On Monday I detailed how the financial model on which the Premier League was founded is in a state of near collapse and risks taking the whole of English football down with it.
It had led us to a bizarro world where the Premier League was awash with money, but had no money. Ex-Palace owner Simon Jordan estimates about 75p of every pound of income is going to pay wages of players and executives and a tiny percentage to other non-playing staff. That’s why clubs have little in terms of cash reserves. Agents, managers, execs and players have taken it all. This isn’t an accident; this is what the league always aimed for. And now we see the foolishness of building such a massive castle on such shifting sands.
It has long been said by fans that they’d rather players got all the money than anyone else, and it’s understandable why. But unless a business builds up financial resilience commensurate with its turnover, it cannot withstand even slightly choppy waters and will soon sink. This is where many clubs are now, all the way down the pyramid.
This is only solvable by football operating as a collective and working together. But this goes against everything the PL stands for. It was set up to create and fellate an elite. It and its clubs have had little interest in sharing money around. It doesn’t believe in such a thing. Even now it doesn’t. Not really. Even the £125 million it is giving to the EFL is just an advance on future payments, not a grant or gift.
It has always, and still is, paying players the sort of wages that would resolve all the lower-league clubs’ financial difficulties at one stroke. Difficulties which are often largely due to owners copying the Premier League’s model of paying far too much in wages in order to attain success.
The precarious nature of lower league football. Fleetwood Town lost £6m in 2018/19, have total losses of £15m, paid £128 in wages for every £100 of income & are propped up by owner loans of £17m that realistically can never be repaid. #FTFC pic.twitter.com/wxxiujAVQf
— PriceOfFootball (@KieranMaguire) April 8, 2020
That is insane.
It is time to end this adventure into hyper-capitalism, where money is worshipped as the solution to everything, where greed is good and a player earning more in a day than many of the people who pay to watch game will earn in two years is considered not just normal but a celebrated ‘right’ and is vaunted, not as horrible and pointless inequality, but the triumph of a perverted version of market forces. All this despite there being no clinical evidence that anyone garners more contentment or happiness even from modest wealth. So what exactly is the point?
But what do we replace this ugly, amoral behemoth with? And how do clubs survive?
Let’s start with things we can all surely agree on.
* We want clubs to be financially viable and self-sustaining as a hub for the local community.
* We want tickets to be affordable for everyone.
* We want the people who staff football clubs to at least be paid the Living Wage.
* We want going to the game and the ground to be safe.
* We want games to be competitive and unpredictable and a league that is likewise.
* We want the game to be more inclusive and less abusive.
* We want players to be paid good money, as we would normally understand that expression.
* We want the game to be all about sport and not all about money.
And after all that, if we can occasionally see some entertaining passages of play, that’d be a bonus, thank you.
I think we can agree on these basics. However, the craving of big signings obviously has to stop. That is a symptom of the Premier League’s culture of financial dysfunction which has turned the game into the cash equivalent of an arms race. Those days are over. The days of humongous wages for executives and players have to stop.The fatal addiction to broadcast rights fees must be cured. Look where all these things have taken us.
The next rights sale is in 2022. That should be the date we set for the end of the Premier League and its reincorporation into the Football League. One collective to look after the whole of the pyramid, for the benefit of the whole of the pyramid. At the same time, Division 3 North and Division 3 South are reintroduced to reduce travel time and costs for clubs and fans, making them stronger and more sustainable and importantly for climate change, reducing pollution.
From 2022, all football should be broadcast on free-to-air TV, the broadcast rights purchased from the Football League by the government. As it is, a lot of businesses will be in part or in whole nationalised by 2022 in order to preserve the nation’s infrastructure. Football should be no different.
Between then and now, the government should offer to support all clubs financially in order to survive and in return, it will take over the existing broadcasting rights from the current rights holders for a payment commensurate with that paid for the period.
Once this is done, it does two things. It means no club will collapse, all staff will keep their jobs, no matter how long the lockdown lasts. And it gives notice to clubs that in two years’ time a wholly new regime will come into being and they need to begin to restructure themselves appropriately. Contracts which stretch beyond 2022 would need to be renegotiated under the new rules.
From 2022 a new financial regime comes into being. Don’t be scared. It’s going to be great. Here are some core ideas.
Cap the total wage bill at a set percentage of the turnover of the poorest club in the league, so it is affordable for all. On top of this, non-monetary rewards and other get-arounds are rigorously policed and anyone found to be directly or indirectly taking remuneration in kind would be banned from the game in perpetuity. A draconian measure to ensure the cap works is essential.
In addition to capping the overall amount that can be paid in wages, an individual limit is also imposed. This means you can’t spend most of the wage bill on one or two players, the way you can in the NFL and in doing so, set off an albeit more restricted version of wage inflation. I suggest this cap is £220,000 per year, which is in real terms what top players received in 1980. It places them almost in the top 0.5% of earners in this country. Still very much the elite.
Transfer fees are also capped at a level determined each season by an independent financial body to make them affordable for even the club with lowest income and to prevent massive inflation. In addition, any club can only buy two players per season. This stops rich clubs stockpiling players or blowing smaller clubs out of the water with spending power. However, we do end the transfer window so there is flexibility in the system to account for random injuries.
The Premier League’s fragile financial eco-system is not fit for purpose. https://t.co/nXyOM8caId
— John Nicholson (@JohnnyTheNic) April 6, 2020
All these changes are designed to allow clubs to compete on an equal financial basis, as well as encouraging clubs to develop their own talent. The days of hyper-capitalism and ever-spiralling wage costs are over. Quality coaching would become axiomatic to success. It would mean we stop obsessing over and defining everything by wages and wealth. Football becomes about football again, not about money. It is a sport once more, not shopping. It calms all of those troubled waters and yet everyone is still well paid. No one suffers. The elite player is still recognised as such.
Owners can’t leverage their wealth to gain success and that in turn may lead to some of the more dubious big corporations, sportswear goblins, oligarchs and regime owners backing out of the business. They will not be needed on the new frontier. Maximising revenue at all costs will be a thing of the past because clubs have no ability to use ever higher levels of income.
Clubs will have different levels of wealth because some grounds generate a huge match-day income and others don’t, so in another redistribution of wealth, each club will be mandated to pay the same percentage of their turnover into an independently governed fund, which can then be accessed by clubs up and down the pyramid for capital projects such as upgrading infrastructure and training facilities. This means the football body politic is collectively self-sustaining and no club ever needs to go to the wall. All clubs are protected against irresponsible owners and the era of non-repayable loans from wealthy benefactors is ended. Sustainability is the principle and guiding light.
On top of this, there will be new rules for agents to prevent them draining money out of the game. A player can employ an agent and they can agree between them how much that will cost. But clubs will no longer pay agents anything, at any time, for any service. That will be illegal. The only income agents get will be from the player, as it is in normal life when you contract someone’s services.
Big clubs making huge surplus profits on match days would be able to use them to invest in their local communities, perhaps especially in sporting facilities for children, which are sadly lacking in number and quality. Football’s profits are thus returned to the people to improve the quality of all our lives. This is a kinder, more generous, non-greedy regime which seeks to spread wealth, not hoard it for an elite sliver of people. It is also a game which doesn’t need the riches of big corporations to survive. Clubs become more like normal businesses.
There is no huge payment for playing in the top flight any more. All that did was fuel wage and transfer fee inflation. Clubs have to survive and thrive on the money they generate.
All of this creates a fair, self-supporting game which is not vulnerable to the financial stresses and strains that it is today. No club could go out of business because the various caps would mean that no irresponsible owner could recklessly risk betting the farm on getting promotion and indeed, the vastly reduced income to the top flight would make it less attractive or tempting financially to do so.
Initially this might drive an exodus of players to clubs in countries who do not have these restrictions, at least until they too adopt these same principles. All the fans in Europe already protesting about the effect of TV money and big ticket prices would welcome this revolution with open arms. But if we have to put up with a talent drain for a while, that’s a price well worth paying. Remember, there are many millions more attendances at non-Premier League games than there are at the top flight, proving most football fans don’t necessarily want to see the best players, or even especially good players; they know football isn’t primarily about that. They know football can be fun at any level. That’s why thousands watch amateur games every weekend.
The Premier League made football and football clubs all about money. It’s all many have known and feel it is somehow natural or inevitable that how things are is how they will always be. But just look where this has left us.
I spoke to a Premier League player this morning. If you’ve read my book, you’ll have read his words before. What he had to say about clubs, players, owners, directors and money in this time of crisis was very interesting. And quite swearyhttps://t.co/HtaHQ7blEJ
— John Nicholson (@JohnnyTheNic) April 3, 2020
As much as everyone is craving the return of the live games – we all still love to watch football – nothing will be the same again. This crisis is altering our football DNA. The sins will not be washed away after this is over and as soon as the new regime is proposed, it would garner huge support from all the people who feel disgusted by how things are and the government would be widely seen as returning the sport to the electorate and giving them free football on TV. That’s a real vote winner. Left or right, no-one would stand against it.
Haven’t I always said that it is we, us, the fans, the football lovers, that have all the power, but they’ve just marketed us away from understanding the profundity of that? We can see this as clear as day before our eyes, right here and now. They are lost without us. They always needed us for their existence and now we’re not there, they are heading into financial ruin. Their castles have been built on our sand and now the tide can return to reclaim them for the people.
In these troubling, sad times, this is something to celebrate. All we need is a government which understands the profundity of this. Do not discount it. The times they are a-changin’.
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