Lord Sugar Tackles Football - His 5 point plan

On Sunday night on BBC2 there was a programme about Football Finance.

Alan Sugar ran through some pretty familiar stuff and came up with a 5 point plan (but didn't mention the Bundesliga ownership rules - more later).

1. Limit Player Salaries - Football clubs have been discussing a "Salary Cap" for many years - Fix at £xMillion per year for EACH and EVERY club or a proportion of Turnover. 66% has been mentioned - Man Utd can spend £200m, Wigan can spend £30m. The 20 Premier League clubs cannot agree the detail, so what chance any other league.

And don't mention the players "Image Rights" - I have been told that Wayne Rooney can double his Man Utd salary with his image rights earnings, which are not paid through domestic PAYE but through (often offshore) separate Limited Companies. Put simply it means image rights are shrouded in mystery.

2. Borrow to build, Not to buy. Man Utd and Liverpool both suffer from "Leveraged Debt" where sums are borrowed against the football club. This is not allowed in Germany.

3. Tougher Penalties For Failure. 10 point deduction for going into Administration. Self explanatory, but pretty much every club who has suffered this points deduction has been relegated which seems quite a punishment.

4. End Fotball Creditors Rule. When these clubs go "bust", all football debt is paid in full first. Then the taxman gets a share, banks get a lesser share and other creditors (all others pie suppliers & local trades) get a tiny share paid over a long period - often as much as 5 years later!!!

5. An Asset Fund setup to protect these creditors paid from TV revenues - This one looks a total non starter as football clubs need to increase revenue.

Sorry its a big article, but what do us fans think?

 

OK I've now caught my breath, let me try and give add my opinions.

1. Player salaries are crazy, limiting salary levels to turnover is clearly a good theory, but the football bosses cannot agree on the detial. 66% of turnover would give Man Utd a limit of £200m, Wigan a limit of £40m and little old Watford just about £8m which once you remove Ellington and Sadler (non playing liabilities) is where we are. That is why our continued survival at this level is so important.

2. Borrow to build, not to buy - Watford's borrowings have gone crazy after relegation (in both 2001 and 2007). Watford have been guilty of borrowing money to fund "player investment" twice. Did we learn the lesson after 2001? NO, I'm afraid not. D'oh

3. Tougher penalties - I actually think this is about right. Only Notts County seem to have escaped relegation following a points deduction - the rest all have suffered relegation in the same season.

4 & 5 This is all about after a club has gone under. 1 & 2 are all about preventing disaster, and 3 is about punishment.

Correct me if I'm wrong but following a change in fortune the likes of QPR and Leicester seem set to spend, spend, spend on player costs - and this is just storing up debt for the future. Many clubs at this level are tolerating losses in excess of £15m per season just to be chasing the premier league dream, so clubs don't seem to be adjusting the the wider economic climate around them IMO.

There is nothing so crazy as football it seems.

 

I think his proposals would be a positive step. You've summarized it pretty well there to be fair.