Patrick Harverson examines the furore that followed the publication last month of a report that detailed huge rises in footballers' wages in the past year
Are footballers paid too much? It is a simple enough question, but one that evades a simple answer. It can be, and often is, argued that footballers are paid too much in relation to the amount of money their clubs earn, or in relation to the performance they deliver on the pitch, or – as several tabloid newspapers suggested recently – in relation to the amount of money a nurse earns.
The latter earns on average about £15,000 a year, or more than 13 times less than the average Premiership player makes over the same period. Is this fair? Probably not. Low pay for nurses is a scandal, but that doesn’t necessarily make high pay for footballers a scandal too. What we can be certain about is that today’s top footballers in Britain operate in a global labour market in which their rare skills (don’t laugh) are in great demand from employers willing to pay large amounts of money to secure their services. The same, obviously, cannot be said of nurses.
In this context, can players be blamed for accepting the riches on offer? Clearly not. But then try telling that to George Best. The great Irishman believes today’s stars are overpaid, and said recently: “There is too much money in the game and we have seen it go out of control.” Best’s remarks were prompted by last month’s report on the finances of the Premiership by accountants Deloitte & Touche.Their finding that the wage bills of the 20 Premier League clubs jumped by 35 per cent to £135 million last year – and are likely to rise by as much again this year – provoked a predictable round of media scare stories, plus the inevitable fatuous comparison with nurses’ pay. A couple of points need to be made about the subject of footballers’ pay before going any further. Firstly, when the media covers the issue of players’ pay in football, accuracy is rarely at a premium. The huge sums bandied around on the back pages are often entirely speculative and must be taken with large doses of salt.
This situation persists because it is in the interests of the players, their agents, sometimes the clubs and certainly excitable newspaper sports editors to inflate the value of salaries. Only a handful of players in the top flight earn more than £1 million a year, a point amply illustrated by the fact that the average annual pay in the Premiership is less than £200,000. That means a lot of players must earn less than £100,000. That is still a hell of a lot of money, but it is worth remembering when someone bangs on about all footballers being millionaires. Very few are.
Secondly, even if some players are paid as much as the papers say, so what? They deserve every penny. The oft-repeated arguments used by the players’ union about short-lived careers, the risk of injuries and the lack of post-football opportunities are entirely valid ones. Also, if clubs are willing to offer footballers sackloads of money to play, why on earth should the players turn the offers down? Sir Tom Finney, who earned £20 a week in the late 1950s, showed a better grasp of football economics than George Best when he recently commented: “I’ve always said that an employer pays you what he thinks you’re worth.Who can blame players if they are offered £15,000 or £20,000 per week?”
Obviously, when a player fails to deliver on the pitch, he deserves criticism for not giving his employers – and more importantly the fans – value for money. A greater element of performance-related pay in footballers’ packages might be step forward in this respect, although it is unlikely the players or their agents would stand for it. The issue of pay has attracted so much attention in the past year not just because a few top stars are extremely well remunerated, but also because the speed at which wage rates at the top of football are increasing has become alarming. It is estimated that between 1992 and 1996 Premiership wages rose by an average of 25 per cent a year, with that rate rising to 35 per cent in 1997. The reasons for this remarkable surge are relatively easy to explain. Wages have shot up because the elite clubs have had much more money to spend, and because the players have been in a much stronger position to demand more money thanks to the changes in the transfer system prompted by the Bosman ruling.
If the huge rise in club revenues provided the fuel for the fire underneath football’s wage structure, Bosman was the spark that lit the fire and fanned the flames higher. Since the ruling in the European court that out-of-contract players within the European union could move to other clubs on free transfers, money that previously would have been spent on transfer fees has been diverted into players’ wage packets.
The out-of-contract players from overseas had more bargaining power than those still in contract, and as their wages climbed sharply, so there was a knock-on effect elsewhere in England, with top players able to negotiate higher wages to match those of the incoming stars.That clubs have been able to meet the demands of players for hefty pay packets is thanks to the big increases in their revenues over the past few years, most notably from the sale of television rights. The latest broadcasting deal between the Premier League and Sky Television is worth £185 million a year over four years to the top clubs, or 13 times as much as the 1988 deal was worth to the then First Division.
Much of that money, plus the extra income clubs are earning from gate receipts, merchandising and other commercial activities, has been spent on player wages and transfers. Alan Sugar may complain about the “prune-juice” economics of handing over much of the new money coming into clubs straight over to the players, but isn’t that what the business of football should be all about – earning money to invest in the playing squad to improve the performance of the team? Yet he does have a point, in that what worried Sugar and many others from the business side of the game is that clubs are spending too much of their income on players’ wages, and creating a worsening financial situation that could eventually lead some clubs into bankruptcy.
Last season wages and salaries (which admittedly include clubs’ management staff) represented 7 per cent of clubs’ turnover in the Premiership. That is not a particularly worrying figure, but within it are some troubling instances of clubs spending as much as two-thirds, or in the case of Blackburn Rovers all, of its income in wages. Clearly, no business can survive if every penny that comes in the door goes straight out on payroll costs.The clubs that do spend a large portion of their income on wages defend the policy by saying it is a short-term phenomenon – they are investing heavily in the playing squad to improve performance and generate long-term benefits for the club. This is all well and good, but the strategy only works if the team is subsequently successful enough to bring in the extra revenues that eventually return the club to a more sustainable balance of income and expenditure. That, as anyone in football knows, is a very big if. Just ask Manchester City.
Ultimately, perhaps, the more immediate problem of rising player wages is that they give clubs a perfect reason/excuse for raising ticket prices. Chelsea offer a king’s ransom to Brian Laudrup, then turn around and ask the fans to foot the bill. This might work while football is booming, but what happens when some of those newer fans of the game, who have jumped on the football bandwagon in the racy Nineties, get tired of the high prices and the hype and jump off again? At that point, the spendthrift clubs could find themselves earning less from ticket sales, merchandising and possibly television income, while still saddled with hugely-expensive player contracts negotiated during earlier, more prosperous times. The sums would simply not add up, leaving the clubs facing serious financial problems. It is a sobering prospect.
From WSC 136 June 1998. What was happening this month