LIFE ON MARS
WHEN SATURDAY COMES
If you want a perfect
picture of the consequences of unfettered free market capitalism, what the
Nobel laureate economist Joseph Stiglitz has called “market fundamentalism,” you
need only observe British football’s[1]
Premier League. And what a truly grotesque creature emerges.
When Bill Shankley took on
the job of managing Liverpool football club over half a century ago he took over
the second side in the city, Everton were the largest side on Merseyside.[2]
Shankley turned this around by sheer managerial skill, a combination of
brilliant man management, a magisterial grasp of tactics and an eye for a great
player in the making. Liverpool FC went on to become one of the major forces of
club football in Europe. *
When the current owners
took over at Manchester City Chelsea
Football was the
quintessential working class sport, played by the working class to entertain
the working class. The middle class had rugby and cricket[3]
the Aristocracy Polo and fox hunting. Being
a sport with mass appeal it presented considerable opportunities for making
money and it was not long before the businessmen descended and began to cream
off the lions share of the money to be made from ‘the peoples game;’ the
players not being included in the original money making coterie. It is worth
remembering that for over half of the 20th century players were viewed simply
as workers and were earning little more than those who watched them on the
terraces. However once Jimmy Hill and the players union broke the salary cap
footballers too started milking the cash cow. Later with the introduction of
players agents there came a level of greed that has seen transfer fees and more
importantly players wages reach figures that simply are not sustainable in the
long term. We thus have the spectacle of football clubs that to all intents and
purposes should be extremely financially viable constantly teetering on the
brink of bankruptcy. Enter the age of the sugar daddy, that motley collection
of Middle Eastern oil sheiks, Russian oligarchs and American corporate dons, who,
in the case of the former seek to give themselves respectability, kudos and the
element of glamour that comes from owning a Premier League football club. In
the case of the American sports businessman like the Glazers they see only money
making opportunities.[4]
Behind the carefully
crafted image of the Barclays premier League,[5]
behind the overpaid and often preposterous Sky Sports and Match of the Day pundits,
there exists a strange and grotesque life on Mars world where only money talks
and players earn more for a weeks work than those watching earn in a year,[6]
all but bankrupting some of the poorer
clubs in the league.[7]
Clubs are increasingly kept afloat by sugar daddies with dubious backgrounds.
At Manchester united the situation is reversed, as an extremely successful club
was taken over, saddled with debt and set up as a cash cow for owners who bore
about the same relationship to the clubs success as horse flies do to the
success of a racehorse.[8]
The working class fans who
continue to flock to the terraces each week, being continually mugged for more
and more cash for their pains, by clubs whose priorities no longer lie with the
fans, have to perform an act of schizophrenia, put aside the grotesque
distortions imposed upon the game from the outside and pretend that it is 1974
once more and that all clubs compete on a more or less even playing field.[9]
Of course teams with
little financial resources sometimes do beat clubs with billionaire owners, as
the FA cup currently being played out testifies; ‘upsets,’ as they are called,
do happen.[10]
But the reality of the Premier League is that for the overwhelming majority of
the 20 teams competing survival in the ‘lucrative’ elite of the Premier league remains
their only realistic goal, Champions League football the preserve of wealthiest
top clubs only.
*I cannot
tell you how much, as an Evertonian, it cost me to write that.
[1] Soccer to those reading this in the States.
[2] Here I must declare an interest as an Everton fan,
albeit of the armchair variety.
[3] I am aware there is also a tradition of working
class cricket, not least in Yorkshire , but this was not a national phenomenon like
Association Football.
[4] There was recently a chilling moment for any insomniac fan of Manchester United or Liverpool football
club awake in the early hours of the morning listening to BBC radio 5 Live. An
American Journalist laughed aloud at the idea that it was the fans who really owned
the club, that the club was part of the community. Not the way it works in the
States he explained, when somebody buys a ‘franchise’ they own it lock stock
and barrel. If it was in their interests to locate the club elsewhere they
would do so, the fans would have no say in the matter.
[5] How appropriate that it should be a bank that
sponsors the League, an institution riddled with double dealing and funny
money.
[6] Top-flight earnings have shot up by more than 200
per cent since 2000 despite a world recession, leaving everyone else behind and
reaching a level which has raised questions about the game’s financial
sustainability.
The new figures show
that: Average Premier League wages have reached £22,353 a week - before
lucrative bonuses - or £1.16million a year.
[7] Aston Villa, though certainly far from being one of
the poorer clubs in the league represent a case in point ‘…According to the
last set of accounts for Reform Acquisitions Limited (RAL), Lerner's holding
company which owns Villa and a number of related companies, the
overall wage bill in the 2010-11 season climbed to £83m…
[8] The majority of the cash used by Glazerto purchase Manchester United came in the form of loans, much of which were secured against the clubs assets, incurring interest payments of over £60 million per annum. The remainder came in the form of PIK loans (payment
in kind loans), which were later sold to hedge funds. Manchester United was not
liable for the PIKs, which were held by Red Football Joint Venture Ltd and were
secured on that company's shares in Red Football Ltd (and thus the club). The
interest on the PIKs rolled up at 14.25% per annum. Despite this, the Glazers
did not pay down any of the PIK loans in the first five years they owned the
club. In January 2010, the club carried out a successful £500 million bond
issue, and by March 2010, the PIKs stood at around £207 million.[1] The PIKs were eventually paid off in
November 2010 by unspecified means. (Courtesy of Wikipedia).
[9] I know that there have always been some clubs bigger
and more successful than others, but never has the difference been so
starkly based upon money alone. There
was an interesting graphic on the BBC sport website earlier this season that
matched league table position with the amount of cash poured into the club, the
positions dovetailed almost perfectly. Some clubs bucked the trend, Everton and
West Brom , whilst Liverpool under-performed. A fuller picture is provided at http://www.telegraph.co.uk/sport/football/competitions/premier-league/9255617/Revealed-the-financial-health-of-the-Premier-League-laid-bare.html
based on figures as of May 2012. this is a very useful graphic allowing you to
adjust the table according to income, debt, wage bill etc.
[10] However if one looks at the last ten winners of the
trophy only Portsmouth have won it outside of the so called top four, now effectively a top five with Manchester
City joining them, City purchasing the title in 2011.
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