Is Money Ruining The Game?

English football is the most lucrative sport in the world. But is money ruining the game? With FA Cup replays scrapped from next season, and more clubs than ever before facing points deductions, we take a look at how money is affecting clubs around the English pyramid.

In Premier League history, four teams have been deducted points – two of those in the current 2023/24 season. Back in 1997, Middlesborough were deducted points and ultimately relegated after manager Bryan Robson claimed he had a whopping 23 players unavailable for their fixture. In 2010, Portsmouth were deducted 9 points after entering administration with several players' wages not paid on time. The club concurred on a downward spiral and has only just got back into the Championship after 12 years out. Then we have this season. Everton breached 10 points in November last year – since reduced to 6 upon appeal – having spent £16.6 million more than their allocated £105m; whilst also recording losses over three consecutive seasons of £371.8m. Nottingham Forest has also breached their profit and sustainability threshold of £61m by £34.5m, and was deducted four points last month.

So, what are the rules? Clubs in the top flight can lose no greater than £105m over three consecutive seasons. Teams must make 90m of that from secure funding, predominantly from their owners. The remaining £15m is from transfer fees, wages etc. Clubs must break even over a rolling three-year period. In other words, over continuous three-year segments, club total expenses cannot exceed total revenues. Financial Fair Play requires all clubs to post their annual financial figures. If clubs are in breach, they may face fines, transfer bans, competition exclusions and points deductions.

Last season, most clubs ran at a loss before tax, with the Premier League running a combined loss of £500m. Only five clubs recorded a profit with Brighton bringing in record profits of £133m primarily from selling star players such as Caicedo and MacAllister. Chelsea had a transfer ban in recent years and a ban from European football for one season for breaching academy rules over 150 times. They had recorded academy players as trialists during competitions. One player had played 75 times under a trialist name between September 2013 and February 2016. Leicester City are likely to face a points deduction next season when they return to the top flight as they recorded losses over three seasons. The club in the limelight the most though is Manchester City. In 2023 they were charged with over 155 breaches dating back to 2009 including for not cooperating with the league and publishing misleading account details. They had a Champions League expulsion overturned recently, with a verdict not expected to be reached until 2025. The argument here is that during this time, they became Premier League champions three times, the FA Cup twice, the EFL Cup four times and the Community Shield on four occasions. With profit and sustainability thresholds becoming more of an issue in recent seasons, it has led to stranger business in transfer windows. Teams like Wolverhampton Wanderers held back in the transfer market, despite needing to add depth to their squad. Chelsea have prevented their billions of pounds of spending from causing an issue by finding a loophole. In the Summer of last year, they signed Moises Caciedo for a combined fee of £155m over an 8 year-deal. Signing this long contract enables the club to pay the transfer fee over

these eight seasons; consequently, Chelsea only pays £22m a season. These cheaper chunks ensure the club is not in breach of FFP.

Putting these rules in place has forced a divide between the bigger clubs and the rest of the league. As mentioned earlier, Wolverhampton Wanderers couldn’t add to their squad in the transfer window despite suffering from injuries. They will likely have to sell their big players – like Pedro Neto, Ati Nouri and Gomes - this summer to comply with FFP rules. Likewise, Premier League clubs earned a total of £6 billion in broadcast revenue alone. Typically, the ‘big 6’ equated to nearly 60% of this figure with £3.5 billion of this revenue. This only divides the bigger teams from the rest of the pack as they can poach on these players to improve their squad. How are smaller clubs ever going to break into the ‘top 6’ if they have to continuously sell their most high-profile players?

So, how do we ensure that money doesn’t ruin football going forward? I’ve come up with some suggestions based on both business and football perspectives.

First up, squad cost control. In other words, clubs are limited to the amount they can spend during transfer windows. This is based on a percentage of the club's revenue. Clubs would be able to spend 70% of their revenue on wages, transfer fees and agents.

It would be beneficial for the Premier League to take some inspiration from the running of America’s NFL. The implementation of salary caps has been drafted by the Premier League. A vote was recently taken with 16 clubs in favour; Chelsea, Manchester City, Manchester United and Aston Villa all opposed. The use of salary caps would limit wages to five times the broadcast revenue of the club that finishes in 20th place. For example, Southampton finished last place in the 2022/23 season. They earned £94.5m from broadcast revenues therefore the salary cap for all clubs would be £471m. It is clear that with rising wages, this could be difficult for some of the bigger clubs but would reduce the divide between them and the rest of the Premier League.

A homegrown player programme would also be beneficial for the league. This has been debated for over a decade; I remember reading this in a MATCH! Magazine as a child. There already is a homegrown rule in place but there are several loopholes to the rule. A player currently counts as homegrown if they have been registered for an English club for three seasons before their 21st birthday. So players like France’s William Saliba count as homegrown because he has played for Arsenal’s academy. Homegrown players are vital in

developing the next generation of talent for the England senior squad. The more domestic talent nurtured in the Premier League and EFL, the stronger the national team will become. Clubs would need to focus on their academy but any player making a breakthrough into the senior squad wouldn’t cost a transfer fee. I therefore believe it would be beneficial for clubs to have 3-5 players in their squad that have come through their academy, not poached from others.

A final idea is to follow the NFL business model. This is split into two forms of revenue; national and local. National revenue involves TV deals and licensing contracts which are divided among clubs equally. Currently, in the Premier League, 50% of broadcast revenue is split equally, 25% is based on the number of matches broadcasted per club and 25% is based on where the club finishes. Although it is fair that clubs are paid somewhat equally, there is still a large proportion of revenue that will automatically go to the bigger clubs. This is without taking into consideration these bigger clubs participating in European competitions and thus gaining more money from them. I would therefore propose that clubs are paid 75% of broadcast revenue equally with the remaining 25% based on ratios of being broadcast. Local revenue includes the likes of ticket sales, local sponsors and merchandise. This money is solely for that club.

With the gap widening between the wealthy clubs are ones struggling, we are at risk of the premier league table picking itself before a ball is even kicked. It is clear that something needs to be done regarding money in football, otherwise, we are going to see more cases of administration.