Financial prudence and sustainability in the world of football

More than forty years have passed since the first footballer was signed for a ‘seven-figure’ transfer fee. I imagine it created quite a stir around the time considering the fact that the erstwhile transfer record was nearly half of what the legendary Brian Clough paid for Trevor Fancis’s move from Birmingham City to Nottingham Forest. Things have come a long way over the past four decades and today’s football fans pooh-pooh at a mere million bucks, and why shouldn’t they? The current record stands at a mind-boggling 93-million Euros, the price Real Madrid stumped up for a certain flamboyant Portuguese winger.

Now take a moment to think about that figure. € 93,000,000. For a football player? What is he going to do? Find a cure for AIDS? Or perhaps feed the millions of starving kids in the world? Or maybe facilitate world peace and simultaneous world-wide nuclear disarmament?

In actuality that brain-melting sum of money was transacted solely for a single man to run around and kick a ball.

Does spending the annual GDP of a small nation of a few individuals make sense especially in today’s volatile economic atmosphere?

If walls could talk, I would love to hear the ones that support the offices that house Manchester City, Real Madrid and a few other ‘well-funded’ clubs with vast financial backing from owners with pockets deeper than the Marianna Trench. They are often portrayed as misguided creatures who love to toss wads of cash at a problem in hope that it vanishes into thin air.

Can this money fueled frenzy be healthy? Who really stands to gain? The fans?

Poppycock! The only real beneficiaries are a handful of players who have started to think no end of themselves, and the invisible shareholders of clubs who rake in millions every season when fans renew cable subscriptions and buy tickets and team merchandise. A classic case of putting the needs of the few before the needs of the many.

They can’t do this forever, right?

Many fans and critics alike are laboring under the delusion that this financial extravagance cannot last. Still others remain smug in the belief that the UEFA’s Financial Fair Play (FFP) concept will put an end to the unhealthy habits of spending boat-loads of money at the drop of a hat.

The truth, ugly as it may be, is that the Palladium Credit Cards & golden Ferrari’s are here to stay. The FFP is riddled with loopholes and is going to be as useful as a paper umbrella in a hailstorm when it comes to stopping clubs spending BIG. One has to but google “FFP” to see how a dozen clubs brazenly break the rules or plan to challenge the UEFA on the nuances of the Financial Fair Play document.

Forcing clubs to try and achieve financial prudence through the FFP is but an idealistic pipe dream. Rather, the UEFA should attempt to teach these clubs the art of being self-sustaining. To understand this, let us delve deeper into the “why” of spending big.

Why do clubs do what they do? To attract the best talent of course. Now why do clubs need to “attract” the best talent? Again the obvious answer is going to be: to compete and win at the highest level, naturally. Here lies the fallacy! Clubs need to attract talent solely because they are unable to produce sufficiently talented youngsters from their academies to meet their standards.

There are myriad methods to go about developing young talent. Understandably, most readers would now be mouthing the phrases “Barca”, “La Masia” & “Barcelona B”. Their model of youth development at Catalonia stands at the zenith of the field and its consistency and quality are unrivaled. But despite the potency of its academy, the club has managed to land itself in a financial soup, mostly due to corruption, ego and avarice which made the club’s top officials spend on players and extravagances that they could have gone without. Moreover, the Barcelona model of harnessing talent takes time and vast amounts of money to set up, not to mention the planning and foresight of a visionary set of leaders who should remain committed to a set of ideals through thick and thin. And even after all the effort and investment, the probability of grinding out a youngster capable of handling the rigors of top-flight football is relatively slim, as clubs are starting to find out. The marked inability of the English giants’ inability to produce even a handful of players from their academies attests to this damning fact. The Mancunian clubs in spite of their size have barely scraped together a few kids barely good enough to even train with their first squads. Tom Cleverly and Micah Richards come to mind, but even they are far from the finished products. Even Liverpool FC who have been credited with having one of the best academies in the English top flight have had only marginally more success in the form of Martin Kelly and Jay Spearing. Only Arsenal FC under the tutelage of the visionary Wenger can claim any measure of success with their youth academy in the form of the hugely promising Jack Wilshere, the talented yet injury prone Kieran Gibbs and Emmanuel Frimpong whose talent is yet to be proved on a more consistent basis.

The relatively low success rate of the youth academies and the inability to ensure that “potential talent” crosses the chasm between the reserves to the first team are some of the reasons why I admire the strategy Udinese Calcio has adopted. The fact that the club’s annual gate receipts are less than those raked in by Real Madrid in a single game gives you an idea of the club’s size and financial clout. Financially, Udinese exists in an altogether different universe when compared to AC Milan, Internazionale Milan or Juventus, yet it competes at the highest level, giving the traditional trinity of Italian football a run for their money!

Their long-term planning and the synergetic relationship with the Spanish club, Granada CF has been the panacea for the Italian club that was wallowing in mid-table mediocrity until the late 2000’s. The two clubs formed a relationship when Quique Pina who worked at Udinese took over as the president of Granda CF. Gino Pozzo of the Pozzo family who owned Udinese was a visionary who maintained close ties with Pina even after he left for Spanish shores and thus started to forge a relationship with the Spanish club. By 2009 the Pozzo family had taken over the Spanish club and an agreement that benefited both Granada (who were on the edge of oblivion) and Udinese was in place; it ensured that Udinese’s young players were loaned out to Granada for a taste of Spanish football in turn Granada too recovered from their financial insolvency by benefitting from having a roster of young talent without the burden of a huge wage bill. The legal framework that houses the agreement between the two clubs ensures that both parties gain without one party exploiting the other, and maintains amicable relations between the clubs. Gino Pozzo too has an impressive history of uncovering and developing talent who have often gone on to play at the echelons of European football, a few players who he has plucked from obscurity are: Roberto Sensini, Oliver Bierhoff, David Pizzaro, Martin Jørgensen, Sulley Muntari, Antonio Di Natale and Alexis Sánchez to name a few. The Pozzos have recently acquired the English club, Watford FC and have Gianfranco Zola at the helm, his plans to extend Udinese’s reach into English football is one that will be followed with interest.

If a club as small as Udinese Calcio has managed to create an environment in which it is able to not only sustain itself with no financial doping whilst remaining competitive but also ensure that another football club is saved from financial annihilation and will continue to thrive, then it is only logical that other clubs who have much larger financial resources at their disposal emulate the Italians. The Leviathans of European football should be encouraged to set up similar formworks to blood their talent. The advantages are obvious – smaller clubs would gain the services of talented players whose services would cost a fortune. Younger players who would have languished in the dreaded “Reserves League” would get a chance to ply their trades in a first team atmosphere in a country that may have a markedly different style of football. And larger clubs could be encouraged to invest in developing their scouting networks and siphoning their funds into youth development on a larger scale rather than paying astronomical sums of money for the so-called ‘proven’ talent.

Football the world over will gain only if the needs of the many are put before the needs of the few. One can only hope that UEFA and the various football governing authorities will unite and take a stance on the seemingly limitless spending on futile ends.