Financial fair play rules into the sinkhole?
In October 2010 Wayne Rooney issued a warning to the Glazers to splash the cash to make Utd competitive. He was proven right a year and a half later as City won their maiden Premiership. For their part City were hardly obliging as even before the ink had dried casting their eyes at their favourite supply chain, Arsenal, for the services of Robin Van Persie, ready to send his wages out of the stratosphere.
This weekend, Roman Abramovich, the original jedi of financial doping finally got the prize he craved from his 1bn fleet of aging superstars revived under a low rent manager. In City's case their first Premiership title ended a 44 year drought while Chelsea tasted their first Champions League success, their finest achievement in their 107 year existence.
These are unmistakably proud milestones in the histories of both clubs. But the inescapable fact is as Simon Kuper correctly points out is money essentially buys championships. This is an almost statistical certainty proven to be true nine out of 10 times. The loser these past weekends was the abstraction of a level playing field. City and Chelsea are propped up by the bottomless wealth of their ownership who underwrite their staggering losses without breaking a sweat. This might be the dawn of a blue moon but City announced a £197m shortfall, their largest since the Al Nahyan's took over. There were more blues for Chelsea as they ended the financial year £68m in the hole. Combined both clubs accounted for more than 50% of the Premiership's £484m deficit between revenue and spending. Sixteen out of the 20 clubs recorded losses. A stark reminder that austerity seems to be late coming to many of these clubs and in a few, not at all.
The broader vision for the implementation of these financial fair play rules was not just a brake on out of control spending. Part of its remit was to encourage clubs to look to their own homegrown talent, to nurture, and bring up the ranks as a means to end living beyond their means. City has in its arsenal a fantastic youth academy of which Micah Richards is one but like Real Madrid's famous cantera they will have little to no chance finding a place in the senior squad as the positions get filled with City's ever widening circle of galactic stars. Chelsea singled out 22 year old Ryan Bertrand's outstanding work controlling Phillip Lahm but the more telling sign was the left back's performance being mentioned as one bright spot. A glimpse into the paucity of options deviling Chelsea in its need to replenish a generation of players on the cusp of retirement or retrenchment. Both clubs seem singularly ill equipped to do so without dipping their hands again into the gaping maw of an insatiable ATM.
These clubs can keep on taking debt as long as they are married to a profit/ loss business parent entity. The Al Nahyan's can shift those receipts into their myriad deals and bury them losing FIFA's accounting trail. There are all sorts of accounting tricks to hide losses and pad revenue through dubious partnerships.
The idea of a level playing field is noble but it is flawed because the ownership structure so loosely regulated in England has been taken advantage of repeatedly. Self realization dawned on Abramovich only very recently when he moved to shift equity onto the club in an effort to bring down debt. The Glazers on the other hand appear to be a spent force and if these numbers are correct are bleeding an astronomical £250,000 a day just to service debt.
There is little chance Utd can keep out City or Chelsea if they so want to corner the transfer market. Oil, gas, and precious metals are not going to be replaced by alternatives any time soon. But just like the debate that is crippling Europe and its governments, is sweeping austerity the answer or is spending your way out of trouble? Liverpool thought the latter was the answer and they did worse while Arsenal opted for the former and has been stuck in the status quo ever since. The dangers of both approaches should be obvious to Utd.
Much of this scrutiny is taking rightly at the EPL, the origin of this wave of heedless spending. FIFA will impose greater transparency and adherence by demanding disclosure statements. A watchdog media and and a public wearying of the disruption to their lives by an ever shrinking pie might keep a notion of fairness alive. However, the wave is now moving offshore to the Russian and Chinese leagues with even fewer insights into the way they run clubs. The success registered by City and Chelsea will embolden clubs like Anzhi whose owner is Abramovich on steroids to issue blank checks to players in the hopes that they too in the not so distant future mount the podium as champions of the world. What will financial fair play rules accomplish when the money trail finally disappears?