Posts Tagged ‘taxman’

The Original Grumpy Old Man: Pouring it down a unfillable drain.

Welcome to the regular Wednesday column from an old favourite; The Original Grumpy Old Man (OGOM). This week OGOM wonders when enough is enough.

So we now know, the car park attendant at Upton Park is on twice the national average wage, whilst Kieron Dyer earns £5m a year on the treatment table. When your £110m in debt should you be asking for 25% pay cuts or is that just fiddling around the edges because you need to make that 50%? Gianfranco Zola can complain as much as he likes but things sometimes need to be said. Are Hull City technically insolvent? Well if they are having a top 10 wage bill won’t be helping, relegation could kill that club (and about 6 others). £180k a week for the PL’s most in form footballer, that’s only £9.3m a year added to the billion pound debt mountain at Old Trafford (junk bonds won’t save you Mr Glazer). Today both Portsmouth, Cardiff City and Southend United have to go to the High Court to try and prevent HMRC from winding them up, the result of using money that should have gone to the taxman to instead let the likes of John Utaka, Michael Chopra and the departed Lee Barnard live like kings! Wages, the dinosaur that prowls the world of football devouring all around it.

We could spend the whole of this article and a hundred other ones listing the financial idiocies which abound, we could point the finger at 100 PL players earning £1m a year plus sitting on their backsides hardly kicking a ball in anger. We could attack the players themselves for greed (we will be doing a bit of that some other time) and spitting in the face of the leech agents that serve no purpose other than to emasculate their clients. We could also give demanding managers, short-term thinking supporters, the hyping media or useless administrators, all of these deserve their place in the hall of infamy that will be needed the other side of the crash to come but that would be missing the point; one set of people got us into this mess and only one set of people can get us out, owners, chairman, chief executives and managing directors of the clubs themselves.

It starts with ambition, the kind of delusionary thinking that assumes success is only a few seasons away so long as you throw money at it and leave your business brain at home. You either “live the dream” or you claim to want to bring success to a fan base that has never had any. A previous OGOM did a conservative list of the number of clubs that could do a Crystal Palace this season http://clarkeonenil.co.uk/front-page/original-grumpy-old-man/the-original-grumpy-old-man-where-palace-lead-dozens-will-follow and I missed a few! All of these clubs didn’t get into that situation with transfer fees (even Leeds United got as much back as they spent between 1998-2004) or even with the recession. Some have made life a little less easy by building stands and new grounds but when you consider most projects like that have long term funding streams and Arsenal are in profit in the post Highbury world you can see that isn’t the major driver towards financial meltdown. That is and always will be excessive wages.

Let’s look at an example of wages out of control, starting with one very charged as we speak. What is £8k a week? Well its £32k-£35k a month, or a year’s wage for most of you readers, its £105k a quarter. £210k every 6 months or £420k a year. You could live off that, you could be a CE of a large firm on that, but it’s not good enough for a L1 striker who has only ever known L1 or the non league! Let’s take that further, it is reasonable to assume that Jermaine Beckford won’t have been offered less than £15k a week to sign a new contract, he clearly by not signing one is unhappy with nearly £800k a year! The rate rumoured to have been offered by Newcastle United was £20k a week or over £1m pounds a year, or 6 times the Prime Minister. Should the Everton possibility accrue he can double that, £2m a year to sit on his backside being 4th choice striker, occasionally getting loaned out to CCC clubs and adding nothing to that clubs financial position because they sell out the dilapidated Goodison Park already! As much as I distrust Bates you can’t fault him when he refuses to overpay for questionable future return.

Let’s go up the food chain, when Manchester City wanted John Terry (oh how they must wish they has shown him pictures of the squad’s wife’s) the suggested carrot for the ex England captain was £200k a week. This amount of money would probably dig 2000 wells in the third world, every week, extrapolate that by the length of a five year contract and that’s £50m worth of self obsessed cheat or half a million wells helping 50m people. Its monopoly money writ large, investments in human beings that are fallible to injuries, stupidity and selfishness. I don’t really care how rich the owners of Manchester City are if I find that kind of money obscene then others not so wedded to the glories of football must be sick to the core.

Part of the problem football clubs have made for themselves is they fall for the “if we don’t pay X, others will or pay Y and they will not come here”. Well whilst there will always be some truth in that it only applies to the 30 or so players that are outstanding. I refuse to believe that the likes of George Boateng, Danny Webber, Greg Halford, or David Nugent are worth a wage auction over. The PL is full of footballers picking up £1-3m a year for producing pap. How much has David Healy earned in the 3 seasons he left Elland Road? Let’s be conservative and suggest £1.5m a year. Divide that by the number of top flight goals he has scored (5) and that is about £800k a goal, divide by the number of games played (43 most of which were subs) that is still over 100k a game!

Clubs need to start taking responsibility for their own affairs, set the appropriate levels of wages and stick to them. It’s not rocket science working out budget levels, it’s the average price of tickets times by attendance times by an average 22-26 home games (including cups), add television revenue and corporate monies, bingo income! Just in case this hasn’t peculated through yet, the tax bill you have to pay is proportional not just to what you earn but also how much you pay (National Insurance Contributions etc). How did Accrington Stanley run up a £350k tax bill? Well it wasn’t from the number of pies sold!

So much to say on this subject and yet most fans stay quiet. For me a simple test should apply; when you set the worth of your most important football related employee, the manager, you are those setting a ceiling on what your prepared to pay a player, which should be no more than 99% of what the man who picks him (or doesn’t as the case may be). If you can also set the respective wage levels within what the club can afford you will probably be surprised to find your support, which has no desire to see you go out of business, supports that, something Gianfranco Zola and the West Ham United players might want to take on board!