With the start of the season overshadowed by talk of financial meltdown and eras at an end, we brought together broadcaster Adrian Chiles, MP Andy Burnham and academic Stephen Wagg to mull over how football got into this state and how we might get out of it
Football clubs at all levels in this country are experiencing financial difficulties of one kind or another. The problems are obvious, but are there also some good things that might come out of this crisis?
Stephen Wagg: To me, it’s a bit like asking whether any good will come from the recent corporate scandals in the United States. Is Enron or WorldCom going to be some kind of blessing in disguise? The sane voice at the back of your head says yes, people will forsake the lunacy of the market system and demand something more equitable and decent. Professional football people will cease to be paid obscene sums of money for their services. But the signs are that that voice, at least in the short term, will not be heeded. So ever more colossal sums of money will be spent on the defensive skills of a Rio Ferdinand or the “image rights” of a David Beckham. But, as a life-long Leicester City supporter, I’m not wholly depressed by their current predicament. They only recently proclaimed that they were “no longer a selling club”. Less than two years later the entire first team squad is for sale and the club has admitted difficulty in paying the salary bill. These salaries were, in all conscience, barmy, as Matt Elliott, who is the recipient of one of them, accepted recently. So, if it ends here, so much the better.
Andy Burnham: One good thing would be if the Premiership clubs looked to the lower divisions more for signings. That’s something that used to happen a lot, but increasingly clubs have looked abroad for journeymen continental players, which I would say is not good for the English game.
Adrian Chiles: But that’s not going to be possible with what is, misleadingly, called the transfer window. It would be more accurate to call it a transfer wall or a transfer ban. We’re all sleepwalking into this. It comes in on August 31 and it’s going to fundamentally change the way football is run in this country. If I was a tabloid editor I’d be having sleepless nights now, because what sells stories but transfer speculation? And I’d be having even more sleepless nights if I was a Second or Third Division club, because my understanding is that they won’t be able to sell.
AB: I take that point, but I think the transfer gossip in the papers is agent-inspired. It’s agents who plant a story that X is unsettled, prompting a whole round of gossip and hype about his fee, or just promoting a player they’ve got in the Nationwide. At Everton we’ve had numerous occasions where a player’s been doing perfectly well and then all of a sudden he starts coming out in the papers saying, you know, “not a big enough club” or it’s not going to win enough – and it’s inspired by the agents.
What would you say have been the main causes of the financial problems of League clubs?
AB: I would say there are three prime causes: unscrupulous and greedy agents; players, equally, not being particularly loyal to a club and wanted to move as often as possible to maximise their income; and then weak management at board level. Those three things combined have whipped up unsustainable finances in football and now we’re reaping the consequences. And something has got to change.
How many of those things are really new, though?
AB: Well, the one-club player is now a thing of the past. At my club there was Dave Watson – OK, he wasn’t a one-club player because he came from Norwich, but he was there for years and years – or Tony Adams at Arsenal. That is a phenomenon that I think is finished, because of the changing influence of agents.
SW: I share the nostalgia for one-club men. I remember a number of them and a good many more who played the bulk of their time at one club. But their days are gone. Admirable though many of them were, their loyalty was in part bred by a system that restrained them. Those restraints have steadily been dismantled since the early 1960s and a good thing too, in many ways. But some of us may think that the restraints weren’t all bad. Very often they were denounced more by the political right than the left – Conservative MPs were leading supporters of Jimmy Hill’s fight against the maximum wage in the late 1950s, for example – and their passing has led to a freer market, in which the Chesterfields must take their chances against the Leeds Uniteds.
AC: I wonder if the clubs themselves aren’t to blame here. What are they doing to encourage players to stay for a certain length of time? You never hear of players being given share options, for example, on condition they stay a certain number of years.
AB: The thing is, the players are getting such fantastic salaries, it is not asking a great deal to expect loyalty. Fans are loyal and that’s the whole glue that keeps the game together. These clubs that began as community organisations, and still are to the fans, have become meaningless high street brands.
AC: When it comes to creating loyalty, a key problem seems to me that agents get nothing if a player stays where he is. Maybe the agents need to get paid to keep the player at a club – anything, to stop them advocating a move. You can hardly blame the agents for trying to cut a deal, if that’s how the rules are. If I was an agent I’d do exactly the same. And if I was a player I’d want to earn as much as possible. It’s the clubs’ bloody fault for paying the money. Man Utd paying £30 million and whatever his wage demands are for Ferdinand is exerting an upwards pull on all other wages and fees. They would be the first to say players are paid too much, it’s taking football down the sink. Yet they’ve still been involved in this tug of war over a player which is pushing wages up all over the place.
SW: Add television into the equation and you have your explanation of the current crisis. Until a couple of years ago, no price was too high to pay for the rights. ITV Digital found, to their cost, that there were limits. Football’s new Fast Show-style fans, enthusing about “soccer” if it involved Arsenal or Manchester United, were never going to bother with Portsmouth v Gillingham, and the crash came. I’m bound to say many people I talked to saw it coming.
Are there ways of making clubs financially more responsible, such as the licensing systems they have in some European countries?
AB: The escalating nature of players’ wages is the main driver of football’s finances and that has a knock-on effect right the way through, from the prices people pay for tickets to the cost of television subscriptions. I’m not saying I’m in favour of across-the-board cuts, but then again some of the salaries people are getting are just unsustainable – for players that are pretty average in some cases. The Premier League have talked about having a club salary cap so that there’s a limit agreed in terms of the total wage bill. These are all options, but I’m not sure how well they’d work.
SW: In a commercial system the only safeguards are, by definition, commercial ones. The tide of history is against interfering with the market. Changes over the last 45 years have all been in the opposite direction. Supporters, customers, whatever you prefer to call them, can intervene as shareholders (which is usually futile, because they’re invariably minor shareholders) by boycotts, demonstrations, throwing things on to the pitch and so on, or by walking away. I’ve been very taken by the case of Wimbledon. The supporters have simply started again, using principally their own dedication and sense of community to do so.
Yet without formal constraints you can see how easily clubs are tempted into spending beyond their means, to make that last push into the Champions League, or the Premiership.
AC: It is easy to see how they could be tempted, but it’s also easy to see how I could be tempted by a horse that is good value. I can see it might come in at 10-1, so I could certainly be tempted to put my entire mortgage on it, but you don’t make stupid gambles with vast sums of money. You don’t bet your mortgage on anything, which is effectively what the management of a lot of these clubs have been doing.
AB: I think the problem is far greater than we’ve been led to think. In my work with Supporters Direct I’ve come into regular contact with clubs at lower levels, and there are a number at the moment who look like they won’t be able to fulfil their fixtures this season. The problem is far greater in the lower divisions than anyone is properly paying attention to. And yet the wealth still at the top of the Premier League is phenomenal. Thirty million pounds for a player? Fractions of that money would keep the traditional ecology of English football together.
Do you expect to see spectacular casualties?
AB: You hear that clubs like Bradford and Forest are in a dire position. It’s a tragedy when any of these names gets into trouble, but you’ve got to be honest as to why they are in trouble. It’s because they’ve ripped off their fans, alienated them, paid their players too much and it’s always the same sorry saga.
SW: Where’s there’s a willing local public, clubs won’t die, although they may scale down their operations, perhaps by going part-time. Where there’s no willing local public, then a club may die, but I wouldn’t call that spectacular.
AC: I do think the fans have got to take a share of the blame. If you say to most fans: do you want your club to go bust? Absolutely not. But if you say, look, do you want a couple of new strikers, we can’t really afford them but you’ve got to speculate to accumulate, shall we take a risk on this? Most of them go: “Yeah, yeah.” I just wonder if the one good thing that might happen if half a dozen clubs did go to the wall – and I’m certainly not advocating that – is that we’d at least wake up to the reality that if you do gamble too much, this could be you in a few years’ time. There might be a new sense of realism.
Is there more the government should be doing?
AB: It would be an absolute outrage if the government were to put public money into propping up football clubs, when so much money has been taken out of these clubs –not just by players and agents but by the directors themselves. They’ve been plundered, half these clubs, that’s why they’re in the position they’re in.
AC: What about the public money that’s being pumped into Virgin to compensate for Railtrack’s shortcomings, that’s exactly the same isn’t it?
AB: But ITV Digital were not state-owned, they were a private company who reneged on a deal.
AC: Perhaps what we need is for Tony Blair and Alastair Campbell to take Carlton and Granada into a darkened room and see whose eyes are watering when they come out again? It can be behind closed doors, but some twisting of the knackers would certainly focus some minds, wouldn’t it?
SW: It’s a nice image, but Campbell and Blair have no record of bullying capitalists. They are not concerned with the “public interest” aspects of football. Such a plainly pro-corporate government can’t be expected to intervene on behalf of supporters, and the secretary of state in question, Tessa Jowell, has made it clear that they won’t. But, of course, she feels their pain.
AB: It’s football’s authorities who are meant to regulate its finances. I can’t stress this enough – there is enough money in football to keep everyone self-sufficient, in business and even doing quite well. It’s football’s failure to regulate itself that we’re talking about here. After all, clubs used to share out the money from TV, but clubs stopped doing that when the Premier League broke away. Why should the government have to step in to reimpose that order?
AC: I would take issue with you about there being a lot of money in football – there’s a lot of money going into the players’ and the agents’ pockets, but nobody else is making a lot of money. Even Manchester United. People say that football is big business these days. In fact, it flaming isn’t. In the 2000-01 season, Man Utd were put down as the richest club in the world. They turned over something like £150 million. On the same day that was news, I looked in the papers at who else was reporting their figures. Wolverhampton and Dudley Breweries, not even a FTSE-100 company, in that same year turned over £560 million. Football is small potatoes in business terms.
There were a few signs last season that attendances might have peaked. Do you think that is likely to be more pronounced in the coming years?
AC: Now that football is a business, in the sense that there are shareholders and there is real financial ambition at a lot of the top clubs, what that effectively means is that you’ve got to take chance out of it. Because business wants certainty, and sport depends on things being random, or at least on there being a limited chance, and the two things absolutely conflict. So that’s why we’re in the situation now, where we know exactly who the top six or seven in the league are going to be. And that is also why there is no trickle-down effect. They don’t want anything to trickle down, they want to keep it all to themselves. But that only works in the short-term or at best the medium-term. In the end it will kill the whole thing, because if one team has no chance, people aren’t going to come and watch a dead cert.
AB: You’ve hit the nail on the head. When the game first began, it had redistributive mechanisms in, for precisely that reason, that you have to preserve competitive balance over a long period. Otherwise, the game eats itself. That’s why the Americans have the draft system, because they understand that the appeal of professional sport is critically linked to uncertainty of outcome and the idea that anyone can win the competition. Now we have let go of those controls and what you’ve seen is the strong becoming much stronger and the rest filtering away. And the result is that the product becomes less interesting.
SW : What Andy rightly calls the redistributive mechanisms of English football have been removed in the name of progress and I see no immediate prospect of them being restored. Clubs such as Derby, Nottingham Forest and Ipswich can no longer win the League, as they once did. Clubs like Leicester, which floated on the stock market, were flogging an impossible dream of trophies and continued Premiership status. A few individuals maybe enriched themselves, but the club threw good money after bad in the absurd belief that they could hang on indefinitely to a place in the Premiership. Most places are now effectively reserved for the big-money clubs. The others will take it in turns to go up and down.
AC: Despite what I said earlier, the idea of the transfer ban is sound in some respects, in that you create a more level playing field – the players you start the season with are the ones you finish it with. But why not take that further and just limit the number of professionals you can have at each club? All right, in totality it probably means there are fewer professional footballers employed. But at least that would stop the likes of Manchester United or Leeds having, I don’t know, 60 professionals, whereas someone like West Brom will have something like 26 when the season starts. Why not just equalise that?
Is it not the case that most restrictions like that would fall foul of European law on restraint of trade? And that they would be bitterly opposed by the PFA?
AB: If you remember when the Premier League were taken to court by the Office of Fair Trading a couple of years ago, the argument – on which the League won the case I may add – was that yes, we are a cartel, but we’re one that acts in the public interest. The main reason they cited for that was the pledge to give five per cent of TV revenue to grassroots football. We shouldn’t be so worried about Brussels. The game can introduce special measures to rebalance sport, it’s just that the clubs choose not to do it, and they’re too powerful. The PFA hold the key to a lot of problems. You look for ideas about cutting costs to come from the game itself and so far there’s been a complete lack of thinking on it. If clubs go bust there will be fewer players in professional football. It’s better to scale everybody back down – and let’s be honest they’re absolutely fantastic salaries compared to working in local government or the NHS.
But it would be hard to imagine the PFA advising any given player to take less.
AB: We’re not saying everybody’s got to take salary cuts, but equally there’s got to be something done, otherwise clubs are going to find themselves in an unsustainable position. And so far the PFA’s response has been: every contract must be honoured in full. Now that’s hardly going to help, is it?
But isn’t that exactly the League’s argument about ITV Digital?
AB: The clubs have had their contract broken, whereas the PFA are saying theirs are set in stone and can’t be changed. That’s the nub of the problem. What we need is for people to negotiate fairly to help clubs stay in business. The PFA should be thinking “How can we help clubs stay in business?” not “How can we get our members every last dot and comma of what they’re entitled to?” It’s got to be a sense of give and take.
We’ve mentioned the fact that the prices for TV rights are all but certain to fall. We’ve also seen lots of websites closing recently, and even some magazines. Is this all symptomatic of the end of a period when there seemed no limit to football’s appeal?
AC: I used to think football was mass popular culture. But in fact it isn’t. The conclusion we’ve got to draw from last season, from the Carlton and Granada fiasco and ITV’s attempt to put the Premier League on at prime time, is that football isn’t as bloody popular as we thought it was. That’s the key thing, and that’s difficult for someone like me to admit. But it’s a terrible, terrible reality, that four million more people will watch Blind Date than will watch football on a Saturday night.
AB: I think what you’ve found with the TV is that there’s a cap on the number of people who are prepared to pay what is quite a lot of money for subscriptions. That clearly has reached a maximum. At £28 a month or thereabouts for the cheapest Sky package – and bear in mind those people are also very likely to be season ticket holders – that’s a lot of money. The whole thing has become just too much for many people. Look again at the season ticket prices. They’re astronomical, some of them.
Is there a sense in which football is better off without that kind of frenzied expansion?
AC: One possible benefit of funds drying up we haven’t mentioned so far is the notion that we’ll see a return to management now, in that you’ll have to manage a set number of players this season and you won’t just be able to flash your chequebook about, because the money’s not there and because there’s this transfer ban anyway. I’m certain that at West Brom last season, an actual major benefit to Gary Megson, although he’d never admit it, would be the limited transfer funds that were available. He probably didn’t use more than 18 or 19 players in the first team all season, but you have to create a team – we had no individuals, we had to go up by virtue of a team ethos. If a player went through a bad patch you’d have to make him better, you’d have to coach him better. There was no alternative. Up the road at Wolves, Dave Jones, with squillions of quid to spend, would think nothing of going out to spend £4 million on a player. But where’s the team ethos? And I’m sure we benefited from that. It really struck me reading Alex Ferguson’s book. He’s always moaning – well, he’s always moaning – but he’s always moaning particularly about not having enough money to spend on players. So let’s say he wanted to spend 50 per cent more than he was actually given. Are you telling me that if he’d got that 50 per cent more money, he would have had 50 per cent more success? Not a bit of it. Look at Portsmouth now, buying absolutely everybody . Last season they had something like 54 professionals. Yet last season we conceded fewer goals than anybody in the country, apart from Plymouth I think, based on two players that Portsmouth didn’t want – Darren Moore and Russell Hoult. They weren’t right for Graham Rix’s style of football, apparently. So we’ll find out who the decent coaches are now – and I’ve got no problem about Gary Megson, incidentally. He could make the people sitting around this table into a decent defence.
AB: I would definitely agree. We at Everton are prime guilty candidates. We’ve probably spent £60 or £70 million in fees and wages on players who have just become disruptive influences in the squad. It becomes counter-productive. If what we’re going to see now are more modest salaries, clubs that are more community focused, looking back to their own core strengths – their loyal fan base, their communities and giving their homegrown players the chance to play – then that would be a good thing. Obviously, though, the danger is that before we get to that point, half of them might have gone out of business. That’s the knife edge we’re on.
SW: There is definitely a feeling along these lines in Leicester, too. The fans would love it if the big earners departed and a lot of players from the academy were given a chance. At the time of this discussion, Dennis Wise, who’s getting over £30,000 a week at Leicester City, is suspended following a fracas on tour and he may have his contract torn up. I’ve found no support for Wise among supporters, many of whom are mindful that if he had broken a workmate’s cheekbone [his reputed offence] on the shopfloor, he’d have been down the labour exchange by now. They, like me, want a fresh start, with some young lads in the side, being paid terrestrial money.
AC: If the television companies do lose interest, there will be some casualties, but I think more good might come out of it than bad. We might get to a situation where we were before, where fewer people watch football, but for those who do it’s a lot more fun and a lot more interesting.
Finally, what would make a good season?
AB: If no club has gone bust by this time next year – not just administration, but into liquidation, like they have in Scotland – if somehow the game has found a way of moving towards a more sustainable footing for them, that would be good news.
SW: I’m looking forward to getting to know some new teams and forgetting the tired soap opera of the Premiership for a while – maybe even for good.
AC: The rule I always apply is that I would draw a league table of each division ranking the teams in order of their balance sheet, with the richest at the top and the poorest at the bottom. Now to my mind it’s a good season if at the end of it the real table doesn’t look exactly the same. Last season people kept saying to me, look, Wolves ought to go up really because they’re a bigger club. I wanted to punch their lights out. Or at least gently explain that there’s no point having football like that. You might as well get some accountants to look through the books at the start of August to decide who’s going up or down and save us all the bother of travelling round the country in the freezing cold trying to work it out among ourselves.
The Panel ~
Adrian Chiles is a West Brom fan and broadcaster with Radio 5 Live, presenting the Chiles on Saturday programme.
Andy Burnham is the Labour MP for Leigh and chair of Supporters Direct. He supports Everton and is the only sitting MP to have written for WSC.
Stephen Wagg is a lecturer in the politics and history of sport at Roehampton University of Surrey. He has followed Leicester City since 1958.
From WSC 187 September 2002. What was happening this month