The good governance topic has hit the headlines in the past few days as UEFA has stated that they may need to look at banning heavily indebted clubs such as Chelsea, Liverpool and Manchester United from competing in UEFA sanctioned competitions. UEFA has set up a working group, which will meet in Geneva on Monday, to discuss how to extend its licensing system and restrict the levels of debt that clubs are permitted to operate with. Currently the financial stipulations imposed by UEFA are limited to bans on clubs who have outstanding debts on transfer payments or ones that do not pay staff and players on time.
Gabriel Marcotti, writing for Sports Illustrated, hits on the key point. The problem with their message is that the intelligent, reasonable parts have been mixed in with alarmist and what some may consider a bit of xenophobic comments. I think the latter bits are what people are reacting to most. As we’ve seen over at other sites like EPL Talk, the reaction has been strong and at times a little irrational.
Let me say that I disagree with Platini that foreign owners should be limited but I do agree with his overall idea that clubs should work to retain some of their local flavour and heritage.
Related to home-grown talent and local heritage, one important topic that Platini continues to talk about is the issue of underage players moving away from home to go to foreign academies. In an attempt to tear a strip off Platini’s example of Chelsea signing a youth from Marseille , the Gaffer of EPL Talk writes that he “would have a tremendous opportunity to become a millionaire, make his dreams come true and help support his family and parents. If Chelsea didn’t sign the player at 11, some other club would snap him up so why blame Chelsea?”
First, let’s be clear. No one is blaming Chelsea specifically, Platini was merely using an example from the current headlines. The player in question is actually 12 and his name is Jeremy Boga. Chelsea signed him on September 30th for an undisclosed fee.
Outlandishly dubbed the new Zinedine Zidane simply because, like the two-time World Player of the Year, he plays in midfield, Boga already has the spotight on him for the wrong reasons. Let me sidetrack for a moment so I can get something off my mind. I am only going to say this once — THERE IS NO NEW ZIDANE ! Zidane was a once in a generation sort of talent and it’s simply a lax comparison to label any French player with any sort of flair/advanced technical ability as the ‘new Zizou’.
Now back to the topic at hand, what benefit comes from signing a 12-year-old from Marseille? Europe’s top teams are trying to sign players earlier and control their development as a way to keep potential star players out of the hands of rival clubs. The guise is that it may aid the team in developing cheap talent for the future but I’m not fully convinced. The theory is sound as I’ve seen the cost of turning a 16-year-old into a first-team starter quoted at about 500,000 British pounds.
However, the reality is that very few players from academies break into the first team, perhaps 1 in 100 if the odds are that high. Will this 12-year-old become a millionaire? Maybe but doubtful. The bulk of academy players are either cut loose or sold to lower division clubs in order to have a chance to kick-start their career. There are many examples of players whose development stalled simply because they were stuck in the academy/reserve side of a ‘big club’ for too long. ‘Big clubs’ like Manchester United, Real Madrid, Chelsea and others simply bid big dollars every summer for top players from other clubs. The fact that there is another club that would sign him does not make the practice correct or healthy for the sport.
The largest argument against home-grown talent is that football is a business and you shouldn’t dictate where the employees come from. Fair point. I don’t think Liverpool needs to field 11 Scousers but insuring that there are 4-5 places for local lads seems reasonable to me. Mind you, I am used to the Canadian Football League and its limits on foreign (i.e. US-born) players so perhaps it’s not as big a leap in logic for me as it might be for others. However, if you are going to allow freedom of employee recruitment then it’s not unreasonable to expect the businesses to recruit smartly and not find themselves severly in debt.
Now had Arsenal blown 30-50 million in the transfer window, these same folks that cry out against quotas would be moaning about the fact that Arsenal were not making money and were simply buying their accolades. Or, they simply would overlook it until the clubs reached the point of insolvency as happened with Leeds United just a few years ago. One of the articles I read this week, from the Guardian newspaper, quoted a football finance expert as estimating that interest payments on debt exceed the profit from the English Premier League. Perhaps I am overly prudent about financial matters but the current Premier League situation sounds like a recipe for diaster to me. The realy worrying part is that clubs in financially well-managed situations are looking at the Premier League model and thinking “Why can’t we do that?” It’s that sort of short term thinking that leads clubs to relying on bailouts from millionaires as with AC Milan in the 1980s or as in the case of Real Madrid, a controversial property deal that reportedly netted the club 480m Euros, which they promptly plowed a large chunk of into player transfers.
What sort of rules could UEFA put in place? This is where it is going to get extremely tricky. They could state that clubs would not receive UEFA sanctioning if their debt rose above a reasonable per cent of their income or if their wage bill ever amounted to more than a certain per cent of their turnover. The latter is unlikely to happen but the limit on debt seems reasonable and fair to me. Why should a club be allowed to spend its way into debt simply to hoarde players from other clubs? The former is also problematic as Arsenal, who also have a large debt they are servicing, are in debt for a “good” reason. They’ve borrowed money to build a new stadium, which has increased their revenue streams. This is good debt as it is tied to a tangible asset and not a player’s contract, which decreases in value over time
(Note: I believe there are ways to write a player’s depreciation off as a loss against the business but it’s debatable whether the cost of acquiring the player and paying their wages is returned in tax benefits).
Those are just basic ideas and I’m sure UEFA will need time to study the problem in more depth before proposing any licensing or regulation of clubs. The important part is to address what many see as a problem within the game and not simply buy into the hype that “All is well” or “The playing field has never been level”. I don’t agree with either viewpoint. Simply because a condition has always existed does not make it just or correct. Ultimately though, UEFA may not have much power to act and might need to rely on the domestic governing bodies to bring their own houses in order as has been done in Scotland and elsewhere.
The other ace-in-the-hole for the ‘big clubs’ is the threat of breaking away and forming a European Super League as has been rumoured in the past. That would be a dark day for many domestic leagues as they would all see their TV money dip and they would be relegated to the role of feeder clubs for the Super League. And don’t think for a second that there would be a way in for a smaller club….any such entity would be a closed shop for the elite.
Interesting days to be sure and we’ll follow the goings on as they develop. Thanks for sticking with me if you’ve read this far and I look forward to your comments and feedback!
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