There`s an old saying which we’ve probably all heard in the past uttered by our parents and grandparents – “all good things must come to an end”. Like most words of wisdom handed down from previous generations, it states the obvious – yet many aspects of the modern world seem to have tried to disprove this statement.
With the average price of a house in the UK having risen relentlessly to almost 10 times the average annual wage, is it any wonder that prices are now falling sharply ? Banks, which were reporting billion-pound profits on the back of excessive loans knowingly made to people who couldn’t repay them, have discovered that there is in fact a point where the whole financial system collapses.
In short, many of us only know we`ve reached the edge of a cliff after we fall over it !!
Football in the UK (especially England) has been marching onwards and upwards for over 10 years now, since satellite/cable TV took off in a big way and the Bosman ruling kicked in. As ever-increasing sums of money poured in from Sky, BBC, ITV and Setanta – with associated big sponsorships from companies desperate to get their names on the interview boards – hundreds of players in Britain became millionaires. The Bosman ruling introduced the concept of a player being worth NOTHING when his contract expired. How ironic then that this should have fuelled a huge rise in transfer fees, as top clubs competed fiercely to sign players during the 2 short transfer windows each season. Only in the last 2 years has total transfer fee activity started to drop in some leagues – meanwhile Premier League clubs in England just continue to beat their own spending records.
The influx of wealthy owners has resulted in absurd amounts of money being spent on players at certain clubs. The latest example is Robinho arriving at Manchester City from Real Madrid for a fee of £32m on a reported salary of over £150,000 ? per WEEK !!
So, where is football`s cliff-edge – and how close is the British game to falling over it ?
With the mood of the British public dented by rising prices and the fallout from the financial system collapse, will they start to “downsize” by buying fewer season tickets, or fewer subscriptions to Sky and Setanta ? Most companies will be faced with reduced revenues, so perhaps the next league sponsorship deal will be smaller too.
If football does go into recession, star players in England over the next few years may even have to make do with salaries of UNDER £ 100,000 per week – imagine the hardships they’ll have to endure !!
Please add your views about where you think our beloved game is heading in the next few years.
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I like how you use football to make a political commentary on the state of the world as a whole. 🙂 To be honest, it’s hard to know how to respond to that. There has to be a breaking point at some time – the recent financial collapse has just proven that if you keep inflating a bubble (any bubble) long enough, sooner or later it’s going to go bang. Football has been steadily heading that way for years now – I find it staggering how much players get paid and wonder how on Earth it’s all being funded. Our ticket money & merchandising doesn’t count for *that* much. It’s all about TV. I think you are wrong that people will cease to buy Sky TV or any of those… the digital switchover & crap freeview reception in a lot of areas means that there’s no choice for many people. Prices will inevitably come down – with increased Sky ownership they can probably afford to bid for the football coverage at much the same levels again next time, and that will see the EPL and CL etc good for another five years minimum. Beyond that, who can say? As long as my family still have a roof over our heads, I probably won’t care less.
Good article SH, and I agree with what you’re suggesting may happen too. Football fans in the UK won’t be able to continue shelling out big money for tickets if the country goes into recession, so it would be interesting to see what happened in the game as a result. The big problem with the likes of the EPL clubs though, is that most of their money is coming from filthy rich foreign owners, so how much they’ll be influenced by a UK recession is unclear. There definitely has to be a breaking point though….
Yes – TV and mega-rich owners seem to be distorting wildly the natural economics of the game. Actually, I wonder if we’ll see an INCREASE in Sky and Setanta viewers, if fans stop going to as many games – the concept of downsizing when times get hard. I really can’t decide if its a good thing or bad thing that Hearts are owned by (and sponsored by) a financial company, in the current climate !! Any thoughts ?
UKIO are not in the same financial league as HBOS, Lloyds or the rest. Those institutions have traded on extended borrowing for long periods based on their size & perceived assets – UKIO don’t really have that “luxury”. Not saying they won’t be affected, but it’s a bit soon to be worrying too much about that just now IMO.
And I agree – we will see a much larger number of Sky and (possibly) Setanta viewers. The digital switchover and the cost of tickets will see to that. The prices will inevitably come down too… or be restructured so that more people will subscribe to the premium channels for less money (= more money for Sky = more money for football). In short, the recession (if it comes) will not affect British football in any meaningful way for years yet.
SJ – if Ukio haven’t got into dodgy trading like the Western banks, then thats good news I suppose. On the other hand, we have to ask ourselves just what sort of management would decide that investing in Hearts is a good idea !!!
The salaries that footballers receive are ghastly and sooner or later a big club is going to end up in administration. Leeds United have already paid their penalty for over spending.