Every time I read an article about the financial plight of these clubs I see comments along the lines of “it’s the FA’s fault” or “the FA should do something to stop it”. Another popular phrase also seems to be “so much for the fit and proper persons’ check”. However, the fit and proper persons check is not a check on how the potential owners will manage the business, more checking where the money is coming from; the Premier League, rightly so, does not want to be attached to dirty money.
So why doesn’t the FA toughen up on this test? Why aren’t income streams checked? Why are prospective owners not audited to check that they have the funds to manage the ownership of a top-flight club in England? Well, quite simply, their arms are tied behind their backs on this one. In each country throughout the world there are governmental laws that deem who is eligible to own and run a business. The FA must be careful not to contradict these laws or they would risk landing themselves in hot water.
So what exactly can the FA do to help the situation? Wage caps seem to pop up in conversation quite often but, realistically, would probably kill off the English game. If players can’t get £100k per week in the Premier League then they will simply move to Spain or Italy or wherever else is prepared to pay those kinds of sums. If the wage cap was not introduced around the world at the same time then the Premier League would simply crumble. And what would happen to the clubs that had players on wages above that that couldn’t be sold? Would these clubs be penalised? After all, they would be in breach of the rules.
I was thinking recently about the plight of the English game and potential ways in which these problems could be addressed. There are currently points penalties in place for teams that enter administration but many believe that this is not a severe enough punishment to act as a real deterrent to clubs. After all, Portsmouth were reported to be paying up to 109% of their turnover on wages at one point last season. They were gambling on the future much as Leeds had done seasons earlier. Despite the virtual destruction of a great club, the lessons were not learned.
Of course, the points penalties could be made worse for entering administration but I believe that to penalise at this point is too late. Things have already become so bad by this point that the teams are virtually relegated anyway and all it does is add to the woes that the club has. In many cases the points penalties are deferred until the next season meaning that they have no hope of recovering sufficiently and, in some cases, are doomed to successive relegations without even kicking a ball.
I would like to see the FA act constantly to try and deal with the problems before they go so far that it is simply too late. There are many clubs in the league who run themselves as diligently as possible and what is the reward? They finish in a lower position than they should do and lose out on prize money to teams finishing above them who have done it by overspending. Why not introduce penalties based on finances before clubs enter administration?
There is no deterrent in place at the moment to foreign investors buying football clubs on finance. Two prime examples are, of course, Manchester United and Liverpool. Liverpool recently announced losses of £54.9m for the last year, despite pretty much breaking even in the transfer market. Manchester United were reported as reducing their debt by £30m over the past 12 months but how different would that have looked if Ronaldo wasn’t sold?
It would be interesting to see what would happen if the Premier League introduced a system whereby clubs were docked a point for every million they lost in a 12 month period. Clubs like Liverpool and Manchester United would be severely hindered and would face the prospect of immediate relegation given the number of millions that could potentially be lost in a season. Of course, there are many very large drawbacks to this idea.
Similar to the wage cap, the system would have to be implemented worldwide for there to be any chance of it working in the way that it should rather than simply hindering English football clubs. In reality, this will never happen. Whatever is to be done, or not done given past experience, there are going to be many more heartbroken fans in the coming years and, much like Portsmouth, it will be for completely the wrong reasons.