I am going to plunge into the deep end of the pool this morning where the water is well over my head, so do not apply fine-grained analysis to some of the points here. The English Premier League has financial rules; here in the US, several sports also have “financial rules”, and we often call them “salary caps”. According to reports, Everton FC has run afoul of one of the financial rules and will incur punishment.
As I understand it, the financial rule that Everton violated is:
- EPL clubs are allowed to lose money but when they do lose money it has to be limited. Clubs can only lose a total of £105M in any 3-year period.
- Everton FC supposedly lost £124.5M between 2019 and 2022.
This rule is in place to assure “financial sustainability” for the clubs and presumably to limit the ability of super-rich owners from dominating the league because the super-rich owners might not care about losses in that range. Somehow, the folks who run the show at Everton missed the mark here.
Interestingly, the punishment that has been handed down is one that would never happen in the US. Everton FC will be docked 10 points in the standings this year and that might mean relegation out of the Premier League. [Aside: Recall that Everton has been in the EPL since the league was created in the mid-90s and the last time Everton was not in the top league of English football was in 1951.]
That penalty made me stop and think about it on three levels:
- A club has lost “too much money” over the past 3 seasons to meet financial sustainability criteria; and so, the punishment inflicted would potentially decrease revenues to the club if it resulted in relegation. The difference in revenue streams for teams in the EPL versus the Championship – – one league down from the EPL – – can amount to millions of pounds per year; so, it would seem to me that the EPL does not care about the “financial sustainability” of clubs in other tiers of English football.
- The punishment seems to me to be disproportionately aimed at people who had nothing to do with the violation. The loss of points in the standings that might lead to relegation is a punishment inflicted on fans and to some extent on the city of Liverpool where Everton resides. The fans could see their heroes kicked down a level; the fans had nothing to do with the violations; the players are only secondary causes for the “excessive losses” based on their contracts with the club. Nevertheless, fans take a hit for something they had nothing to do with.
- The city of Liverpool could easily suffer agita as well if Everton is relegated. People go to Liverpool to see Everton play EPL games; when they do that, those people spend money in Liverpool generating tax revenues for the city and providing jobs for people in Liverpool who then pay taxes on their incomes. The “town council” – – or whatever it is called in Liverpool – – was not a party to the actions that created these “excessive losses”, but the town council will pay a penalty anyway.
It seems to me that the individual most responsible for the rules violation is the owner of the club – – a man named Farhad Moshiri. The problem facing the EPL in this situation – – and probably in any similar situation that could obtain in the future – – is that punishing the owner is extremely difficult.
- This man owns and runs a business that has lost £124.5M ($156M) over a three-year period. So, how much might the EPL have to fine him as punishment for his violation of their rules for it to be meaningful?
The EPL has inflicted teams with points deductions in the past, but this 10-point deduction would be the largest one ever. As it stands now, Everton was 5 points clear of relegation prior to the penalty but now is tied with Burnley at the bottom of the EPL Table. There is still plenty of time for Everton to climb out of this hole; there are still 25 games left for Everton to play in the 2023-2024 season, but the fact that Everton may not suffer relegation has not dampened fan reaction. And fan reaction to this is spreading because there are other alleged “financial irregularities” under investigation for at least two other EPL clubs – – Chelsea and Manchester City.
Some folks in the UK are calling for some sort of government oversight mechanism to regulate and enforce EPL rules. I really do not have any way to assess how that might work in a European society, but I would shudder to think of a Federally created overseer of sports here in the US. Here the overseers would create a bunch of rules and then try to justify them and enforce them when – – in fact – – many of the rules are there only to have rules in place to monitor. [Aside: Is that beginning to sound like the NCAA minus the Federal imprimatur to “go forth and do good”.] Then, the overseers would have to present themselves to the Congress – – the body that birthed them – – periodically giving various Congressthings the opportunity to posture and preen. Maybe government oversight/regulation can work in the UK; I don’t know. But that would not be the case here in the US.
Finally, since today was about English football – – soccer – – let me close with this simplification of the game attributed to a Welsh footballer, Phil Woosnam:
“The rules of soccer are very simple. Basically, it is this: if it moves, kick it; if it doesn’t move, kick it until it does.”
But don’t get me wrong, I love sports………