Tuesday, 24 July 2012


Pre-season  has begun in earnest , starry-eyed fans are salivating over the likely new signings their team would make . The Consensus is that  we need to sign better players - like A , B , and C , and we should be winning trophies . After all Clubs X, Y, Z did so last season , and look where they are now .

The trouble is football is an industry that has largely deluded followers, and the dynamics in this field tends to throw conventional economic theories up-side-down . Tell me in what industry will a company buy Capital Asset to the tune of £35 Million, and  asking buyers to have it for £ 20 Million in a year and six months  time. That's what Liverpool want to do with Andy Carroll. Football has managed this idiosyncratic, artificial bubble lately , due to distortions to the market by Clubs like Manchester City , Chelsea , Paris Saint Germain , and a host of Russian Clubs , backed by mega Wealthy Owners . The Bosman ruling has further advanced the bargaining position of players nearing the end of their contracts . Take the imminent departure of Arsenal's Robin Persie as another example. Brought to Arsenal eight years ago for the cost of £2.5 Million , has only played the last two seasons injury free , has a year left on his contract , would not renew it , has his destiny in his hands by being legally entitled to listen to offers from January 2013 , Arsenal are willing to do business if an impetuous sum of £30 Million is offered ; either way Van Persie stands to double his wages due to the circumstances .  

If Football fans think what's happening with Glasgow Rangers , a Club in financial ruin at the moment , is some crazy and far fetched occurrence , they are mistaken. I remember Italian Club Lazio , bankrolled by Sergio Cragnotti , and his Tinned Food conglomerate , CIRIO , in the late 1990's , buying the best players in  Italy and beyond , and winning titles too , till it all went belly-up in 2002. Lazio were in debt to the tune of €110 million , with liabilities exceeding assets . Entrepreneur Claudio Lotito took over the Club , and  managed a deal with the banks , for a 23 year repayment of the loans the Club is saddled with , and a quick fire sale of the it's star players. They now have to produce their own players through the youth system, and would be lucky if they win the Italian Championship in another 30 years.

The prevalent dire economic climate  many European countries are facing brings into focus what Arsene Wenger of Arsenal has been practicing  in the last few years. The Self-Sustaining model should now be highly recommended . We should not be fooled by the aberration of the likes of Manchester City and Paris Saint Germain , who have created a false bubble by consequence of the vast amounts they have to spend on players and related wages . That is a synergy of good and bad . Good in the sense that Clubs with talented players can rake in a fortune from sales to these Clubs that defy economic gravity ,  through direct or indirect means , and the cascading effect creates transfer activity and money  for  Clubs . Bad in the sense that rich clubs trigger inflationary pressure on transfer purchases and wages. Fans need to wise-up . It is not a level playing field for everyone.  The teams run on a modest budget will most likely win nothing , and the best they can hope for is that their team is run on the right model which should be about sustainability - expenditure should not exceed returns by more than two or three per cent at worst. 

The trouble is , Clubs seem to shy away from telling fans how it all stacks-up.  Rather, Fans get sucked into more personal debt paying for season ticket , and Club merchandize in the false hope this is the year the holy grail arrives. Arsenal fans have seen the arrival of two new strikers - Luckas Podolski and Olivier Giroud for a combined fee of £23 Million . Arsene Wenger is busy telling the world of his intention to keep Van Persie till his contract runs out , and if he has to sell him , £30 Million would be the price. Come on fans , Arsenal know Van Persie would leave before August 31st , and the base price will be around  £22 Million . That's amount for the 2 strikers they bought recouped. Why the secrecy ? Arsenal are not trying to keep Van Persie , they need to sell him , and making a huge profit is part of their thinking . Why not ? but just make it clear to the fans early enough . The issue is Clubs do too little to explain the plans to the fans , and that's awful and dumb. The fans frustration is abated if issues are transparent , and their concerns are factored in .

The Self Sustaining model is undoubtedly the way forward , and a reflection of our economic times . Fans ought to know there shall be a lot of tears with the departure of star players to the  Clubs who can pay to get them . Staying afloat is the name of the game , we need the price distorting nuisance of rich clubs . We need the Bosman free transfers ( which is beneficial to clubs and players alike )  It's the reality we face , the onus is on the Clubs to communicate their financial health to the fans in a more efficient and transparent way. Fans would tend to persevere and stay loyal. It's better for them than being in the dark about events. Fans ought to have an idea what the transfer budget of their Club is for the season , and if potential additional revenue is derived from the sale of player x or y , what percentage of that sum shall be put into the existing transfer budget for player purchase / wages . For too long , fans have lived in false hopes about what they are buying into , yet they matter the most . 

There are two worlds out there..... one for the " rich " Clubs , and the other one for regular Clubs . The fans must not confuse the  two , and the Clubs with regular means need to stop paying lip service to the hopes and dreams of the ordinary supporter. They need to tell it like it is .

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