Overground Online
Overground Online

Football is a Religion, But Players Aren't Gods

Over the past few weeks, I’ve posted several blogs highlighting the need for executives and club chairmen to change their business models if English football is to maintain solvency, writes Peter Murray.

It appears that someone in soccer heaven either reads my weekly posts on the Insolvency and Law blog or heard my cries because English Football League Chairman Greg Clarke, above, recently announced plans to visit all 72 clubs under his jurisdiction to investigate how to improve their business strategies.

This season, we’ve seen established clubs such as Liverpool, Portsmouth and Cardiff City battle administration and last month HM Revenue and Customs took Sheffield Wednesday to court in attempt to recover £1.4 million in unpaid tax revenue.

Clarke hopes lower league clubs will look at their finances and implement new spending controls.

These include limiting spending to 55 per cent of player’s wages and possible adoption of the UEFA financial fair play regulations, which only permit clubs that break even financially to play in European competitions.

Such far-reaching controls are long overdue. Far too many English football clubs are obviously insolvent and should not be allowed to trade.

Ordinarily, directors of similarly run organisations would face disqualification and their companies would be wound up; which is what happened to Terry Venables in 1998 after he was found guilty of manipulating Tottenham Hotspur’s accounts and taking money owed to creditors.

It seems to me that because football is akin to the national religion, clubs are allowed to trade insolvent; enter administration and lose all their creditors, while paying players (who are also creditors).

Footballers are not preferential creditors, but they’re given preferential status. In an ordinary company they would lose out, but this rarely happens in English football.

When you think about how many clubs there are; the percentage that entered into insolvency procedures in the past two years is extremely high.

So the question has to be asked: can you turn football into a business that makes money, or is the English game insolvent? If Man Utd and Liverpool are barely making a profit, what chance do clubs from the lower leagues have?

These clubs’ business models are not viable and there would be no place for them in mainstream business. Emotion is dominating commercial logic to the detriment of the sport.

20 years ago, these clubs weren’t facing the serious kind of insolvency issues they are now.

Since the 1995 Bosman ruling, which allows professional footballers in the European Union to move freely to another club once their contract expires; there’s been an influx of foreign players.

As a result, wages have rocket, which has made these clubs insolvent. This is utter madness. Players are assets and you’re not supposed to acquire assets that make you insolvent.

It should be no surprise if Man Utd (the country’s most successful club) – or any other team for that matter – faces insolvency at any time in the near future because their business models are not fit for purpose. Peter Murray is director of business rescue firm Insolvency and Law.

Share
| | | More
Tags British, Money, business, football, Insolvency, Peter Murray, Insolvency and Law, English Football, Greg Clarke, Liverpool, Portsmouth, Cardiff City, HMRC, Sheffield Wednesday, UEFA, Terry Venables
Related Articles Watch: Ty Talks to Monie Love About the History of UK Hip Hop Cathy Tyson Returns in Hair Salon Drama One To Watch: MiC LOWRY - Britain's New JLS? Young, British and Sober Millions Trapped in 'Loveless Marriages' Video: Ex-Londoner's Charity Bid for Teen Footballers in Ghana Free Download: UK Reggae and Dancehall Mix (2003 -2006) Alicia Keys to Tour UK in 2013 Sade 20 Year Anniversary: No Ordinary Love 'Gappy Ranks Led the Way, But I've Taken the Baton' No Romance Without Finance: Sex, Lies and Rinsing Guys Prince Michael of Kent in Cash for Protection Scandal TV Premieres for Talented UK Newcomers Payday Loans: Debt Trap for British Workers One in Six Prefer to Stop Showering for a Year than Lose Internet Access Overground's Radio Show on FeelingMandy.fm - 02/03/12 2000 Flashback: Money - Jamelia FREE: Money Advice for Women Pepe Reina's Advert Is Offensive, But We've Seen Worse on British TV Fire Media UK Nottingham Forest Ladies Secure Back to Back Wins 1971 Flashback: Happy Earthday Andy Cole Fern Whelan Makes International Football Debut Watch: Real Sports Weekly Radio Show Preview: Premier League 2011-2012 Everton Outside Favourites for FAWSL Championship Lily Allen's Dad Launches Princess Diana Film Classic Thatcher Video: Famous Final Speech Lord Sugar Lifts the Lid on Crazy World of Football Finance Rio Ferdinand Stalker Does a Runner World Banks Financed by Cocaine Cash New Report Links Alcohol to Cancer Insolvency and Law Premier League Football Club Linked to Middle East Conflict English Football vs HM Revenue and Customs UK Lawyer Issues Court Summons via Facebook New Brit Comedy Anuvahood Released Nationwide African Farmer Richer than Oprah, Facebook Founder and Roman Abramovich Fulham FC to Honour Michael Jackson with Statue Rich and Poor: Who Controls the World's Wealth? David Cameron Under Fire for Promoting Gun Firms Footballer Birgit Prinz Inspires New Barbie Doll Philip Green on Topshop and Dumping Kate Moss Take a Peak Inside World's Most Expensive Apartments Mobile Phones to Replace Cash and Chip & Pin Katie Price Confirms Split with Alex Reid: Video and Full Statement VAT Increase: HMRC Crackdown on Tax Dodgers Lloyds TSB Vs Businessman Keith Elliot Bankruptcy for Britain in 2011 Unemployment Will Hit Men Harder than Women Tony Blair Recalled to Iraq Inquiry Marta on Target for FIFA World Player of the Year 2010 N Dubz' Tulisa Begins Shooting Idris Elba Film Secrets of UK Journalism We'll Bring 100,000 to Protest Tuition Fees Mario Balotelli is Future of Italian Football Says Mancini England 2018 Launch Facebook Campaign for World Cup Bid Judge Orders Wesley Snipes to Surrender Britain's Five Trillion Pound Nightmare Silvio Berlusconi: Media Pimp or the Smartest Leader in Europe? Hurricane Tomas Kills Seven in Haiti Buy a Stylish Vertu Smartphone for 20 Grand Spending Review 2010: What Does It Mean? Is Love More Important than Money? Italian Stallion Balotelli Battling Fitness for Juventus Clash Ting Tings a Hit with African Ballers Anton Ferdinand Embarrassed By Freak Goal Overdose: Get Ready for Another Financial Crisis 50 Cent's Got Love for Wayne Rooney, But Beef with Gays Looming Recession is a Problem for UK Businesses One in Six Britons Have Secret Bank Account Usain 'Lightning' Bolt to Give Up Athletics for Football World Cup and Premier League Footballer John Paintsil to Launch GUBA Awards Cristiano Ronaldo's Baby-Mother is British Teen Says Ex Girlfriend Manchester City's Mario Balotelli is Man to Watch I Turned Down Simon Cowell Because I Beleive in Myself Says Zarif Get Ready for Economic Storms in 2011 Warn Business Advisers Tinchy Stryder Up for Ghana UK Based Achievement Award Wesley Snipes on His Jail Sentence for Tax Evasion Channel 4 Star Elliott Tittensor Talks Sex, Man United and Reggae Michael Jackson: Greatest Entertainer in the World Stop The Press: What Does the Future Hold for Black Newspapers? I Loved Surviving Without Cash for One Year, Says Londoner 50% of Employees Unhappy with Job and Workload
COMMENTS (23) Add your comment
There are no comments for this post yet. Be the first!







LATEST VIDEOS
EDITOR'S PICKS
About Us - Contact Us