PFA: Financial excesses in the past
The Professional Footballers’ Association are confident clubs have learned the lessons from the game’s financially-troubled past.
The latest figures released by Deloitte’s sports business group confirm the financial excesses of the late 1990s and the start of this decade are no more.
Clubs are clearly more prudent with salaries increasing by just 8% in 2002-03, against an annual average in the previous 10 years of 25%, while transfer spending was cut by 42%.
The slowdown comes as no surprise to the PFA, who believe the collapse of ITV Digital was the catalyst, with deputy chief executive Mick McGuire describing it as “a shock to the system.”
“From that moment clubs were forced into a period of refinement, and I always felt that would happen because that season we went round the country looking at clubs financially and the overall picture was horrendous and they have since had to act,” added McGuire.
“We have always said you shouldn’t pay more than you can afford and clubs are aware of that principle, so squad numbers now appear to be reduced, while there has also been a lot of activity in the loan market.
“Clubs are looking to reduce their annual wage bills and one of the ways is by allowing players to go out on loan. I believe Arsenal loaned seven out at the start of last season to reduce their expenditure.
“When you add in the fact that Premier League clubs operate in transfer windows, it is no surprise to see transfer activity down by 42%.
“But clubs are being more prudent anyway because they are starting to turn to their youngsters and they are now getting a chance.
“That’s why the likes of Wayne Rooney and James Milner have come through earlier than they would have done a few years ago.”
PFA chief executive Gordon Taylor adds in the fact there is also greater transparency on transfers with regard to the fees agents now earn, while he feels clubs realise they also “have a duty to their supporters.”
Taylor also believes a certain Russian billionaire has had an impact, adding: “But for Chelsea and [Roman] Abramovich then things could be quite serious.
“The money Chelsea have spent has helped to keep a few heads above water.”
Taylor also highlights Leeds as an example that football’s financial worries have not merely impacted on Football League clubs.
Following their recent relegation from the Premiership, Leeds will be in the Football League from next season, taking with them debts which still hover around £60m (€89.9m).
The current board are working overtime to ensure the club will be viable, with further players sales to be made to cut a wage bill which could yet drag Leeds under.
“Any club relegated to the First Division is going to take a detailed look at the wage structure because they cannot afford Premier League wages at that level,” said Elland Road finance director Melvyn Helme.
“We are no different. We have had to take stock of the playing staff and decide who we can keep and who we cannot and hopefully build on the players who will take us back to the Premiership as quickly as possible.
“But we have been making strides. We know what we have to do. We are doing all we can to get the club healthy again on the financial side.”
McGuire, meanwhile, believes the financial situation has now reached what he describes as “its level.”
“It’s now a buyers’ market,” added McGuire. “Clubs can afford to offer a little less these days and that’s something I was expecting. I feel the market is stabilising.”
