Premier League clubs’ £3.5billion shocker strengthens Platini’s ‘fair play’ case
The timing could hardly have been more acute for the release by UEFA of a report into the financial excesses of Europe’s top clubs, just as Portsmouth were placed, insolvent, into the knacker’s yard of administration.
UEFA’s report, “The European Club Footballing Landscape,” a mammoth comparison of 654 clubs in the top divisions across Europe, showed that more money is coming in than ever before, but almost half of clubs overall, 47 per cent, still made losses in 2008. European football, the richest club sport in the world, lost €578million (£513m) in total.
UEFA president Michel Platini and general secretary Gianni Infantino pointed to the report as further evidence of the need for their “financial fair play” initiative, the full force of which is only slowly dawning on the overspending clubs, particularly in England. From 2012-13 clubs will have to break even – and earnings do not include money poured in from owners, even though the Premier League is still arguing it should.
Platini, who has made it his presidential mission to wrestle with football’s financial excesses, said in the foreword: “While clubs’ revenues have continued to rise, these have been entirely absorbed by the growth in [players’ wage] costs…pushing many clubs to rely on debt or shareholders’ contributions. For the health of European club football, those many clubs that operate with financial discipline and sustainable business plans must be encouraged.”
The report shows English football’s income towering over the rest, each Premier League club making on average £108m, compared to £70m in the next richest league, the Bundesliga.
Yet even on those booming figures, the Premier League recorded a loss overall – and the most startling figure was that for debts. The 18 Premier League clubs included in the report were carrying close to £3.5billion of debt from banks, more than all of Europe’s other top-flight clubs put together: 56 per cent of the total.
Infantino stressed not all debt is damaging, citing Arsenal, who borrowed £260m at a favourable 5 per cent annual interest rate to finance the mountainous move from Highbury to Emirates Stadium.
“Arsenal is a good example of a club borrowing to finance long-term development,” he said. “But doing it to fuel spending on players is not sustainable. It is worrying to see such huge debt, and Portsmouth’s example shows that something must be done.”
The Premier League, with Pompey crumbling further every day, has been notably restrained about this rule-making by a confident UEFA, now demonstrating genuine leadership for European football. Gone – for now – is the grumble that UEFA’s concerns are a plot by a Frenchman (Platini) to level English football down.
The Premier League accepts it does make sense for clubs, in the game’s richest boom time, not to be skirting financial collapse. However, the sticking point is over whether owners should still be allowed to put millions in, citing men such as Jack Walker at Blackburn Rovers, Roman Abramovich at Chelsea and the latest extravagant backer, Sheikh Mansour of Abu Dhabi, who has already pumped £400m into his Manchester City venture to, principally, fund high wages.
Portsmouth did not figure in that list of benefactors, but the club is not the aberration the league would like to believe. Pompey too had an owner, Alexandre “Sacha” Gaydamak, putting in loans to fund the spending which took Harry Redknapp’s muscular team to the FA Cup as recently as 2008.
Since the Premier League was formed in 1992 as a breakaway by the Football League’s First Division, clubs in the other three divisions have fallen insolvent a staggering 53 times. The inequality between the top league and the rest – a chasm of £40m per average club in TV money alone – has been a factor in those collapses. Yet now, the first club in the world’s richest league has gone the way of Stockport County, Crystal Palace and so many others, and that asks searching questions of the freewheeling way England’s clubs have been bought, sold, pumped up and allowed to borrow.
Clubs are not in the pink of health everywhere in Europe. In France, though, they are not permitted to run up huge debts and debts generally are a fraction of those in the Premier League. In part this is because most clubs still do not own their grounds – 65 per cent of Europe’s top-division clubs rent from a local authority. It is also striking how many, 42 per cent, are still truly clubs (members associations), and not companies at all.
Amid all the money frothing around, particularly in England, the most commercialised football country of all, there is still a people’s game at its heart, crying out for protection.
