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The Writing has Been on the Wall for Football for Some Time as Financial Collapse Beckons Clubs on a Global Scale

Covid-19, Premier League, Mikel Arteta infection, Champions League, football

Football has managed to shoot itself in the head over successive years, as the out of control gravy train thundered around sports circles on an endless supply of track. The monies in the global sport have been truly phenomenal and the transfer of Neymar from Barcelona to Paris Saint-Germain for a bewildering €222 million (£198 million) in August of 2017, serves to underline the madness.

The overrated Brazilian and he is almost certainly that, earns an obscene 865,000€/ £775,477 per week at Paris Saint-Germain. Just to enlighten you further to the newfound stupidity of the game, Neymar earns €1.16 per second, €70 per minute, €4,200 per hour and €100,821 per day, which gives him £36.8 a year from Paris Saint-Germain and that’s all without his personal endorsements for hair products, deodorant or whatever it is he lends his name to.

That alone is thought to be worth around €18m to the player, as advertisers form an orderly queue to be represented by a man who spends the majority of his days kicking a football around for a living or rolling around like he has been upended by a rogue Ninja.

Yesterday was endless streams of cash and tomorrow seemed to be guaranteed, as everyone asked for more and without hesitation, got it pre COVID-19.

Of course, as the world was back then, the game hadn’t found its financial ceiling and some predicted the first €300m transfer to be just years away, but COVID-19 has applied the brakes to this insane spending and it may even reverse the trend, even if just temporarily.

Who in the current time is going to be interested in paying astronomical sums and wages for players who might not even be permitted to play an entire season? Clubs won’t be able to count on the fees from the sports broadcasting mafia or lucrative deals and sponsorship from big businesses.

Many observers, myself included, wondered how long it could go on for and you didn’t have to be Nostradamus to predict that eventually, the craziness had to stop. All the signs were there that the bubble could burst, as football writers discussed the elements of the impending problems ahead without the benefit of hindsight, but those words are quite profound

Craig Bailey, a columnist on Norwichcity.myfootballwriter.com, wrote an article in 2018 titled – “Football has eaten itself. The bubble will soon burst and the vultures are circling”The article said:

“It all started when Sky started injecting huge sums of cash into the game. Only a fool would think this is out of the goodness of their hearts – it’s always been about return on investment.

The emphasis on the Premier League has always been too great and disproportionate, leading to a mad scramble to get at the money in order to compete with those already there and benefiting from its rewards. This is epitomised by the Play-Off final itself, where the difference between winning and losing is staggering. In Villa’s case could prove fatal.

It’s just not right.”

He continued:

“Of course, Sky is only one small part of the mix. We now have BT Sport throwing money around and Amazon wading in too, not to mention international rights and sponsorship.

If managed more even-handedly it could be of huge benefit for the entire football league and even grassroots football.

If you look at the teams in the Premier League, it seems the case that very few are actually stable for any length of time, the rest inevitably fall from their rise and end up in financial difficulty.

When you add to that mix, clubs being run in what are frankly unprofessional and foolhardy ways it becomes a toxic mix.”

“No other business would be run this way and if they did at some point they would fail when sales dried up or the investors failed to see a return on their investment. This is the crux of the problem at Villa – in essence, they adopted a high-risk investment strategy and it’s backfired and when it’s become obvious the return on investment isn’t there. The investors have essentially cut their losses. This may end up in a fire sale in the best case and liquidation in the worst.”

Although Bailey wasn’t aware of what was around the corner, he saw that the game had begun to virtually strangle itself in the search to source more money.

Andrew Brennan (Forbes) said in 2017:

“This summer has seen a clear bubble in transfer fees and valuations in the prominent five European soccer leagues, above all in the English Premier League. This is because of the monumental international and domestic (BT Sport and Sky Sports) television deals coming into effect from 2016 through to 2019. The deals have enabled a flood of fiscal overreaching at the lower-ranked and more domestic-orientated EPL clubs, allowing them to compete with inflated budgets against the wealthier, high-tier clubs.”

More recently, ESPN wrote:

“Jonas Baer-Hoffman, the general secretary of FIFPro, the international players’ union, has told ESPN that clubs will no longer be able to bank on big money transfers in the future.”

“With football on hold across the world amid the coronavirus pandemic and clubs having to cut costs to survive, Baer-Hoffman said clubs are going to have to look at their financial model, with budgets that have for so long relied on selling players up the chain to bigger clubs.”

He continued astutely:

“Football sells one product and for the first time since World War Two, that product is off the shelves,” Baer-Hoffman told the Gab & Juls podcast. “That relates back to the transfer system, not as a talent acquisition process but as a funding model which we’ve been questioning for a while”

We can all speculate on how this pans out amid the COVID-19 outbreak and perhaps, players like Neymar who arrived from Barcelona in a whooping and paradigm shifting transfer deal, will be stuck at their clubs because a new suitor will not meet their valuation or the selling clubs will have to accept that they are going to make significant loses on some investments which they made when the good times were extremely good. Leading Clubs like Real Madrid, Manchester United and Liverpool will also have to bear the brunt of this global recession thats about to hit all of us once our lives resume.

The wage structure for football players has certainly peaked and without question, it’s going to be more modest in the future as the world adjusts to a scenario that could eventually be like the American depression but on a global scale. A 30% Premier League wage deduction for all players is already being discussed and will be tabled soon to Premier League clubs like Liverpool, Manchester City, Manchester United, Tottenham, Wolves and others.

Large numbers of supporters will be plunged into unemployment and as a result, seat prices will have to remain static or reduced to attract the crowds back.

Another product of this COVID-19 crisis may see players that are approaching the end of their contracts, deemed surplus to requirements and without a club. The result of various league outfits cherry-picking their employees in the search for more reasonable alternatives.

Believe me, this domino reaction will continue for the foreseeable future and football could re-emerge almost unrecognisable after the COVID-19 crisis is over.

The ESPN/Baer-Hoffman piece also looked at the immediate future after the COVID-19 catastrophe and incorporated the upcoming transfer window:

“Many of these clubs have been building budgets based on the assumption for how much money they will be able to sell players. Well that transfer market is going to look vastly different this summer and maybe next winter and probably for years to come.

“What I think is important to say is that, you have clubs who are right now asking for pay cuts who hopefully will amend their transfer strategy in the summer. It will be hard to justify to your current squad if they had to pay to keep you afloat, and then two months later you go in and buy players for €30 million, €40m, €50.”

READ MORE:

Assessing Likely Scenario’s in Which the Premier League can Conclude Without Voiding the Season

Crisis Talks to Avoid a Staggering £1.1 BILLION Payoff Takes Place Between the Premier League and its TV Paymasters

From an Arsenal perspective, don’t expect massive changes in the summer. What promised to see four new faces arrive at the Emirates is now out of the question as Arsenal’s accountants scramble around to make the circumstances fit the profit and loss sheets amid the COVID-19 crisis.

Arsenal will probably make one permanent addition with perhaps, added reliance on free players, loans or even more likely its academy prospects. Last summer’s reckless transfer spending won’t happen again for a while, if at all, as clubs like Real Madrid, Manchester United, Barcelona, Liverpool, PSG, Tottenham, Wolves, Norwich City and Aston Villa alike try to make new operating models for themselves in these uncertain times.

Keep following ArseDevils to know more!


Amiya Saha
Avid follower of Manchester United FC. Have blind faith on the Red Devils at any point. Waiting to see Manchester United bring back the Ferguson era. Has a dream to watch Manchester United play at Old Trafford live.
https://arsedevils.com

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