Football League talks tough on spending

This is all well and good but i understand why teams are reluctant. Just look at my team, Derby County. Currently run by a board firmly on the cost cutting bandwagon and our league position over the last few years shows this.

Its a catch 22 situation, the current board at Derby are ensuring the future survival of my club but at what cost? They have driven down costs but in doing so have ripped the guts from the club. We are now laden with a squad of ineptitude (barring a minority) and have no cause for optimism. Another season of the same and i fear we will be cost cutting again, to keep the club afloat in league 1..
A sad state of affairs and the loyal supporters dont deserve it.

Its frustrating to see as we are operating within our means but teams who go for the boom or bust approach are often rewarded (QPR being this seasons offenders)

I somehow doubt crawley will be spending 60% of turnover on players' wages.

This is massively important to for developing a long term security for all clubs.

I agree about the need for a salary cap, but the issue is how will it be implemented? A % of revenue look good - but you then have the problem that you'll penalise the smaller Championship clubs - who historically have not attracted large crowds and generated that much other revenue. These clubs have historically been kept afloat by benefactor owners.

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Its interesting that the picture shown is of recently promoted Swansea City scoring in the play off final against Reading. This being significant because Swansea were one of the few truly solvent clubs in the entire league. Spending within their means and budgeting appropriately. They have shown that getting to the Premier League requires a solid plan and good quality staff on their books, not splashing the cash and hoping you get there so the PL money will wipe out any debts. Also, and probably most importantly, a stable squad has been a massive benefit. Naturally players will come and go but bringing in quality and developing it both as a group and individually has provided the club with promotion to 'the promised land'.

Maybe, if Huw Jenkins is actually invited now, he could explain the Swansea blueprint at the conference and other clubs can take note of how Swansea went about doing it and adapting their plans accordingly.

I think that this has to eb the way forward. At Huddersfield Town, chairman Dean Hoyle has implemeneted a way of working whereby he is happy to bankroll transfer fees, but the wages paid must come from the clubs income. Whilst this didn't bring the promotion we wanted this year, long term this has to be the way forward.

I also think the FL needs to extend their review to get clubs to sign up to a commitment to change the way creditors are prioritised. Last year it seemed a different club a week were in the courts over unpaid HMRC bills. How can this continue?

If clubs want to run themselves like businesses they can't pick and choose the aspects that suit them - they have to accept that responsibilities come with the approach and that sometimes it is just tough - you have to pay your bill,s live to your means, and accept that sometimes you'll get left behind.

Some clubs are lucky enough to have rich a chairman, others not. Just like some greengroces are multinationals with more spending power, others are independent. Accept your place in the market, plan accordingly and grow at a reasonable, sensible and manageable rate.

Or else prepare to go the way of many clubs over the last few years.

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Surely the first thing they should do to reduce costs is to not meet in Cyrpus!

i wish at my work we got a holiday for a team meeting. ridiculous!!

I've said it before and I'll say it again. The reason that football is in huge debt is because of Agents. ALmost 20 years ago, when the top division rebranded itself as "The Premership", the Chairmen present would've laughed out loud if someone has said "well, the good news is that each of you will be getting 10 times more income from TV rights......but you'll all have 10 times more debt". It's a contradiction-in-terms almost, but that is modern football.
The players haven't just had their slice of the cake - they've stolen the recipe....with their partners-in-crime - Agents.

One possible way to stop Agents' influence is to outlaw payments from Clubs to Agents. Instead the PLAYER pays his Agent for all that wonderful advice. Players would then soon start to question the role that Agents play - and would in all probability show a bit more loyalty to their employers.

Retuning to the blog - the problem is deep-rooted. Take my club - Nottingham Forest - undoubtedly one of the 'biggest' clubs outside of the PL. We are ambitious to get there, but have an owner who - understandably - isn't prepared to gamble everything on Promotion (unlike, say, Cardiff last season and Leicester who have told Sven to do "whatever it takes" to reach the Prem !!). If a rule is introduced whereby, say, a Championship club can only spend 60% of what they 'generate', then we might be in trouble - our ' income' is £14m.....of which £6m is fresh loans from the Chairman. SO if Forest generates £8m per year, then we have a Salary Pot of £5.4m - or £100k per week - and yet even in the Champiosnhip some players are on £20k per week.

At current wage levels, the figures don't quite add up - though the sentiment of what thr League is trying to do is spot-on.

Wage Inflation is the prime villain of the piece, and Agents are the drivers.

One way-out way of getting things back on an even kiel is for Every Player in the Football League to take a 5% pay cut - if everyone does it, then the dynamics stay the same. But that will never happen of course.


PS - one of the reasons that FL attednances fell by 6% last season was Newcastle's return to the Premier League !

i wish at my work we got a holiday for a meeting. ridiculous!!

The cause of football's parlous financial state is wage inflation.
And the cause of wage inflation is, in a word, Agents.

Ban Agents receiving Payments from Clubs - the player gets the 'advice' so the player pays the Agent. Simple. Then perhaps there will be more loyalty to clubs.

The same finance issues face all businesses and football clubs at all levels, so I don't see why the football league in itself is special.

Still, and I can't be the only one that thinks this irony, 72 people plus their inevitable entourages travelling to Cyprus to discuss cost cutting is like fat people discussing issues to do with food shortages for the starving!

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Which football league ?

Had to read on a bit to find out !

"As football has got more and more attractive and popular, the game has sadly become financially weaker," Clarke told me. "The Football League clubs currently have around £700m of debt - and more than 80% of this is in the Championship."

That's why the representatives of the 72 Football League clubs have their meeting in Cyprus. £700m debt is not far away from £701m. Let's use the advantage and combine it with a holiday. Great! :)

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Having the meeting in Cyprus is no different to many companies who host conferences overseas. Cyprus is hardly the most expensive country to fly to so it's really a bit of a non-issue. It could easily be more expensive to host it somewhere in the British Isles.

Finally, what's with the idiots spamming this blog by repeating the same thing each time? Shouldn't even get approved, or be allowed to remain for very long before being removed. No-one thinks you're funny so give the rest of us a break.

The "Football League talks tough on spending", and here are the "movers and shakers" meeting up in Cyprus!! How barmy is that, why can't they reduce their expenditure by meeting in England or haven't we any suitable conference venues?

It's no wonder the fans and supporters generally have such a disparaging view of these people when they resort to actions like this.

There have to be harsher penalties for entering administration, a ten point deduction is insufficient in my opinion. Clubs should be relegated two or three divisions which would make them think a lot harder about spending money they don't have.
I would also like to see some form of revenue equality introduced in each division so that success is not dependent on the owner having deep pockets.

As a Barnsley fan I've become acutely aware of the situation in recent weeks, since our previous manager proved to be a gutless coward when told he was no longer going to be able to spend money stupidly. Of course, that doesn't mean that there isn't any money for the club to spend, the club simply outlined a plan for the future where youth will take a greater role rather than big money loan signings, hardly an unreasonable proposal. It's a pretty disappointing situation for football when managers feel that they have to resign rather than control their spending. I'm proud of my club for taking the stand they have.

Just a quick point on a salary/revenue based cap - wouldn't it be bad for fans? Surely some clubs may just put up ticket prices in order to try and gain an advantage over the clubs around them?

Unfortunately the pyramid system appears to be fundamentally incompatible with sensible financial management. Supporters will always demand that the club progresses to the next level, and in most cases they have to gamble and spend money they don't really have in order to do that.

As long as there are people willing to lend money to the clubs and rescue them whenever they come close to collapse, this situation will continue (though not sure why banks will lend to clubs when they know they probably won't see more than a few pence in the pound when it comes down to it!) Perhaps administration should carry a heavy penalty, like automatic two division relegation, then it might mean that clubs are less inclined to gamble in this way. They threw the book at Luton, effectively kicking them out of the League, while teams in higher divisions get away with a slap on the wrist.

I'd like to see agents banned from the game as well, to try and reduce the crazy cost of wages and transfer payments, but can't see that being FIFA's priority at the moment!

13 mrblueburns

my sentiments exactly.

Can't believe they are going to Cyprus, they could hold their meetings at the league clubs hospitality and save money; fly all the way to Cyprus and just work mmm.

Surely a good place to start saving money would be to go to Blackpool or Scunny for such a meeting!

@10

Thinking what I'm thinking.

All players, managers and anyone on wages that aren't really that justified (e.g. don't cut the kit man's wages) will need to have their wages cut by a meaningful %.
They won't like it obviously. But it's gone too far and needs to be reeled in.

I honestly think the players would stay as they'd still be getting a good wage. A few from the lower leagues might decide to look for work elsewhere. But at least you'd know who was in it for the love fo the game and not the money.

Surely a sensible way to reduce expenditure and to improve youth development is to simly remove the restrictions on loaning U21 English players within the English league system?

How many tens of young, talented, English players simply do not get game time and are stuck in the reserves of Man U, Chelsea, Liverpool, etc, etc for years until they get shipped out on free transfers in their early to mid twenties having played next to no competetive football?

Surely these players would develop better by going on season long loans (with the ability for the parent club to recall them if absolutely nedded) to lower league (professional) clubs and getting competetive match experience.

I'm not 100% certain of the exact figures but I believe an English team is restricted to something like 5 loans in a season & 4 in a squad, why not allow unlimited loans of U21 English players to teams below the parent club?

the 60% rule is meaningless when you have supporters who willingly hand over thousands to their club who then sponsor players on their behalf.

@ 18, Eric Morecambe,

Classy response of someone with clear inability to assess event costiing, especially when the discussion is about curbing cost. You embarrassed yourself there.

Ok, so the Football League - which prides itself on being 'Green' - makes a massive carbon footprint taking a load of overpaid and over-privileged suits on a jolly to Cyprus.

What's wrong with holding it in Weymouth, Bognor or Blackpool instead?

Shows that all they care about is money and themselves - wouldn't surprise me if football isn't privatised in the future like the railways were in the 1990s...

(Waits for the football finance bubble to explode...)

@1: Lewis Ramilton

I think your mindset is one that is common and I believe that it where the root of the problem is. Why is it so bad for a team like Derby to be in League 1 for a while? Surely it is better to be there than having ever increasing costs to get to the elusive Premier League.
As a D&R fan, I was delighted when we reached League 1 but never once wanted to gamble on staying there or going up. I'd sooner watch my team in the BSS than risk the future.
Fans on the whole have ridiculously high expectations these days and a relegation or two is seen as disaster, when it is just the way football works. The league you're in doesn't matter if you truely support your team.

As for those moaning about them flying to Cyprus: A previous company I worked for had an annual conference in Portugal for the senior managers and it was cheaper than holding it in Britian.

#17 Pompey pay one of their players over £20k a week because that is his contract from the Premier league, they also had until recently 2 players who refused to negotiate their contract to a sensible (Championship) rate and spent half the season sitting and watching Pompey play while their current contract expired ( they would have received an additional year on premier league salaries if Pompey had played them). Fortunately these parisites have now left the club. They did both offer to reduce their salary but it was way over the top for a Championship Club and not within the new salary structure of Portsmouth If you know a way of breaking a players contract and reducing their wage please come back on this site and let us all know; I am sure there will be many clubs waiting with baited breath. Sadly this case shows how the power remains with the players who were both prepared to sit out half a season on inflated wages and along with agents are one of the main causes of debt in the Championship.

Well,where to begin? Perhaps these people could first explain why they are swanning off to Cyprus to 'discuss' matters? As for the problems before clubs I would make two comments. Firstly they should not just jump at the highest bid everytime a tv deal is on the table. They should always go for terrestrial tv where possible. Exposure is every bit as important as cash when you are a small brand trying to become a large one or a Football League club with designs on the Premier League.Next years new deal means that FL clubs will be screened exclusively by Sky,audiences are likely to hit ITV Digital proportions but gates at televised games will not improve,in short fewer and fewer people will be exposed in anyway to the FL ,which is no way to run any business.
Secondly,I really believe restructuring would help but is again not even on the agenda. Regional football followed by a huge play-off tournament would work on so many levels. First no club would ever be more than one year from glory. Second derby games equal bigger gates,always have,always will. Third the play-offs are a success story and could stand enhancing. Fourth and not least it would be devilishly difficult to win promotion but that would ensure that standards would rise.

Based on the coming seasons membership I would like to see 8 Regional Divisions of 9 clubs each playing 32 fixtures in a 'regular' season over 36 'matchdays'. The top two in each division would then enter a 16 club play-off competition with the round of the last 16,the quarter finals and semi-finals 'pre-drawn' before the season begins and all played over two legs. The two winning semi-finalists would be promoted,the two losing semi-finalists would then meet at Wembley in a 'last chance' play-off.
Meanwhile the 8 clubs finishing bottom of their division would be relegated,replaced by the champion club from each regions 'feeder' Conference Division.
The loss of fixtures would be compensated for by a group phase in the League Cup which would carry both League Cup and JPT knock-out phase qualification for all clubs. Id envisage this group stage process kicking off each new season with the 72 clubs drawn into 12 groups of six each playing 5 home and 5 away games. The group winners would join the Premier League clubs in the last 16 of the League Cup. The 2nd,3rd and best 8 fourth placed teams would contest the JPT.

Less time should be spent talking about spending and more about how to enhance income. I have always believed that regional football is the way to go and my ideas were supported some years ago by Delloitte as I

Take a look at the three teams who have just dropped down from the PL to see three very different potential transfer policies this summer: Blackpool, with much of the money they earned in the PL still burning a hole in their pockets, spending money that they have in the bank; Birmingham's owner financing his team's title challenge from his own wallet; and my boys West Ham, up to their necks in debt and likely having to sell players in order to survive. How can any fair spending restrictions be implemented when many teams each have their own set of circumstances governing their current policies?

How many movers and shakers, exactly? If this were FIFA, there would be HEADLINES RAGING AND SHOUTING. Well, this is no different. PEOPLE - WAKE UP!

How can the FL talk about costs by jetting off anywhere? In the words of John McEnroe....

FANS, Romans, Countrymen - we need a coalition pressure group to start taking these idiots on. Let's make sure they get the message in a peaceful yet agressive marketing campaign of our own. Who is with me on this?

Its very difficult...the Championship teams have to spend enough to be competitive when they get into the Premier League, which is where I think the real problems are. It's silly money when you get to the crux of the matter - you can't just spend £24m and £35m on two players who are not the absolute best around. If they sort out the spending in the PL, which the UEFA fair play could do, then the Championship can be sorted.

@32. Kitson and Lawrence are both on £20k plus and were bought when pompey had been relegated/were about to be relegated. Common sense should dictate that relegation clauses be built in to protect the clubs.

Football is clearly mad when a small club with 15k gates pays out £20k salaries.

@ 37, Paul Fletcher,

the whole conference starts with an embarrassment.
When they set Cyprus as the venue for this cost curbing meeting, I'm more than certain, they first found the excuses to defend the indefensible.

If I was the chairman of a Football League club, I'd recommend this meeting to take place in one of the clubs premices and to become a custom for clubs to host these events, in rotation.

You don't curb £700m debt by such first actions.
Next meeting in Las Vegas?
These people have lost touch with reality, big time.

Cyprus , ok lets do the maths for 2 reps from each club.
Rounded average prices which i just looked up :
Flights £200 x2px= £400 (short booking dates sorry may have been cheaper in advance)
Apartment studio plus b&b for 2 for three days= £218
Total per club £618
72 x £618 =£44,496
Thats based on three days stay .

The Robert Hardy Building , in the University College Lincoln , has a lecture theartre that seats 176 at £23.23 an hour , so lets say 28 hrs over two days = £650.44
Divided by 72 = £9.04
Now accomdation averages about £50 and an extra £12 for breakfast so lets say £65 , so three days £195 x 72 = £14040
Total so far approx £14700.
Thats nearly £30,000 cheaper . Now the eagle eyed among you will have spotted no travel cost for the UK meeting , and even a room hire cost for cyprus .Well this is because 1) I wasnt going to work out the average rail cost from ALL 72 clubs to Lincoln and 2) I couldnt find a cost for a venue in cyprus without phoning them up!!
No lunc or evening meals included either on both accounts .
So their spending meeting is truely that .
The other point of note is IF THIS MEETING WAS HELD IN ENGLAND IT WOULD KEEP THE MONIES SPNT IN ENGLAND .

OK just read th bit added in while typing about the cyprus tourist board. But still Darlington would have been a good call .Or Lincol :)~

@31: The problem with a "team like Derby" spending a season or two in league one is the fact that it could potentially kill my club. You speak of Derby and D&R like they are in the same ballpark. Derby have a premier league stadium, training facilities and still a few players (unfortunately) on premier league wages, we NEED to stay up in order for this to be controlled effectively.

There is nothing wrong with my mindset, i am against the "boom or bust" mentality but i want my team where i feel they deserve to be, the premier league. Now if only our board shared even half of my ambition...

You can't introduce a salary cap based on income, while maintaining parachute payments as they are. Any team relegated from the EPL with their massive parachute payments mean they already have a large increase of income compared to the rest of the league. It would just reinforce the gap between the haves and have nots, with the same teams being promoted and relegated each year, just like UEFAs FFP will entrench the current "big clubs" ensuring no club can rise to challenge them again.

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All this user's posts have been removed.Why?

As an actual salary cap would severely limit clubs and their ability to progress why don’t they introduce a ‘salary guarantee’, the maximum wage bill that a club can sustainably afford based on some sort of co-efficient of club size and current league. There would be no limits on how much the total overall salary for all players can exceed the amount of ‘salary guarantee’ but each player must have a percentage of his salary guaranteed and this total must not exceed the guaranteed amount. Any ‘top up’ payments towards the players overall salary would be met by the current owner/benefactor/investor as a sort of bonus and it must be a separate contract. If an owner takes the club into financial difficulties each player would still receive their ‘guaranteed salary’ from the club but it would be his responsibility to seek the top up payments from the owner. If the owner is forced to sell the club, the club and therefore a new owners would not be saddled with a huge wage bill as the previous owner is still responsible for meeting the cost of the top up payments. Players will not be able to demand such high wages as the club owners will not want to expose themselves to the liability above what the club can actually afford, therefore salaries can be ‘self capped’ without stopping the more ambitious chairmen taking risks with their own money

I had the pleasure of sitting opposite David Richards (when he SWFC Chairman) on the train from Sheffield to St Pancras. During the journey we chatted over the general state of sport and football in particular. Now bear in mind this was at least 15 yrs ago and he remarked then how scandilous it was that he had to shell out about £15k per week in wages and agent commisions to sign very mediocre players. He had identified very clearly that the "game" had never had so much money coming into yet clubs were being ruled by agents and and were not seeing any benefit into their own bottom lines. What has he managed to do so far to actually sort it out , from a position of power as the PL's chairman...sweet FA !!

@20 wrwxham442,

"There have to be harsher penalties for entering administration, a ten point deduction is insufficient in my opinion. Clubs should be relegated two or three divisions which would make them think a lot harder about spending money they don't have."

Funnily enough, this was put forward at last year's AGM by Leyton Orient chairman Barry Hearn, who proposed a two-division relegation for any team going into administration.

Not surprisingly, self-interest among the other 71 chairmen meant that the proposal was not accepted.

I would like to point out to @39 that we can afford to pay those wages because Portsmouth are happily breaking even at the moment. The current chief exec David Lampitt has made the club more cost effective. With a team of 17 the wages are probably just about covered by gate reciepts, sponsorships, owed transfer money from clubs such as Genoa and Inter Milan and most of all parachute payments (these cover our CVA also). So it's all budgeted.

But we are not the worst culprits on £20k a week. You question what Bellamy was paid at Cardiff? Or perhaps Jimmy Bullard who was rumoured to be on £34k a week at Hull. Of course not, just had to jump on your south coast neighbours.
Wouldn't be suprised if you were paying £15-20pw on player by next season.

I have to agree with many of the comments on here questioning the venue. They can't convince me that flying at least 72 people out to Cyprus is cheaper convening at a Travel Lodge in Barnsley, for example? Or how about a Holiday Inn with function room? But no, they have to fly out to the Med.

And bring back 606!

@43

"Derby have a premier league stadium, training facilities and still a few players (unfortunately) on premier league wages, we NEED to stay up in order for this to be controlled effectively"

That's a ridiculous argument, effectively saying "we have big costs therefore we should be where the biggest income is". Just because you gambled on always having Premier League income doesn't mean you have any right to be where you think you deserve to be. You deserve to be where your performances on the pitch leave you, no more or less.

If you've still got players on Premier League wages then either (a) re-negotiate their contracts to match your income, or (b) get rid. And if, heaven forbid, you get relegated to League One, then look to Norwich City for how to survive, prosper, and ultimately climb back.

@39.At 14:32 7th Jun 2011, Saint_In_Staffordshire wrote:
.............................................................................
True . A stepped system would be good written in to contracts like -
Level A2 : basic weekly league 2
Level B2 : A2+ play bonus
Level C2 : B2+ Home draw bonus
Level D2 : B2+Away draw / home win bonus
Level E2 : B2+ Away win bonus
Level A1 : basic weekly league 1
Level B1 : A1+ play bonus
Level C1 : B1+ Home draw bonus
Level D1 : B1+Away draw / home win bonus
Level E1 : B1+ Away win bonus
Level AC : basic weekly Championship
Level BC : AC+ play bonus
Level CC : BC+ Home draw bonus
Level DC : BC+Away draw / home win bonus
Level EC : BC+ Away win bonus
Level APL : basic weekly PL
Level BPL : APL+ play bonus
Level CPL : BPL+ Home draw bonus
Level DPL : BPL+Away draw / home win bonus
Level EPL: BPL+ Away win bonus
This would be interesting , can you imagine the players training to make sure they make the team ? This used to be the norm for all divisions , a play bonus , but nowadays its gone . Win bonus? when was the last time a player mentioned that ? 1980's? Bring them back . A manager would have an easier time motivating players . Players would be reluctant to take a laid back approach , can you imagine a PL player on 20k if they play but only 2k if they sit back and try to enjoy the gravy train (like so many have) ?That wont pay for the Audi TT will it?

Paul Fletcher asked :

What about the idea that Championship clubs might voluntarily introduce a system similar to Uefa's fair play initiative?

I am still at odds with the use of the word “ fair”. It all depends who it’s fair to.

As I understand it the clubs spending must not exceed income generated. Is that income before or after expenses. Just as an example if you took Blackpool ( with ground capacity of, is it 15000) and Man U ( with massive Gate, TV, and commercial income) the financial chasm between the two says Blackpool doesn’t have a chance.
Where’s the fairness in that. Just means domination by the established clubs and this must stand true even in the Championship. This maintains the status-quo rather than allowing other clubs a look in.

Your not going to have some Roy of the Rovers fairy tale where a club can put together a challenging team at some bargain basement cost and inevitably to compete, debt is going to be a factor. It’s the business regulation of all this that seems a bit skewed. If you’re talking about a ceiling cap on wages what about the same for clubs.
A requirement to notify the FA if say their expenditure exceeds certain thresholds based on previous agreed accounts. It seems to me that in a given year much of the trouble stems from profligate spending that only comes to light when the damage has been done. Some form of ongoing monitoring of spending that rings alarm bells before the local shops find their bills are not going to be paid. The clubs might resist but it could be done.

The current financial market dictates that lenders will be a little more circumspect in the criteria set for borrowing so that may stall some but in the end they are all businesses who ought to live within the dictates of sensible trading. You overspend at your peril.

@ 41, murry1975,ts

Now calculate the alternative:

- business (first class) flights for 2-4 representatives of each club (perhaps including the wives too?);
- full board luxury accomodation in best hotels in the area, in best suites
- car hire, taxis, etc;
- evenings entertainment for the lot;
- petty cash expenditure for each of them for whatever reason you can imagine;
- conference cost;
- expendiiture to go to English airports and get back;
(add as you wish)

This meeting is going to cost well over a £1m, in moderate estimates.
And it is ridiculous when they are talking about curving costs.

Every club has conference rooms. Use one of them. But you need to have common sense.

Good article. Bring back 606, please!!!

who cares about money when the world has cats?

https://www.youtube.com/watch?v=Nm-wEO7ElL0

some old fellas going on a jolly really doesent interest me. especially when its lower league football. cant we have a blog on a proper subject like Wayne Rooneys hair or who ashley cole is dating?

Comment number 8 is exactly right. Saving money is the way to go. If Cyprus sponsor the FL they should get advertising not receive 'Jolly' kickbacks.

Possibly the core problem is the massive step change in revenue from Championship to Premiership. Relegated teams implode if they fail to get promoted before the parachutes run out. Teams go to the brink trying to win promotion.

If the reward for just avoiding relegation (like Wolves) were closer to the reward for being a failed play off finalist (Reading) the boom/bust effect might be reduced. But several years ago (time of ITV Digital) the League declined the opportunity to link its TV rights with the PL, and the now the 2 are permanently separated. The PL revenue from overseas deals is growing faster than anyone predicted and may soon be greater than the UK Sky deal! The football League is doomed, no conference in Cyprus will fix it. Eventually the PL doors will be closed with no entry by promotion. Then and only then will the League restabilise.

Depressed of Preston

If clubs want to run themselves like businesses they can't pick and choose the aspects that suit them - they have to accept that responsibilities come with the approach and that sometimes it is just tough - you have to pay your bill,s live to your means, and accept that sometimes you'll get left behind.
----------------------

The trouble is that most businesses are also plastered with debt. The manufacturer I work for currently holds around £6bn in debts, not 6 million but 6 billion!

Yet we are not in imminent danger of meltdown because we are able to service those debts.

That is how many businesses are run so the idiotic ramblings of some posters here who would deny a football club the same option are clearly nothign to do with business as it is run in the real world.

Salary caps in an open league simply do not work, they produce an artificial elite that will very rarely if ever change. Swansea (my club) are seen as an idel model, yet we have been spending more than 80% of revenue on wages for some time, we have done that by keeping costs lower elsewhere.

As for people blaming agents, please wake up. All agents do is negotiate deals and try to initiate rules. They are not the reason for the spending, the reason for the spending is you, the fan. Fans always demand more, regardless of realism involved. Anyone remember Charlton fans asking to be taken to the next level after finishing just outside European places? Clubs have to be willing to pay these wages for Agents to have any effect and they are willing because the riches are there to be had for the faceless investors and the glory is there to be had for the fans and "football manager" fans.

The difference at Swansea is that very few of us go around demanding this, we understand the need for prudance because of how hard we fought to keep our club alive, yet even now we have some dissenting voices who would rather we spent £40m on players this summer than invest it in the club's foundations.

The problem isn't so much spending, as it is about debt.
Chairmen should be allowed to spend whatever they want, as long as it's a gift to the club and not some kind of 'loan' and clubs shouldn't be allowed to have more than a certain amount of debt, whether that's a set amount in £s or calculated as a percentage of income over a set period of time.

I don't understand all this fuss about Cyprus. Clearly the Chairmen are paying the fares to go there out of their own pockets. Aren't they?

Also, anyone who mentions commonsense and football in the same sentence has no commonsense.

@#1

You cannot seriously call QPR the worst offenders?

When Cardiff practically ran their squad with Loanees, the best example being Craig Bellamy, who was having his wages mostly paid by Man City.

Leicester City, and Sven paying big wages and big signing on fees?

I'd like to see your figures for my club, QPR, getting promoted on a boom-or-bust scenario.

Had we NOT won the Championship, there was no danger of us imploding...whereas there are some teams who must be dreading the opening of the transfer window.

Please quote facts before casting aspersions!

#29
Actually I clearly haven't embarassed myself thanks. As Paul Fletcher has written, the costs of the trip have been covered by sponsorship. In addition, I don't believe I was showing ignorance in event costing - a rather rude reply I thought from you!

I'm well aware (in areas of the country where I have experience of having been to) of how much it can cost to hold events. You have no greater idea than I do about the specific place they are holding their conference when compared to venues they might have been considering in this country. Staying in hotels in this country can easily be more expensive than other countries abroad.

I'm not going to resort to the level of rudeness you chose to go to - if you felt I was wrong, it could have been done in a far less personal way.

Would the parachute payments be included in the calculations? I always believe that it was only money generated from Football activities that counted towards the income. In the Premierleague this is how it works, clubs like Arsenal have to remove money they generate from the income from the houses etc they own so couldn't they just remove the parachute payments if they decide to bring in a wage cap? then they wouldn't affect teams

They don't plan these things a few weeks in advance they would have had this booked months in advance, if not straight after the last meeting was held so I believe it would be as cheap if not cheaper then the holding it in England

I was going to make some significant point , but its gone now . I'll resign myself to saying nothing instead.

Clearly, and something no one has yet spotted: this is Cyprus' first step to hosting the 2026 World Cup.

I found out something interesting about the finances involved in owning a club from an article about the owner of the New York Mets baseball team. He said that buying the Mets turned out to be one of the smartest things he ever did, even though it's been more or less a break-even business, because it greatly heightened his profile, and gave him a great way of attracting new partners. ("Come down to the ballpark and we'll introduce your grandson to his idol.")

Of course, this sort of effect is greatly magnified in a major league team in New York, but I think it often goes on on a smaller scale elsewhere. It may make sense for owners to operate at a loss because owning a sports team can be great for your other businesses. So there's going to be a conflict between the owners who look at a team's losses as part of their advertising budget, and those that need to run them as businesses.

Cannot see a voluntary agreement standing up. If they are serious about changing the way that football is run then they must do it properly and set the proper punishments in place for those whom break the rules, whatever those rules may be. As the clubs that are not financially sound but feel very close to the premier league will have almost no incentive to change there behaviour especially if the owner is willing to continually fund it.

And regarding some comments on agents I too feel that their salary must come directly from the player rather than the club, or have agents working for the FL who deal on the players behalf. Plus the clubs must be far more sensible in giving contracts to players, ALWAYS putting in a relegation clause.

@ 66, Eric Morecambe,

Actually, you used a rather rude noun while addressing all posters questioning who pays the cost of this meeting. Now, it would be a good assignment for a football journalist to find out who pays (because besides your claims about sponsorship, no sponsorship is mentioned in the article) and what the total cost of this meeting will be.

To me, it appears to have an attempt to give a more than dramatic look of the debt of the Football League. The numbers look presented in a way to produce a bleaker picture than it actually is.

According to the article, about £560m of this debt relates to Championship clubs. This includes West Ham who could be allocated some 10% of the total debt of Championship sides. It also includes clubs like Cardiff and Leicester (who invested more than they should perhaps), Ipswich who have invested without return and Crystal Palace who, once upon a time, had their own stadium but ripped a deal for the stadium only in order to be renting it by the company who bought it, at multiple times the amount they were paying. What I'm saying is the core of this £560m of Championship debt is clustered to a few clubs, while the rest have their finances in a much better state.

A similar picture could be viewed in League 1 and League 2 that seem to have some £70m debt amongst the 48 clubs the leagues consist of. But there is no information about what is the debt state in other countries, using figures so that we can understand, neither we see debt allocation amongst clubs. Out of the 48 clubs, there are culprits there, surely, that have spent heavily gambling on whatever glory. I don't know how much Notts County relates to that.

We shouldn't forget that, like all companies, football clubs find themselves in debt when they buy players. We see no data to what is the actual cost of personnel in clubs (or divisions).

All we have here is some total numbers of debt in the Championship, League 1 and League 2 and 72 groups of delegates meeting in a holiday destination, at whoever's expense, in order to talk about it.

@ Lewis Ramilton

Yoour ambition is admirable, and maybe you believe your team is to big for league 1 but you should be careful what you wish for. I believe that my beloved Luton Town are too big for non-league football, but that's where we are. Thanks to overspending. Dislike your current owners for being prudent if you want, but I'd rather have them than those that spent Luton to the point of oblivion.

I did my dissertation on football finance back in 2007 and it is alarming to see how big the gap is between the Premier and Football League.

I support Newcastle and when we dropped into the Championship in 2009 we saw a significant decrease in our TV income. Luckily, parachute payments helped to soften the blow but for my local side Ipswich who have been out of the Premier League for some significant time, it does worry me that some teams seem to be outstretching themselves financially which could lead to them going into administration, or worse liquidation.

I think a 50% rule whereby clubs can only spend on wages that are 50% of their turnover would begin to regulate clubs. Also implementing a wage cap of £10,000 in the Championship, £5,000 in League 1 and £2,500 for League 2 would ensure that clubs remain sustainable in the future.

I like the approach that West Brom have taken, yo-yo-ing between Championship and Prem League, signing mostly 'championship' players. Now they seem settled and established in the Prem. Norwich seems to be going the same route with the players they are signing. i.e if they get relegated take advantage of the parachute payments and be a top Championship team. Wigan, Blackpool and Reading are others. If premier league players dont perform for their established premier league teams, and there is no demand from championship teams to buy these players it will bring about change.

@58

I'm also still patiently waiting for a blog dedicated to Rooney's barnet. What shoddy journalism.

That'll be the same Cyprus then whose FA supported the uncontested re-election of Sepp Blatter as head of an organisation that doesn't do "financial transparency"?

Separately, I wonder how many clubs would have sunk beneath the waves over the years if they had not had injections of personal wealth from rich individuals? Or had a new ground built for them by the local council?

So long as the unfair competition, possibly illegal under European law if anyone challenged it, of giving TV money to clubs relegated from the Premiership continues then FL clubs are forced to spend more than they have to even stand a chance of promotion. Add the clubs being bankrolled by rich owners and FL Clubs are forced to spend beyond their means to even stay in the division.

Of course no one dare challenge the Premiership's protecting their own because they would simply withdraw the relatively small to them amount of funds they trickle down, but huge and vital sums to the struggling FL clubs.

#72

I was actually referring to the people spamming - I won't repeat what they have been posting, but it's obvious that their references bore no relation to the blog, particularly one "contributor".

@45 You make it sound as if i was the man behind those decisions! We needed a new ground and training facilities, the Baseball Ground was falling down and the Ramarena had worse facilities than my local park.

All i'm saying is that Derby are being dragged into relegation oblivion by owners who have taken this too far too soon.

@65 You are owned by Ecclestone and Co, correct? I agree about Cardiff but i couldnt use them as they didnt get promoted.
I very much doubt that QPR are "living within their means" buying players like Hulse, Smith, Taarabt etc and having an average attendance of 15k.

Where would you be without your current owners?

Fly everyone out to Cyprus to discuss the problem of debt - that's football in a nutshell.

Why do the powers that be need go all the way to cyprus for agm , arent they all in uk and would be a lot cheaper for clubs if they met in uk.Cost cutting talk whilst paying for flights and hotel and no doubt massive bar bills excellent

Well my AFC Wimbledon side have gained promotion to the Football League with the 14th biggest budget in the BSP, according to stats in the Non League Paper. We lived within our means with our major spending this close season will probably be on upgrading our ground.

How did we do it? By having a good manager backed by the board and the fans who signed the right players both young and experienced. Oh, and a bit a luck in the play-off final.

But the most important things was that we didn't expect promotion and the manager's job wasn't linked to this.

There will be plenty of young players available to sign in this close season. The question is whether your club sign the right ones. You can get a decent side for relatively little.

@ Sue Denim - and any other Swansea fan - don't preach on here how law abiding and within a business plan Swansea have been run - They have gone in to Admin twice and stitched up many a local business in order to survive. Yes prudent now, but not historically.

ROFL! 'Clarke watched his first football match in 1967... He claims that football has been in his DNA ever since'. That's hysterical - either it's in your DNA when you're conceived, or it isn't - you can't absorb it as you go along, unless you're being genetically engineered during your lifetime.

81. At 20:37 7th Jun 2011, Tissie76 wrote:
Fly everyone out to Cyprus to discuss the problem of debt - that's football in a nutshell.
_______________________________________
Very, very, highly recommended.

"So long as the unfair competition, possibly illegal under European law if anyone challenged it, of giving TV money to clubs relegated from the Premiership continues then FL clubs are forced to spend more than they have to even stand a chance of promotion"

As nicely illustrated by the picture accompanying this article, that's simply not true is it?

A well run club with a board, management and playing staff all singing from the same hymn sheet can achieve promotion to the top levels on a relative shoestring budget. It takes a collossal lack of imagination to believe that the only route to success in the game is via huge expenditure.

Look at Blackpool for another example of a club who have made their way right up without breaking the bank. Or if you want proof at a higher level, look at Arsene Wengers achievements over the last fifteen years with budgets far inferior to his rivals at Arsenal.

It can be done. You just need the moxie to do it.

@50 please correct me if I am wrong but I understand that Portsmouth still owe a very large sum of money to both Sol Campbell and Tel Haim ? Also I understand no payments have been made yet to the C.V.A. which allowed Portsmouth to come out of Admin ? Finally I read somewhere that they have offered 20,000 a week to Norris from Ipswich ?

There is a very simple solution to this which is a base salary and performance pay, players are rewarded by where a team finishes in the league. In that way players are part of a team as opposed to out for themselves.. the performance pay is tied to the number of games played, won, lost or drawn...
now where do I send my invoice for that priceless advice

@ 84, dorsetblue,

Yet, Swansea managed to win promotion playing splendid football, without being in the red which is highly commendable. In football recent history is what counts. The rest is ancient history. And if lessons are proven to have been learned, then a club is looked at as an example to follow.

@88

Sol Campbell took the club to court, but as far as I'm aware he never succeeded, was this long disputed 'image rights' issue. Tel Haim is an odd story, he's under contract on a large wage, we want to get rid of him, even paying off his contract to get rid of him. One administrator report put his wages around £35k p/w (while in the Premier League, a Storrie deal that), before you start telling us we are 'monsters' we are trying to unload him off our wage bill, we did it with Utaka in January and soon probably David Nugent. David Lampitt our Chief Executive whom previously worked for the FA has kept a strict control over our wages, if we couldn't afford them we simply wouldn't of bought/loaned them! Simple! Hence why we never played Michael Brown and Richard Hughes during the second half of the season due to contract clauses if they played another game.

Also, why would an annual payment of a CVA be news? It's a business matter that the club will sort internally and will pay in October 2011 probably.
The old operating company has been liquidated and a new one is operating the company now. The old company is pending investigation into what caused it to pretty much collapse in such a horrific mess.

This comment was removed because the moderators found it broke the house rules. Explain.

Some of Jesus the Teddy Bear's comments are awaiting moderation. Explain.

I will go to the grave with these convcitions - the top 3 leagues i.e. PL, CCC and CC Div 1 should be 18 teams.

The next 3 divisions should all be regional North/South divisions.

Football clubs should be treated like any other business by which where a club goes bust they are allowed to drop out of this life to reform from the bottom (and I know administration is used as a way to sell a business as an ongoing concern but I'm really talking more about your Leeds and Cardiff's).

U-21 players from top-2 should be loaned for free to clubs in the Regional divisions with a share of the media income for these players being used as the loan fees.

Wow, the great British public in action. People have got so hung up in the fact it's in Cyprus that they forgotten the actual point of the article. Who cares? So they spent £50k on it? Owners of football clubs have more money than you; get over it. It's like 0.001% of the football league wage bill.

And that's the real problem they have, not just the FL but the PL too. There's nothing wrong with income or structure (though a few less teams in each division wouldn't hurt) and we really don't need or want regional divisions at this level. The problem is excess spending and 99% of the excess is on players wages (including agents fees).

A salary cap, though difficult to formulate fairly and hard to enforce, is the only real solution. Clubs are already in an arms race and cannot rationally unilaterally lower their wages without a loss of competitiveness. It will be resisted strongly by the traditional big clubs in the league as spending power is often their main advantage and would render parachute payments useless.

Which leads us on to the root of the Football League's problem: the Premier League. Income distribution is so heavily weighted towards the top of the pyramid that the spending require to break into the next level is exponential. The gap between the Championship and the Premiership is as apparent as that between the Champions league clubs and the rest of the Prem and the extra income clubs get for just a season in the prem is enough to take them beyond the reach of most Champ clubs. Not that it is normally wisely spent of course as they're involved in the same salary arms race as the Champ, just for higher stakes. Small unfashionable clubs (like, say, Wigan) have to massively overpay mediocre players just to get them in, distorting the whole wage structure and raising player's salary expectations constantly.

The players in fact have to take some responsibility for their actions. It's all very well to say "well I'm always going to take what I'm offered", but the job of the agents that are always employed is to play the clubs off against each other, forcing clubs to stretch themselves to the limit.

A good first step however would be to ban clubs from paying agents. That would at least put some of the pressure back on the players.

I forgot to add - the only other way around these huge bills is that the FL "own" the players and then charge loan fees to the clubs to "use" these players for a season.

How much of the £700m are debts and how much are outstanding loans? my club Norwich had debts of over 20m before promotion however some 50% of this was the balance of a loan taken out to build a new stand which is being repaid year on year (just like my mortgage to buy my apartment). Although this is showing as a debt it is covered over the length of the repayments. I bet quite a bit of the £700m will fall in to this category of Debt

#84 - Agreed that creditors would have been ripped off in the distant past but even as a Swansea fan I can't see this as being a constructive comment given the subject of this review. Swansea went through very tough times and fans would be the first to admit they suffered from poor ownership. The point is that the Swansea model of recent times has shown that given an even playing field and good owners and support a club can be well run in the Championship. However even then Swansea have been lucky. If they hadn't have gone up this year the danger was they would have lost key and experienced players and struggled relatively next year, they do not have the biggest crowds even with a tiny capacity and actually have a wage bill which is high by percentage of turnover and will need to be managed carefully. They face huge and different challenges in the PL and sadly many of the loyal fans who supported them in the lower divisions may get squeezed out by season ticket allocation but they seem to be going up with a capable side and no aspirations to spend heavily. If they succeed in staying up this will be improving on the WBA yo yo model and will certainly be improving on the overspend model we have seen pursued by many other promoted clubs. If they succeed it can only be a good thing for other Championship clubs to aspire to. Big 'if', but what an experience to finally have.

"the extra income clubs get for just a season in the prem is enough to take them beyond the reach of most Champ clubs."

therein lies the problem for all the clubs in the land - now that CL cash goes down to 4th in PL you can get there and that money reinforces your position. Whereas if you had a rubbish season after winning the league, you needed to win the CL to get back in amongst the CL cash - I mean can you imagine Chelsea not winning the league for 2 years but forgoing CL cash - and imagine Leeds not ever having the CL cash. Much fairer and it would make a stronger 2nd tier Euro competion.

The problem of over spending in the League can only be delat with by a restriction on spending in the Premier League. Given the terrible state that football in England is in, it will need to survive by the introduction of a US style of cost control which will also help to create a more levl playing field.

Good luck to the League Chairman as they seek to resolve this complex issue.