The 25 Things I Would Fix About the Beautiful Game, Part 5 – 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?
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
Part One – The Rules
Part Two – The Regulations
Part Three – The Competitions
Part Four – The Administration
Part Five – The Finances