The Lead

A lot of football fans talk about Financial Fair Play–the rules that require clubs to break-even before they can enter European club competitions*–as if it’s coming down the pipe five or ten years from now, and isn’t already in effect.

It also seems that some of those who are aware that FFP is “live” don’t seem to want to make the connection between the current summer transfer market and the break-even requirement. It’s a small sample, not all clubs share the same needs in reinforcing their squads, what matters is what happens over the next few seasons.

It’s cyclical, yes, but that shouldn’t prevent us from looking at certain patterns that aren’t likely to change over the next few years. Like the latest failed joint bid by Manchester United for Everton’s Leighton Baines and Marouane Fellaini £38 million, slapped down by Roberto Martinez with the backing up the chairman Bill Kenwright.

Many critics of FFP believed that under the new rules, those clubs that enjoyed enormous revenues like United would simply hoard talent from smaller clubs like Everton, thereby consolidating their lock on the top spots in the league. And yet here is Everton refusing the play ball with a very generous valuation.

Why would that be? Here’s a hypothesis, at least. Everton are a club with a reasonable chance of making the Europa League this season. They don’t have the benefit of wealthy benefactor or lucrative commercial sponsorship, and so are run as a financially tight ship. So far this window they’ve spent £9,680,000 total for Arouna Kone (Wigan) and Joel Robles (Atleti).

Consider that in a post-FFP world, clubs are no longer able to write off losses either by going into debt or receiving equity payments from wealthy owners. This means they are entirely dependent on club revenue. In the Premier League, revenues are in part attached to merit payments based on final table position, the number of times Everton games are broadcast on television, European competition, and of course gate sales and commercial revenue. So it doesn’t make sense for Everton to take a pile of cash for two of their best players in return for risking their Premier League chances and subsequent earnings.

Sure, you might say, that’s right now. But in future when good players are available, the clubs with the biggest revenues (United, Arsenal, Chelsea) are going to hoover them all up. In some cases, yes. But Everton first bought Baines back in 2007-08 for £6,600,000, and he developed there into one of the best full-backs in England. In Fellaini’s case, he was picked up for £19,145,280 from Standard Liege in 2008-09. If that sounds like a lot, consider that the club spent £14m on Yakubu the year before.

The transfer market, in other words, is inherently risky. Everton could use the £38 million from the joint bid to go on a two day spending spree, but there is always the risk of picking up a few overpriced duds and thereby condemning the team to a poor season. The only reason a club would panic sell their best players would be to cover debts accrued from overspending. And that is no longer allowed. Welcome to the post-FFP universe.


Quote of the Day: “…possibly he will be.” -Real Madrid vice president Fernando Fernandez Tapias on whether Bale is still going to Real Madrid.

Things I didn’t see coming:

Michael Cox has a nifty tactical breakdown of all the Champions League groups based on yesterday’s draw. I thought he might be a little more hyperbolic on Group F with Arsenal, Dortmund, Marseille and Napoli (the group of fun!), but this seems reasonable: “Arsenal brushed aside Ligue 1 runners-up Marseille last season with few problems, but Dortmund were the toughest of the Pot 3 sides and Napoli the most dangerous from Pot 4. Arsenal performed well against Jürgen Klopp’s side two years ago but Dortmund have improved considerably given greater European experience. Rafael Benítez has managed Napoli against Arsenal this season – a 2-2 Emirates Cup draw. He has revamped the side in his usual 4-2-3-1 formation, spearheaded by the former Arsenal target Gonzalo Higuaín.” [the Guardian].

Iain Macintosh lays down some sweet justice on Gareth Bale, following what has to be considered some fairly reprehensible behaviour in helping to force through a deal with Real Madrid: “Bale has turned over his club for his own gain, throwing his toys out of the pram until he got his own way. That doesn’t make him any different from the majority of modern footballers, but it does mean that he relinquishes the right to leave the room smelling of roses.” [ESPNFC]

Crossbar and in the net from Lewis Holtby as Spurs down Tblisi 3-0, 8-0 on agg [101ggs]:

And a sneaky analytics link: James Grayson and the correlation between Total Shots Ratio and points for over a decade of Premier League seasons [James Grayson's blog].

Comments (8)

  1. Not ready to vilify Bale just yet. He really wants the move, RM have offered stupid money, and Levy is dragging it out. Not that I am blaming Levy either – he is using the Bale money to build one hell of a team for this season (COYS!) and didn’t want to be held ransom for Carroll-esque inflated prices. He is leaving a bit of uncertainty floating around in the ether so that he can secure all of his targets at fair market value. I think the whole ‘Bale the villain’ theme is just the media’s latest spin on the Bale saga because the ‘Bale to Madrid’ news expired a long long time ago. And while I don’t know the mood of the average London Spurs fan, I don’t think his refusal to train with a team he is leaving is anything like grounds to condemn him. He was amazing for Spurs, and we are building a strong, deep side out of the money his sale is generating. Hell, I am still thinking of getting his name put on my Spurs jersey. In my opinion, his biggest crime is wearing that fucking pink outfit in a misguided effort, I can only presume, to appear more cosmopolitan for the Madristas.

    Unfortunately, I think the game this weekend is coming a bit too soon for Spurs. I’d love a win, and I think our current squad is better than the Arse at this point, but I doubt the squad have had enough time to figure out AVB’s system in a way that will allow them to get past the Arse – a side that is still annoyingly pretty good. I would be satisfied with AVBs tactics if he parked the bus at the Emirates to get the draw given the timing of this game, but I wouldn’t be surprised if we lose this one. The return fixture, however, will be another story. And I will go on record as saying that there will be no St Totteringham’s Day this year my derby friends. Spurs for a CL spot, and Arse to miss out.

    • I don’t blame Bale at all. He wants his move and he doesn’t trust Levy to make it happen without a push. If the move doesn’t happen, I’d sit out if I were Bale.

      • There is no way that the move can’t happen. Levy has already spent the Bale money. It can’t be a coincidence that Spurs biggest transfer window by a landslide (in terms of imports) coincides with the record bid for their prized asset. Levy is getting maximum value – and I wouldn’t be surprised if there is some truth to the idea that he is trying to jeopardize Arsenal’s pursuit of RM players – but the deal will happen before the window closes.

        As for Bale – if somehow the move doesn’t happen, I would expect a fairly short period of sulking, and that he would then lace up the boots and play his guts out for Spurs – much like Rooney did on the weekend. That won’t happen since he will be in Madrid, but man, if you add Bale to the side they have constructed, we would aim higher than a 4th place CL spot. I doubt he would exclude himself from that project simply to protest against Levy.

    • No matter what, the only party that looks bad in the end of all this is Madrid. They basically did nothing to strengthen their team this summer, and put all their eggs into one extremely overpriced basket. They have other needs that weren’t addressed and is going to cost them this year.

  2. On FFP these effects should have been pretty expected.

    Spending beyond revenues is essentially a form of credit; whether in football it’s actual borrowing, or funding from a wealthy benefactor it can be considered the same way.

    In any market if limitations are placed on availability of credit then inflation and economic activity (transactions) decrease. In football terms that’s fewer transfers and smaller transfer fees.

  3. I would think another big factor would be the huge TV deals that I believe are in effect this season. If I’m not mistaken I think the domestic and foreign TV deals have approximately doubled over the previous ones. That makes every EPL team that much richer, so the teams outside the top few clubs don’t need transfer money as much as they have in the past.

    Also, as you stated, Everton’s realistic shot at a spot in Europe if they keep Baines and Fellaini.

    Now a question on FFP. You said teams aren’t allowed to go into debt by making transfers. How does it work for a team like Man U who is already in debt (but are obviously making enough money that they are able to pay down their debt).

    • FFP doesn’t apply to outstanding debts, it just proscribes that clubs have to break even (not spend more than they earn) before they can compete in Europe. Now, keep in mind there are all sorts of caveats to that. For one, the break even equation doesn’t include infrastructure spending, youth academy investment and the like. There is also a 5 million pound “buffer,” and equity investments are allowed but limited over a set period of time in the initial stages.

  4. Just heard that Arsenal will likely be getting Bendtner back this season, so all is not lost. He is like a new signing.

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