Some time ago, Italy was the place to go if you were a professional footballer. In Italy, fame, honor and prestige was aplenty. And so was the money. In the past, every top footballer wanted to be in Italy. Tragically, this is not the case now.
The money is now undeniably in England. In the past few years, we have seen many English clubs fall in foreign hands. Chelsea is the prime example of course, but traditionally English powerhouses Manchester United and Liverpool have fallen into foreign hands as well. Even clubs of smaller stature, Manchester City and West Ham, were not spared. And as we speak now, Arsenal might be next in line.
The result of this as we can all see is that English clubs have more spending power. During the last transfer window, Manchester United splashed over £40 million on new signings Nani, Anderson and Tevez. Meanwhile, Liverpool matched United by spending well over £40 million on players as well. Chelsea, bankrolled by an incredibly wealthy Russian by the name of Abramovich, on the hand hand, have spent so much money in the past few years that I doubt the accountants at Stamford Bridge can even keep up. Manchester City were no slouch either, ranking in over £30 million in receipts for player purchases, thanks no doubt to Thaksin Shinawatra’s millions.
All this might seem great at the moment and why shouldn’t it? If I had a dime for every time I hear a Liverpool fan gloating about signing Torres, or a Manchester United fan boasting about having Tevez join their ranks, I would easily be at least $50 richer. The fans are certainly happy. The club is spending money to sign players so that they can challenge for the title, so how can this be a bad thing?
If you’ve been paying close attention, you’ll soon realize that what is happening now in the English Premier League mirrors closely that of Serie A years back when Serie A teams were signing checks left, right and center for players.
Economics and finance are subjects that I’m not intimately familiar with, but it is clear that the way clubs in England are spending money is something we must be wary of.
Chelsea, ever since being bought over by Abramovich in 2003, have been making losses annually despite their successes, which includes winning the EPL twice and reaching the semi-finals of the Champions League twice. In other words, success on the pitch does not automatically translate into dollars. Also, it is perhaps not an overstatement to say that probably the only thing keeping them afloat at this moment is none other than Abramovich’s billions.
We must also consider the predicament of Manchester United, who after being subjected to a hostile takeover by the Glazers, have been placed in a huge mountain of debt. I shudder to think what will happen to United and Chelsea if their respective owners, the Glazers and Abramovich, should pull out. I’m betting it would be nothing short of a financial catastrophe of epic proportions.
Ever since the financial crisis suffered by Italian clubs Parma and Lazio, and the demise of Leeds, I was convinced that business and football shouldn’t mix. I am not saying that businesses investing money in football is a bad thing. What I am saying or trying to highlight rather, is the very real problem that arises when clubs spend large sums of money which they cannot afford.
An appropriate analogy to describe what is happening in the English Premier League now would be likening these overspending clubs to individuals who are charging their every expenditure to their credit cards without care, conscience and without thought for long term sustainability.
Spending money that you don’t have is taking the first step on the grim road to financial destruction, and football clubs are no exception to this rule.