By J Hutcherson – WASHINGTON, DC (Feb 29, 2012) US Soccer Players — There are two assumptions that many American fans make about the European transfer system that aren’t true. The first is that payment is due upon receipt. Those high dollar amounts associated with a transfer are normally paid in installments. The other is that there’s no way to trade players in Europe similar to the standard way in-contract players move in North American sports. Though it’s rarely used, European soccer calls it a part-exchange, and it’s the equivalent of a player trade.
Instead, the European transfer system focuses on the astronomical transfer fees assigned to the world’s best players as they move clubs. Those elite level numbers push the transfer market, making the marginal deals between clubs more concerned with finishing mid-table in a domestic league more costly than they would be in a North American style league. There’s a simple reason for that. In a North American style league, those types of deals would be player trades.
European soccer’s stubborn refusal to reconsider the transfer fee system should be brought up each and every time we hear about a club’s revenue. That’s both positive and negative. It has to include the clubs showing gains by selling players as well as those losing money through buying. Both are artificial economies, created by a system that doesn’t work.
Imagine if North American sports suddenly decided to encourage clubs to forget about trading in-contract players, and instead to sell them to other clubs for cash. The result would be a heavily destabilized economic system that would reset what it really means for a club to be competitive and profitable. It’s a loss of a control, the kind of thing that kept New England Patriots and New England Revolution owner Robert Kraft from buying a Premier League club.
Kraft told the New England Sports Network earlier this month that he had no interest in a league where there is no financial equality. Creating the kind of parity the National Football League has would require rebuilding the economics of European football. Yet as unlikely as that sounds, UEFA’s Financial Fair Play is an attempt to do just that. It’s an attempt that doesn’t directly address the necessity of the transfer system, but it certainly reinterprets the financial futures of clubs all over Europe.
In some ways, focusing on just the transfer system would be easier for European soccer’s governing body. Instead, they’re introducing a system of financial checks that almost encourage clubs to figure out how to maneuver just within the rules season after season. In a Europe where long-term planning and rebuilds are almost unthinkable for any club with ambitions, it will undoubtedly create even more pressure to win immediately. What that does for the near and long-term quality of the game is a question that all involved need to be asking. Right now, we simply don’t know.
It’s in that environment that the cost of running elite and would-be elite clubs takes on an added importance. With the economic world of European soccer set to change for the 2014-15 season, all clubs are currently in a beta phase whether they realize it or not.
As Aston Villa’s official website tries to shift focus to their next game, the English media focuses on their finances. Villa announced income of £92m but lost £53.9m with owner Randy Lerner putting £25m into the club.
In a statement included with that announcement, chief financial officer Robin Russell said: "The Board of Aston Villa are confident that the actions taken since the end of the 2010-11 financial year have galvanised the long-term sustainability of the club and have also given us a better financial platform on which to build for future success. Our objectives are to compete strongly on the pitch and to achieve sustainability as well as compliance with UEFA’s Financial Fair Play requirements."
Pick a club, and there will almost always be a unique event that impacts their earning statements. Arsenal was in the real estate business selling condo units in their old stadium, something that positively impacted their earnings. Aston Villa had manager turnover during the fiscal year in question, costing them £12m. Yet the biggest ticket item for almost every Premier League club remains the transfer system.
For Villa, that meant making £24m from selling players and not replacing them with equally expensive options. The result is a weaker version of Aston Villa, a team that was in the conversation for European places for several seasons. Since no one should be thinking of the Premier League as a circuit where every team play to capacity for every game, Villa have lost fans willing to pay for their product. Playing an elite visiting team gets the attendance over 40k, the rest of the home schedule doesn’t.
Though Villa is the club of the moment when it comes to finances, their situation is hardly unique. It’s another piece of evidence calling the economic system in play not just in England’s top league but across Europe into question. Ultimately, that has as much to do with the transfer system than it does with UEFA slowly attempting to wean European clubs off of operating at a loss season after season.
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