Football Management

Commentary on the management of over 160 English football clubs by Dr John Beech, winner of the FSF Writer of the Year Award 2009/10 Twitter: @JohnBeech Curator of! Football Finance

Archive for the ‘Transfers’ Category

The ins and outs of the transfer window

Posted by John Beech on September 3, 2011

So, the transfer window finally slammed shut, to use the mandatory cliché, amid the predictable hype.  In one respect this was hardly surprising – of the 289 August deals reported by the BBC (1), no fewer than 93, or 32%, had taken place on the final day.  In total 141 (49%) had taken place in the final week.  One was almost left wondering whether a whole month was needed.

A noticeable feature of the BBC data is that of the 289 deals, 69 involved players described as unattached, 110 were loans, and 10 were free transfers, leaving only 100 (35%) that were full-blown fee-paying transfers.  Given the main reason for having a transfer window – to prevent clubs buying in extra talent in a burst to achieve promotion or a Champions League place – the question must surely arise as to whether it is necessary to apply any transfer window at all to non-fee-paying transfers, now the clear majority.  After all, no club is going to loan another club a player willingly if it feels that will upset competitive balance and/or give the receiving club a somehow unfair advantage.

It’s difficult to analyse the spending by individual clubs – the BBC data records the figure for a mere 17 deals:

Samir Nasri Arsenal – Man City £25m
Juan Mata Valencia – Chelsea £23.5m
Bryan Ruiz Twente – Fulham £10.6m
Mikel Arteta Everton – Arsenal £10m
Peter Crouch Tottenham – Stoke £10m
Andre Santos Fenerbahce – Arsenal £6.2m
Scott Parker West Ham – Tottenham £5m
Oriol Romeu Barcelona – Chelsea £4.35m
Jermaine Beckford Everton – Leicester £3m
Emmanuel Eboue Arsenal – Galatasaray £3m
Ishmael Miller West Brom – Nottingham Forest £1.2m
Leroy Lita Middlesbrough – Swansea £1.75m
Shaun Maloney Celtic – Wigan £1m
James McClean Derry City – Sunderland £350,000
Darnel Situ Lens – Swansea £250,000
Shaun MacDonald Swansea – Bournemouth £80,000
Chris Lines Bristol Rovers – Sheffield Wednesday £50,000

There seems to be a consensus that spending has peaked again following a couple of years decline.  Which is bad news in my book.  I would have hoped that Financial Fair Play and capped squad sizes would have reined in the crazy levels of spending.  It may be that they have outside the Big 5, but that in itself is dysfunctional – these are the five clubs most likely to qualify for Europe and therefore find themselves under scrutiny from UEFA.

It’s also clear from the limited data available that there is no sign of the vertical disparity in terms of spending power  up and down the football pyramid declining.  Again, I can only greet this with disappointment.  When will they ever learn?

Posted in Costs, Globetrotterisation, Premier League, Transfers, Uncategorized | Tagged: , , , | Leave a Comment »

A fish rots from the head down

Posted by John Beech on February 4, 2011

Watching the transfer window lurch to its conclusion has not been an edifying experience – I didn’t have high expectations mind you, and my thoughts were possibly coloured by the constantly breaking internet connection at the hotel in Central Europe where I am staying.

Certainly I was slightly surprised to read last Friday, from my position of intermittent ignorance, that Premier League spending had been “restrained” (1) according to Deloitte.  This of course was before the surreal outbreak of activity which saw Torres transferred to Chelsea for some opaque figure, possibly with as high a valuation as £70m (2), and Carroll transferred to Liverpool for £35m (3).  These transfers certainly helped to restore the inflationary trend of the past few years (4).  While an argument can be made in defence of Liverpool’s position, it is not encouraging to find Alan Pardew ‘vowing’ (I hate the word, but am clearly out of line with most journalists) to spend all the money on new players (5).  Much less encouraging was the report in The Times of India that the Torres transfer had been personally funded by Roman Abramovich (6), this at a club that is ‘strong’ despite losses of £70m (7).

Where does all this leave Financial Fair Play and an end to financial doping?  Well, UEFA apparently seem unconcerned, stating that they have “full confidence that the clubs are increasingly aware of the nature of the financial fair play rules, which aim to encourage clubs to balance their incomes and expenses over a period of time covering 4-6 transfer windows” (8).  I can’t honestly say that I share that level of confidence.  It seems to me that some clubs are pushing spending to the limit and are making no attempt to keep the spirit of financial fair play.

The continuing lack of restraint the top of the pyramid simply continues to stretch the vertical integrity of the football pyramid.  The guaranteed payments by the respective leagues show the increasing distortion.  A Premier League club is guaranteed a payment of at least £41m, a Championship club receives just under £5m, and a League 1 club £1m.  No wonder that ‘ambition’ pushes lower level clubs to unsustainable levels of expenditure.  Breaking point has been reached in some cases and is nearby in others.  A cull through my intermittent bookmarks of the last ten days highlights a few cases:

  • Clevedon Town
    The club is facing a mass exodus of players because of their worrying financial situation (9), exacerbated by Jack Frost.
  • Histon
    The club was recently visited by the bailiffs, although was apparently “all just a misunderstanding” (10).
  • Kidderminster Harriers
    An on/off deal to save the club is, as I write, off, and players are unpaid (11).
  • Leyton FC
    The club has been forced to withdraw from the Isthmian League Division 1 North mid-season (12).
  • Plymouth Argyle
    The club is now dependent on survival on funding finally turning up from its absentee Japanese investors (13).  Under threat from HMRC and with other debts, the future of the club is by no means certain.
  • Welling United
    The club has faced allegations that players wages have not been paid on time (14).
  • Windsor and Eton
    A sad case this – the club was in no position to contest a winding up petition from HMRC (15) and is now no more (although there is talk already of a resurrection club).  Whatever criticism may be levelled at the club’s directors, it is difficult to disagree with President Barry Davies’s assertion that “Not enough money in football these days filters down.

It’s the minnows that are really suffering, and will continue to suffer until the highest level of football gets itself in order.

[Normal service should be resumed when I return to the comfort zone of my own wifi system in the early hours of Sunday morning.  This posting is thanks to the University of Applied Sciences in Kufstein, Tirol, Austria.]

Posted in Cashflow, Governance, HMRC, Insolvency, Premier League, Resurrection, Transfers, UEFA | Tagged: , , , , , , , | 7 Comments »

Transfer torpor

Posted by John Beech on September 7, 2010

The transfer window just isn’t what it used to be.  I found myself habitually clicking to find the latest news from the BBC website and checking Twitter, but there just wasn’t much happening.  Even on the final day, there wasn’t much action to follow, unless you are a Stoke City, Spurs or Sunderland fan.

As luck would have it, I’m in the middle of moving my office across campus (hence the paucity of postings in the last week), and in the general turning out I happened across a printout from the BBC dated 22 Jan 2008 (the online version is here).  “January transfers set new record” it proclaimed.  £93m had been spent, with Chelsea the biggest spenders – £15m on Anelka and £9m on Ivanovic.  On the last day of that particular window Portsmouth signed Defoe from Spurs, and Middlesbrough splashed out £12m on Alves (1).  It all seems a long time ago.

Quite simply, this transfer window there were fewer transfers, with a propensity for not disclosing the value of the transfer fee, but many more loans.

USA Today declared that “Football’s transfer windows are a bore” (2), but was perhaps a little tongue in cheek as the report also advised “Rule No.1 of the transfer window: Believe little or nothing of what you read in the newspapers.”  As Bloomberg pointed out, England was not alone with its inactivity – in France, Germany and Spain gross spending during the transfer window was down by about 40 percent on last season (3).

I would suggest there are three causes for this downturn: the general economic downturn, an imposed discipline as we approach the Financial Fair Play protocol (although Manchester City don’t seem too worried by this) and the enforced reduction in squad size.  It is the latter that has triggered the growth in loans, with everyone a winner, unless the loanee is suddenly recalled.  The market for loan players is certainly becoming highly competitive, and there is at least a suggestion that competitive balance is being distorted by the influx of Premier League players into the Championship, the loan of Craig Bellamy to Cardiff City attracting particular comment – Burnley Chief Executive Paul Fletcher has called for a review by the Football League into loan movements between Premier League and Championship clubs (4).  The strange rule that which allows English clubs to borrow only two players from within the UK, but an unlimited number from abroad, has come under criticism from West Ham’s David Sullivan (5).

The basic argument for having transfer windows holds good – a way of ensuring some stability in a squad without the constant fear of players being lured away – so I can’t see a return to the bad old days.  For the immediate future though, it looks set to be much less exciting than it used to be.

Posted in Transfers | Tagged: | Leave a Comment »

On the embargo front

Posted by John Beech on August 8, 2010

A quick look at clubs and embargoes, not exhaustive, and needing qualification for the particular circumstances of each club, and obviously subject to changing reactions to the lifting of an embargo.  It does however suggest that the impact of a transfer embargo varies enormously, making it a rather blunt instrument as a sanction.

Accrington Stanley
The club has finally lodged its accounts for 2008/09, showing a loss of £300,000 and debts of just over £1m (1).  The embargo, which had been reimposed at the end of June (2) has been lifted, and two defenders have been signed (3).

Cardiff City
The embargo has just been lifted (4) and manager Dave Jones has two signings lined up (5).  He obviously hopes for a ‘flurry of signings’ but it seems unlikely that the club’s finances will allow a great deal of activity.

The for yesterday’s match against Coventry City gave the squad thus [click on image to enlarge]:

By the time of kick-off there had been some updates.  Ashdown had been cleared to re-sign, and the actual bench had but four possible substitutes.  Boateng, who did not appear at the Ricoh, is up for sale, as is Utaka, but on yesterday’s performance it is hard to see the latter fetching a decent figure. Kanu is yet to agree new terms.  Don’t hold your breath for a ‘flurry of activity.  It’s still very much a case of ‘Pray Up Pompey:

Pray Up Pompey

Preston North End
The transfer embargo was lifted at the end of June (6).  Trading has been constrained.

Sheffield Wednesday
The embargo has just been lifted (7), but again a ‘flurry of activity’ is not expected.

Southend United
The embargo has just been lifted (8).  Seventeen (yes, that’s seventeen) players have been signed by the newly-relegated club, which was repeatedly in court last season regarding HMRC debts, and which struggled to pay its players on time.  Double Nectar points all round then.

Posted in Sanctions, Transfer embargo, Transfers | Tagged: , , | 2 Comments »

Player mobility and Sunday’s semi-final

Posted by John Beech on April 12, 2010

Deep joy in the Beech household, of course, after the much wished for but more than somewhat unexpected result for Pompey against Spurs.  It was a strange game for other reasons though.

There were those familiar ‘Pompey’ faces – Crouch, Defoe and Kranjcar – on the Spurs bench, and although Kaboul was cup-tied he was no doubt there.  A Spurs fan would equally have been watching for Boateng, Brown and Rocha, albeit on the Pompey bench, and might well have been looking for O’Hara, on loan to Pompey and thus contractually constrained from playing against Spurs, perhaps sitting in the stands with Kaboul.  Now, I don’t keep stats on the numbers of players cup-tied, let alone on players who pop up later on the opposition bench, but it did strike me that this was a tie with particularly strong reunion connotations.

This of course is no surprise given that professional players have moved between teams since the 1880s, when Preston North End regularly turned out a team of imported Scots, but it was nevertheless particularly striking that ’till I die’ does not apply to players in quite the same way it does to fans.  Which means that club loyalty is just that – loyalty to a club but not in the same way to its players.  But if the players move around so much, and in this case between two specific teams, it doesn’t help with the notion of local identity and a sense of community implicit in the team.  Perhaps I’m just being old-fashioned, but I find it difficult to ‘dump’ ex-players as readily as they themselves dump their previous clubs.  The problem I have is in seeing a club as something permanent and not related to its ever-changing squad of players.

Hey ho, I’ll get over it, but it has reinforced my view that the all-too-often often opposing diad of the sociocultural  ‘club’ and its business form the ‘company’ constituting a football club should more rationally be thought of as an uneasy triad of ‘club’, ‘company’ and ‘crew’, to use a naval term as Pompey prompted this rambling.  In terms of ‘identity’, it is a peculiarity that both ‘company’ and ‘crew’ regularly change (well, especially the former if you are a Pompey fan) while it is ‘club’ that goes on for ever, even if in a resurrectionist form.

Posted in Community, Fans, Identity, Transfers | Tagged: , , , | 3 Comments »

The transfer deadline…

Posted by John Beech on September 1, 2009

… is Christmas Day for the better players and their agents.

As the pressure mounts to sign players before the deadline is reached, clubs tend to make better and better offers as they vie with one another to get the striker or defender they so desperately need. All this does is ensure even more money goes through the game and into players’ and agents’ pockets, adding to the clubs’ wages bills, pushing them nearer to debt (or in many cases into deeper and deeper debt, which may prove unsustainable).

It also adds to the disparity between the tiers as the clubs with the fattest cats as their owners reach for their cheque books.

Exciting it certainly is, but it’s a new tradition that is harming the game.

Bah humbug, say I!

Posted in Costs, Debts, Transfers, Wages | Tagged: , , , | Leave a Comment »

Everton and Mr Micawber?

Posted by John Beech on July 16, 2009

According to the Liverpool Post, Everton Chairman Bill Kenwright “laments club debt despite record turnover” (1). It’s tempting to shout ‘Mr Micawber!’ at him, with a dash of ‘The Emperor’s got no clothes!’, but, while that may be sound yet obvious advice, the problem of debt in a Premier League club deserves deeper analysis.

Details of Everton’s financial position emerged at a Shareholders’ Forum last night, which the club reported live on its website (2), a welcome change from the usual culture of secrecy (see [3]) that surrounds so many clubs.

The basic financial details (bearing in mind that the accounts are still subject to audit, so there might be some corrections to come) are:

  • Annual turnover now a record figure of almost £80 million, up 5.3% on 2007/08 and up 55% on 2006/07
  • Commercial income up from £6.7m to £7.4m
  • A wages bill of £49m, up slightly from the previous year’s £44.5m, but only 62% of turnover, one of the better percentages achieved by a Premier League club

On the face of it, all seems healthy, but:

  • Debt levels have increased by £16m over the last three years

This is good cause for lamentation!

There are a number of reasons why football clubs, in general, can find themselves in this position:

  • They fail to concern themselves with long-term debt, focusing only on operating profit or loss.
  • The drive for success on the pitch clouds financial judgment, and unrealistic aspirations result in the risky strategy of borrowing money on the assumption that improved playing performance will allow the money to be repaid, an assumption which may turn out to be unfounded.
  • Rather than try and manage costs against projected revenues, they automatically see the solution as getting more investment, which is unsustainable as a business model.

Readers are invited to add their own examples of clubs which make all three mistakes, although a rather shorter list would be one of those which make none of them.

Behind these three reasons lies a deeper reason. Clubs do not of course operate as normal businesses. Because they operate in league structures, their businesses strategies are to a large extent shaped by the strategies followed by the other members of the league they play in. If other clubs pay silly money for and to players, there is little option but to follow suit, and the vicious downward spiral is reinforced.

Unless the constant inflation of both transfer fees and payers’ wages is tackled at the league level, and specifically at the level of the highest tier in the league structure, there is going to be a lot more weeping and wailing and gnashing of teeth, not to mention lamentation.

Posted in Costs, Debts, Governance, Revenues, Transfers, Wages | Tagged: , , , | Leave a Comment »

Ronaldo’s exit from Manchester United

Posted by John Beech on June 12, 2009

The purchase of Cristiano Ronaldo by Real Madrid for a fee of £80 million (1) has been widely reported (as has the latter’s earlier purchase of Kaka from AC Milan for a reported fee of £56 million (2)). How much of the £80 million will be made available for use in the transfer market remains unclear, and it is thus difficult at this stage to assess the impact on the English transfer market. But I would surprised to see Sir Alex Ferguson spend it all before the end of the transfer window.

The impact on Spanish football is more clear. Real Madrid are making a bold statement of how they see themselves as a European club – as a big roller. Within the Spanish football scene, the gap between the ‘big 2’ of La Liga and ‘the rest’ will inevitably be widened, to the detriment of all other Spanish clubs and the state of Spanish football in general.

At an entirely different level, I can’t help pointing out that the combined fees of £136 million would have bought 217,600 classrooms from Save the Children (3) – I pick this particular charity because of rivals Barcelona’s involvement with UNICEF as shirt sponsors. Have we become inured to obscenity?

Posted in Costs, Transfers | Tagged: , | 1 Comment »

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