The 25 Things I Would Fix About the Beautiful Game, Part 5 – The Finances

PART FIVE
THE FINANCES

Our fifth and final set of changes revolves around the economics of the sport of football. Money is king.  There are billions to be made in the world of football these days, yet, I don’t think that the money is going where it is needed at the professional level — this is my focus for today’s article — the amateur level will be addressed some other day.

The following are my recommendations for changing the way some of the money changes hands in the world of footy!

21 – TV Rights Reallocation

The Premier League sells its television rights on a collective basis. This is in contrast to some other European Leagues, including La Liga, in which each club sells its rights individually, leading to a much higher share of the total income going to the top few clubs.

One need only look at the greed in Spain to realize how screwed up the system is, how unfair it is to most clubs, and how it contributes to a greater and greater divide between the top two and everyone else in the league.  And Spain is not alone.  Italy, for instance, has the same approach to tv rights distribution.

Let’s focus on the English Premier League.  In the EPL, the money is divided into three parts:

  • Half is divided equally between the clubs;
  • One quarter is awarded on a merit basis based on final league position, the top club getting twenty times as much as the bottom club, and equal steps all the way down the table;
  • The final quarter is paid out as facilities fees for games that are shown on television, with the top clubs generally receiving the largest shares of this.

Of all of the major European leagues, this is the fairest allocation of tv rights by far.  I still think that the final quarter (facilities fees) should be allocated equally amongst all clubs.  That is the perfect model.

In contrast, the Spanish giants Real Madrid and Barcelona get the Lion’s share of the money, which they use to buy better and better players, thus turning the Spanish La Liga into a slightly more exotic version of the Scottish Premier League, where only two clubs exist. 

Contrast that to the English Premier League, where many clubs are financially stable, and where folks tune in for a better chance of watching something other than the routine destruction of less well-resourced clubs.

FIFA need to take measures to fix this globally.  My model is the way to go, or competition will eventually die, as is happening in Spain.  You can’t get me to watch anything but El Classico, and you know my feelings on that too!

22 – Feeder Club Compensation

 Important note:  Feeder clubs are not allowed in most football federations.  I am stealing the term because it is an easy concept to follow.

Let’s take a specific player as an example: Cristiano Ronaldo.

Ronaldo’s first club was Andorinha, as a youngster.  He then signed with Nacional, another Madeira, Portugal club.  Then he went on a three-day trial at Sporting Lisbon, where he was signed and placed at their famous football academy (you may recognize other players bred here: Luis Figo, Ricardo Quaresma, Simão Sabrosa, and Luis Boa Morte, among others).

As a professional, he was then transferred to Manchester United, and most recently, to Real Madrid.

The concept of “feeder club compensation” is basically this:  whenever a player is transferred, his previous clubs should be entitled to a cut of the transfer fee, say, 10%.

These payments, often called solidarity payments, are fair because of the player’s development at those clubs. Fortunately, most current contracts have a “sell-on” clause which stipulates that moneys should be shared on all future transfers of a player.

In this hypothetical example, if no money was exchanged between Andorinha and Nacional, then no payment would be necessary.  However, when Sporting purchased Ronaldo, his previous clubs should be entitled to 10% of the transfer fee – let’s assume that was $125,000.  Nacional would get 10%, or $12,500, but would need to pay Andorinha $1,250.00 (their 10% share).  When Manchester United bought Ronaldo from Sporting for $20 million, the fair breakout under my proposed rule would have been:

$18 million to Sporting; $2 million to Nacional; and $200,000.00 to Andorinha, since all three of these clubs had a hand in the development of Cristiano Ronaldo.

Doing this across the board would assure these smaller clubs a more equitable share of the resources, which they could use to continue to develop great talent.  In the long run, all clubs would benefit from such a strategy.

23 – Capped Salary Spending

UEFA President Michelle Platini already declared his intentions to passing a sort of salary cap for all European clubs.

In essence, clubs would only be allowed to spend as much as they earn – no longer can they finance dozens of millions of dollars in transfers with debt;  if they didn’t earn it, they can’t spend it.

This has the great advantage of keeping clubs “out of trouble”, so to speak.  With so many clubs near bankruptcy these days (take Portsmouth’s troubles a couple of seasons ago, for example), this rule would just make sense.

I say implement it globally. 

The downside is that rich clubs, financed by multi-billionaires (Chelsea, Manchester United, et all) will always find loopholes to spend money on the best players.  There are rumors that Manchester City has been selling their trees to investors.  I suppose that can be considered income, and why not spend it on players like Sergio Aguero and the like?

Regardless, the overall benefits outweigh the downsides, so I am all for it!

24 – Fair Play Compensation

Fair Play is rewarded by FIFA in many ways, mainly in the ability for teams to qualify to some competitions if they are deemed to exhibit the most fair play.

I say that concept to the next level:  compensate the cleanest, fairest clubs monetarily!

Think about it;  if you are a small club, with little chance of ever challenging for the title (or say, even an European spot), then what financial incentives do you have other than avoiding relegation to a lower division?

And what incentives (besides the fear of suspensions) do these clubs have to play nice?

None.

Enter the Fair Play Compensation rule.  My suggestion is to take a set amount of money, say, 10% of a league’s tv rights amount, and allocate it to the best-behaved clubs in the league.

How do you measure it?  Yellow cards; red cards; total suspension days; total amount in fines, and other measurable things of this nature.  Everything is awarded a certain number of points, and at the end of the season, the pot is distributed amongst the teams appropriately.  In England, for instance, the fairest club would get 20 times the amount of the worst-behaved club, and everyone else in between would fall accordingly on the distribution curve.

I guarantee you the quality of the game would improve.  Dirty tackles, silly yellow cards for game delays, simulation, and other ridiculousness would be curtailed, all for the love of the green stuff.

25 – More FIFA Profit-Sharing

This concept really goes hand-in-hand with the transparency concept discussed in Part Four – The Administration.

Currently, it is very difficult to determine who exactly benefits from all of FIFA’s dealings.

Once an accurate understanding of FIFA’s (and all its subsidiaries) is obtained, the administration should look to allocate their resources to all its federations, professional and amateur clubs as they see fit.

Currently, less than 10% of all of FIFA’s profits go towards its associations in the form of programs for the improvement of football.  Lord knows what that even means.

Real improvements and contributions must be identified and implemented, the most important of all, financial protection.

The hottest topic today, when it comes to football financial protection, is the concept of insurance for bankrupt clubs – it is sad to see players at lower clubs who go months without getting paid.  There is insurance that can be purchased, premiums that can be paid by FIFA to ensure no professional or amateur club player goes unpaid at the end of the month.

The money is surely available, and likely being embezzled or squandered by the folks who hold currently hold the check.  Hopefully, the organization won’t be destroyed by these people before they are exiled.

The football world needs a real FIFA.  One that works for its players, clubs, and associations… and most importantly, for us, the fans.

And so it begins…


Go back to Part Four – The Administration


SERIES GUIDE:

Part One – The Rules
Part Two – The Regulations
Part Three – The Competitions
Part Four – The Administration
Part Five – The Finances

Ronaldo and Messi Transfer to Manchester City – Biggest Robbery in History of Football

The transfer rumors keep coming.  On September 4th, 2011, it was reported in Spain that Manchester City had offered £50 million plus Mario Balotelli to bring Lionel Messi from Barcelona to Etihad Stadium.  Reportedly, Barca rejected the bid.

What makes this interesting is that week after week Manchester City continues to be linked to the world’s best players.  Whether these rumours are true or false, the fact is they are inching closer all the time!  It seems ages ago that City tried to sign a former FIFA World Player of the Year in the Brazilian Kaka.  Although they failed to sign him, £91 million for Kaka meant Man City had arrived.

Manchester City have their eyes set on two players…

Before I get to that, let me remind you that City already nicked one world-class player off Barcelona.  Yaya Toure.  That was waaay back when they supposedly couldn’t pull any big-name signings.  This transfer window saw them add to the likes of Dzeko, Yaya Toure, and David Silva with two new guns Samir Nasri and Sergio Aguero.  Other teams linked to these incredible players in the transfer window were Manchester United and Chelsea.  With all the transfer money available to these two giants of world football, City still pulled off the robbery!  And they almost pulled off the biggest robbery EVER when they attempted to lure Wayne Rooney across town not too long ago.  If anyone else other than SAF was in charge, Rooney would be wearing blue today.

Let’s get to the good stuff…

Back in June of this year, news came out that Cristiano Ronaldo was tempted to join Manchester City.  It was reported that he bragged to a friend that it might be interesting to have another go in England, but only if certain demands were met:

  • £400k/week
  • The No.7 jersey and captain’s armband
  • A guarantee that he’ll always be City’s highest paid player
  • Transfer fee equal to the record £80m Real Madrid paid for him two years ago

Ronaldo’s friend claimed that a member of the Sheikh’s family offered him this world record-breaking package and that they were prepared to go to extraordinary lengths to get him.  They even sent him a picture of a Bentley loaded with piles of cash across the back seat and an invitation to Abu Dhabi where he would be treated like royalty.  Ronaldo’s friend went on to claim that he was considering the offer.  The fact is that City denied these claims, and according to them no offer had been made with their knowledge.

All we know for sure is that when Ronaldo said that his dream was to one day play for Real Madrid, he packed his bags and left.  Like his manager at Real Madrid, Jose Mourinho, Ronaldo has always left the door open to return to the Premier League.  Not coincidentally, he still has a home in England which he rents to his former Real Madrid teammate Emmanuel Adebayor.  Since leaving Man United, Ronaldo has mentioned numerous times how he has many good friends back in Manchester and still keeps in touch with them.  One of them Sir Alex Ferguson.  If some day Cristiano does sign with Manchester City, hopefully SAF will have retired as that would surely break his heart.

Here’s my take on it.

Now that Ronaldo is living his childhood dream to play for Madrid, La Liga has developed a huge gap between the top two teams and everyone else.  Sadly for him, the level of competition is simply not as high as the Premier League where any team can get a result at any given day.  La Liga’s lower teams are terrible!  It became apparent last year, and will continue this year that Real Madrid will crush any of the lower teams 8-1.  When facing these underpaid, unmotivated players, CR7 will bag 5-6 goals per game.  He and Messi will again battle it out for top scorer except this year they’ll reach for 60 goals a piece!  These stats will look impressive on paper, but the truth is knowledgeable soccer fans will put an imaginary asterisk * next to these records.  Similar to the steroid era in Baseball, except without the actual cheating.

Manchester City Money Facts:

  • Since 2008, Man City have spent £240m on forwards alone
  • Since 2008, Man City have spent £223m on the rest of the squad
  • Grand total in transfer fees Man City have spent since 2008… £460 million
  • £460 million EXCLUDING player wages

The Truth:

  • The quality of the players Man City buys is increasing with every transfer window – Yaya Toure, Tevez, Dzeko, Silva, Nasri, Aguero
  • In La Liga, the gap between the top two teams and the rest will grow even larger
  • If the EPL continues to get richer and more competitive, more stars will leave Spain for the English Premier League
  • Man City and Liverpool have joined the likes of Manchester United and Chelsea as the world’s most powerful clubs

How impossible are these fictional scenarios…

  • This season Cristiano Ronaldo will lead Real Madrid to either a La Liga or Champions League trophy (or both)
  • Barcelona’s season will be deemed a failure by their standards
  • Ronaldo will again strive for top level competition and return to England
  • Ronaldo will have won everything with Real Madrid and sign for Man City or Man Utd
  • Messi will feel the need for a change and to prove himself in a different league and sign for Manchester City
  • Jose Mourinho will again replace Roberto Mancini as he did with Inter Milan and manage Man City
  • Mourinho will replace SAF at Man Utd when he retires

Well, maybe not.  But I know what is possible.  Manchester City will continue to push to sign the biggest superstars of the game in an attempt to buy a Premier League title.

I have two wishes.  One, that La Liga works out their financial issues and becomes the exciting and unpredictable league it once was.  They keep all their big-name players!  Two, if indeed either Ronaldo or Messi decides to give it a go in England, that CR7 chooses Man United and Leo chooses Man City!

Disagree?  Give us your thoughts by leaving a comment below.

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