Dealing in big money and sky-high ambitions, the pretenders and big-spenders need a reality check?from IPL to European football
Manchester United?s Sir Alex Ferguson has called it ?kamikaze spending?, which, according to him, has become the bane of professional sport in the modern era. Deccan Chargers, perhaps, are learning this the hard way. The franchise didn?t have the right checks and balances, and it has taken them deep into financial mire. Time will tell if they will be able pull out of the crisis, but at present, it seems that the Indian Premier League (IPL) is on the verge of losing yet another team, a former champion, after they lost the Kochi franchise.
And if the trend continues, then the League will not only become weaker as a competition, but more importantly, it will lose its credibility. The Board of Control for Cricket in India (BCCI) might be better off learning a lesson or two from UEFA. A comparison between the two seems grossly out of place. UEFA is in charge of the European affairs of the world?s most popular sport, while BCCI runs a cash-rich domestic tournament. Also the cricket league, as a tournament, is still in its infancy and will evolve over the years. But the guidelines that UEFA has set for the clubs about spending money are applicable to and relevant in all other sports that deal in millions of dollars. In September 2009, UEFA?s executive committee unanimously approved a ?financial fair-play concept? for the game?s ?well being?. All the clubs?and UEFA has all the world?s big clubs under its banner?supported the decision as the economic meltdown had given them a rude awakening. The objectives of the financial fair-play are:
1) To introduce more discipline and rationality in club football finances; 2) to decrease pressure on salaries and transfer fees and limit inflationary effect; 3) to encourage clubs to compete with(in) their revenues; 4) to encourage long-term investments in the youth sector and infrastructure; 5) to protect the long-term viability of European club football; 6) to ensure clubs settle their liabilities on a timely basis.
UEFA wanted to create a systematic environment in European club football to curb the efforts of some clubs spending multi-million dollars on players? salaries and transfers, without thinking about its wider inflationary impact. Clearly, they are as applicable to any other sport too. Yes, the Eurozone crisis and a global slump in economy did play a part in goading the European football authorities into action. But credit must be given to them for the fact that they didn?t pass the buck to individual clubs. Rather, they have stepped in to prevent clubs going the way of Portsmouth and Glasgow, big names that are now in administration and deep financial trouble.
Rangers are the latest examples. Milan, too, are walking the line. Pompey have sunk gradually after Sulaiman Al Fahim took over the club in May 2009. Three years and several changes of hands later, the club of Jimmy Dickinson, Nwankwo Kanu and David James is on the brink of liquidation, forced to field nine teenagers in their first match of the 2012-13 season?a League Cup fixture against Plymouth?and lost 0-3.
More importantly, questions are being raised about whether they would be able to see out this Championship season. Without a new owner willing to bail them out, it seems unlikely. In the first decade of the new millennium, Portsmouth spent big after they were promoted to the Premiership. Little did the management realise then that spending beyond their means ought to have a negative effect in the long run. Rangers was a bigger fall. Known to be an institution in Scottish football, they have been voted out of the top tier this year and their monetary woes have sparked a fear of an economic collapse in the country. They have gone into administration, which is perhaps the ?most shocking sporting story? of the financial crisis. European football is a cut-throat world, especially in places like England, Italy and Spain. Manchester City won the League after 44 years and the ?blue moon? rose over the Etihad. But at end of the year, the club, another outfit to be spurred by the Arab money, reported a loss of ?197 million. Collectively, Premier League?s 20 clubs made a loss of ?361 million last year and this was despite the fact that they had a record income of ?2.3 billion.
Still, some clubs seem to be failing to recognise the impending danger. Chelsea bought Eden Hazard for ?32 million this season, prompting Sir Alex to deride the transaction as follows: ?When people pay such big money for a 21-year-old, then I must say football has gone crazy.? He also took a jibe at City for paying their players ?silly salaries?. United themselves went on to spend ?24 million for a 29-year old striker. Some clubs are still not learning, as they go after their Holy Grail of European and domestic success. UEFA so far had been watching silently. But now they have cracked the whip. It has withheld the prize money of 23 clubs as they had ?outstanding transfer payments from previous deals?. The clubs includes Europa League winners Atletico Madrid and the action should set alarm bells ringing for the others as well. Dealing in big money and sky-high ambitions, the pretenders and big-spenders need a reality check, whichever the sport.