Monday, 7 May 2012

A Man City Title May Signal the Death of Football As We Know It. They have Undermined the Integrity of the Sport Financially, Competitively, and Morally.

Newcastle United were swept aside on Sunday as Man City almost certainly sealed the Premier League title. A bit of English football died today.

£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 outmanoeuvring 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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  1. That is the main thrust of the "Man City bought the league" accusation. While other teams have spent big in the past they have spent big on a particular player to fill a particular need. What Man City have done is open the Who's-Who of International football and then thrown some wads of cash on the table. It is Fantasy Football and not a level playing field. Hopefully FIFA and UEFA tighten the rules on sponsorship/sugar daddy backing soon so we can stop this. Otherwise it is only going to end up one way.

  2. Some comment and thoughts on your blog
    The Man Utd team that played City last week cost virtually the same--but because United have a history and 600 million debt that makes it all fair game.

    Why should having a history make make a club more entitled to succeed? Ask Wigan fans if they should be denied success and ask Huddersfield,Sheffield,Notts County fans,clubs with history, if they blame City Leeds or Chelsea for their demise .It started years before we all had success.

    Who was to blame for Bradford Park Avenue,York and Accrington Stanley,all clubs with history failing? City?Does poor management ever come into the equation?

    If you want to discuss history,it may be worth mentioning that were it not for City helping out United in WW2 they would not have had a ground to play in.They shared our ground for eight years.

    Why should the FFP only look at profitabilty and not the size of debts clubs hold ?

    Cubs do not have to be profitable and your figure of 5 million loss is wrong,it is 45 million euros over two seasons,ie 19 million sterling pa

    If you want to see how City will manage and learn something about the FFP rules read this

    Why would Villa be unhappy receiving inflated sums for Barry,Milner--the question you should be asking about your super historic well run club is where did the money from the deals go.Not on equivalent players for sure.Is that Citys fault?Check Randys bank account.

    For years we have been known as the bitters.Maybe we have been,starved of success,poorly run,much as your club is now.I agree the playing field is not level but it never has been and never will be unless radical steps are taken.We are not to blame for all the problems in football,or even many of the ones you claim.But I rewind the clock to 9/2008 watching SKY
    unveil the City takeover,the utter joy at the prospect of success after years of pain.Please be honest and tell me if the same
    happened tomorrow and the Qatari Royal family bought your club would you still be protesting or just happy success is around the corner.The door is closing.Dont be bitter,with your history surely one day your time will come.

  3. The current debt problem at Man United has been injected into them by their owners, it is not their own debt per se.

    Sorry if i made it appear that you need tradition/history to be entitled to success, that certainly was not my intention but i can seen why you have read it like that. I am arguing that success should be built on previous successes and not rely on influxes of money that have not had anything to do with football. Using your example for Wigan, they earned their position through good management, good signings etc etc. This is just as valid a way to do it as any other - i was not implying that you need history, just that you should do it through a slow progression of footballing practice.

    I have not claimed that demise in success is City's fault, i have merely argued that the financial debt in football is as a direct result of wage and transfer fee inflation, which in turn has been exacerbated by the exploits of Blackburn, Leeds, Chelsea, Man City etc.

    I have not claimed that history is a precursor for success or failure, or that demise is based on this factor.

    The reason FFP do not look at debt is because the goal of the legislation is to create durable businesses from football clubs, thus preventing further debts from mounting. Current debt is a big enough problems as it is, so there would be no need for them to punish clubs with current debt. In the case of Man Utd (whom i assume you are referring to) their debt does not really count as footballing debt and it would be bizarre to punish them for it. If this was the case, the Glazer's would simply remove the debt from the club, since they put it there in the first place.

    City's role in helping Man U in WWII hardly seems relevant to my point.

    Villa is run very badly, you are correct. Replacing players like Barry and Milner, however, is a very difficult task. Their exceptional quality is difficult to replicate as they are rare talents found by lower clubs. I do believe you can blame cubs that suddenly receive massive amounts of money for taking key players from other teams. Replacing them is hard. Maybe not for Man City since they can promise European football, but it is for everyone else.

    My bitterness (which, as you rightly point, does exist) is not at it not happening to my club. I agree that if it happened to Villa i would be happy that i would have the opportunity to watch world class football. That does not mean that i would not accept villa would have become a very bad influence on football.

    I am not saying you are to blame and in fact, you are taking my article very personally. I believe that the way in which the club's owners have treated football has influenced the game very negatively.

    I did not mean my article to come across as someone bitter about their own club's fortunes, or indeed that Villa's history makes them entitled to success or vice versa for City. My point with Villa was simply that they grew like every other club. I chose them for my example because i know their history better. Villa do not deserve success, and in fact deserve relegation.

    I hope this answers some of your problems with my article. Perhaps it was tactless of me to use Villa as my example and bring the concept of history into the debate.

  4. Thank you and boy do you type quickly.Just one point on the FFP.Lets assume we all enter this phase with either a debt or a credit in our respective bank accounts.You,and UEFA are saying we should ignore the debts and stop the clubs with credit spending it because it isnt fair on the clubs that have collected such big debts.Now that cant be sensible can it ?
    The City project isnt just about the first team.They are investing in Manchester for the future,not as a short term target like Leeds/Blackburn.Football ,like many businesses is diversifying and finding revenue streams from all sources.Like in life some have and some have not,maybe not fair but there it is.But in the world we live in now,if we were to stop the people who have money spending,what will happen?
    PS UTV nice club

  5. Well, i think like any business, regardless of the money you currently have in the bank, you still shouldn't operate at a loss, because long termt aht can't work out. I think that element of debate is probably why they say over 5 years - to be perfectly honest i don't know enough about the FFP in detail to comment. If you have say £20 m in the bank already (and it hasn't got there from outside investment, i.e. it was earned through footballing matters) then that would be on your books as a £20 m profit anyway, so you would be able to spend it.
    Man City are going about it in a better way than the ones before them, and that is good for them, but again, the investment being from outside football is still an unfair advantage; it just means that the initial investment will be consolidated.
    I think it's an awkward comparison to make regarding life in general - football is an unusual industry in that it is relatively 'closed off', and as such it is important for the entire industry that clubs are running profits because the knock on effect can be so dramatic. Needless to say my article is probably pretty hyperbolic, but i do think that allowing outside investment in the way City and Chelsea did can have an indirect knock on effect that means the only safe way for football to grow, or even remain as big as it is now, is for everyone to make sure their economic model is viable.
    Thanks for the feedback though, i wish i could agree with you on the villa! (let's hope the manager is sacked ASAP and i might start writing UTV too!)

  6. wow, you are one sad bitter rag, it is clowns like you that make your PLC the most hated in the world

  7. Just get over it mate. You can't change anything by your bitterness and misunderstanding of what Sheikh Mansour is developing for the club and the local area of East Manchester. I suggest you do more research, and i suspect that your REAL loyalties lie in Stretford, as your poor blog leans that way. The futures Blue.Send your blog over to MUTV veiled as a job application, as you seem perfectly qualified. Rag

  8. Completely agree with your blog. Ive been trying to say all of the above myself to anyone who'll listen. Youve summed it up much better!


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