Levelling the football playing field

By Bill Wilson
Business reporter, BBC News, Stamford Bridge

The Premier League's Sir Dave Richards again opened the event

A year after a controversial first meeting, senior executives from the world of football have come together to tackle the big financial issues again.

The second Leaders in Football forum comes as Sir Dave Richards, chairman of the Premier League, described to those gathered that it had been a "challenging" year for "all sectors of the football industry".

And also as the global recession, which has also hit sports hard, shows signs that it may finally be easing.

Twelve months ago, there had been a difference of opinion between Football Association chairman Lord Treisman and Premier League chief executive Richard Scudamore about whether the debt levels carried by top clubs were sustainable.

And, unsurprisingly, major issues this year again surrounded levels of debt, business models, the financial health of football, and - a growing concern - the economic differences between the top and bottom levels of the global game.

'Teams left behind'

Speaking to delegates from clubs, leagues, and federations at Chelsea FC's Stamford Bridge, Fifa vice-president Jack Warner said football had seen "the emergence of wealthy club owners and emergence of mega-clubs, which are then propped up by these wealthy businessmen".

"You say what you want about the free market system the bottom line is the playing field is not level and other teams find themselves being left behind," he warned.

Mr Warner said that while the huge cash injection may help bigger clubs in the short term - he referred to the big four in England of Manchester United, Arsenal, Chelsea, and Liverpool, as well as Spanish duo Real Madrid and Barcelona - it was not good for the broader health of the game.

"A salary cap should be introduced to allow for more level playing field among clubs. Otherwise smaller clubs will never be able to compete with high spending ones. Never."

He also expressed concern at what he said was the "disconnect" between wealthy club owners and the "money owed by the clubs," suggesting that there should be sanctions for clubs that go deeply into debt.

Mr Warner also believes the bigger clubs should invest 10% of the earnings of their players in the countries from which their players originated, to be used "for development of grass roots football".

The US model

The Fifa executive's comments come a day after a report from Deloitte's Sports Business Group that said top flight Premier League clubs in England were proving resilient during the economic downturn.

But Football League chairman Lord Mawhinney also took up the issue of borrowing.

They are defying economic gravity... but increasingly being a rich man in football is not enough Lord Mawhinney, chairman Football League

He said "unsustainable debt" in the Premier League was a major problem for English football and that the repercussions were being felt by the professional leagues below the top tier.

He said the Premier League must act to change business models which sees many clubs depending on the corporate of personal wealth of individuals and non-football related income.

"They are defying economic gravity simply because their owners are rich," he said. "But increasingly being a rich man in football is not enough. Today what is required is to be very rich."

Lord Mawhinney added: "Current business models need reworking, and sooner rather than later."

The US's top football administrator, Major League Soccer commissioner Don Garber, suggested that European football look to the MLS and other US leagues as a guide for "financial fair play".

In the US there is a broader spread of playing and financial assets among all clubs in sporting leagues, with many having some form of salary formulas or caps for playing squads.

"That is the key driver to the stability that exists in our major leagues - and there is tremendous stability in American sport," he said.

"I'm not so sure that same stability exists in football around the world."

'Struggling to compete'

A representative of what might be called one of the smaller European clubs is Joe Borocz, chief executive of Hungarian club Upjest Dozsa.

He fears that football is increasingly becoming a case of financial haves and have-nots.

There are fears that the biggest clubs are running too far ahead

"We are not struggling financially any more than we were before, but when you compare clubs in Hungary to the wealthier clubs in Europe, we are not up there with them," he said.

"The smaller nations are struggling to compete. Our clubs' finances are counted in thousands, not millions or multi-millions."

Mr Borocz said that he applauded the changes made by Uefa boss Michel Platini to try and give clubs from smaller nations a chance to progress further in the Champions League.

He pointed out that Upjest's Hungarian rivals Debrecen, who have made it through to the group stages of the competition, would earn enough from these games to cover their budget for two years.

"The windfall for them has been tremendous, but right now the financial disparity between the large and small remain huge," he said.