English Premier League: Four Ways Clubs Can Avoid Turmoil and Administration

Colonel SteeleAnalyst IMarch 16, 2012

English Premier League: Four Ways Clubs Can Avoid Turmoil and Administration

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    The Premier League, home to some of the biggest heavyweights in modern football, is often considered the largest money-making division in Europe. This is no doubt due to the glamorisation of the beautiful game. Millions of pounds are invested into the league, and millions more into running the clubs that make up the 20-team structure.

    Unfortunately, despite the monetary success found within the league, there has been a startling rise in clubs who are failing to run properly and are actually slinging cash out of the window. We've seen Wimbledon fall into liquidation, Portsmouth's spells with administration and now the drama at the Ibrox with Rangers and down the leagues with Darlington. Some of the top teams in the league seem to be running merely on name value, with Manchester United's debts being a very large £439,000,000.

    However, unfortunate circumstances like these can be prevented. In this slideshow, I will look to name four different methods that can be undertaken to secure their financial safety.

Introduce a League-Wide Salary Cap

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    Major League Soccer, based in the United States, has a very healthy profit with many of the clubs owing little to no money whatsoever to the bank or other sources. While the league may not earn as much revenue compared to those in Europe, they can boast much less losses.

    This is down to each club having to contain their players' contracts within a certain salary cap. It may not go over this limit, with the only exceptions to this rule being "Designated Players"; players whose wages do not contribute towards the total wage. David Beckham is notorious for this, having been assigned as a DP contract and earning multiple times the amount of his cohorts.

    This strict policy has been instrumental in the success and survival of every club in the MLS, ensuring a stability that most clubs in the Premier League can't claim to have. If the board of the division were to introduce a similar ruling, then maybe we won't see another situation like Portsmouth suffered.

    On an unrelated note, maybe a draft combine like what is found in most American sports could benefit the English leagues. It would provide a fairer level of play between clubs, instead of having all the top players situated in one of the Big Four clubs.

Be More Cautious with Their Transfer Finances

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    You would think this would be a given, but unfortunately it is much more easier said than done. In recent times, there has just been a huge and unnecessary rise in transfer prices. Players like Fernando Torres and Andy Carroll have joined their respective clubs for over-inflated fees which do not reflect their true ability or their form.

    However, there are two clubs in the Premier League who don't possess any major debts: surprise packages Swansea City and Norwich City. While neither club have an enforced transfer policy, the managers at both sides are very wise with the money they have been provided. A key example of this is Canaries hitman Grant Holt, who signed for the club at a measly £400,000. That's 100 times less than Torres was signed for, and Holt has been much more proficient in front of the goal.

    In fact, the rest of the Norwich team were signed for small agreements as well, with only few breaking the £1,000,000 barrier. This sort of shrewd wheeling-and-dealing shown by both clubs has been praised by numerous pundits, partially because of the success they have found in the league without having to break the bank. Similarly, Championship outfit Blackpool had a similar method and, during their last tenure in the top division, were believed to be the only team in the entire league at the time to have absolutely no debts.

    If other, larger teams were to hold back on their spending then maybe they wouldn't find themselves caught in a conflict between the administrators and the owners. I'm not saying cut out their transfers completely, but merely stating that they could find success at half the price they are currently working at.

Get Rid of Any Dead Wood

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    I'm sure we have all, at one point, bemoaned a player at our beloved club, or scoured through the squad list and pondered to oneself, "Why is he still here?"

    Every squad needs reserve players, because who else is going to step in when the star player picks up a knock? However, this doesn't support the need for other players just wasting their time in the sidelines. Often, these "dead wood" players take up a noticeable chunk of the wage budget and, for whatever reason, the manager or the board hesitate or even refuse to tear up the contract.

    These players don't always have to be untalented. Carlos Tévez is a prime example of this. He is one of the best forwards Argentina has, but he has no business still being in the Manchester City fold. He is one of the highest-earners at the club, but has failed to even turn up to training. If it wasn't for clauses in his contract which could give him the right to thousands, if not millions of pounds in compensation, they could so easily terminate his contract.

    That doesn't stop City from putting him on the transfer list though, something which they are foolish for not doing.

    Leeds United should have done this as well, as just a season or two before they began a free-fall down the English football pyramid, they had some of the top talents in the Premier League. With a star-studded lineup, they should have balanced the books by cutting loose some of the unneeded players, many of whom could of so easily found success at other clubs.

    Unfortunately for Leeds, they kept their seldom-played talents and instead had to sell up some of their top stars in order to stay afloat.

    No club wants a situation like that, and should re-evaluate their entire squads to find players to boot or else suffer a fate similar to the once-great Leeds United.

Hand Ownership to Fan-Owned Trusts and Businesses

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    Many clubs in the Premier League are now in control of rich business owners. While this hasn't proved troublesome for the likes of Manchester City and Newcastle United, the latter being nearly completely cleared of all debts, it has spelled the opposite at other, less fortunate clubs.

    Portsmouth, who have recently hit the headlines after falling into administration for the second time in three years, were once ran by a careless businessman who funded inefficiently into the club. In an effort to sign star players for the short-term, they promised to pay the selling club money that they didn't have; often resulting in having to take loans from the bank. In some cases, Pompey assured them that they would pay in installments, which may have taken the bank loans out of the frame but put the long-term future of the club in crisis.

    And crisis it was. After their first stint in administration, the club could only showcase a grand total of fourteen players, which isn't even enough to fill up their bench. Throughout the 2010-11 season, Portsmouth had to introduce several youth players into the line-up, and while they may have steered clear of relegation, the fans looked on with uncertainty as the circumstances at the club didn't look like they would bode well for the next few seasons.

    That was exactly what has happened, with the club straight back into administration and lingering at the bottom of the table. Chances are, they could fall farther beyond Plymouth have and possibly in faster time too.

    In contrast, clubs that are ran by fans, be it businessmen or just a trust fund, often find themselves in better situations, both on and off the pitch. Barcelona, one of the most decorated teams in Europe and the only team to have won the sextuple, are owned and operated by its supporters. In terms of revenue, the club are the second-richest in the world with a turnover of €398,000,000 per year.

    Likewise, Norwich City's board of directors are almost entirely composed of investors and businessmen who follow the club with a passion, such as Delia Smith and Stephen Fry.

    While this isn't a necessity at the moment for most non-fan owned clubs, there are definitely a few that really should consider a change at the top of the hierarchy. Blackburn, who have found themselves in dire straits with their foreign owners, and Manchester United, whose owners are incredibly unpopular with the fans and have plunged the club deep into the red, both need to transfer ownership to the fans as it may be the only way to stop an almost inevitable decline.

End

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    I just want to say thanks to everybody who has read this, feel free to debate in the comments section if you agree or disagree with any of these potential solutions. Please tell your friends, colleagues or anybody who may be interested.

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