Let's not going kidding ourselves that abandoning FFP would make football more "competitive"

Martin Samuel seems to think that removing FFP rules would make English football "even more competitive". I beg to differ.

I have no desire whatsoever to call Martin Samuel a ‘shill’. I do not believe this to be the case. But I do have questions, regarding his recent column regarding Newcastle United and Finanancial Fair Play. Because it was difficult to avoid the conclusion that, while Martin Samuel is not, I repeat not, a ‘shill’, his brief intervention on the subject… Well, while it would be overstating things to say that it could have been written by the club itself, Samuel’s list of grievances on their behalf was already extremely familiar to all those who have been anywhere near Newcastle’s corner of Football Twitter or the blogosphere over the last year and a half.

But his arguments on Financial Fair Play are fundamentally flawed. Samuel seems to forget that there was a time before FFP, and that this period was dominated by a tiny number of clubs based on what they could spend. Chelsea and Manchester United dominated the decade prior to this; Chelsea through the financial heft of Roman Abramovich, United by their global reach and vast commerciality. Arsenal and Liverpool tried to keep to their coat-tails and amazed in flashes, Arsenal by going a full league season unbeaten, Liverpool by winning the Champions League, but over that decade, week-in week-out, Chelsea and United dominated.

But starting from the present day and working back isn’t the best way to tell this story. You need to begin in the past and work forward. Because these stories only really make sense if you start from the beginning. In the first place, football in England has since the 1870s been a scrap for control between two different classes; the upper class, who formed the FA from public schools and the upper echelons of the military and civil service, and the merchant class, the ‘new money’ borne of the industrial revolution, who came to run many of the clubs away from London.

The FA lost the war on amateurism as early as 1885, but they remained the overarching governors of the game and were able to set restrictions on the extent to which this new money could disrupt its ‘purity’. Amateurism continued for decades in a near-parallel universe to the professional game, its popularity peaking between the wars and in the 1950s.

But a rugby-esque schism was avoided in the 1880s, and there were serious restrictions put in place on clubs and their finances. Directors were not permitted to draw a salary. Players had a maximum wage set at about that of a skilled tradesman. Gate receipt revenues for every match were shared between the two competing clubs.

But times changed. The maximum wage was abolished in 1961. Money was becoming a factor, but how to raise it? Clubs were wary of television, fearful that crowds, which had already been falling steadily for a decade since hitting a post-war peak in 1950, would fall further if people had the option of staying at home and watching there instead. The first TV contracts were measured in thousands, rather than billions, of pounds.

By the end of the 1970s, it was clear that commercialism was coming. Clubs were starting to wear sponsored shirts by the end of the decade, though typically for the time, even this was a botch-job of a ruling in which clubs weren’t allowed to wear them for matches which were being shown on the television. But crowds had continued to fall. Transfer fees had continued to grow. Wages were rising and revenues were flat. Something had to give.

And in the early 1980s, it did. A new generation were buying into a game that was pretty much universally recognised as being in a state of ‘dying on its arse’. Spurs built a new stand with two rows of executive boxes and floated on the stock market, finding a simple way of bypassing the rules by making the club a wholly owned subsidiary of a PLC. Shirt sponsorship was allowed for televised matches from the start of the 1983/84 season. Gate receipt sharing ended at the same time. Two months into that season, the first live televised match in 23 years was played on a Sunday afternoon.

It was coming. Talk of a ‘Super League’ started to grow from the early 1980s on. ‘Exclusive’ TV rights became an issue for the first time when ITV paid £44m for four years’ worth of television highlights in 1988. The extent to which the game had been hollowed out was even costing lives, in a fire in Bradford and at a crumbling wreck of a stadium in Brussels in 1985, and in a cage in Sheffield four years later. Urgent safety work and renovation had to be added to this growing list of matters that required urgent attention.

Crowds finally bottomed out in the mid-1980s, but the recovery was slow. Even by the 1992/93 season, the average Premier League attendance was just 21,125. It’s easy to forget how far we’ve come, this last thirty years. And the Premier League, it turned out, was the tipping point for English football and its relationship with money. Sky’s money opened up a new world for the top twenty clubs, and the gaps started to show. In truth, they’d been there before. When Liverpool dominated both England and Europe from the mid-1970s to the end of the 1980s, their transfer muscle had occasionally pushed others out of the way, but even they often weren’t the highest spenders. They didn’t break the UK record transfer fee once until they paid £8m for Stan Collymore in June 1995.

But as the 1990s wore on it felt as though this was changing, that money was counting for more and more. In the same year that the Premier League was formed, the European Cup converted into the Champions League. Another jump in revenue for an ever-smaller number of clubs. As early as 1995 Blackburn Rovers proved that it was possible to ‘buy’ the Premier League. Money was talking louder and louder. Across the continent, a diminishing number of clubs started winning trophies.

To that extent, Roman Abramovich and then Abu Dhabi were just the next logical steps in this trajectory, with non-intervention at its heart. TV revenues were growing, sure, but the value of the clubs now outstrips anything tangible to the point that some are in the hands of people so wealthy that it doesn’t even really matter how much money they lose.

Because that’s what FFP is about, in its idealised form. It’s not about letting people make money, it’s about making them not lose it. At least, it is for so long as football’s current expansion continues. Because alongside the deepest pockets are the speculators, who are in this because they consider football to be undervalued. This is why Manchester United are worth billions of pounds. Future revenues, baby. The smart money is riding on Manchester United being worth a lot more money in a few years’ time than they are right now, and they’re not worth billions of pounds right now because of the shininess of the bricks and mortar at Old Trafford or the quality of their players. Of that much we can be pretty certain.

Samuel may or may not be correct to describe the introduction of FFP as “protectionist”, but there is more than one way of looking at this particular word. Was it “protectionist” in the sense of being introduced to maintain the status quo? Well, you’re going to need to bring the receipts, if you’re making that sort of allegation. It certainly didn’t come about for no reason. Portsmouth became the first Premier League club to enter administration in February 2010. It was the way the tide was turning at that time. Something had to be done.

Looking at the vote in 2011, six clubs voted against it—Manchester City, Fulham, Aston Villa, West Bromwich Albion, Swansea City and Southampton—while one—Reading—abstained. Speaking of that vote, the Financial Fair Play website had this to say on the way in which clubs voted:

Such a change would have hit clubs that operate on a ‘wealthy benefactor model’ (such as Chelsea, City, Fulham, Villa).  City and Chelsea are opposed to any change that would overly restrict the owner being able to put their hand in their pocket and finance the club. Clearly clubs were lobbying out of self-interest and wanted to gain an advantage over their rivals.

Interestingly, West Brom voted in a different way to how we might have expected.  West Brom took a highly principled position; they believe that, as they are able to balance their books and not run up debt, no restrictions are required. It appears that Swansea may have taken a similar view.

When Reading and Southampton were in the Championship, they both voted against FFP rules being introduced - so perhaps it is no surprise that they took a consistent position and neither voted in favour this time (although Reading abstained).

While Chelsea’s position was described thus:

Chelsea’s position is interesting. They were originally against all spending constraints but have been won round by Premier League influence and the concession that permits clubs to lose up to £105m over three seasons (starting next season in 2013/14).

One can only wonder at how Reading might have voted, had they known where they’d end up, just over a decade on. One might say the same for West Bromwich Albion, though Southampton’s resolve over it may only have hardened further since. If there is one thing we can say with a degree of certainty, it’s that clubs tend to vote on this sort of matter in accordance with their own narrow self-interest.

Whatever the motives might have been, the Premier League collectively voted this through. But it would be disingenuous to even suggest that the only alternative to FFP as it stands is a boot with Manchester United or Chelsea’s badge on the sole stamping on a human face forever. Firstly, spending a lot of money isn’t necessarily a 100% guarantee of success. After all, taking “the shackles off” doesn’t appear to have done Chelsea much good this last year and half or so, while Manchester United have found many inventive ways of wasting tens of millions of pounds over the last decade or so. It should also be remembered that, if nothing else, Mike Ashley left Newcastle United with few concerns over FFP. The new owners of the club knew the rules when they bought in and they’re not being unfairly disadvantaged. The attempt to change the rules on January signings from related clubs part-way through this season was, not unreasonably, voted down.

I’ve been fairly consistent in my position on FFP over the last few years or so. The principle that clubs should not lose hundreds of millions of pounds a year on creating an entirely unlevel playing field is a sound one, but as we all already know, FFP doesn’t really fix this. As such, it was always fundamentally flawed. Unless accompanied by either some sort of financial redistribution then yes, it was always likely to lead to propping up a hegemony.

There is even tacit recognition of this in the way in which the Premier League distributes its money. At the end of last season, Manchester City only made 32% more than bottom club Southampton from TV and prize money. But this isn’t the full picture, when it comes to the finances of Premier League clubs. Bigger clubs get more from overseas television revenues, and then we have to factor in the vast amount of money to be made from the Champions League. Redistribute some of that money, introduce 50+1 ownership, and you’d get some idea of what I’d think a healthy football business could look like in this country. I do recognise, of course, that some–probably many–would consider this to be an ‘extreme’ position. 

It may or may not be reasonable to say that Newcastle would likely be higher up the Premier League table if they were “unconstrained” by FFP, but then anybody could say that, couldn’t they? This is the nature of exactly the sort of capitalism that the league—that the whole of European club football—has adopted since the early 1990s, if not sooner. In a way, this segues very comfortably with professional football, in which everybody starts believing they can be the biggest winner but only perhaps two or three can. Game recognise game, after all.

It’s a familiar enough clarion call for those familiar in libertarian circles. The only answer to the fault-lines drawn up by capitalism is even more capitalism, even less restrained. And if this sounds familiar from the adventures of ‘disruptors’ in recent years, well, there’s a good reason for it. They all come from the same place, the place in which those cheerleading the loudest believe that they will be the ultimate winners of a changing of the guard. Perhaps in the case of Newcastle United and Saudi Arabia, this could turn out to be true. But that doesn’t make it a good idea for anybody apart from them, or at the most a very small number of clubs indeed.

The issue of “dirty oil money” is a whole other can of worms which I don’t even really believe warrants mentioning here. This piece is about FFP, not sportswashing.