The topic of what economic realities our Premier League clubs face in today’s footballing world is often as highly charged, as it is emotive. Ever since Uefa rubber stamped it’s intentions to go ahead with its financial fair play initiative, fans of clubs within the nation’s top flight have certainly been split about its values and morality with a keen emphasis upon the transfer fees that clubs pay for players.
But although the effectiveness of the scheme remains questionable and the concern around lofty transfer fees undeniable, it is often the concept of the Premier League wage packet that is overlooked. It may not be something that bestows the sort of instantaneous and high profile effect that the transfer fee has, but its economic effects are potentially just as sinister – if not more so.
The latest round in the debate around finance in football has seen the case for a Premier League wage cap reintroduced. The league’s chairman, Richard Scudamore, was in London last Thursday to discuss a raft of potential new measures with clubs, as fears arise over the fate of the next wave of television money.
As was widely expected, the Premier League’s new set of television deals has blown away all manner of expectations. As the country’s economy continues to struggle in the face of what feels like a continuous realm of fiscal slump, it seems as if English football’s top tier exists in a different reality – £3billion has been raked in from UK rights alone.
But the fear is that a vast majority of that massive capital, which will be distributed between clubs in the Premier League, will instantly be swallowed up by wage demands. Supporters may have lit up like Christmas Trees when they first read about the almost unworldly level of imminent riches – but don’t think for a minute that such a sum immediately equates into a boosted transfer coffer.
The problem is, that as Premier League income grows to continuous record highs, it is being almost continuously matched by an equally startling increase in player wages. As David Conn superbly pointed out in The Guardian, figures for the last financial year highlight that although the overall income of Premier League clubs grew to £2.5billion, so did players wages, eating up a staggering £1.8billion of that figure or 70%. Poignantly, of the 20 clubs that make up the Premier League, only eight managed to make a profit.
To some, the grossly inflated size of top flight wages might not come as much of a surprise, but it does often feel as if it’s an element that can be misconstrued by supporters. For example, as Tottenham Hotspur broke into the top four for the first time in the Premier League during the 2009-10 season, supporters almost routinely expected for chairman Daniel Levy to pump in their forthcoming riches as soon as they got them- and as expected, turnover increased from £119.8million in 2010 to £163.4million in 2011.
But where as some fans seem to insist that Levy and principal owner Joe Lewis are continuing to hoard that money as opposed to splashing it on the likes of a new striker, a lot of that money had in effect, already been spent. Spurs’ annual wage bill skyrocketed from an annual £67million to around about £92million; the suggested figure has been said to be more. Although their Champions League adventure is of course an exaggerated example, they prominently highlight the effervescent bond between income and wage bill.
And it is the wage bill that seemingly will always increase, no matter what the fortunes of the clubs accounts. Regardless of whether clubs’ turnover had increased over the period of 12 months from 2010-2011, every single Premier League clubs’ wage bill increased without fail. For some, enough is enough.
Stoke City chairman Peter Coates said of the almost unstoppable escalation of Premier League wages, that the culture of inflation was out of touch with reality:
“I hope this view is widely shared: we cannot have all the new money going in inflated wages and payments to agents,” the Bet365 founder said.
“There is no need to do that; we will have the same players, they won’t get better because we pay them more. It should not be beyond us to find a formula which works for us all.”
Similarly, Arsenal boss Arsene Wenger believes that Premier League clubs simply have to live within their own means:
“You should just get the resources you generate – that will determine the real size of the club.”
The argument here is of course that touted financial countermeasures such as a wage cap or even Uefa’s Financial Fair Play mechanism itself, simply ensure that the rich stay richer while the poor stay poorer. The nature of business demands that one must spend before they earn. It’s easy for the likes of Manchester United and Arsenal, who rake in gargantuan amounts from match day revenue to throw their weight behind the live within their means argument – as in principal, the already existing ‘big clubs’ are less likely to face any fresh competition any time soon.
It’s a difficult balancing act and there aren’t any easy answers. Uefa’s FFP has it’s heart in the right place, but it’s ultimate sanction of a blanket ban on European football isn’t something that is likely to prove effective in policing the majority of our domestic teams.
Although there is a feeling that the Premier League are serious about implementing something to try and stop the almost unrelenting escalation of clubs’ wage bill. The issue is finding a mechanism that all the clubs can agree on. In order for any rule change to be rubber stamped, 14 of the 20 Premier League clubs must all be in agreement with each other – something that may produce a very significant hurdle indeed.
How do you feel about the introduction of a potential salary cap into the Premier League? Should clubs be forced to limit escalating wages or are we wrong to try and police the way our clubs go about business? Let me know how you see it on Twitter: follow @samuel_antrobus and bat me all of your views.
