Is Football Sustainable?

Another transfer window has closed and Premier League clubs have spent another massive sum as they attempt to climb up the table this season. Clubs have spent £490 million over the summer, which a quick calculation tells us is an average of £24.5 million per club. Five clubs are credited with spending over £30 million; Chelsea, Tottenham, Man City, Man United and Arsenal. This will come as no surprise to most, but even clubs such as Southampton have spent just short of £30 million. Bearing in mind they went into administration 3 years ago it seems remarkable that clubs are able to spend these sums. So that is the question I am asking with this article, is it possible for football to carry on this way? There is also a side question to this, which is; do we want football to carry on like this?

UEFA, the body that regulates European football, is at present introducing new financial fair play rules. The short explanation is that it will require clubs to break even or make an “acceptable loss” (around £36 million) rather than consume the large amounts of debts that they do now. There are monitoring periods of an initial two years ending 2013 and then there are 3 year periods when this limit will apply. Punishments for not adhering to the rules include a warning, a fine or even disqualification from UEFA competitions. But will this make a difference to the transfer’s fees that we see now; are they a thing of the past?

Well the answer is no according to Ed Thompson of the website financialfairplay.co.uk.

“The new TV deal that kicks in next season will add lots more cash back into club’s revenues so it is possible the spending will increase… If clubs can get through this Monitoring Period and still be the right side of FFP, then the new TV revenues open up more spending possibilities for them”

So at least initially it seems that transfer fees will continue to increase. One difference the regulations will make is to the length of contract players are given and the amount they are paid. The transfer fee paid for a player plus his yearly wages are added together and the impact on the FFP limit depends on the length of the contract.

“We are already seeing clubs give longer and longer contracts to players. Whereas 3 years was the norm, now players are regularly signed for 5 years (not seen a 6 year deal yet though). This is probably mainly because of the Bosman ruling but also in part due to the FFP rules.”

“Essentially the FFP rules work as a kind of soft salary cap.”

In my opinion the spiralling costs of football are starting widen the gaps between the very rich clubs who can afford £100 million transfer budgets and everyone else. What the solution is who knows. I would like to see stricter controls over wages. An overall wage budget cap to me would narrow this. Clubs could still sign star players and pay then ridiculous fees if they want to but could only afford to have a small number of these players in their squads. Rather than having three international players in each position like Man City appear to have done.

Anyone interested in the financial fair play regulations should have a look at Ed Thompson’s website click the link below.Financial Fair Play

By Jack Troup

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