Financially Fair for Fans?

Plenty has already been said about the new financial fair play rules only just agreed by Premier League Clubs, designed to improve the financial sustainability of clubs.

Not a financial expert myself, I was a little apprehensive to say the least when writing this piece, so forgive me if I say anything incorrect.

Basically, clubs will be limited to losses of £105m over three seasons and will also need to limit their wage bill. Those with an annual wage bill of more than £52m will be able to increase it by only £4m per year.  The aim has obviously been to curb mega-spending of clubs, particularly my own team, Manchester City.

Many have said this is bad news for City, who did vote against it, but City’s owners have been working on balancing the books ever since Uefa announced their own, even stricter, financial fair play rules - restricting clubs in European competitions to making total losses of €45m (£38m) in 2012‑14.

Our most recent annual report (2011-12) revealed we more than halved our losses, reporting a net loss of £97.9m, down from £197.5m in the previous period. The report also highlighted that annual turnover broke the £200m threshold for the first time in the Club’s history with the Club achieving annual revenues of £231.1m in 2011-12.

Still - as promising as that growth may be – and as many have rightly said - there will still need to be two fantastic financial years to meet with the requirements. But is it unachievable? Not at all, in my opinion.

Yes, the wage bill is an issue. Nearly £200m of an issue to be exact. But this will change. We have already unloaded a high earner for £20m in Balotelli and are likely to part with both Maicon and Kolo Toure in the summer. It wouldn’t be a surprise to see other players the wrong side of 30 depart - namely Joleon Lescott and unsung hero Gareth Barry - and then there are the rumours that Carlos Tevez is returning to Argentina in the Summer. With a year still left on the contracts of the last three players mentioned, City can expect some return on the fees paid for them too.

Investment into the youth academy is exempt from these rules, so the multi-million pound academy currently being built on the Etihad campus in Manchester is safe - for now. The Academy is working hard at producing senior members of the squad, such as the highly-rated forward John Guidetti, only 20 years old. City also have Jack Rodwell (currently out injured but still only 21) and the defensive revelation that has been Matija Nastasic (an incredible 19 years of age) - a promising spine to a future City team to line up in front of England’s number one, Joe Hart (only 25 himself).  Hart, along with club captain Vincent Kompany, and the outstanding Pablo Zabaletta, arrived before Sheikh Mansour's 2009 takeover, clearly a contributing factor to the introduction of these financial rules.

The rules seem to be blatantly aimed at Manchester City, a club which at least sees money going in from their owner, rather than the Glazers' draining of Manchester United or the American owners of Arsenal and Liverpool, who were coincidently all for the introduction of these rules designed to hinder City.

But it’s too little too late if the objective is to put a stop to the project at City. The owner’s idea was to initially inject a huge amount of money into a team capable of challenging for trophies quickly, and then to develop a superior youth academy that will successfully integrate younger talent into the preliminary successful squad. NOT to spend ridiculous amounts every single transfer window. So far, so good.

The losses are decreasing, the revenue is increasing, and the financially-exempt youth academy project is thriving and still on schedule. If City can continue to challenge for top domestic honours over the next few years, qualify for the Champions League, and manage to make it out of the group stages – with a few minor changes to the wage bill and the expected increase in TV income – I believe revenue will rise significantly and the City project will be on course for success.

As a football fan though, my only worry with these new rules is the impact they’re likely to have on ticket prices.  Under the new rules, clubs can increase wages through commercial revenue – or matchday income.

At a time when the cost of supporting football in the UK is under scrutiny (£62 to watch City at Arsenal, but £68 to watch the Champions League Final at Wembley), the rules clearly promote an incentive to raise ticket prices even further. As much as I’m sure these rules will help improve the financial sustainability of clubs, I am very concerned about the knock-on effect this will have on ticket prices, and the financial sustainability of the average match-going fan’s bank balance.

Personally, I’m aware that City are currently looking into ways to develop parts of the Etihad Stadium (stadia development is also financially exempt under the new rules) to add further seating.  I like taking my whole family to see City (wife, and two young boys), but having moved from Manchester to Devon, a day trip to watch City (petrol, tickets, programme, meat pies and bovrils all round, etc.) costs us nearly £200. Which, understandably, limits me to a minimum two visits a season.

As it stands, for the price of those two round trips to watch City I could get a season ticket for my boys and I at nearby Plainmoor to watch Torquay United. I choose, however, to spend the money on watching the team I have supported for over twenty five years. But if ticket prices were to be hiked up significantly due to these new rules, it may just out-price real fans like myself and restrict us to unfortunately watching the City project on TV.

Wonder how many would then spend the money on lower league games instead?

….I’ll see you at Plainmoor…

Simon Culley