Well, what a day that was, "momentous" as sliver-haired, one man hype generator Jim 'Six Phones' White put it on Sky Sports News late last evening. Momentous because enough money changed hands on the final day of the football January transfer window to finance a war large enough to wipe out a couple of post-Soviet, East European states, not to mention preventing hundreds of libraries being shut down across the country.
£50 million for a grown man with freckles to wear a blue shirt instead of a red one? £35 million for a man with a court case pending and half of a decent season at Premiership level (not Premier League, up yours Barclays)? The world of football has gone literally mad, but, you already knew that.
Despite the fashion of pissing away money like everyone in society did in the Blair years returning for just one day, all in all, football was a rather prudent business, all thing considered, in the January transfer window with just Chelsea, Manchester City and Aston Villa having a net spending of more than £5 million, a lot of money but not enough that would run a business the size of your average top-flight football club to the brink of ruin.
However, in the wider context of the state of football right now, there is another point to consider. Every team in the top two divisions in England did some sort of business (transfers in or out) in January, in the pursuit of either promotion, a place in Europe or to avoid relegation. Now, the only reason football clubs aim for these goals is for matters financial; you have more money if you get promoted or are playing in Europe, you get less money if you get relegated. Let's be clear, in the world of business, which football is clearly in, money is the be-all and end-all, the glory of promotion is not in the minds of owners, just the balancing of books. Leave the emotional side of the game to the plebs who fork out fifty quid a week to watch the team play.
To balance these books though, owners take out huge gambles to achieve these aims. For example, Darren Bent for £18 million plus add ons is looking a good gamble as he is a proven goal-scorer and Villa have since hit a bit of form since he joined, thus probably saving their Premiership status and getting more money.
Largely, it's called chasing the dream. Evokes images of Leeds and Portsmouth doesn't it?
And here is the rub, taking out these gambles are, well, gambles, as you are breaking the bank either to fork out the cash for a player or paying the wages of a bigger name player, to get money in the future. But, there appears to be no real risk in the long term of taking these gambles.
To use Leeds and Portsmouth as examples, these clubs were run well beyond their means and rightly, fell through the leagues as punishment for spending way more than they could possibly afford. One hopes that the same chronic overspending in recent years of Chelsea and Manchester City similarly comes back to bite them in the arse. Despite the obvious facts in the cases of both Leeds and Portsmouth, how could they afford the price they were paying for players and their wages increase so much when their income cannot have risen by a similar amount, these clubs were allowed to carry on spending this money and making something of a mockery out of the league.
The owners of both clubs, Peter Risdale and Alexandre Gaydamak respectively, did not care for the long term futures of their clubs and looking back, they needn't have had to as it appears that both the Premier League and the Football League do not want a club to go out of business under their watch as it would be a horrible blow to the marketing of their product and so clubs are very unlikely to go completely out of business in these leagues. For example, note how Portsmouth were granted their TV rights money early last year and the loopholes in which both clubs attempted to operate to save themselves money.
All this begs the question, what is the incentive for clubs, particularly at Championship level, to be financially prudent? If clubs can run up huge debts and 'chase the dream' with no likelihood of going bust, why should other football clubs be run prudently and be businesses that balance their books?
My team for example, Reading, is believed to run at an operating loss of around £2 million a year, which is largely paid for by selling players, Gylfi Sigurdsson, Kevin Doyle, Stephen Hunt, Nicky Shorey and Dave Kitson to name five over the last three seasons, with occasionally the Chairman paying for this loss. This is the correct way to run a business, only pay for what you can afford and balance the books. As a result, we are roughly in the same position in the league this year as we have been for about the last decade (but for two seasons in the Premiership) knocking on the door of the Championship play offs.
But, for how much longer is balancing the books going to be seen as enough from the fans perspective as teams around us spend, spend and spend so more with no real consequences of their actions? Having your house in order financially as a football club isn't going to get punters through the turnstiles, only investment and top quality football does that which leads to the overinflated market we saw in action yesterday whereby clubs pay over the odds for players and yet do not endanger their long term life as a football club thus undermining pretty much the whole point of being fiscally responsible in the first place.
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