The winter transfer window slammed shut in the last couple of days, with many teams around the world decreasing by a wide margin their spending on new players. Whereas this time last year, Chelsea spent £50 million (a British transfer record) on the maligned Fernando Torres and Liverpool spent £35 million on the similarly unimpressive Andy Carroll, the 2012 winter transfer window has been uneventful, lacklustre and bland.
A key reason behind this seems to be the UEFA Financial Fair Play, which has come into partial effect this season and will be fully implemented by the 2013/14 season. The UEFA Financial Fair Play is a new rule implemented by the grey-beards in Zurich, which states that all clubs must break even without fail every season, in order to participate in UEFA competitions. If clubs fail to match income with expenditure, then the eventuality is forfeiture from the Champions League or the Europa League. Part of this drastic rule also states that if debts are laden at a club, then domestic sanctions may apply.
Why has this been put in place? Recent seasons have seen incredible transfer fees, salaries and other expenditures, which are seen to put many clubs at risk of collapsing. For example in 2009, Spanish Primera Liga giants, Real Madrid, spent heavily on four players, two of whom were the most expensive in history. These were Spaniard Xabi Alonso, the Frenchman Karim Benzema, Kaka and Cristiano Ronaldo. With their £55 million expenditure on acquiring Kaka from AC Milan and an incredible £80 million on Cristiano Ronaldo from Manchester United, Real Madrid’s debt before the start of the 2009/10 season was estimated to be around £296 million.
Portsmouth FC is an extreme example of riches to rags. With Harry Redknapp taking over the club in 2002, they soon secured promotion to the Premier League in 2003. Heavy investment from various owners, which included spending a significant amount of their budget on wages to secure the top players such as Andres D’Alessandro, resulted in Portsmouth being able to finish in the top half of the Premier League in 2006/07 for the first time ever. The following season, marquee players such as Nwankwo Kanu helped Portsmouth win the FA Cup for only the second time in their history. However, what they did not realise was that this was the beginning of a decline that is still continuing.
After lacklustre performances in the subsequent seasons, Portsmouth failed to achieve success, which would have resulted in prize money, which in turn meant a failure to pay high wages. With finances drying up, Portsmouth was forced to sell key players, including Younes Kaboul, Niko Kranjcar, and Glen Johnson. By the turn of the 2010/11 season, Portsmouth were relegated from the Premier League with substantial debts, unable to pay their staff and repeated liquidation orders from the HMRC. By this time, the club’s debts had risen to £135 million.
Currently, Portsmouth is a club on the brink. Lingering in the lower half of the Championship, it seems highly unlikely that they will ever return to the Premier League. In fact, Portsmouth’s situation is so bleak that they are more likely to fold as a football club altogether than return to the top flight. Just as recently as the January 24, 2012, Portsmouth was issued with a winding-up petition by the HMRC for incurring £1.6 million in unpaid taxes. The money problems are deep rooted at the club and have now resulted in potential owners turning their back.
It is from these examples that the UEFA Financial Fair Play was born. Liverpool, as a point, was in debt to the tune of £315 million as a result of Tom Hicks and George Gillett taking over the club in 2007. Since then, however, Liverpool’s debt has been wiped out largely due to another takeover from another American consortium in late 2010, which in itself came about after large protests calling for Hicks and Gillett to sell the club.
Strategic planning of signing key players is now more likely rather than a splash and dash approach. With clubs such as Manchester United in significant but structured debt, the fear is that the most prestigious and historic clubs could fold up if no preventative measure is put in place. What would the world of football look like with no Manchester United? Hard to imagine, I know.
With the emphasis taken away from spending money on buying players, teams are now encouraged to look within their youth teams and academies for quality. This is also not without controversy, with allegations of prestigious clubs poaching young, naive, starry-eyed talent and reaping the rewards. Recent examples include Francesc Fabregas, who was brought to Arsenal at the tender age of 16, from Barcelona’s youth system in 2003.
Players at this age are wide-eyed, bright lights, lofty ambitions and all that. They are oblivious to the damage they are causing to football at grass-roots level because the temptation is too great.
Fabregas has since moulded into one of the finest midfielders in the world, commanding a high wage and a transfer fee to match. Barcelona were very bitter in the way that Fabregas left the club. He had no time to develop in his local team and no time to grow a sense of loyalty. He did however become a beacon at Arsenal after breaking into the first team aged 16 years and 177 days. He soon became the youngest ever goalscorer in the history of the club when he scored in a 5-1 victory against Wolves in the League Cup.
His ability to spot a pass, create a moment of magic, was what prompted Arsene Wenger to drop him into the deep end at such a young age. Wenger’s philosophy on developing talented youth players has certainly reaped its rewards. Arsenal is one of the most profitable clubs in the world because they rarely spend big.
Profitability is number one at Arsenal. After signing Fabregas for a nominal fee, Arsenal was able to sell him back to Barcelona for £29 million in 2011. In doing so, it ended one of the most protracted transfer sagas in recent times.
Long-term success has now become the watchword, with increasingly younger players commanding high transfer fees despite the lack of reputation or experience behind them. Who would have thought that an 18-year old playing in the lowly Belgian League would then transfer to Chelsea for an expensive £18 million? This is what happened with Romelu Lukaku, a strong 6ft 3in player who has been likened to Didier Drogba. But those who gasp at the sight of incredible transfer fees for such young players better get used to it. A player at this price is bought for what he will do in the future, not in the present. The hope is that with developing and investing in the player, this will eventually pay itself off.
The message is clear then: football is all about the youth now. Golden oldies are no longer needed. The quality of a 17/18 year old player now is at such a level unimaginable even four to six years ago. Lionel Messi, the world’s greatest present day player, has now reached a level that can put him in the same sentence as Pele or Maradona. Next time you watch a football match and see an 18-year old player on the pitch next to those much older, just sit back and think for a while. This is the future of football.
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