Greedy clubs are now taking a financial licking

The real reason why it looks like
Cesc Fabregas will stay at Arsenal even though he doesn’t want to is because
Barcelona cannot afford him. When the most successful club in the world – which
boasts World Cup winners among half its players – cannot afford to strengthen
its ranks, there is something alarmingly wrong with the way football as a
business is run.

Back in the day, English top
footballers were paid a flat $10 a week in the winter and only $7 in the summer
because there were no matches. Players often had to take on summer jobs to pay
the bills! Yet clubs were raking in a fortune, mainly from gate receipts.

Compared to the $300,000 weekly
wage of some top players now – especially at Manchester City – wages from years
ago were tantamount to slave labour. Footballers were largely underpaid until
the late ‘80s when TV money started kicking in. Now the pendulum has swung in
the opposite direction. 

An audit into Barca’s finances show
they had a loss of more than $100 million last season and they owe a scary
total of half a billion. No wonder Arsenal are refusing to lower their asking
price of around $40 million.

UEFA, the European football body,
has passed rules designed to curb European clubs’ excessive spending and end an
era of so-called “financial doping.” They want to introduce salary capping like
American sports successfully do. This may be too little too late because the
culture of illegal payments in football is as old as the hills.

All clubs believe they have to
spend beyond their means to be competitive. For instance, last summer Real
Madrid borrowed from banks before spending $310 million on a host of talent,
including Cristiano Ronaldo, Kaka and Xabi Alonso. Yet they had an indifferent
season. With the addition of new boss Jose Mourinho, they hope for instant
success, which they should get. But their finances will still be in tatters.
Ronaldo in top form still can’t shift enough jerseys to balance the books.

In England, the 20 Premier League
clubs have been carrying a collective debt of $5.1 billion.

Under UEFA’s new rules, owners will
be allowed to cover losses of up to a maximum of $55 million over an initial
three-year period starting in 2012. In the three years from 2015, just $37
million in losses can be covered. Clubs without a wealthy patron would be
allowed only $6.1 million in losses over three years.

When Chelsea published their
accounts for 2008-09 earlier this year, the club announced that its owner,
Roman Abramovich, had written off his mammoth $960 million loan to the club and
converted it into shares. Manchester United and Liverpool are also hundreds of
millions in debt.

Football club owners used to be
millionaires. Now even the wealthiest billionaires are shying away from getting
involved. At least Arsenal have the right attitude to sensible economising.

Arsene Wenger has done a marvellous
job despite the financial restraints. It’s a pity other clubs have not followed
the Gunners’ example.