Episode 66 - Stefan Szymanski on the state of English football finance

Buster's barely settled on what was a

dramatic day in English football last

week we saw some of the biggest

transfers known in the world and the

history of football we saw Fernando

Torres go 450 million pounds Andy

Carroll 435 million pounds it just goes

to show that days of big spending in

football have never really gone away and

to discuss the issue of finances and the

regulatory background in English

football I'm joined now by Professor

Stephan jawarski of Cass Business School

Stefan sir just goes to show big money

big football big game well I guess

that's right and what people were

thinking was in the last couple of years

that spending had been falling we hadn't

had any of the big dramatic transfer

deals that we've seen in the past and

maybe the effect of the recession was

hitting football but I think what really

we've seen last week is that money is

still coming in quite rapidly into the

Premier League particularly through the

sale of its overseas broadcasting rights

are now generating huge amounts of money

by overseas sales and that money as

always is seeping into the pockets of

the players and that's why we've seen a

big big jump in fees obviously for the

fans of Chelsea or Liverpool when their

clubs are spending big money it's

probably a cause for celebration but big

money hasn't always been very popular in

the wider football community has it well

a lot of people have complained that

about the fact that football in this

country has been so commercialized over

the last 25 years so it's a people feel

that price ticket prices are too high

that the player salaries are too high

that it's all about money now and it's

not about football in the way that it

used to be and people are also comparing

it unfavorably with countries like

France and Germany where ticket prices

seem to be a lot lower and where there

seem to be much stronger regulation of

football clubs and this has been an

issue that's being obviously in

discussion amongst MPs at the Department

of Culture Media in sports this week

that's right well the government

actually made a commitment to looking

into

the financing is football and to see

where the football is being properly

governed and whether anything can be

done about debt in football and so on

and so the the Department of Culture

Media and Sport the responsible

Department has set up a select committee

to look into at the state of football

and are I along with a lot of other

people who look at the football business

were giving evidence to it this week I

mean let's get down to the heart of that

what can amp is actually due to regulate

football I mean what tools are available

to them well I mean as with any industry

the government could establish by law a

regulator who could have really more or

less unlimited commercial control over

the league so if you think about say an

organization like off what the water

regulator the water regulator is allowed

to look at the finances and accounts of

the water companies allowed to tell them

how much they're allowed to spend

allowed to tell them at what they should

invest in all allowed to tell them what

they will be allowed to charge so really

quite quite deep and thorough going

right to interfere with what they're

doing and you could in principle see the

same thing happen in football telling

the club's what they can spend what

prices they can charge and so on

obviously MPs are often big football

fans of the local community themselves

but government intervention is extremely

found upon by the world governing body

FIFA in reality government intervention

in English what will probably mean

expulsion from the international game

well I'm not possibly i'm not sure it

would go that far because if it was

about financial regulation wouldn't

necessarily be about how the game was

played but it would be about the

financial rules relating to them of

course we've seen a lot of concern about

financial regulation anyway we've got

the creation of the new financial fair

play system by UEFA which is going to

regulate clubs participating in UEFA

competitions and there's been a lot of

talk about extending that system

throughout the whole football system and

maybe what the government is hoping is

that they will by holding this inquiry

and by making

a lot of loud noises they'll press the

football authorities into somewhat

stricter self regulation in the future

it's had a funny effect through the sir

you wait for fair play in terms of

finances because it's due to kick in in

this summer and we all thought that most

of the clubs will be screening

streamlining they're spending ahead of

it it just goes to show that Chelsea you

know has totally bought the trend and

liveable to some extent sue well I know

that is kind of that is kind of

surprising and I think what it what it

tells us is I think that the club's have

now had time to fully digest the rules

the rule book which is a 80 80 plus page

list of rules and regulations and how

they're going to be applied and I think

their lawyers have figured out how they

can get around them and it's not

surprising you see this not just in

football you see this in all sports when

governing bodies or lead management

committees start to put regulations into

place in order to bring some control

over the game immediately the clubs and

the players start finding loopholes and

ways around it and my prediction is that

the the rule book of financial fair play

will be more than 800 pages long within

a couple of years I guess this is a

billion pound question this a

cat-and-mouse chase between football

clubs and regulators or the governing

body who's ever going to win from it

well I mean one of the things I think is

perverse is that people think that the

unregulated nature of English football

who's currently puts it in as a in a

crisis well actually objectively

speaking it's actually better in better

shape than it's ever been attendances

are now are back to levels that were

last seen in the 1950s so really it's

been a tremendous recovery in attendance

in football even though ticket prices

are extremely high football is very

successful big big crowds are going at

all levels again not just the Premier Li

but the championship league one week to

its internationally very popular which

means not just that there are foreign

investors but that in territories around

the world people are obsessively

following the Premier League and its

really way ahead of its European rivals

in Spain Italy

in this respect so it's ironic that

people are crying for regulation just at

the time when in reality football in

this country's doing rather well and

just one final question I'm bearing in

mind that so few football clubs are

genuinely profitable maybe the biggest

winners of all or big spending is

actually the fans who are currently

crying out you know for change are the

biggest winners themselves well that's

absolutely right i mean it's it's it's

ironic isn't it that we see fans and

fans supporter groups clamoring for

regulations which will make the football

clubs profitable because those profits

will be coming out of their own pockets

what's good for the fans is actually for

clubs to make no money at all everything

they spend goat goes on the players

everything they get goes to it gets

spent on the players and that actually

makes for better football and that's

really what the fans would want better

football not more money in the pockets

of the owners yeah well I guess watch

this space and Professor Stephan

Sharansky thanks very much