Million plus salaries cripling football clubs

Football shooting self in foot

As the football transfer window opens across Europe, clubs are working around the clock to attract top class players and renegotiate contracts to hold onto their brightest stars. This period, sometimes known as the ‘silly season’, is a time when tens millions of pounds can exchange hands in a matter of minutes.

But a leading financial adviser has warned clubs to act with caution and rein in player wages, which are spiraling out of control and creating unsustainable businesses.

Deloitte, which provides consulting services to several Premier League clubs, just released its latest report into the state of football finances. A key finding is that the Premier League’s wages-to-revenue ratio has risen to 70 per cent for the first time.

For most of the 2000s the ratio was 60 per cent and Deloitte warns that anything above the low 60s is dangerous for the long-term viability of a business. Deloitte, itself, has a wages-to-revenue ratio of 41 per cent.

The good news is that the increased operating costs are mostly being offset by increased club revenue. At a time of flat economic growth, football’s popularity has not waned, helping the sport remain a viable product.

Premier League club revenues increased by 12 per cent to £2.3bn, which is remarkable growth when you consider that in 1991/92 the collective revenue of England’s 92 professional clubs was £263m.

Revenue growth was driven by increases in broadcasting revenue (13 per cent) and growth in commercial revenues (18 per cent). The growth in broadcast revenue for clubs is due to the distribution of money generated from TV broadcasting rights. Overseas broadcasting rights more than doubled in the past year.

Despite all of the extra money coming into football clubs, it is exorbitant player salaries that are threatening their very future.

The Premier League’s wage bill soared by 14 per cent to 1.6bn, which is equivalent to 80 per cent of the increase in revenue.

Pay rises mostly come from the ‘Big Six’ clubs, although Manchester City (who spend £174m in annual wages) and Chelsea (£191m) are the major culprits helping to drive the inflation.

Manchester City, which spent more than £100m net on transfer fees, is already under the microscope of UEFA, European football’s governing body. 

From the just completed 2011/2012 season, UEFA will be monitoring club finances as part of financial fair play rules that require all clubs competing in Europe to break even. In 2015, clubs will be assessed and punished if they do not comply. At present, only eight Premier League clubs reported pre-tax profits with Manchester City reporting the largest operating loss of £82m.

In the past decade, player wages have inflated to unsustainable levels at a time when many football supporters face pay freezes or cuts. If clubs do not take responsibility for controlling player salaries, then football authorities should consider regulation to cap it.

As most companies have had to adapt to much harsher economic conditions in recent years, the football industry can no longer afford to turn a blind eye.

David Beckham lies on floor, expensively, Photograph, Getty Images

Arvind Hickman is the editor of the International Accounting Bulletin.

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"We repealed, then forgot": the long shadow of Section 28 homophobia

Why are deeply conservative views about the "promotion" of homosexuality still being reiterated to Scottish school pupils? 

Grim stories of LGBTI children being bullied in school are all too common. But one which emerged over the weekend garnered particular attention - because of the echoes of the infamous Section 28, nearly two decades after it was scrapped.

A 16-year-old pupil of a West Lothian school, who does not wish to be named, told Pink News that staff asked him to remove his small rainbow pride badge because, though they had "no problem" with his sexuality, it was not appropriate to "promote it" in school. It's a blast from the past - the rules against "promoting" homosexuality were repealed in 2000 in Scotland, but the long legacy of Section 28 seems hard to shake off. 

The local authority responsible said in a statement that non-school related badges are not permitted on uniforms, and says it is "committed to equal rights for LGBT people". 

The small badge depicted a rainbow-striped heart, which the pupil said he had brought back from the Edinburgh Pride march the previous weekend. He reportedly "no longer feels comfortable going to school", and said homophobia from staff members felt "much more scar[y] than when I encountered the same from other pupils". 

At a time when four Scottish party leaders are gay, and the new Westminster parliament included a record number of LGBTQ MPs, the political world is making progress in promoting equality. But education, it seems, has not kept up. According to research from LGBT rights campaigners Stonewall, 40 per cent of LGBT pupils across the UK reported being taught nothing about LGBT issues at school. Among trans students, 44 per cent said school staff didn’t know what "trans" even means.

The need for teacher training and curriculum reform is at the top of campaigners' agendas. "We're disappointed but not surprised by this example," says Jordan Daly, the co-founder of Time for Inclusive Education [TIE]. His grassroots campaign focuses on making politicians and wider society aware of the reality LGBTI school students in Scotland face. "We're in schools on a monthly basis, so we know this is by no means an isolated incident." 

Studies have repeatedly shown a startling level of self-harm and mental illness reported by LGBTI school students. Trans students are particularly at risk. In 2015, Daly and colleagues began a tour of schools. Shocking stories included one in which a teacher singled out a trans pupils for ridicule in front of the class. More commonly, though, staff told them the same story: we just don't know what we're allowed to say about gay relationships. 

This is the point, according to Daly - retraining, or rather the lack of it. For some of those teachers trained during the 1980s and 1990s, when Section 28 prevented local authorities from "promoting homosexuality", confusion still reigns about what they can and cannot teach - or even mention in front of their pupils. 

The infamous clause was specific in its homophobia: the "acceptability of homosexuality as a pretended family relationship" could not be mentioned in schools. But it's been 17 years since the clause was repealed in Scotland - indeed, it was one of the very first acts of the new Scottish Parliament (the rest of the UK followed suit three years later). Why are we still hearing this archaic language? 

"We repealed, we clapped and cheered, and then we just forgot," Daly says. After the bitter campaign in Scotland, in which an alliance of churches led by millionaire businessman Brian Souter poured money into "Keeping the Clause", the government was pleased with its victory, which seemed to establish Holyrood as a progressive political space early on in the life of the parliament. But without updating the curriculum or retraining teaching staff, Daly argues, it left a "massive vacuum" of uncertainty. 

The Stonewall research suggests a similar confusion is likely across the UK. Daly doesn't believe the situation in Scotland is notably worse than in England, and disputes the oft-cited allegation that the issue is somehow worse in Scotland's denominational schools. Homophobia may be "wrapped up in the language of religious belief" in certain schools, he says, but it's "just as much of a problem elsewhere. The TIE campaign doesn't have different strategies for different schools." 

After initial disappointments - their thousands-strong petition to change the curriculum was thrown out by parliament in 2016 - the campaign has won the support of leaders such as Nicola Sturgeon and Kezia Dugdale, and recently, the backing of a majority of MSPs. The Scottish government has set up a working group, and promised a national strategy. 

But for Daly, who himself struggled at a young age with his sexuality and society's failure to accept it, the matter remains an urgent one.  At just 21, he can reel off countless painful stories of young LGBTI students - some of which end in tragedy. One of the saddest elements of the story from St Kentigern's is that the pupil claimed his school was the safest place he had to express his identity, because he was not out at home. Perhaps for a gay pupil in ten years time, that will be a guarantee. 

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