I’m not a huge fan of football, but do watch it now and again and used to quite enjoy playing the game – although fairly poorly. I have also been quite a vocal (to people I know at least) opponent of the current free market approach to the game in England. The premier league footballer’s salaries are enormous (the top ones earning well in excess of £100000 per week) and it seems as though the only reason they can afford to pay these salaries is because they have very wealthy owners and not because the business model makes such salaries viable.
According to a recent BBC news report, the English premier league clubs currently have more debt than all of the other major Europeans teams put together. Portsmouth has just gone into administration, and Manchester United and Liverpool both have massive debts passed onto them when they were bought by their current owners. Although I suspect there is nothing technically wrong with this, it does seem odd to be able to buy something using borrowed money and then pass on the debt to the organisation you’ve bought. I guess technically it is yours, but it still seems strange. Manchester United is particularly interesting. The current owners bought it, in 2005, with about £300 million of their own money and a £500 million loan. They currently plan to sell shares worth £500 million to pay off most of the debt. With what they will be allowed to keep and with what they (or their other companies) have earned in the last few years, they will have made in excess of £300 million and still own a share worth £300 million. Again, technically probably perfectly legal, but to have effectively had returns of 20% a year in an area that generally appears not to be particularly profitable does seem odd. Manchester United may, however, be something of an exception as it appears to be a club that does indeed make a profit.
I don’t really want to write a long post about English football, partly because I don’t really know much about it and partly because I can’t really be bothered. What motivated this was an article in the Guardian about a Labour party plan to fix football. I didn’t read it extremely carefully, but it seems like one of the ideas is to give fans a 25% stake in clubs “in recognition of their links with their local community”. It has always surprised me a little that Arsenal supporters still support a club with apparently very little current link with London, so maybe this is good thing.
I’ve no idea if the Labour party’s plans have any merit (if past history is anything to go on, probably not), but I have felt for quite some time that something has to give. Either there has to be a real change to the way in which English football is run, or it will collapse spectacularly when billionaires realise that owning an English football club isn’t a good way to make money, and decide to spend their money elsewhere. Essentially this is my attempt at a post that will allow me to say “I told you so” when something does indeed happen. I could quite well be wrong and English football could go from strength to strength, but something tells me that there are big changes ahead.