Enforced sustainability and honest mistakes

Inside the Blue Room, back in the day when Rangers were still alive, no one shouted: “STOP”!

Hence the highly entertaining dégringolade of 2012 was an entirely brogue-wearing production.

Although outsiders were the hinge factor in the dénouement at the top of the marble staircase, they didn’t create it.

The HMRC folk were just dealing with a situation, not of their making.

Rangers were, in Scotland, a poster child for unsustainability.

When Lehman Brothers became the first domino on Wall Street on September 15^th 2008, the chain reaction was felt on Edmiston Drive.

Sir David Murray’s business empire ran on easy credit, and he used that easy liquidity to bankroll Rangers.

The banks moved in to steady HMS Ibrox, and austerity was imposed; once more, it was an outsider.

This was the state of affairs until the club was sold to, according to Keith Jackson of the Daily Record, a billionaire with “wealth of the radar”.

You know the rest.

I bring this up because yesterday, UEFA released the fourteenth edition of The European Club Footballing Landscape report.

This is its annual club licensing benchmarking report on European club football.

Aleksander Čeferin, UEFA President, welcomed the publication:

Dear friends of football,

I am proud to present you the 14th UEFA Club Licensing Benchmarking Report, an in-depth analysis of European football finances and a true testament to the robustness and resilience of our sport. This year’s report vividly highlights how quickly European football is recovering from unprecedented threats while remaining as appealing as ever to fans, investors, and sponsors.

And I want to start with the fans, who proved once more to be the true essence of our beautiful game. First, they were on the frontlines of defending proper football and European values.

Now, they are filling the stadiums again, creating a magnificent atmosphere that was missing in the last two years. At the same time, they offered unconditional support for their players on the pitch and a much-needed boost in revenues from home matches for their clubs. Some people call this passion, dedication, devotion, or even fanaticism. I call it true love.

This report also makes it clear how extraordinary European football’s resilience has been during and after the COVID-19 pandemic. After missing out on a staggering €7bn during this challenging period, we are happy to see that so far the top division clubs’ revenues are higher than they were on pre-pandemic levels. That proves that football is not only standing tall; it is bouncing back.

Thus, football remains very attractive – sponsors, commercial partners, and broadcasters are delighted to be part of the game and were a fundamental part of the revenue growth picture in

2022. Moreover, the open model of European football competitions remains attractive to investors, as witnessed by the record-breaking number of club takeovers and minority investments reached in the last two seasons.

I am also proud to see how much the section on women’s football has expanded. It portrays well its increasing popularity across the continent, as indicated by the enormous successes of UEFA Women’s EURO 2022 and the UEFA Women’s Champions League.

This report also indicates the most significant challenges for clubs come from the cost side. Despite the unprecedented turmoil of recent years, wages have continued to grow, rising on average by 16 per cent compared to pre-pandemic standards. Top-division players’ salaries, for example, have more than doubled during the past decade. And while this is not a negative trend per se, it is clear that many are compromising their economic sustainability in their reckless pursuit of success.

Therefore, UEFA and its member associations must remain vigilant and strictly implement the rules of financial sustainability at European and domestic level. UEFA took the first step last summer by introducing the first squad cost ratio rule in the new Financial Sustainability Regulations, restricting spending on wages, transfers, and agent fees. Clubs will be assessed against limit on these costs, moving from 90% in 2023 to 70% in 2025, providing a timely and direct measure between squad costs and income to encourage more performance-related costs, while limiting the market inflation of wages and transfer costs of players. The key is now to remain fair, strict, and consistent.

As football navigates through its darkest times, we must remember the lessons we learned during this period. And the one that I keep underlining is the unity of the European football family.

We can overcome any threat or challenge by working together and remaining faithful to our beautiful sport.

Aleksander Čeferin

UEFA President.

 

Let’s look at that again:

Top-division players’ salaries, for example, have more than doubled during the past decade. And while this is not a negative trend per se, it is clear that many are compromising their economic sustainability in their reckless pursuit of success.

Therefore, UEFA and its member associations must remain vigilant and strictly implement the rules of financial sustainability at European and domestic level. UEFA took the first step last summer by introducing the first squad cost ratio rule in the new Financial Sustainability Regulations, restricting spending on wages, transfers, and agent fees. Clubs will be assessed against limit on these costs, moving from 90% in 2023 to 70% in 2025, providing a timely and direct measure between squad costs and income to encourage more performance-related costs, while limiting the market inflation of wages and transfer costs of players. The key is now to remain fair, strict, and consistent.

 There it is; if you needed to sum up the Ibrox shitshow over the last two decades, it would be this:

“…compromising their economic sustainability in their reckless pursuit of success.”

To put it simply, this is UEFA has issued a fiat that clubs WILL live within their means or else!

As I have written here before, FSR, mainly because it bypasses domestic associations, is a game changer on Planet Fitba.

Quite simply, the scandal that was addressed by the Resolution 12 requisitioners at the Celtic AGM in 2013 could NEVER have taken place under the new UEFA regulations.

Anyone who wants to see the forensic detail can find it all here.

Then, as if taking their cue from Nyon, Celtic also published their interim report yesterday.

As Rugger Guy has left the building, I will leave it to others to dissect these numbers.

What I do know is that there is one club in Glasow on a UEFA financial watch list, and it isn’t Celtic.

One of the poor dears in the Unsurpassed Dignity community did spot the significance of the Celtic financials.

Another chap feared that the fundamentals of the Parkhead operation might be substantially more robust than the shaky timbers of HMS Sevco.

It’s almost as if they think Big Mike has actually gone away.

Ah, bless…

At all times, Celtic cut their cloth accordingly.

That is probably largely down to the fact that the club was EIGHT minutes away from insolvency in 1994.

Across the city, it was a governance panhandle, and this impeded Celtic’s ability to compete.

Throughout the EBT decade, the Parkhead club paid all due taxes on time and lived within their means.

Of course, being a good corporate citizen put Celtic at a serious sporting disadvantage.

This state of affairs was allowed to continue for ten years because of a failure of governance at Hampden, and the local media willfully looked the other way.

Sadly, since the death of the original Rangers in 2012, nothing has appreciably changed on Planet Fitba.

The teachable moment was spurned, and it was as you were as soon as the Five Way Agreement was signed.

Consequently, Ibrox is still the home of the favoured franchise; it is just being operated by the club founded by Charles of Normandy.

When the bank moved into the Blue Room at the start of 2009, a moratorium was imposed on signing players.

The late Walter Smith had to get by with what he had.

Then, in an entirely unconnected development, there was an explosion of entirely honest officiating errors that eerily seemed to favour one club.

I call this the “Dougie Dougie” period.

FSR will force the current Ibrox club to be run on a sustainable basis.

That means they will not be able to have a football budget match Celtic.

The next challenge for the people in the Celtic Boardroom is to resist the temptation to remain publicly silent in a new era of VAR-enhanced honest mistakes.

Given who the new chairman is, then I’m not hopeful.

I’m really not.

Hampden, in two weeks, will be the first real test.