Will Hutton on Football

Yes, he\’s as confused on this subject as he is on all the others.

Instead of the profits being spread to the roots of the game and the communities in which the clubs are embedded, the Premier League has become the vehicle for financial engineering that makes private equity look honourable. In essence, clubs are being bought at astronomic prices, then the revenue they generate is used to pay back the debt their new owners incurred. The winners are the selling shareholders, the loser is football.

So the winners are the selling shareholders. That\’s the Brits who currently own the clubs, eh? You\’d think that a bunch of Brits doing well from hte way they hav developed an industry over some decades would be regarded as a good thing but no, in Hutton World, this is a bad thing.

Last week, Russian billionaire Alisher Usmanov took his stake in Arsenal closer to the 30 per cent that would trigger a full bid. Despite the club\’s robust talk of staying British, the eye-watering price he can afford to pay for the shares, to be financed by the club\’s own revenues post takeover, surely means it is only a matter of time before even this citadel falls.

But Will. If it\’s all being financed out of the club\’s own revenues then it doesn\’t have to be a billionaire that buys it, does it?

Chelsea and England captain John Terry\’s recent £135,000-a-week contract, a catch-up with the pay of Chelsea imports Michael Ballack and Andrei Shevchenko, is a classic example of the inflationary dynamic.

Indeed, this is absolutely a classic example. Of the way in which in talent based industries, all the money flows to those with the talent. They might only be 1% better than the other hundreds of thousands of soccer players in the country but that 1% means that they are in great demand. The same is true of merchant bankers, film stars, actors and so on. The owners (whether individuals or more widely spread shareholders in listed companies) get the short end of the stick here as that competition to hire that rare talent means that the workers\’ wages spiral ever upwards.

But then I thought that as a man of the left, Hutton was in favour of the workers getting the money, rather than the capitalist overlords?

What to do? Ten days ago, Michael Platini, incoming president of the Union of European Football Associations (Uefa) wrote to Gordon Brown arguing passionately that \’the values championed by football are a powerful source of social integration and civic education\’. Now the values are money. He wants pan-European action: wage caps on players; quotas for home-grown players; regulations on agents; financial checks on owners; revenue sharing between clubs; and redistribution of revenue into lower leagues. Platini even wants a reference to sport\’s special nature in the EU Reform Treaty.

Does Hutton want this? Salary caps for God\’s sake? That the workers should not get the full value of their contribution?

Football values must be reasserted and some limits have to be negotiated and it will have to be an initiative on a pan-European scale. The way things are, it cannot and will not include free-market, Eurosceptic, every- asset-can-bought-by-anyone England.

Apparently so. What a liberal man Will Hutton is, to be sure.

 

8 comments on “Will Hutton on Football

  1. “But Will. If it’s all being financed out of the club’s own revenues then it doesn’t have to be a billionaire that buys it, does it?”

    Ah, OK then Tim, I’ll buy it…. errrm, will you lend me the £622m required for the purchase as so far I have been unable to persuade my local branch of Lloyds to do so.

    Tim adds: Well, quite Bob. Therefore, it isn’t in fact being financed out of the club’s own revenues then is it? Hutton can’t have it both ways. Either you’ve got to come up with the dosh in advance, in which case it isn’t being so financed, or it is being so financed and you don’t need to have the cash. One or t’other.

  2. There are some good points made by Platini – the England team is rubbish due to lack of supply of players, because the English leagues are filled with cheap imports, and because they don’t get enough time to play together as a team.

  3. “the England team is rubbish due to lack of supply of players, because the English leagues are filled with cheap imports”

    But the England team was far worse in the early 1990s & in the 1970s when there were hardly any foreigners.

  4. “the values championed by football are a powerful source of social integration and civic education” – says Platini.
    Since when was that? The results of local clubs being a force for social cohesion, the results of local businessmen being involved as owners, may well have been positive. The results of sport as character-building experience for youngsters is probably good too. But that is a far cry from showing that these are the “values of football” in some kind of spiritual sense.

  5. Well of course football is being run on business principles but that does not make it a business, My local hospice has to run solvently too.

    As a shareholder in many PLCs I am looking for a return on capital, as a shareholder in my local bankrupt no-hoper’s I am looking for trophies in the cabinet. (in my dreams)

    Now if the PL was run like the NFL (and note NO shirt advertising), now that would be a proper business with a much better product to sell.

    I do agree with Ross, the imports have made it much harder for English players to come through the ranks, now they have to be of a much higher quality to make it into the PL never mind the England team…and that is a very good thing.

  6. If film is a talent-based industry, how the hell do you explain Keanu Reeves?

    I think your mistake is assuming that “talent” is purely limited to acting ability. His “talents” are a box office draw regardless of our ability to detect them.

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