Premier League May Limit Spending by Soccer Clubs, Bolton's Gartside Says
Bolton Chairman Phil Gartside
Michael Regan/Getty Images
Bolton Chairman Phil Gartside.
Bolton Chairman Phil Gartside. Photographer: Michael Regan/Getty Images
England’s Premier League may force clubs to limit spending with rules similar to those planned by European soccer’s governing body to avoid threats to teams’ financial stability, Bolton Wanderers Chairman Phil Gartside said.
While the Premier League has the highest revenue in world soccer, most of its 20 clubs operate at a loss. Last season Portsmouth was the first of the top division teams to seek bankruptcy protection after building up more than 100 million pounds ($161 million) of debt.
UEFA rules from next season will limit clubs’ expenditure to what they earn, and teams would be banned from competitions such as the Champions League if they can’t control costs over a three-year period. Premier League officials are in discussions and may adopt similar rules within two seasons, Gartside said in an interview.
“There are ways of tweaking it that would suit the English game better,” said Gartside, a board member of the Football Association, English soccer’s ruling body. “Owners should be allowed to invest in equity. So if you, as an owner, want to buy a striker for 10 million (pounds) that shouldn’t be a problem. But what you then can’t do is pay him extortionate wages that take you out of the breakeven situation.”
The Premier League’s income has soared since it started in 1992. Its current 3 billion-pound television contract is the highest in world soccer, yet those gains have been lost to rising player salaries.
About half the Premier League is foreign-owned by investors such as the Glazer family of the U.S. at Manchester United and Russia’s Roman Abramovich at Chelsea.
Liverpool Bought
Even so, sports investors such as Robert Kraft, owner of the National Football League’s New England Patriots, have said the lack of a wage cap has made them leery of English soccer.
“I’ve been chairman for 12 years and on the board for 21. We’ve never had an approach from anyone to buy it in all that time,” Gartside said. “I think there’s a general acceptance that we need something. It’s a question of tuning the detail that meets the circumstances we’ve got.”
UEFA’s new regulations were a factor in New England Sports Ventures deal to buy 18-time English champion Liverpool last month, its principal owner John W. Henry said after completing the 300 million-pound takeover.
“When we looked at Liverpool, the first thing that struck us was there are opportunities here to really build a winner,” Henry said. “The revenue potentials around the world -- it is a global football club -- and especially with the financial fair play rules, it is really going to be revenue that drives how good your club can be in the future.”
Tougher Rules
Gartside said Richard Scudamore, the Premier League’s chief executive officer, is pushing for tougher rules on club finances. The Premier League declined to comment.
“Richard’s keener than anybody,” he said. “I think he’s concerned as much as anybody about the financial state. We keep upping the income and we keep losing more money. It’s ridiculous.”
In October, Manchester City, owned by Sheikh Mansour bin Zayed Al Nahyan, reported the Premier League’s second-highest ever annual loss of 121 million pounds. Chelsea had a 132.8 million-pound deficit in 2005.
Larry Schechter, a banker with investment bank Schechter & Co., said that whatever the league decides the rules must be enforced.
“Unless these rules are strictly governed they’ll be meaningless,” he said. It would take years for many teams to get to a breakeven position, he added.
To contact the reporter on this story: Tariq Panja in London at tpanja@bloomberg.net
To contact the editor responsible for this story: Christopher Elser at celser@bloomberg.net.
Rate this Page