Will Pavia
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A year ago, financial analysts reported astonishing news: average wages of Barclays Premiership footballers had fallen for the first time. They were not quite in the same category as university lecturers or newly qualified nurses, but their wages had gone down by 3 per cent on average.
That now appears to have been a momentary aberration. The latest review of football finances by Deloitte shows the natural order reasserting itself, with wage bills rising 9 per cent.
From next season, a new £2.7 billion television package will add to Premiership revenues, leaving them £680 million higher than the nearest foreign league, Serie A in Italy – a league that less than a decade ago had a roughly similar turnover. Meanwhile, the average Premiership club will earn five times the revenue of its Championship counterpart.
Critics gave warning that clubs would have to fight to ensure that players did not take an equally large chunk of the new TV money, but with the price of failure rising so high, further wage inflation is expected. The analysts found a strong correlation between success and spending on players.
The average Premiership player will earn more than £1 million next season and within three years fans in England could be watching a £10 million-a-year player, who will earn enough to buy a reasonable-sized house in outer London every week.
Dan Jones, of Deloitte’s Business Advisory Group, told The Times: “We are seeing the English league pulling away from the pack in Europe.” However, Professor Tom Cannon, Dean of Buckingham University Business School, saw signs in the report of stronger competition from Germany, Spain and France – whose revenues grew by nearly a third – in years to come. “They have learnt the lessons of the Premier League,” he said. “How much longer will English clubs be able to take their pick of foreign players?”
The top four Premiership clubs are also pulling ahead, making nearly treble the average revenue of the remaining 16. Blackburn Rovers, Bolton Wanderers and Wigan Athletic were able to buck the trend to some extent, achieving successful seasons despite lower turnovers and player salaries.
Despite rocketing revenues at the top of the English game, the report excluded the £604 million debt of the parent companies of Manchester United. Dr Rory Miller, of Liverpool University’s Football Industry Group, said: “They say Arsenal had the highest net debt [£262 million] but most of that was incurred in building a new stadium, whereas Manchester United, which was debt-free, has been saddled with the debt Malcolm Glazer incurred to purchase it. I think the same thing will happen at Liverpool. It’s very worrying – in the end these takeovers are being financed by fans via higher ticket prices.”
In the Championship there were 11 clubs surviving on drastically lower revenues, with debts of more than £10 million and their only hope of reducing it lying in promotion or a generous new owner. Still, there was less correlation between spending and success. “Derby [County] finished twentieth last year and went up, Leeds [United] made the play-offs last year and are going down,” Miller said. “The question for the Championship is how to turn that exciting competitive balance into TV revenues.”
Meanwhile, Serie A appeared to pay the price of corruption and hooliganism scandals. Revenues for this season are expected to be behind those of the German and Spanish leagues. Miller saw this as a cautionary tale for the Premiership. “The risk is of some sort of financial or bribery scandal,” he said.
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Dave Roughley - you are 100% correct. The space on the posting prevented that point. The EPL may well then become a lower class itself - maybe this is a UEFA or FIFA issue in a similar vein to foreign player caps within squads?
Brendan Bartlett, Launceston, Australia
Salary caps have ruined American sports with massive turn over in players every year and while a new champion is crowned almost every year the best players just rotate around the league making it impossible to actually root for your team as you never have time to even learn the roster. Also the players still earn rediculous salarys and have no loyalty to any team or city/fan base. Other problems with this idea is the relegation/promotion issue and the fact that some league somewhere wouldn't have caps and the players and sponsors would simply move there. The fact is players will continue to earn more and more money up until the point where fans cease paying more. Players will earn up to the point of solvency and sometimes over it. It will always be a balancing act between over spending and spending just enough for success. Better get used to it.
Ian, Wilmington, US
I think Brendan Bartlett has missed one major problem with the Salary Cap, he is trying to state what has happened in a small sport that is played ONLY in Australia, there is not the pull of clubs through out the world, with Football it is completely different, and it is not only the English League that has to tackle the problem but also through out the world game, but I also would like to know even if the wages were capped, would the top players want to play at Reading, and such teams (no disrespect to that club) or would they want to be at clubs like Manchester United, Chelsea, Liverpool, Barcelona Real Madrid etc etc etc.
Dave Roughley, Buderim, Qld, Australia
Come on! This is getting ridiculous, just how much does one person need? I don't begrudge any person a right to earn a good wage but how do you even go about spending £100,000 a week?!!! The average fan probably earns less in a year than most premiership players make a week.
Maybe footballers should have performance related pay with a maximum of £20k a week salary but with bigger bonuses for each win or away draw they play in.
Also how about a club lottery where at each home game the home teams' average weekly wage is awarded to a supporter (drawn out of a hat) who has BOUGHT a ticket to see that particular game. This could be a life changing amount for most fans.
Football needs to start giving back to the fans or it will lose them...
David Birch, Lincoln, UK
Here in Australia a salary cap in Australian Rules Football was implemented about 20 years ago. Prior to that there were a handful of powerful income rich clubs who could afford to spend on players and as a result enjoyed a period of sustained success and snowballing sponsorship deals.
Following the instituaiton of the salary cap which is indexed every year there is not sufficient room to ensure all players are continually satisfied with wage demands. This then leads to a fuller regular market driven turnover of players rather than inequitable buying power purchasing we see in the top 4-6 EPL clubs which degrades the lower capacity teams.
This regular turnover limits the ability of dynasties of success to develop through buying power, sponsorship to be more evenly spread (and TV rights for that matter), and a more variable competition ladder - not predictable. I think it will break down the class aspect in english football, upper, middle, and relegation class.
Brendan Bartlett, Launceston, Australia
One might be cynical and suggest that so many players are now turning a natural talent for football into a way to rake in super bucks. However, there are players, such as Jamie Carragher, who play because they love footy and love their team. What price loyalty and local pride therefore?
The passion for the club, and the fans as it happens, seems to have all but left many players now, as they jockey for the best pot of gold on offer from various clubs.
The loss of football passion, being replaced by six figure salary passion, is turning our game into a three-ring circus of high stakes extravagance, all, as this article points out, at the expense of the everyday fan.
I can barely afford a ticket nowadays, and have to travel almost 300 miles for a home game. I can't afford Sky, please ask the players how I am supposed to support their efforts, and their monstrous salaries.
Jennifer Hynes, Plymouth, England
The idea of a salary cap in team sports originates in the US in both professional American Football and Baseball. But how the salary cap in the US actually works is always misunderstood when its application is discussed in relation to Europe and football.
So let's be clear the salary cap is defined as the maximum amount a team may spend on player compensation for ALL of its players combined. Unlike other leagues, for example the NBA (which permits certain exemptions) or Major League Baseball (which has a "soft cap" enforced by "luxury taxes"), the NFL has a "hard cap:" an amount no team under any circumstances may exceed.
The NFL salary cap is calculated by a formula. It is defined by the current CBA to be 59.5% of the total projected league revenue for the upcoming year. This number, divided by the number of teams, determines an individual teams maximum salary cap. For 2007, it is projected that this will rise to $109 million.
There is NO reason this cannot work in FOOTBALL
Neil, Walton on Thames, UK
I love football, it's an amazing game to me. But sadly nowadays it's all about the money. Players who earn £100000 a week or more is still complaining! That is ridiculous, i mean it's only their "pocket money" the get cars, food, clothes, and maybe even flats for free? It's time to bring back the passion in football again. It's loong gone...
But as long a we spectators pay to watch it either live or at home, well then the clubs will keep paying the players what they want. Sad but true
Daniel, London,
we are a capitalist society and so if the even after raising the salaries clubs are still making money how can you cap them, if they were surely it would be anticompetitive. it is a shame that the top four will further break from the pack without abramovich-esque investment but i don not think capping players salaries would be a way to restore equality to the football league. how about making it non-profit and funded by the government. (that was a joke). if someone is willing to pay a 20 something year old 200,000 pounds to run around a football pitch once/twice a week who are we to stop them. more fool us or tuning in every game or travelling the length and breadth of the country or continent every time a game is on.
David Simons, London,