This summer the Premier League will discuss a proposal to alter transfer fees regulations. The proposal highlights a need for stricter interventions from the governing forces of the league in an attempt to curb the ever-increasing debt accrued by football teams. Instead of the current transfer fee regulations that see the option to spread payments over the course of the players contract (mostly between three and five years), the proposal stipulates that 50% of a transfer fee be made payable up front and the other 50% to be paid within twelve months of the deal going through. Though I agree that the cumulative ramification of Premier League teams’ debts is an issue that must be addressed, this proposal is a short-sighted attempt to appease those without a long term model of sustainability.
It is simple to see that this proposal, to be discussed at the summer’s AGM, is largely reactionary to the high profile demise of Portsmouth Football Club. It is hoped that by needing to pay transfer fees within a shorter time period clubs would be forced into stricter management of finances. Consequently, any club that is selling will be owed money faster meaning that if a struggling club sold its players their debt margin would be mitigated with imminent effect. David Gold, co-owner of West Ham, is backing the bid and had the following to say:
“From my own club's perspective I would say: 'Here I am needing as much credit as I can get because we're in financial restraints because of the debt we've inherited’... we almost need to be saved from ourselves. Because we're in such an extraordinary business we are subject to building debt because we're under pressure from fans, other board members, the manager, the players...”
Gold seems to be oblivious to the fallacy of his argument: to tackle the inherent issue of debt we must confront the ‘pressures’ that perpetuate it instead of trying to blindly satiate clubs with quick fixes. Moreover, acquiring capital over a shorter time period will only create fleeting security and leaves a club subject to the exact same pressures we see presently. ‘The fans, other board members, the managers, the players...’ these pressures will continue regardless of a rule change, which is indicative of the endemic problem of debt in football as opposed to an easily solved issue relating to time frames. To add to this, out of the £123million worth of debt Portsmouth is in only £14million is through money owed in transfers. This constitutes a meagre 11%. The AGM should consider instead the roots of the remaining £109million of debt and just why they found themselves in such an alarming situation. The proposal breeds a short-termism that is counterproductive to a club’s needs; the problem of debt and the pressures associated with it will only be masked in the short term instead of erased in the long. We’ll see clubs operating as they do now, the only difference being a condensed and hyperbolic transfer landscape. What is stopping a debt ridden club from plunging further into the chasm of penury if they sell their most marketable assets and do not replace them in some form, leading to on-the-pitch failings? The change offers no sense of tangible progress because it is subject to the same limitations as the current system.
Furthermore, the change serves to handcuff the Premier League in relation to the rest of Europe. Teams from Italy and Spain, for example, will have much more room to manoeuvre when vying for a player’s signature. The potential degeneration of our league on the European stage could prove far costlier in the long run with advertising, endorsements, and broadcasting rights all subject to suffering if the English Premier League’s popularity diminishes.
Even a cursory glance at the problem of debt reveals its complex and paradoxical roots. The simple truth is that this proposal naively suggests that a shortened time frame would encourage debt management. Why not point over to north London where Arsene Wenger and his board have remarkably created a sustainable, long term solution to the debt incurred from building the Emirates? Even now, when the magnitude of this achievement is lost amongst the pressure for on-field success, we should laud Wenger because it is damnably ungratifying to have a club’s long term future at heart. The solution to debt, and this is no surprise, is a carefully considered, regimented, and highly disciplined management plan that must cater for the long term. The problem for Portsmouth (and probably more) is that time has ran out.