The reporting on Sunderland AFC in the Newc***le-based newspapers The Journal and Evening Chronicle is always a bit negative, to say the least. It has to be, as most readers are fans of those deluded barcodes from across the Tyne. I went to school on foreign territory north of that particular river for 10 years, so I know what I am talking about. The Chronicle on http://www.chroniclelive.co.uk/sport/sunderland-afc/safc-news/ did however report the new financial fair play rules quite well – see below.
I believe these new rules, if properly enforced, would bring some fiscal sanity back to football. The proposed changes mean that the current top six Premiership clubs would have to live within their means, and players’ salaries may end up being capped de facto. These major clubs would no longer be heavily subsidised by rich owners, leading hopefully to a more level playing field in the top league in the world. Well-run clubs like Arsenal clearly function by planning for the future, by bringing on Europe’s best youthful talent. Although this can frustrate the fans at times, the Gunners do well without the need for the mega-signings craved by other top clubs, but are still a major force. It will be teams like Chelsea, Liverpool, Newcastle and the Manchester clubs that suffer.
In 2009-10 Sunderland lay 6th in average Premiership attendances, with an average of 40,355, just short of Chelsea’s total. The Black Cats already have their stadium designed for 64,000 fans with relatively inexpensive modifications at the SSOL. Although the turnstiles are less important as a fraction of total income in the modern game, in the end, teams with the best support and most loyal following in terms of buying club merchandise will prosper under this new financial paradigm. I would also look to Sky Sports to provide even more funding for top English clubs. So despite the pessimism in some quarters, I welcome these changes.
Well-run clubs like Sunderland, Everton, Stoke, Fulham and Arsenal have little to fear, and avoided the temptations to gamble away their futures in a way illustrated by basket cases like Portsmouth; we should remember that Steve Bruce sold Danny Collins and Dean Whitehead to help balance the books last summer. As reported by the Chronicle:
SUNDERLAND chief executive Steve Walton says football’s new financial fair play rules will be a big headache for ambitious Premier League sides – including the Black Cats.
Under new regulations agreed by European football’s governing body UEFA, by 2013 clubs must not spend more than they earn. Those that do could be banned from European competitions such as the Champions League and the Europa League. The amount of money that can be injected by ‘benefactor’ owners – such as Chelsea’s Roman Abramovich, Manchester City’s Sheikh Mansour, Aston Villa’s Randy Lerner and Sunderland’s own Ellis Short – will also be capped at £38m over three years, which will have an impact on clubs who rely on outside income. Sunderland posted a £26m loss last year as they signed players such as Darren Bent, Lee Cattermole, Fraizer Campbell and Lorik Cana, with the Black Cats’ American owner making up the shortfall.
European is football is still some way off for the Wearsiders, but Short, chairman Niall Quinn and manager Steve Bruce all believe the club has the potential to one day compete at that level.
Walton said: “The financial fair play rules represent the biggest challenge facing the bigger clubs in this country, but also clubs like ourselves that are trying to make a step change.
“At the moment, unless there is a change in the finances of many clubs, they will not be in a position to compete in European competition as they would not be able to comply with the financial regulations. Some clubs have run at huge losses because they have been supported by the money their owners have contributed. It is what Chelsea have done for years, it is what Manchester City’s model is based on at the moment and, to be fair, what Sunderland’s model is based on. Ellis Short is supporting the business to take us from yo-yo club to where we were last season, which was 13th, to establishing ourselves and hopefully thinking of having a crack at the Europa League.”
Football’s finances came under scrutiny last season after Portsmouth imploded with debts of £120m, in the process becoming the first Premier League club to go into administration. It is that kind of crisis that UEFA’s new rules – passed on Thursday – are designed to avoid.
Walton says the key is getting to grips with clubs’ spending on transfer fees and, even more importantly, wages. But he believes UEFA’s proposals will prove a tougher challenge for Premier League clubs than for those elsewhere in Europe, because the new 50% tax rate on earnings over £150,000 per year in the UK means clubs have to pay higher salaries than those in other countries where tax rates are lower.
Walton said: “It is all about trying to get restraint on outgoings. I was talking to someone in Europe and they have beneficial tax rates for high earners. If I was trying to buy a French player, for example, I have to pay him twice as much as he would be paid at home so he can get the same take-home pay because of our tax rates.”
So I say, bring on these changes as a way of returning financial discipline to our top football clubs. As long as we can rely on Inter Milan, Real Madrid, Barcelona, Panathanikos and Porto having sounder and more transparent finances than their respective southern-European national governments, I predict a brave new world of British domination in European Competitions...and judging by attendances, sound management and the ability to bring on young, home-grown talent, Sunderland should eventually be part of that pack.
©Lars J.S. Knutsen