Manchester City manager Pep Guardiola gestures on the touchline during the Premier League match at St James' Park, Newcastle.
The news that Nottingham Forest have been deducted four points and been plunged into the relegation zone is bad enough. I mean, it’s not exactly as if Forest are who comes to mind when you think of clubs whose owners have spent huge wads of cash to improve their side (Man City, anyone? Chelsea, perhaps?). And to take it beyond the ridiculous, the date for completion of any appeals process is 24th May when the season finishes on 19th May, teeing up the very realistic prospect that the relegation battle may go to VAR.
This follows from the points deducted from Everton earlier in the season. Their owner, a British-Iranin billionaire called Farhad Moshiri – bought the club in 2016. His plan was to follow that of Roman Abramovich at Chelse and the Emiratis at Man City: spend a lot of money to try to get to the top of the table. He certainly spent the cash but, as Chelsea are discovering under their new owners, in the toughest and most prestigious league in the world, this has not smoothly translated into on-field success and Everton remain mired in serial relegation battles.
But why are these rules in place – what is their effect and what is the mischief they are trying to avoid?
The effect is pretty obvious. It is to reduce the competitiveness, and thereby the interest for fans, in the Premier League. It is a result of trading off competitiveness for stability. By limiting the ability of owners to invest in their clubs to make them better you make it harder for up-and-coming teams ever to challenge the current top-tier clubs.
This incumbency bias is compounded by the metric used, which looks at a “squad cost ratio” calculated by reference to income. So if your existing owners have already built a spanking great new stadium then you are golden as ticket sales provide a big chunk of your relevant income. I’m a Leeds fan. I love Elland Road but it needs a refurb. Badly. Yet under these rules, it is hard to see how we can invest to do it without crippling the squad.
The incumbency bias then has a further ripple effect because the existing top-tier incumbents are at the top of the league and so get more TV money and more cash from finishing in a higher position.
To put this in real-life context, I don’t see how Jack Walker would have been able to invest to get the SAS Machine (Shearer and Sutton) which won them the Premier League back in 1995. Now how is that good for football or football fans?
It also has no parallel in business. Imagine if someone had explained to Apple or Google some years ago that it was illegal for their companies to invest in developing world beating products because it was “unfair” to the makers of inferior products. It would have been utter nonsense, which is why rules like this do not exist in any other business environment.
Yet the Premier League is a business and, to borrow that awful phrase of the Tories, it is “world-beating”. Yes, in my lifetime English club football has gone from being a slum game played in slum stadiums in front of slum fans (to quote a slightly more impressive Tory PM of yesteryear) to having the two best leagues in the world which in turn have enabled football to finally conquer the U.S. You would not have seen that coming in the 1980s.
We have the best players, managed by the best managers playing in the best stadiums in the world.
And yet the governing bodies want to cripple all this because of some illogical concept of “financial fair play” that any economist can tell you is utter nonsense. It’s almost as if UEFA came up with this concept solely at the behest of jealous European giants to bring the English clubs to heel…
And then finally what does it achieve? Supposedly it is to stop clubs going bankrupt. But it doesn’t. To the extent that some clubs have overextended and gone into administration, this was a result of mismanagement and there are existing general company rules to deal with it. It happened to my own Leeds United. It completely sucked that ended up in League One (the Third Division in old money).
But what happened to Leeds was clearly the fault of the board in making bad decisions. They bet the whole club on staying in the Champions League and renting goldfish. When we missed out on a place in the Champions League the die was cast. Businesses occasionally bet the farm on something (Boeing did on the 747) but you accept that if it does not come off there are consequences. Leeds’ board at the time did not fully think it through and made some (I think) bad choices.
When boards or owners mismanage a situation you should deal with that through fit and proper tests for who can run a football club. You won’t prevent every problem, but at least you will be doing something which addresses the real issue. You will not solve those issues by imposing rules which threaten to make all of the clubs and all of the leagues less good than they are already, and which results in the winning of championships being decided in courtrooms rather than on the pitch.
The Financial Fair Play rules are intellectually nonsense, patently unfair and are messing up one of the very few things in this country that still works. Hopefully what has happened to Forest has brought this into clear focus for everyone.
Football fans of the world unite and rise up – we need to get rid of this nonsense.
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