An interesting discussion about an important topic. Unfortunately, it’s not easy to be optimistic. On one level the answer for Clubs is straightforward. All they need to do is manage their costs so that they can live within the revenues they generate. Rochdale FC is an outstanding example of this. The Club has always lived within its means whilst managing to compete at or above its natural level. It’s quite remarkable that they’ve never had to “cheat” by going into administration, like so many similar Clubs, whilst still managing to avoid relegation to the Conference. Arguably, Rochdale has been one of the best managed Clubs over the last 50 years, but does anybody care? Would you want to be a Rochdale fan?
Football in this country is very tribal. We want our Clubs to aspire, to compete and progress, but that’s not always easy to reconcile with financial prudence. As somebody has already noted, “'twas ever thus”, but its been getting progressively more challenging and it’s the independent business model of the EPL which makes the Championship such a financial graveyard; independence in this context meaning that they don’t give a “wotsit” about anybody else.
Consider the latest TV deal. The money allocated to the Championship is a token, the smallest token considered “politically” acceptable; the message is very simply, “if you don’t like it *** off and negotiate your own deal. However, it’s the next bit that really hurts. Scudamore doesn’t give a monkey’s about sustainable business models or normal business practice; he simply wants Clubs in the EPL to do what is necessary to attract the best players to the League so that he can look smart negotiating ever larger TV deals. The huge parachute payments now awarded to relegated Clubs say, “don’t worry about being sensible, we know these four/five year player contracts are completely absurd, but they’ll help you compete for players on the global market and we’ll subsidise you if you get relegated”. This kills the economics of Championship football because to compete, Clubs without this subsidy are forced to inject equity capital to cover losses.
Clubs in the Championship would actually be better off with no TV money if these parachute payments were stopped. Scudamore knows this, but simply doesn’t care; his sole focus is on the EPL and that’s the real issue. FFP won’t help. It might force Clubs like ours to reduce their losses, but it will make it even more difficult to compete, “locking in” the existing football hierarchy. I posted a rambling comment on this subject on an earlier thread which I’ve copied below.
What can the Trust do about all of this? As we’ve seen this week, any suggestion of immediate financial involvement is almost certainly a non-starter; the numbers are just too big. However, for what it’s worth, I wonder if it might be worth considering the following; 1) A research project piecing together what we can find out about football business models in other countries. How does it work in Germany? What relevance might a more socialist model have for football in this country? Perhaps this might form the basis of a reform proposal? 2) A similar piece focusing on football business models in the UK, designed to identify best practice. The objective here being to assess what might work best for Charlton. 3) An ongoing educational programme for fans, designed to create more understanding, more realistic expectations, perhaps more flexibility and, hence, more support for the Club’s general management, whoever they might be, as they strive for sustainable development.
Just a thought.
I’ll close with a provocative observation. If football economics are to become more sustainable it may be that radical options need to be considered, but the intense tribalism involved in the game seems to rule out rational possibilities. AC Milano and Internazionale share the same ground, but Notts County and Nottingham Forest don’t. Nor do Wednesday and United. Why not? If you take a look at Charlton’s accounts, you’ll note that there are very significant costs which do not relate to player’s salaries. The Club would be struggling to make a decent return if its players were amateurs!! How much of that cost might be saved if a different operating model could be developed? I’m not suggesting a ground share with Millwall or Palace, but…….
Here’s the comment on FFP;
STARTS
Football's finances are nuts and, as Off_it has pointed out, you don't need a degree in economics to figure that out. The introduction of FFP may make Football's finances less nuts, but the new rules would be better called Financial Unfair Play because that's what the effect will be.
There is actually nothing wrong, per se, with Cardiff or Charlton making losses if the owners are prepared to finance those losses; that's their choice. Indeed, it might be argued that investing today in the expectation of higher revenues tomorrow is a valid business strategy, albeit, as I noted on another thread, a dangerously seductive one in the case of Football.
Football's problem with this has not been that it is "unfair", but instead arises when losses are funded by debt (and I'd exclude loans from the equity investor in that calculation), which then becomes unmanageable, and because of the absurd length of player contracts which lock in a high cost base.
To a significant extent the risk created by debt funding is taking care of itself because Banks won't now lend to Football Clubs, but player contracts are still a major problem. It would be much healthier if they were all one year in length or, alternatively, linked to performance so that if a Club gets relegated player's salaries automatically fall. In Charlton's case, for example, this would have avoided the crippling need to continue to pay Racon, Semedo and Youga "Championship wages" for Division One football.
The wizards at the EPL are onto the problem of player contracts, of course, but their solution, as is so often the case, is perverse and damaging. They've increased the size of the parachute payments to Clubs relegated. This is a positive incentive for promoted Clubs to be irresponsible and is perhaps the primary reason the Championship is such a financial nightmare. Clubs like Charlton and Cardiff are forced to inject equity to compete with Clubs receiving unfair subsidies. You really couldn't make it up.
The consequence of so-called FFP will be to lock in this unfair advantage. Charlton's owners will not be allowed to lose as much money as they are doing today - even if they can afford to - and, of course, in many ways that has to be a good thing. However, once FFP is in place it will be even harder for a club like us to win promotion because the Clubs with parachute payments will enjoy an even bigger advantage (3 Clubs each season with an average of £12m p.a. for four years). As result, and perhaps paradoxically, FFP may make a Club like Charlton a less attractive vehicle for a very wealthy owner.
An interesting anecdote which helps to illustrate the point I'm making is that recently some of the big Clubs wrote to the FA/EPL arguing in favour of the introduction of FFP. The list included Manchester United, Arsenal and Tottenham. I wonder why? They know that their revenue advantage means that their only competition can come from a wealthy owner injecting equity. Remove that threat and there will be no competition - they'll enjoy a wonderful virtuous circle of dominance on the pitch and the benefit of the huge revenue advantage that follows from that. They'll be able to employ all the best players (hoarding them using the now completely farcical loan system) and have enough over to pay themselves fat dividends.
I'm trying to find out more about Germany. Hoping to identify a friendly Bundesliga club whose members reps.might give us an insight. That said, it works in Germany because they are nearly all on the same model, even the hated Bayern. We can't just copy a German model on our own.
I agree with what Len said about being backed by the local businessman with an interest in the Club. This essentially is where we were in the 90s and 2000s.
Its worth remembering that even in the Murray Premier league years we need cash injections from share issues to balance the books more seasons than not, hence the very large board we ended up with.
Now the game has gone from needing millionaires to billionaires. Even in the PL Clubs struggle to break even and compete.
Swansea seem to have cracked it but the question is how long can they sustain their success and their "only spend what we have" principals?
Prem2 might help another 24 clubs but it only pushes the gulf between rich and poor further down the pyramid.
The gulf in finances between the PL and Championship, is shown by how many clubs really struggle after relegation, even with the Parachute money. It's unlikely any of the 3 relegated clubs will go back up. Yes they have parachute money, but they also have a lot of players on PL salaries still, and only the decent ones will be easy to sell. Remember how we had to send M Bent out on loan to reduce our wage bill?
Back in the 90s, a club like Charlton could sell one player a season for reasonable money to cover any deficit, and still progress, but the deficit is much greater now; how many £7m players do we have to sell? As out 90s team was probably better than our current one, and gates were much smaller, the only assumption is that wages are now much higher than they were in the 90s.
Mundell Fleming, you make some excellent points but just to be provocative, is it just a coincidence that none of the top half teams in the Championship are receiving parachute payments?
Meanwhile the likes of Birmingham, Bolton, Blackpool, Wolves and Blackburn struggle in spite of the gift from the Premier League?
I would say that the payments allow a relegated club to gamble for one season (maybe two under the new rules) but if the gamble doesn't pay off they are in dire trouble as highly paid players stuck in long term contracts force a radical weakening of the squad (see Birmingham example today).
As Charlton proved, it can be a struggle at that point to avoid another relegation even before the payments run out, as you fight to keep up performances with that amount of player turnover going on.
However if you bounce straight back as West Ham did then yes, it can certainly appear an unfair advantage.
Congratulations for introducing this subject. Perhaps one thing that we should also be considering is the emergence of the USA over the coming years, the influence of that could be very significant. A worrying thing is that the game could become an armchair sport with false crowd noise injected to hide the lack of atmosphere at games partly caused by lack of away supporters, New York v Man U for instance. To combat the current situation, perhaps the Football League should move away from the Premier League, leaving it denied the 3 extra mugs to shake it up every season. The FL could be interesting, and surely it's time for some creative input into the way in which football is presented and marketed. How about under 12's go free with an adult to cement them into loving the game. When you start thinking about the possibilities, they could be quite exciting. What about a weekly TV programme where they go to a different Club every week, look at the history showing past games, talk to supporters, players, Directors and management. I reckon that would bring some interest, and help to fill the terraces. Get your thinking caps on.
Not at present - and it will get even worse given that the extra Sky money will put even more upward pressure on players wages. Something really needs to be done to contracts so that when a team gets relegated from the Premiership then there is an automatically a reduction in wages. Player's wages are just not at a sustainable level in the Championship - and there are too many crooked clubs whose directors will bend the rules to get around the Financial Fair Play rules. Incidentally, I suspect one of the reasons why Charlton is financially restrained at present is that we are trying to honest and operate with the rules - under the rules I doubt whether we have much capacity to pay higher wages even if we wanted to.
I have to say re this thread: this topic is one of the prime considerations for a supporters' trust and one we are exploring.
This sorry state of affairs is one of if not the main reason we think a trust is so important, this situation simply cannot continue for much longer before it all comes crashing down in some way or another. If you truly care about this future of our club an indeed football in general outside the rich few, and haven't already done so please join and just register your support and that you care what happens www.castrust.org/join/member, now is the time to do this, not just talk about it. But also email me direct if you would like to participate in the Trust itself and the research and other activities we are doing in this area. chair@castrust.org
The majority of supporters at all levels expect to pay as little as possible to watch football AND expect 'someone' (which could be a loan) to put extra money in so the club can compete [beyond its natural means]. If the current squad and average attendance at Charlton were to stay the same, and for the club to break even, we should probably be paying nearer £75 a ticket for each game, never mind £25! Clubs 'find' this extra money, which leads to player wages inflated well above their natural level. For a two-bob team in the Championship the wage bill is ridiculous.
I don't know why sensibly run clubs don't just collectively declare that they'll run themselves to break even. True supporters would back that 100%. The supporters who expect 'someone' to subsidise their club can be allowed to drift off if the standard of football isn't to their liking. True supporters will stay. Things would soon even out to a natural level and we'd be back to where we are now but with players wages cut to their proper level and less Big Egos running football clubs mortgaging everything off. Then we can all get on with watching football at an affordable price. Benefactors - fine, bring your egos along, but funds up front please, nothing 'given' as loans.
Probably needs a few more high profile clubs to go to the wall before supporters and clubs wake up about the need to run their clubs within their means. And probably needs ticket prices to go up a bit more before more people vote with their feet in proper numbers and say enough is enough. It can't be long now, surely?
And then, yes, it would be possible for clubs outside the top flight to compete.
On the basis that most clubs spend more than they get in (and this does include many Premier League clubs) the disaster is to see a substantial reduction in income. If you get £8m revenue and spend £13m you need to find £5m - obviously.
If a Premier League team gets £32m a season and spends £37m the shortfall is the same but relegation drops the revenue from £35m to £14m and then the shortfall becomes £23m. This is the point that they need to sell but frankly none of the teams outside of the Championship can afford Premier League wages, and clearly a team that gets relegated must have a few players that are not good enough for the higher division.
Thus the club finds itself with a load of Marcus Bents and Amdy Fayes. These players can't be given away due to the cost and length of their contracts. So they end up with a wage bill that is still way too expensive even with the parachute payments.
Congratulations for introducing this subject. Perhaps one thing that we should also be considering is the emergence of the USA over the coming years, the influence of that could be very significant. A worrying thing is that the game could become an armchair sport with false crowd noise injected to hide the lack of atmosphere at games partly caused by lack of away supporters, New York v Man U for instance. To combat the current situation, perhaps the Football League should move away from the Premier League, leaving it denied the 3 extra mugs to shake it up every season. The FL could be interesting, and surely it's time for some creative input into the way in which football is presented and marketed. How about under 12's go free with an adult to cement them into loving the game. When you start thinking about the possibilities, they could be quite exciting. What about a weekly TV programme where they go to a different Club every week, look at the history showing past games, talk to supporters, players, Directors and management. I reckon that would bring some interest, and help to fill the terraces. Get your thinking caps on.
I don't think there is ever going to be any real TV audience for anything below the top tier. With this in mind the top tier teams will continue to take the best talent, and push up the prices for the rest of the leagues.
I like your ideas but I don't think football can ever go back to the way it was (being funded by gate receipts or a local businessman), and I don't think there is any way to stop clubs from going out of existence. The total debt has now become too big and it is just not sustainable. Many more administrations and/or a few liquidations must be in the pipeline. The system is set up for speculators to gamble with other people's money and it if doesn't work they walk away and leave the club to die.
Congratulations for introducing this subject. Perhaps one thing that we should also be considering is the emergence of the USA over the coming years, the influence of that could be very significant. A worrying thing is that the game could become an armchair sport with false crowd noise injected to hide the lack of atmosphere at games partly caused by lack of away supporters, New York v Man U for instance. To combat the current situation, perhaps the Football League should move away from the Premier League, leaving it denied the 3 extra mugs to shake it up every season. The FL could be interesting, and surely it's time for some creative input into the way in which football is presented and marketed. How about under 12's go free with an adult to cement them into loving the game. When you start thinking about the possibilities, they could be quite exciting. What about a weekly TV programme where they go to a different Club every week, look at the history showing past games, talk to supporters, players, Directors and management. I reckon that would bring some interest, and help to fill the terraces. Get your thinking caps on.
I don't think there is ever going to be any real TV audience for anything below the top tier. With this in mind the top tier teams will continue to take the best talent, and push up the prices for the rest of the leagues.
I like your ideas but I don't think football can ever go back to the way it was (being funded by gate receipts or a local businessman), and I don't think there is any way to stop clubs from going out of existence. The total debt has now become too big and it is just not sustainable. Many more administrations and/or a few liquidations must be in the pipeline. The system is set up for speculators to gamble with other people's money and it if doesn't work they walk away and leave the club to die.
I disagree. The reason the premier league gets all the money is because they have all the coverage. I'm hoping the internet may provide a solution. How many football league fans would pay, lets say £50 a year to watch their teams matches after the game was played. ie Games on an equivalent of iplayer. The technology is coming. Yes the money will never be as huge as the premier league is able to demand, but I'm sure a ten fold increase on current peanuts cash is possible across the board. Greater coverage would hopefully increase revenue streams over time.
The biggest challenge is players contracts. They need to be performance based (lower base/higher bonus element). Paying employees more than the business makes is illogical and non sustainable.
A lot of the problems for established clubs in the prem is the lack of relegation clauses in players contracts.
When they go down they are still forced to pay the big wages.
If we were promoted no doubt the players contract would be revised for this. However once you have been there for a few years these tend to get dropped.
This is why teams like Blackburn and Bolton will struggle inthe next year or so once the parachutes finish and they still have to pay big wages.
what if the Chumps played on weeknights, whenever there wasn't another game, that would bring in some revenue, and even 745 games on sat and sun?
Don't we see a significant reduction in attendances for evening games? If we played all games in the evening that might require away fans to take two weeks off work to attend half of the away days. That would, presumably, reduce atmosphere and discourage fans.
Also how can we expect to generate life long fans from children when every game finishes past their bed time?
I don't think there are any bad ideas, but I don't, personally, think this is a good one.
I've thought for a while that the Premiership should play on a Sunday. 2 games each at 12,2,4 and 6, 1 game on a saturday and 1 on a Monday. Then there'd be far less changing for TV, they could should more game, in fact they could show practically all the games. There'd also be no clash with the Football league, which can only improve gates.
I've thought for a while that the Premiership should play on a Sunday. 2 games each at 12,2,4 and 6, 1 game on a saturday and 1 on a Monday. Then there'd be far less changing for TV, they could should more game, in fact they could show practically all the games. There'd also be no clash with the Football league, which can only improve gates.
Nice idea but with the global TV markets it won't happen.
3 time slots on a Saturday and Sunday plus a Monday night game (featuring teams that are not popular in Asia) will more than likely become the norm, It is not far from that now.
what if the Chumps played on weeknights, whenever there wasn't another game, that would bring in some revenue, and even 745 games on sat and sun?
Don't we see a significant reduction in attendances for evening games? If we played all games in the evening that might require away fans to take two weeks off work to attend half of the away days. That would, presumably, reduce atmosphere and discourage fans.
Also how can we expect to generate life long fans from children when every game finishes past their bed time?
I don't think there are any bad ideas, but I don't, personally, think this is a good one.
this is just off the top of my head, but you could quite possibly play within the current evening game framework, just spread the games around a bit more, might be a boost at least?
I've thought for a while that the Premiership should play on a Sunday. 2 games each at 12,2,4 and 6, 1 game on a saturday and 1 on a Monday. Then there'd be far less changing for TV, they could should more game, in fact they could show practically all the games. There'd also be no clash with the Football league, which can only improve gates.
One of the problems with this is that it leaves precious little opportunity for kids and others to play the game as well as following their own teams. Sky and many others are just viewing football purely as a spectator sport from which to maximise their revenues - a lot of extra money has gone into the UK game, but rather than improving it as a whole most of it has just gone to inflating players' wages and improving the profits of BSkyB and a few premier clubs. Where are the improvements at the grass root level? Why are so many youngsters poorly coached? Why is the game in real danger of financial collapse at levels below the Premiership (just look at the numbers of administrations and clubs who are unable to pay HMRC)? The FA and FL are clearly not fit for purpose and I suspect the time for Government action has now come.
On the other hand we coould all just stay at home and watch a never ending supply of Premiership games played by people from those countries where game is still encouraged amongst the young - and continue to wander why Engalnd never do well in international tournaments.
There is always going to be disaster waiting for the clubs that play in the division just below the super rich one as they must end up chasing players that could play for the very rich clubs. For this reason the second tier of English football is always going to be littered with teams that have playing employees that they can't afford.
what about a televised system where you could dial into any game based on your location (I know fraught with problems) but the game would only become available locally once the home areas had sold out, and further than that once the away allocation (which wd have to be a minimum %) had sold out
It assumes ofcourse that all games are recorded in some way for TV.
Suppose as of next year you were the owner of a small PL club with a "natural" income of £12m p.a. in the PL and £8m in the Champ. Then factor in the £70m for finishing bottom and the £16m parachute payments. Would you spend £80m (or even more) each year, desperate to stay up, or would you say, sod that? Let's bank £50m p.a. and then, if we go down, we'll have at least £74m (16+8+50) to blow on yoyo-ing back up. You will be like the big clubs in the PL, with FFP working very strongly in your favour in the Champ.
Many people without the time or money to travel to away games would probably pay £10 or thereabouts to watch two or three camera coverage over the internet, much as people watch pirate feeds now when available. I doubt if it would amount to more than 5,000 people for Charlton and you'd have to get round the away ticket receipts issue, but there is a revenue stream that's potentially profitable and the IT isn't that difficult now and will get easier.
Playing all Championship games in the evening, except possibly Friday night, would be very damaging to gate receipts, at Charlton at least.
I've always been very sceptical about the government interfering in football, but as the football authorities are so completely useless I think it's going to have to come or we are all going to hell in a handcart.
Bosman was the catalyst for the absurd player wages that are the root cause of the problems being discussed in this thread.
And you know why that went through, Len? Because football was so useless at speaking with a unified voice for the clear case: that sport should be an exception to competition rules, as it is in the USA. And can you be surprised when you look at the complete corrupt muppets heading FIFA and UEFA at the time? (or now, come to that) Whatever you think of the structure (and I think the European Commission should be made more accountable to us, certainly) these commissioners are seriously intelligent people. I have a feeling that at that time it was Mario Monti in that role. Monti vs Sepp Blather? Embarassing.
If the Government wants to legislate to ensure that one body runs professional football, and controls how the TV money is shared out, the EU will have no means, nor any reason, to stop them doing so. It is, after all only what already happens in Germany.
Maybe a 'Super' Tax on players wages and transfer fees. Maybe even a similar tax on TV revenues above a certain level. Hell, why not have a progressive tax on TV subscriptions. Then Sky won't be able to charge as much for televising the 'National Game' and the football clubs won't be able to earn so much and the players will not be able to bank as much.
I know the clubs will all scream that they will not be able to compete in Europe, but to be honest I'd rather have that than have our National game heading for bankruptcy!
Comments
Football in this country is very tribal. We want our Clubs to aspire, to compete and progress, but that’s not always easy to reconcile with financial prudence. As somebody has already noted, “'twas ever thus”, but its been getting progressively more challenging and it’s the independent business model of the EPL which makes the Championship such a financial graveyard; independence in this context meaning that they don’t give a “wotsit” about anybody else.
Consider the latest TV deal. The money allocated to the Championship is a token, the smallest token considered “politically” acceptable; the message is very simply, “if you don’t like it *** off and negotiate your own deal. However, it’s the next bit that really hurts. Scudamore doesn’t give a monkey’s about sustainable business models or normal business practice; he simply wants Clubs in the EPL to do what is necessary to attract the best players to the League so that he can look smart negotiating ever larger TV deals. The huge parachute payments now awarded to relegated Clubs say, “don’t worry about being sensible, we know these four/five year player contracts are completely absurd, but they’ll help you compete for players on the global market and we’ll subsidise you if you get relegated”. This kills the economics of Championship football because to compete, Clubs without this subsidy are forced to inject equity capital to cover losses.
Clubs in the Championship would actually be better off with no TV money if these parachute payments were stopped. Scudamore knows this, but simply doesn’t care; his sole focus is on the EPL and that’s the real issue. FFP won’t help. It might force Clubs like ours to reduce their losses, but it will make it even more difficult to compete, “locking in” the existing football hierarchy. I posted a rambling comment on this subject on an earlier thread which I’ve copied below.
What can the Trust do about all of this? As we’ve seen this week, any suggestion of immediate financial involvement is almost certainly a non-starter; the numbers are just too big. However, for what it’s worth, I wonder if it might be worth considering the following; 1) A research project piecing together what we can find out about football business models in other countries. How does it work in Germany? What relevance might a more socialist model have for football in this country? Perhaps this might form the basis of a reform proposal? 2) A similar piece focusing on football business models in the UK, designed to identify best practice. The objective here being to assess what might work best for Charlton. 3) An ongoing educational programme for fans, designed to create more understanding, more realistic expectations, perhaps more flexibility and, hence, more support for the Club’s general management, whoever they might be, as they strive for sustainable development.
Just a thought.
I’ll close with a provocative observation. If football economics are to become more sustainable it may be that radical options need to be considered, but the intense tribalism involved in the game seems to rule out rational possibilities. AC Milano and Internazionale share the same ground, but Notts County and Nottingham Forest don’t. Nor do Wednesday and United. Why not? If you take a look at Charlton’s accounts, you’ll note that there are very significant costs which do not relate to player’s salaries. The Club would be struggling to make a decent return if its players were amateurs!! How much of that cost might be saved if a different operating model could be developed? I’m not suggesting a ground share with Millwall or Palace, but…….
Here’s the comment on FFP;
STARTS
Football's finances are nuts and, as Off_it has pointed out, you don't need a degree in economics to figure that out. The introduction of FFP may make Football's finances less nuts, but the new rules would be better called Financial Unfair Play because that's what the effect will be.
There is actually nothing wrong, per se, with Cardiff or Charlton making losses if the owners are prepared to finance those losses; that's their choice. Indeed, it might be argued that investing today in the expectation of higher revenues tomorrow is a valid business strategy, albeit, as I noted on another thread, a dangerously seductive one in the case of Football.
Football's problem with this has not been that it is "unfair", but instead arises when losses are funded by debt (and I'd exclude loans from the equity investor in that calculation), which then becomes unmanageable, and because of the absurd length of player contracts which lock in a high cost base.
To a significant extent the risk created by debt funding is taking care of itself because Banks won't now lend to Football Clubs, but player contracts are still a major problem. It would be much healthier if they were all one year in length or, alternatively, linked to performance so that if a Club gets relegated player's salaries automatically fall. In Charlton's case, for example, this would have avoided the crippling need to continue to pay Racon, Semedo and Youga "Championship wages" for Division One football.
The wizards at the EPL are onto the problem of player contracts, of course, but their solution, as is so often the case, is perverse and damaging. They've increased the size of the parachute payments to Clubs relegated. This is a positive incentive for promoted Clubs to be irresponsible and is perhaps the primary reason the Championship is such a financial nightmare. Clubs like Charlton and Cardiff are forced to inject equity to compete with Clubs receiving unfair subsidies. You really couldn't make it up.
The consequence of so-called FFP will be to lock in this unfair advantage. Charlton's owners will not be allowed to lose as much money as they are doing today - even if they can afford to - and, of course, in many ways that has to be a good thing. However, once FFP is in place it will be even harder for a club like us to win promotion because the Clubs with parachute payments will enjoy an even bigger advantage (3 Clubs each season with an average of £12m p.a. for four years). As result, and perhaps paradoxically, FFP may make a Club like Charlton a less attractive vehicle for a very wealthy owner.
An interesting anecdote which helps to illustrate the point I'm making is that recently some of the big Clubs wrote to the FA/EPL arguing in favour of the introduction of FFP. The list included Manchester United, Arsenal and Tottenham. I wonder why? They know that their revenue advantage means that their only competition can come from a wealthy owner injecting equity. Remove that threat and there will be no competition - they'll enjoy a wonderful virtuous circle of dominance on the pitch and the benefit of the huge revenue advantage that follows from that. They'll be able to employ all the best players (hoarding them using the now completely farcical loan system) and have enough over to pay themselves fat dividends.
That folks is Financial Unfair Play.
ENDS
http://www.bbc.co.uk/blogs/davidbond/2012/10/premier_league_boosted_by_fore.html
I agree with what Len said about being backed by the local businessman with an interest in the Club. This essentially is where we were in the 90s and 2000s.
Its worth remembering that even in the Murray Premier league years we need cash injections from share issues to balance the books more seasons than not, hence the very large board we ended up with.
Now the game has gone from needing millionaires to billionaires. Even in the PL Clubs struggle to break even and compete.
Swansea seem to have cracked it but the question is how long can they sustain their success and their "only spend what we have" principals?
Prem2 might help another 24 clubs but it only pushes the gulf between rich and poor further down the pyramid.
Back in the 90s, a club like Charlton could sell one player a season for reasonable money to cover any deficit, and still progress, but the deficit is much greater now; how many £7m players do we have to sell? As out 90s team was probably better than our current one, and gates were much smaller, the only assumption is that wages are now much higher than they were in the 90s.
Meanwhile the likes of Birmingham, Bolton, Blackpool, Wolves and Blackburn struggle in spite of the gift from the Premier League?
I would say that the payments allow a relegated club to gamble for one season (maybe two under the new rules) but if the gamble doesn't pay off they are in dire trouble as highly paid players stuck in long term contracts force a radical weakening of the squad (see Birmingham example today).
As Charlton proved, it can be a struggle at that point to avoid another relegation even before the payments run out, as you fight to keep up performances with that amount of player turnover going on.
However if you bounce straight back as West Ham did then yes, it can certainly appear an unfair advantage.
To combat the current situation, perhaps the Football League should move away from the Premier League, leaving it denied the 3 extra mugs to shake it up every season. The FL could be interesting, and surely it's time for some creative input into the way in which football is presented and marketed. How about under 12's go free with an adult to cement them into loving the game. When you start thinking about the possibilities, they could be quite exciting. What about a weekly TV programme where they go to a different Club every week, look at the history showing past games, talk to supporters, players, Directors and management. I reckon that would bring some interest, and help to fill the terraces. Get your thinking caps on.
This sorry state of affairs is one of if not the main reason we think a trust is so important, this situation simply cannot continue for much longer before it all comes crashing down in some way or another. If you truly care about this future of our club an indeed football in general outside the rich few, and haven't already done so please join and just register your support and that you care what happens www.castrust.org/join/member, now is the time to do this, not just talk about it. But also email me direct if you would like to participate in the Trust itself and the research and other activities we are doing in this area. chair@castrust.org
Thanks
R
I don't know why sensibly run clubs don't just collectively declare that they'll run themselves to break even. True supporters would back that 100%. The supporters who expect 'someone' to subsidise their club can be allowed to drift off if the standard of football isn't to their liking. True supporters will stay. Things would soon even out to a natural level and we'd be back to where we are now but with players wages cut to their proper level and less Big Egos running football clubs mortgaging everything off. Then we can all get on with watching football at an affordable price. Benefactors - fine, bring your egos along, but funds up front please, nothing 'given' as loans.
Probably needs a few more high profile clubs to go to the wall before supporters and clubs wake up about the need to run their clubs within their means. And probably needs ticket prices to go up a bit more before more people vote with their feet in proper numbers and say enough is enough. It can't be long now, surely?
And then, yes, it would be possible for clubs outside the top flight to compete.
If a Premier League team gets £32m a season and spends £37m the shortfall is the same but relegation drops the revenue from £35m to £14m and then the shortfall becomes £23m. This is the point that they need to sell but frankly none of the teams outside of the Championship can afford Premier League wages, and clearly a team that gets relegated must have a few players that are not good enough for the higher division.
Thus the club finds itself with a load of Marcus Bents and Amdy Fayes. These players can't be given away due to the cost and length of their contracts. So they end up with a wage bill that is still way too expensive even with the parachute payments.
I like your ideas but I don't think football can ever go back to the way it was (being funded by gate receipts or a local businessman), and I don't think there is any way to stop clubs from going out of existence. The total debt has now become too big and it is just not sustainable. Many more administrations and/or a few liquidations must be in the pipeline. The system is set up for speculators to gamble with other people's money and it if doesn't work they walk away and leave the club to die.
I'm hoping the internet may provide a solution. How many football league fans would pay, lets say £50 a year to watch their teams matches after the game was played. ie Games on an equivalent of iplayer.
The technology is coming.
Yes the money will never be as huge as the premier league is able to demand, but I'm sure a ten fold increase on current peanuts cash is possible across the board.
Greater coverage would hopefully increase revenue streams over time.
The biggest challenge is players contracts. They need to be performance based (lower base/higher bonus element).
Paying employees more than the business makes is illogical and non sustainable.
When they go down they are still forced to pay the big wages.
If we were promoted no doubt the players contract would be revised for this. However once you have been there for a few years these tend to get dropped.
This is why teams like Blackburn and Bolton will struggle inthe next year or so once the parachutes finish and they still have to pay big wages.
Also how can we expect to generate life long fans from children when every game finishes past their bed time?
I don't think there are any bad ideas, but I don't, personally, think this is a good one.
3 time slots on a Saturday and Sunday plus a Monday night game (featuring teams that are not popular in Asia) will more than likely become the norm, It is not far from that now.
On the other hand we coould all just stay at home and watch a never ending supply of Premiership games played by people from those countries where game is still encouraged amongst the young - and continue to wander why Engalnd never do well in international tournaments.
It assumes ofcourse that all games are recorded in some way for TV.
Does that make sense?
Playing all Championship games in the evening, except possibly Friday night, would be very damaging to gate receipts, at Charlton at least.
I've always been very sceptical about the government interfering in football, but as the football authorities are so completely useless I think it's going to have to come or we are all going to hell in a handcart.
You may be right about the FA and the FL, but Government action is the answer? How would you have the Government solve the problem?
Before you all moan and criticise me for introducing the EU to this debate I give you one word: Bosman.
http://eur-lex.europa.eu/smartapi/cgi/sga_doc?smartapi!celexplus!prod!CELEXnumdoc&lg=en&numdoc=61993J0415
Bosman was the catalyst for the absurd player wages that are the root cause of the problems being discussed in this thread.
If the Government wants to legislate to ensure that one body runs professional football, and controls how the TV money is shared out, the EU will have no means, nor any reason, to stop them doing so. It is, after all only what already happens in Germany.
I know the clubs will all scream that they will not be able to compete in Europe, but to be honest I'd rather have that than have our National game heading for bankruptcy!