Newcastle United were swept aside on Sunday as Man City almost certainly sealed the Premier League title. A bit of English football died that day. Man City have undermined the integrity of the sport financially, competitively, and morally.
£24 million Toure scored the goals, the stand-out performer amongst the £82 million Man City midfield. Do we need another scary statistic? Well, their starting 11 cost £179 million, with collective wages of over £1 million per week. Say what you like about Mancini’s managerial qualities, City’s fight back when the title seemed beyond them, or simply the feat of out manoeuvring Alex Ferguson; Manchester City have bought the Premier League trophy.
There are numerous economic reasons why the oil-rich billionaire’s toy is having a drastic affect on football, but let’s start with the most obvious. Football is a sport built on very simple ethics; a successful club is built on a tradition, and it is built on slow progress.
Manchester United’s current position has come from decades of brilliance. Their stadium, their fan base, their commercial power, their ability to attract players – in short, their success – is built from a long history of achievement, each contributing to the next generation, each weaving a stronger thread into the complex tapestry of their success. The same can be said of Arsenal, Tottenham, Liverpool, Aston Villa, and Everton (amongst others).
In modern football, success is dependent on money. Whether you see this as a blessing or a curse, it is difficult to deny. A successful league season will be rewarded with prize money or lucrative European football, which will allow a club to build towards the top. Villa almost got there, Tottenham are getting close. Manchester City, on the other hand, skipped this bit, pretending they were a big club and producing money out of nowhere.
As an Aston Villa fan, let me use the Villa as an example of how football is supposed to work. Founded by 4 men convening under a lamp post in 1874, Villa became one of the world’s biggest clubs in the Victorian era. Slowly gaining household status after FA cup and league success, crowds flocked to watch the Villans, leading to an eventual move to a larger ground, now known as Villa Park. Over the next hundred years the stadium and fan base grew, with Aston Villa remaining a famous name in European football. Today, the 40 000 capacity stadium, the club’s financial position, and the club’s Premier League status, are all a result of this chain of success.
Man City have not grown to their current position. They have produced money from an industry that has nothing to do with football, and used it to buy the world’s best players, cheating the system and frankly destroying the integrity of club football.
Man City’s rise to Premier league champions has been anything but organic, and to achieve a rapid ascent to success relies on incredible transfer sprees. Since there is not an infinite pool of world class players, this inevitably hinders the progress of those clubs who have persevered with a more traditional, honest approach, before seeing the talent they have nurtured lured by City’s billions. Their signings ripped the heart out of Arsenal, Aston Villa, Everton, Newcastle, Valencia, West Ham – the list goes on. Everton, fighting heroically for European football on a small budget, had Joleon Lescott lured away from them in their prime. Aston Villa, desperately trying to finish in the top 4 and consolidate their rebirth under Lerner and O’Neill, saw captain Gareth Barry and playmaker James Milner taken from them in successive seasons, with the latter transfer culminating in the resignation of the manager. Wenger’s endlessly ‘transitional’ Arsenal side were cut down by the sales of Kolo Toure, Gael Clichy and Samir Nasri to Man City.
Of course, the reason these players leave is because Man City can offer wages and transfer fees that are (seemingly) impossible to refuse. Prepared to make a substantial year on year loss, the amount they invest is essentially ‘free money’; there are no repercussions for spending grotesque amounts on footballers that will bring them trophies. It is quite simply an abuse of economic power, treating the structural integrity of the sport carelessly, with no consideration for the long term effects of their actions on the industry as a whole. Losing one billion pounds in four years may not affect Manchester City, but it has huge repercussions on the rest of English football.
It is common knowledge that the debt of English clubs is spiralling out of control. This is almost entirely due to inflated transfer fees and increasing wage demands that do not correlate with the finances of top level football. 17 of the Premier League’s 20 clubs are making a loss each year; that is a failing industry. Millions of pounds are written off every season, making players and agents wealthier and football clubs (and fans) poorer.
When did it get out of control? Certainly football finances have been managed ineptly across the board, but the game never really got out of control until the creation of the Premier League, and the first ludicrous football investment at Blackburn Rovers. Rovers would win the league in 1996 after creating a dream team from the millions made available for transfers, but being built without lasting foundations, their decline was almost as rapid as their ascent.
This story, along with similar exploits at Leeds in the late 1990s, Chelsea in 2004 and Man City in 2008 had an enormous impact on the market, doubling or even tripling the valuation of footballing talent and raising wage expectations. Abramovich can flippantly throw £50 million at Fernando Torres, but any club without the luxury of being able to record a loss, cannot afford the knock on effect of inflated fees.
There is an undeniable correlation between the over-paying of Blackburn, Leeds, Chelsea and Man City during their periods of heavy spending, and the overall inflation of player valuations. The trickle down effect of this is hard to see, but football economists claim that an increase in the average price of a premier league player increases the valuation of players at every level. Teams in the lower divisions of English football cannot make up this gap without serious consequences.
In a conventional confined economic system, a market will fluctuate based on supply and demand. Logic would assume that clubs would baulk at inflated fees and refuse to pay them, thus bringing prices back down. Unfortunately, the stakes are too high for such stubbornness.
Since the creation of the Premier League in 1991, TV deals have become an integral element of football finance, and short term success is crucial in maintaining TV income (such is the disparate spread of generated revenue). Relegation threatened clubs cannot afford to risk refusing increased transfer fees. Short term failure could cost them upwards of £60 million in the following financial year. Equally a team desperate for European qualification is forced to yield to the market even to tread water, with the difference between 4th, 5th and 6th costing a club tens of millions. This catch 22 is exactly the same with regards to the increase in wage demands. The average premier league wage today is £22 000 p/w, with some earning £250 000 p/w. When free-spending Blackburn signed Alan Shearer in 1992 he was paid around £8 000 p/w.
The type of success Man City have bought has contributed greatly to the rise in transfer fees, which has directly affected the enormous debt that looms over football, threatening to completely obliterate the sport at professional level. If the current situation persists, it is simply impossible to see football surviving another 20 years in its current format. Fortunately, the first wave of clubs to sink into administration this millennium (QPR, Hull, Bradford, Leicester, Derby, Ipswich, Wimbledon, Leeds, Southampton, Portsmouth, Rangers) have all been rescued at the last minute. It cannot be long before one club is left to drown, and when one club is liquidated, many more will fall.
Unless of course, UEFA’s Fair Play initiative has anything to say about it. Firstly, it is worth mentioning that this system, although likely to reign in club football debt (Chelsea have begun a ‘sell to buy’ strategy now and many other Premier League clubs have begun cutting their wage budget), the system has already had setbacks. The £400 million sponsorship of Man City’s stadium by Abu Dhabi Group owned Etihad is, overtly and unashamedly, just another way to pump £400 million of their own money into the club. It is cheating, and it undermines the system, again. But even if this system does work, there is a very high chance that it will be a poisoned chalice.
From next season clubs must be profitable; their expenditure cannot exceed their turnover by more than £5m, or they face transfer bans, withholding of prize money, or even bans from European competition. Although appealing, this initiative holds one fatal flaw; it does not allow for the risk of investment for long term gain.
Aston Villa and Tottenham, two sides who have challenged the top four (with varying degrees of success) in recent years spent £120 million and £140 million respectively in the space of four years. The idea being that initial investment will break the monopoly of the big clubs and bring Champions’ League qualification, which is worth up to £70 million per year in TV revenue and prize money, offering an eventual return on the money spent. If such gambles are stopped, then the rich clubs will simply cement their dominance, relying on financial might gained from European football to ensure nobody else can take their spot away from them. The league is in danger of becoming repetitive and non-competitive. Newcastle may break the top four this year, but there are already rumours that their key players will be signed by bigger clubs, and it is unlikely that they will be able to repeat their success next season. A system that may cause more problems than it creates has only been instigated as a result of the morally dubious exploits at clubs like Chelsea and Man City.
Early signs of this are already becoming apparent. The gap between the big clubs and the rest is so plainly evident that owners may have begun to realise that there is no financial gain in attempting to be competitive. With £9 million prize money separating 17th from 5th, and £60 million+ separating 17th from 18th, what is the use in investing, aiming high, when the chances of any monetary gain are so small?
This is clearest of all at Villa. McLeish was seen as a ‘safe’ appointment, ahead of a riskier one that would try to build something challenging the top 6 again (of course, we can now see how foolish he was in thinking McLeish was safe, but that’s a different matter). Boring mid-table obscurity becomes an attractive prospect for an owner who has seen significant financial investment fail to turn into anything substantial.
Clubs creating wealth from nothing, like Man City, are the cause of this dearth in competition. They have forced UEFA’s hand that may reduce long term competition. They have taken key players from burgeoning sides and thus stunted growth and increased competition. They have made it impossible to sign players without running up insurmountable debts, thus reducing the ability for others to compete and causing the financial system to fold in on itself. They have contributed to the wealth disparity that has led to pragmatic management aimed at safety, not glory. And they have done it through means that essentially amount to cheating the system, producing money out of nowhere, leaving nothing but chaos in their path.
That is why we are watching a two team league. We are lucky it is as competitive as that.
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