Monday, February 15, 2010

Stupid Questions Part 5: What it Will Take to Reform English Football

In a Pitch Invasion Sweeper from last week, Tom quoted Supporters Direct on various solutions to the debt problem in English football: 
"...they may be salary caps, luxury taxes, loss caps, a more comprehensive, single Fit and Proper Test, built in supporter-representation at clubs to ensure protection against grounds like Crystal Palace’s Selhurst Park being split from the club, or the countless number of small London clubs seeing their homes sold to pay for wreckless spending (in some cases, something a little more sinister at play by property developers).”
As I wrote in the Sweeper on Sunday morning, it seems some or all of these measures may be coming down the legislative pipe.  These two stupid questions come immediately to mind: can any of these a) be feasibly implemented in the free market culture English football now takes for granted? and b) will they be actually effective in protecting clubs from running up irresponsible debts and threatening their club's existence a la Pompey?

Market freedom has been both extremely generous and extremely dangerous for English clubs since the advent of the neoliberal ethos of the post-1992 Premier League era.  In good times, the freedom of the top flight to separately negotiate its own TV deal and distribute said rights fees to its member clubs has been an enormous boon, leading to clubs with a lot of money to spend to buy the best players to get even better, win trophies and get Champions League money, promotion money, more TV money, and eventually, European dominance.  Few fans complained because hey, everything's lovely when you're winning.

In bad times (and importantly these are the first real bad times since '92), this freedom has led to a negative feedback loop of debt.  Clubs that went into debt to spend on players now have to go into even bigger debt buying players to maintain their place in a league or cup competition to guarantee future revenue to keep making debt payments (see my previous posts).  So what?  In dire economic times, companies die under similar circumstances all the time.   The difference is, if a company becomes insolvent and goes out of business, it's tragic because people lose their jobs.  But when a long-established football club dies, thousands, if not millions of supporters are aggrieved a beloved sporting institution that has been around in some cases longer than a century.  It gets people really upset, hence the sort of legislative campaigns we're now just starting to see form in England.   

The model everyone is now touting as a model for the Premier League future is the Bundesliga. Patrick Barclay at the Times has been running with the idea of introducing wholesale the Bundesliga's 50+1 rule to English football, whereby private investors can never own more than 49% of a club, meaning club members control the board of directors and the day-to-day operations of the club.  He also advocates selling off the most egregiously paid players in an effort to drop ticket prices across the board, and implementing a salary cap based on revenue turnover, providing ticket price subsidies from a portion of TV revenue.

I don't want to go into the various merits/drawbacks of these ideas.  We know them: English clubs might not do as well in the Champions League because they would no longer be able to run up massive debts on star players.  England would no longer have pick of the international litter.  And the upside, which I think are significant: less irresponsible spending, more fan say in the operation of their club, cheaper ticket prices.

I'm just not convinced that these sorts of changes are yet politically or culturally feasible in England.  Clubs have enjoyed some measure of private autonomy from fans since the inception of the league in the 1880s.  There has been a culture of ruthless capitalism in English football for decades, stretching through the White Horse final to Portsmouth captain to Jimmy Guthrie's struggle against the Football Association for better wages to the inception of the Premier League.  It may not seem that way because for most of football's history, strict control of player salaries and exploitative contracts, and run-down, often unsafe grounds, and a dismissive attitude to fans, kept owners and chairman rich and football relatively stable.  In some sense, the bitter irony is that the Taylor report, a recommendation to modernize the game so that fans were no longer treated as cattle to be exploited, when combined with the splitting off of the Premier League and the Bosman ruling, led to an unsustainable period of enormous wealth for clubs, as well as enormous risk.  So even when intentions are good, in the relationship between money and heritage in English football money has tended to win out. 

I use this example because I think that the relationship between private money and football in England is so entrenched, legislating reform has to be more than cosmetic, more than installing a place or two for fans at the club directors table.  While the Bundesliga provides a great sustainable model for football (although it had its opponents in Germany among those who wanted glitzy PL style glory), it was born in 1963 out of a league system that had only gone semi-professional beginning in 1949.  Even then, the Bundesliga was formed out of concerns that the lack of a single professional league in Germany was adversely affecting the national team.  My point is, the sporting culture in Germany largely supported a more equitable, more member involved and less capitalistic or financially reckless model.  The Bundesliga was a means to improve the national sport, not to make owners rich.

To my mind, changes to the English system should be based on a clearly articulated belief that clubs can no longer be considered to be private, for-profit companies alone, but public cultural institutions in need of governmental protection and regulation.  My concern is that the current anti-debt movement in England is both populist and reactionary.  Public sentiment is largely directed as individual owners, often portrayed as "foreign investors."  A few fan-placating provisions might prove popular before a General Election, but I'm not convinced they will flip the script and protect beloved clubs from mismanagement and ruin.  As I've tried to demonstrate, debt in football is not just a problem of bad management; it's built in to the league structure itself.  Simply telling clubs they can't spend more money than they have won't be enough.

Any structural changes are complex, and require the expenditure of a lot of political capital.  This means the Supporters' Trusts need to go beyond Green and Gold campaigns: they need to articulate a new vision for clubs that puts fan interests ahead of owner profit.  This would comprise a massive ideological shift in England, a sharp break from the past, and therefore it deserves more than indignant, populist reaction.  It deserves a clearly articulated vision and plan for implementation from the Supporters' Trusts, not a laundry list of possible "solutions."  There will a lot of resistance; already the Premier League have made a token gesture to increased competitive parity with a playoff option for the final Champions League spot, which essentially follows the Premier League script: get the TV money, buy the good players, compete for top spot.  But it's a fight worth undertaking.       

1 comment:

Ole Gunner said...

I see what you're saying now. You think the changes proposed won't affect the psychology of people who run clubs.

Maybe. But we still need a wage cap in football. It is wages that's the biggest pressure on the finances of clubs.

If you don't fix the wage problem you can't reform governance and solve the financial problems clubs are facing.

In any business, if the price of your most important resource is high and rising, the company's financial health is likely to be declining.