Diminishing returns

With the gap between the Premiership and the Championship getting bigger all the time, the threat of finiancial ruin is getting closer with each passing season

Aston Villa fans won’t want to be reminded of this but they have set a record this season. No club with as many points as they had at the halfway stage has finished lower than third since the Premier League began. Those who had hoped to see the top-four cartel broken up will have to wait – and their patience may be tried for several more years yet. But football is still subject to some quite sudden change, none more startling than what has taken place at the bottom of the Championship.

The teams in the relegation places – only one of which is still to be decided at the time of writing – all played League fixtures at Anfield and Old Trafford within the last four years. Charlton were the model of a well-run Premier League club for the best part of a decade but have spent several months anchored to the foot of the table and had their relegation confirmed with four games to go. Southampton had looked likely to drop even before ten points were deducted in late April for their holding company going into administration. They had spent 27 consecutive years at the top level before going down in 2005 and have not been in Division Three since 1959-60. The other club who went up that year, Norwich, may also return to the third level for the first time since then.

The fact that some clubs’ fortunes can fluctuate dramatically might be seen as a good thing, not least by those who rail against the monotony at the top. Indeed, in past decades the travails of Charlton and co might have been perceived as a by-product of healthy competition – there have to be some clubs who lose more games than they win and some will always be better run than others. The latter point is borne out by specific circumstances that contributed to the decline of two of these clubs: Charlton made a couple of poorly judged managerial appointments after Alan Curbishley left in 2006; Southampton had been beset by boardroom strife for several years.

More broadly, however, there is something fundamentally wrong with the way that many, if not most, professional football clubs are being run in the 21st century. What we are seeing demonstrated time and again is the corrosive effect that the pursuit of wealth can have on any form of endeavour – in the case of football, not just how much money stands to be made but how much can be lost. The gulf between the Premier League, with its attendant riches, and the next level is such that all three Championship strugglers were overloaded with financial commitments once they went down.

In fact, any clubs dropping out of the Premier League face the same problem if they fail to return within a year: the best players have to be sold to reduce debts, leaving a weakened team featuring cheaper buys and youngsters thrown in too soon, which further inhibits their chances of bouncing back. It’s not as if a return to the Premier League would resolve the problems that clubs have created for themselves in any case – the majority at the top level spend nine months of the year quaking with fear at the prospect of demotion.

Meanwhile, the top four are setting the worst examples of all. No amount of fanbase-building tours to the US and Asia will balance weekly wage bills running into millions. As anyone with an overdraft will be keenly aware, borrowing a small of amount of money is a lot harder than putting yourself in hock for seven figures. The 20 Premier League clubs owe more than £2.5 ­billion, with nearly half that debt being built up by just two clubs, Man Utd and Liverpool. But it doesn’t matter that they are constantly gambling with money that has been loaned to them because the debts will never be called in, just transferred to a new owner who will borrow more to finance a takeover – and then seek to get some of it back through extending the club’s global reach.

In mid-April the All Party Parliamentary Football Group called for a tightening of the regulations governing the ways in which clubs are financed. This included a more rigorous “fit and proper person test” to be applied to prospective owners and a licensing system that would force clubs to spend within their means. There is no indication that any of their proposals have been taken seriously by the game’s administrators.

The international banking system was only deemed to be in need of reform when it was on the brink of collapse. Football had been edging towards the abyss for several years before the recent economiccrisis but no one seems inclined to halt its lurching momentum. When clubs disappear altogether rather than going into administration, the football authorities will react with shocked bafflement. Every­one else who follows the game won’t be at all surprised.

From WSC 268 June 2009