Finance in Football

Yesterday the FA finally responded to the pressure the government has been putting football under. That pressure is to clean up the financial situation in English football and remove the fear the government has of having to bail out another football club that gets its self into a Leeds or Portsmouth state.

The FA announced yesterday a 3 year plan which they described as making football more sustainable. In fact the plan has more loop holes than a 7 year olds shoe lace. The plan is a two point statement the first being no club can make a greater loss than £105m other the next 3 seasons. My first point against this is why is this not set to zero how can any club making a loss be financially sustainable, I understand this is a bit radical considering the losses some premier league clubs run but in my opinion that is the only way you can be 100% sustainable. Clubs like Manchester City and Chelsea who have some of the biggest losses can also by-pass this ruling as it does not include stadium redevelopments and academies there is also nothing stopping a rich owner ploughing more money into the club and just calling it a sponsorship deal to mask over the operating losses.

The second part of the plan is centred around wages. The FA announced if you pay more than £52m in wages in one year the next year you will only be allowed a £4m increase on this (so having £56m the following year for wages). The FA has made this clear that this is not a salary cap and I would respond by saying we can clearly see that. The final details of how this will work are to be voted on in April but i would suggest a hard salary cap to not only help financial stability but also fair play. However it is a step in the right direction to make players wages actually reflect reality. The one question mark I have over this is the timing by introducing this now it reflects really badly on club owners as they try to take a bigger slice of the eagerly anticipated TV revenue.

This plan put in place by the FA is only in the infancy stage of helping create financial sustainability in football but I feel they need to be stronger reducing the loop holes that even a amateur like me can spot and at the same time create fair play.