Graham MacAree writes about Chelsea for SB Nation, and is very good at it. He has a very compelling long-form piece up on SBN on the upcoming proposals to set up a Financial Fair Play-style rule in the Premier League to prevent sides from spending more than they take in.

MacAree underlines the going counterargument, and warns off those who believe FFP would benefit smaller clubs that the big clubs are pushing for the rule to shore up their built-in advantage. He writes:

The obvious answer is that cost-control benefits the ‘big’ clubs as much if not more than the smaller ones. Take the break-even rule, for example. If clubs could only spend exactly as much as they brought in, Table 1 describes how much money would have been available for each Premier League side in 2011, the most recent date for which the Guardian provides detailed figures.

Under a break-even system, the top four clubs (the old big four) are able to spend almost as much as the rest of the league combined. Add Manchester City and Spurs to that list and you have the top 30 percent of clubs spending 60 percent of the league total.

MacAree is absolutely correct that loss-prevention rules in the Premier League would benefit bigger clubs the most, in the short-to-mid-term. However, there are several factors that, ideally, could help mitigate this apparently financial stranglehold.

First, MacAree doesn’t address the one major problem that FFP was designed to help mitigate: wage inflation. Teams able to spend far and above what they earn in revenue help drive up transfer fees and wages for players across the board. Even with the added purchasing power of the historically-established big clubs, there will be limits on what they can spend based on turnover.

Moreover, currently mid-to-low table clubs aren’t competing with the Chelseas and Man Citys for players, but clubs of similar size and financial heft. Wages ideally would drop to reflect the new-found restrictions.

None of this, you’ll note, will upend the existing world order. MacAree is absolutely correct that spending limits ossify the current power structure in football. But it does provide financial stability, and prevents clubs from either risking financial ruin or courting owners with bottomless pockets in the blind hope of leap frogging the elite.

In this respect however, it is little different from professional leagues like Major League Baseball. And the financial stability afforded to mid-table clubs can give them room to invest in performance analysis and scouting in order to beat the market for younger prospects, prospects they’ll have less reason to immediately sell-on to bigger clubs in order to cover losses.

No doubt, spending limits are good for big clubs. But they provide an immense opportunity for smartly run clubs to shore up commercial revenues via the old fashioned method: winning football matches.

Comments (2)

  1. is this a FIFA thing? or just FA?

  2. IMHO the loaning of players needs to be curtailed. The bigger and richer teams can afford to park younger players at lesser teams.
    Since I have not seen any discussion of ideas related to loaning players; what am I missing?

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