, which makes trading harder, and means they'd end up spending inefficiently on the next tier of players (no guarantee of success), or paying huge wages to the mercenaries in the industry (Robinho seems like a classic example when City were up and coming).
Then they'd all get clobbered when they qualified for Europe, where the limits are much harder to meet. And that's the reality here. The clubs outside of Europe already have the capacity to spend beyond their means because they're subject to the much less restrictive PL limits. The issue for a Newcastle is not PSR, it's UEFA's FFP. That's what clobbered Villa last year, and may catch Newcastle this year. If only they had a coveted striker they could sell to trade their way out of the mess they're in.
But that's why you don't hear the mid-table teams moaning. They're doing just fine, thanks.
My personal view is that cementing the power base in football wasn't a purpose of FFP, but it has undeniably been an effect. I think that power base was pretty well established already. There'd been an Arsenal / United monopoly over the title for years. Prior to the PL era, Leeds won the league then went bust due to financial impropriety. Blackburn doped their way to a title (when it was still allowed) and are nowhere now. Chelsea doped, still going. City doped, still going. Leicester had a fairy tale season and are nowhere now. No-one else has won the league in the PL era.
The clubs who have consistently been in the power base are United, Arsenal, Us, Chelsea, City. Each of those clubs has a pulling power - a combination of history, prospects of success, glamour of the club's identity. Historically we also allowed ourselves to be a springboard for the likes of Suarez and Mascherano.
Think about Wirtz. Most teams in the PL could have afforded him this summer (they have the financial means and in most cases the leeway in their financials), but only those in the power base could have realistically attracted him.
And that's the reality of a loosening of the financial purse strings. If Newcastle, Villa, Forest etc were allowed to spend more, they'd still struggle to attract the very top players, which makes trading harder, and means they'd end up spending inefficiently on the next tier of players (no guarantee of success), or paying huge wages to the mercenaries in the industry (Robinho seems like a classic example when City were up and coming).
Then they'd all get clobbered when they qualified for Europe, where the limits are much harder to meet. And that's the reality here. The clubs outside of Europe already have the capacity to spend beyond their means because they're subject to the much less restrictive PL limits. The issue for a Newcastle is not PSR, it's UEFA's FFP. That's what clobbered Villa last year, and may catch Newcastle this year. If only they had a coveted striker they could sell to trade their way out of the mess they're in.
But that's why you don't hear the mid-table teams moaning. They're doing just fine, thanks.
Don't disagree with any of that but an ambitious midtable club could lure a top/near top player with heavy wages. And then fail to surround them with enough talent to keep qualifying for Champions League or even Europa, and then fall afoul of either PSR or UEFA regs. And then be required to dismantle the squad and start again.
I just don't see how teams like Villa or Newcastle can ever realistically aspire to a higher station than their current state without a historic run of value mining the transfer market or taking years to build up their commercial revenue (which itself is compromised by the inability to sustainability acquire marketable players).
I realize my bias as a North American is towards greater equity and competitive balance in sports (despite an otherwise hyper capitalist culture) but it seems fundamentally unfair to me.
I wonder whether it actually helps aspiring clubs to get into Europe. The ones who are financially in a mess would be better opting out until they're on an even keel. They go into Europe, squads are stretched, they struggle, either in Europe or domestically, often both, and then get fined by UEFA for over-spending, removing the financial advantage of competing (I'm pretty sure Chelsea paid more in fines last year than they made winning the competition). And I've said it before, but it is harsh that UEFA has a single set of rules for all three competitions - clubs in the Europa and Conference Leagues shouldn't be fined as heavily as clubs raking it in via the Champions League.
To bridge the gap the in-between clubs really need two things:
1. A coach everyone wants to play for.
2. A big sale to give them the financial muscle to spend without punishment.
Villa had the second (Grealish), then gave the money to Gerrard. A big-name but not a coach everyone wanted to play for.
Newcastle could sell Isak to give them the financial leeway but Europe's top talent isn't queuing up to play for Eddie.
But I doubt we'll ever see a North American-style set of rules and greater equality, but my thesis is that FFP didn't create that advantage for the legacy clubs, it just entrenched it.
FFP: Financial FAIR PLAY.
The clue's in the name isn't it? Back then they weren't even pretending it was about keeping clubs sustainable.
It was about combatting "financial doping" - not a term you hear much these days. In other words, stopping upstarts like City from spending money that wasn't earned.
The clue's in the name isn't it? Back then they weren't even pretending it was about keeping clubs sustainable.
It was about combatting "financial doping" - not a term you hear much these days. In other words, stopping upstarts like City from spending money that wasn't earned.
The case of Villa is interesting and while Gerrard may not have been able to pull top players, the bigger issue is that he just wasn't a very good manager at a big 5 league level.
So, a significant portion of the Grealish money was burned to little effect.
Howe is equally ineffective at pulling players but is a far better manager. They just haven't had the ability to sell a player for such a huge sum (until now, when pride seems to be fucking with their long term interests).
At least broadcasting revenue is shared far more equitably in the Premier League, in comparison with, say, La Liga. No one will ever compete with Barca and Real. Even Atletico are fortunate to sit near the top of the table. In England, clubs like Spurs and, to a slightly lesser extent, Villa and Newcastle can at least sustainably compete for Champions League places, if not the title.
Completely agree that the inequity already existed. And it is unlikely to ever disappear.
It also came in the wake of the Portsmouth financial crisis.
Chelsea in particular caused the inflationary cycle that led to smaller clubs feeling the need to spend beyond their means to keep up.
I'd argue that the "fairness" is questionable too. Who's to say that their (or Chelsea's) "unearned" fiscal resources are any less fair than us, United, Arsenal happening to be strong at the time when broadcasting revenues exploded.
They don't have a fan base though, not really. They're a very local club.
Well quite. What's fair? Almost impossible to say. I was going to write earned in inverted commas but didn't want to come across as any more cynical than I have to.
Agreed fully. Depends on perspective and values. I admit that my perspective when it comes to sports is informed by the North American landscape.
Not claiming it's a universal truth.
I remember soon after Chelsea became a threat back when Abramovich appeared, some interviewer asked Ferguson if he thought it was unfair how they were just buying success. He was like, well try telling that to a loyal Chelsea fan who's followed their team for 50 years and never once seen them even threaten to win the title.
He had a point.
That's kind of where I'm at now. The current system doesn't allow for that.
I also don't think it should become a race to acquire multibillionaire/oil state ownership groups.
Teams should be able to invest according to their resources and aspirations. And those with lesser resources should have their aspirations supported by subsidies from those willing to overspend.
I don't think it will happen but that's why I think a luxury tax is the best solution.
I don't want a free for all like the situation that allowed Chelsea and City to sweep all before them.
That makes things more dynamic in a sense but it's no solution in the long term and at worst, if you get really massive spending like City used to do, then it makes things even less competitive than before - in terms of the top club vs the rest, anyway.
On a selfish level I'm not sure I'd change anything right now because it seems almost optimal for us as LFC fans - good chance of competing, but not of dominating.
On an unselfish level I don't think you need equality or anything like it; I think some kind of hierarchy is fine and probably desirable tbh. But I think you want each club to have a reasonable chance of continuous improvement. So in the current situation I'd want Newcastle or Villa fans to be thinking they've got a decent chance of consolidating as a top 6 team for a couple of years and at the same time building a new team on top of that base which could challenge for the title in, say, year 2 or 3. And if those clubs then found it harder to sustain a title challenger status than us or Arsenal, then I think that's fair enough. So you'd have a kind of natural order but with reasonable fluidity.
Now what system of regulation or subsidies would best achieve that I don't know, but that's the goal I'd be working towards.
