The Sweeper: David Conn Has the Premier League’s Number, and it’s Red

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John Westwood — Super Fan, Financial Analyst

You know things have gone too far when John Westwood—the man with the funny hat, no shirt, and dreads visible at every Pompey game—articulately expounds his views on the financial state of the game on the BBC.  It seems everyone has a view on Portsmouth FC‘s winding-up by Her Majesty’s Revenue and Customs and the club’s subsequent administration, but few have matched the Guardian’s David Conn in both depth and insight into the greater implication of Pompey’s financial problems.

His articles, usually coupled with Jaime Jackson’s superb and relentless coverage of each new sordid detail to emerge from Fratton Park (available to buy now from Balram Chainrai in easy monthly payments over the next ten years!), have provided a fascinating read over the course of the last few months as Portsmouth’s troubles worsened.  What’s interesting though is that Conn has resisted the temptation, indulged in by many pundits, of hammering us with his view on what’s wrong with the system and how we should fix it.

Today though, Conn seems to be edging closer to the heart of the matter by writing that the problems at Portsmouth cannot be leveled simply at “bad management”; they are built in to the contours of English football’s financial model.  Yesterday’s Sweeper highlighted Stoke’s debt-free management under the Coates family ownership, but Conn’s remarks today indicate the Coates’ £24 million investment may be a symptom of the same disease:

At Manchester United and Liverpool, the takeovers have loaded the great clubs up with debts. At the clubs with owners putting money in, some are rich enough to sustain it, and do it relatively responsibly. It does, though, inflate players’ wages at all clubs, fuelling overspending. At some, Pompey now proving the point, the commitment will become too great once rich men pull out.

The inflationary effects of this sort of private investment has had an enormous effect on Premier League coffers.  As if to prove the point, the Independent has today provided a must-read, team-by-team breakdown of club debt to demonstrate how pervasive the problem has become.  And the article’s author notes, there’s more to it than money-owed:

Yet debt should really be only one part of the concern for fans. Even if owners write off what they are owed, their other function is to absorb losses made by the club and provide working capital. If that backing (often a condition of banks continuing to lend) disappears, clubs will be in big trouble. Relegation and the accompanying fall in television revenue are likely to spell bankruptcy.

It’s becoming more and more obvious the lethal combination between finance and the competitive nature of football—the increasing reliance on private capital to buy better players in order to avoid relegation and continue enjoying broadcast rights’ fees; the enormous player inflation that results; and the insistence by the Football League that debt-laden teams pay transfer fees to clubs first and taxes to the government second (the “football creditors” rule) to avoid giving competitive advantage to a club on the pitch—will continue to wreak havoc in English football unless serious changes are introduced to the English system.  It seems Westwood is right; it’s all about “the men at the top” right now.

Quick Hits

  • Yesterday in a flutter of Blogger Minima opinionating, Fake Sigi gave his views on Canadian player development and what it will mean for future expansion in Vancouver and Montreal: “In the short term, the lack of domestic Canadian talent will continue to provoke more Canadian frustration with the rigidity of MLS, and it will also be the motivation behind the Toronto bloggers supporting the players in their quixotic quest for free agency and bigger salaries.”  I responded, and Duane Rollins felt compelled to reveal exactly what he wants for MLS and why.  It seems not all Canadian frustrations about MLS are necessarily the same.
  • Buyers beware: police warn fans not to buy World Cup tickets from sites like eBay and Gumtree.

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