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- [00:01]
Noah Chestnut
Hey, it's Noah Chestnut from the Athletic. If you're into games and sports, pay attention. I'm gonna give you four sports terms. You tell me the common thread. Ready? Game. Match point.
- [00:15]
Jacob Whitehead
Set.
- [00:16]
Noah Chestnut
This one's kind of a gimme. The answer is how tennis is scored. Do you want more of a challenge? Check out Connections Sports Edition. It's a new daily game for sports fans to play. Now go to theathletic.com connection.
- [00:34]
IO Akinwaleere
The Athletic FC Podcast Network. Welcome to the Athletic FC Podcast with me, IO Akinwaleere. The Premier League's financial rules will still be in place for next season despite plans to change them. Teams like Manchester United, Aston Villa, Newcastle blame these rules for stopping them spending heavily on players. So why the delay for the new rules and how exactly do they impact clubs and their summer transfers? Joining us today we have the Athletics, Matt Slater. And we've also got Jacob Whitehead as well. Matt. Wow, this is an interesting one. Premier League clubs met in London last Thursday and agreed that they're not ready for the new squad cost ratio rules to come in. So that means PSR remains for now. Firstly, let's just debunk what this squad cost ratio is and secondly, tell us why clubs came to such a conclusion.
- [01:37]
Matt Slater
Right, yeah. Much loved PSR survives. Right, so let's start with squad cost then. I think we've been talking about it. People have heard about it over the last year or so, perhaps even longer if they've been kind of following UEFA. UEFA started this a few years ago and it's up and running. So the way the squad cost ratio rule works is it's a soft cap. So it is an attempt to connect the spending that you, any club makes on the products on the pitch. So your first team squad, your players, your coaches and any kind of money you spend in assembling that group. So what counts is wages, obviously, players and first team staff. The amortized transfer spend. Again, we've talked about amortization. That's just how you account for transfer spend. You basically spread your transfer fee over the length of a player's contract. So it's an annual cost. So very simply, 100 million pound transfer over five years, it's a 20 million pound cost per year. So it's that wages, amortized cost of transfers and any fees you spend on agents, that's your squad cost. Then the ratio bit is your turnover. So UEFA have introduced it in stages. In year one it was 90%, year two it was 80%. I think this season we're at 70%. That's where they want to get to, which is, if you think about it, a nice healthy, sustainable number. It's an idea, it's very old fashioned idea. About 70% of a business's costs should go on wages, basically. Wages and, you know, the cost of doing business. So that's where UEFA are at Premier League, as they did a decade ago with financial fair play, wants to make it a little bit more liberal. They want to give clubs that don't play in UEFA competitions and don't have that sort of additional revenue, huge revenue that has created gaps and chasms all across Europe. They're going to let clubs go to 85%, nearly everyone, because UEFA have gone there first, think, well, we might as well we should, right? We should all be aligned, just as we were all aligned when UEFA started this journey a decade ago with financial fair play. So there's that, you know, our teams that play in Europe are already under this UEFA system. And I think there's also the fact that people are fed up with psr, which was just the Premier League's version of FFP financial fair play. They're fed up of the loss threshold. You know, we spent the last year or so, 18 months of seeing Premier League clubs actually breach this rule. They want to try something else. I think most people believe that squad cost is a bit looser and the direction of travel was we're going to do it next season. I think the reason, which I'm sure we're going to spend a lot more time talking about, there are many reasons why they're not ready. In, in no particular order, they are the fact the Professional Football association don't like bits of it. The Premier League has been tied up in legal lawfare with Manchester City and other bits of its, if you like, FFP regime are under attack. So there are lots of reasons why they're just not ready. But anyway, squad cost, it's happening in Europe, I, I believe, and the Premier League says there's unanimous support for it and I, and I think that's probably true amongst the clubs and I suspect we'll get there, but it's just going to be another 18 months or so away. 15 months away.
- [05:18]
IO Akinwaleere
Yeah. Jacob. Matt talks about a general consensus, especially across the Premier League, but you look at what's happened to the likes of Everton, Nottingham Forest, you look at talking about Aston Villa, Manchester United, I mean, is there a general consensus for PSR in general across the Premier League for all these clubs?
- [05:35]
Jacob Whitehead
Well, yeah, but it's unpopular, but just as Matt says, but for different reasons. I mean different clubs all have their own interest. Loosely, I guess you've got teams who aren't spending money at their capacity who are frustrated by it. Villa are one really good example. Also Newcastle, Chelsea, Man City who just want to be able to sign far, far, far more players. It's worth remembering that even in their battle, Man City were saying privately they did support some form of financial regulation, just not in its current form. Like it's your decision as to exactly how much at face value you want to take that. But then there are other clubs as well who are supportive of PSR or at least to sort of PSR adjacent thing just to kind of keep them in touch with the leaders, but who kind of feel that in practice there's still this two tier system, they aren't actually competitive. I'll use Everton as an example who in the last three windows have barely signed a player for any significant money and is still right up against it and sort of asking are these rules actually really helping us so kind of get left in this weird place, I guess, where it's now been dealt with. But clubs felt like it had to go, but for several different reasons because they all have these different interests in mind. There has been some conflict over it. Exactly what they're going to be replaced by.
- [06:45]
IO Akinwaleere
Okay, Matt, let's delve into it a little bit more then in terms of the benefits of SCR versus PSR for Premier League clubs. You spoke about safeguarding clubs who potentially won't have European football. But what other benefits are there between SCR and psr? And sorry if you're getting confused, there's quite a lot here.
- [07:04]
Matt Slater
Oh, so many acronyms. What are the benefits? I mean it really is just a development. I sometimes sort of see and hear people talking about this being kind of this radical huge change. It's not really. That's not how UEFA view it, it's not how UEFA sold it to the clubs. It was very much worked together on with the European Club association and they sort of just see it as, you know, the next iteration of a financial fair play, a kind of tweaking, relaxing. I think it would be fair to say. That's certainly why the clubs were interested in it. They thought that certainly UEFA style, ffp. So again, the Premier League's version being PSR had got quite tight. So that allowable loss threshold for clubs in Europe was really pretty, you know, it was quite low, I think. Was it 39 million euros by the end? So you know, barely sort of 30 odd million over a rolling three year period. Whereas of course in the Premier League it can be 105. So clubs that competed in Europe really did have to sort of watch what they were spending. They couldn't go on mad tears 2, 3 windows in a row. Now, of course they had the benefit of Champions League money, most of them. So squad cost I think is sort of a bit of a compromise. It is by taking away that kind of loss threshold, certainly a loss threshold that bites and allowing you to sort of kind of strip out some other kind of costs and really just focus on the. The team does in theory, in theory, I stress, give a bit more leeway, a bit more to disrupt the clubs. And then of course the Premier League is looking at and going we need to give even more leeway, right? So instead of having 70%, we're going to go 85. So look, it's all a bit theoretical because it's all new, but the fact I think there is consensus in the English Premier League does suggest that those middle class clubs, those mid tier clubs, your West Hams, your brightons, forests, evertons, etc. At least see this as a fairer regime than PSL.
- [09:15]
IO Akinwaleere
Okay, well, you finished on PSL. It's still going to be in place. Jacob thinking transfer window. Right. Got another summer coming up. Not much spending happening in January for many clubs. But the big one is the teams like Everton. Do they have any money or any wiggle way to play with? They've just moved into a brand new stadium, for Christ's sake. You know, like where does it go for teams like that?
- [09:37]
Jacob Whitehead
Everton actually might have a bit. I mean, Moyes gave a hilarious quote earlier saying they wouldn't spend money, but spend money on the right players. Like, well, okay, sure, I think teams have got a lot better at dealing with it after all the elasticity which they granted during COVID I think teams got a little bit of a kick in the teeth when they realised that the Premier League could give them punishments in Forest with Everton and they've sort of worked out how to push the boundaries a bit better. You've seen swap deals which are controversial but actually have been working out quite well in a few cases. Elliot Anson's returning to Newcastle this weekend with Forest potentially, you know, on the edge of an England call up, you've got some who are getting other clubs who are getting much better commercially to raise those ceilings. I'd expect it to be a lot less sort of panicked than last year, like June 30, there's that massive scramble. Of course some Teams I guess have taken a risk in January, but you know, Newcastle at one point were 10 minutes away from a massive points deduction. I don't think it's going to get to that extent. One thing which I think is probably worth bringing up as well is that Rory Smith, our colleague, made a really good argument where he was sort of writing about how PSR actually makes it far easier for clubs to hang on to their best players. So while they may not be able to, I think we touched on that in a previous podcast. While they may not be able to sign tons more, they actually take Newcastle for an example. You know, they might be frustrated they've not made a first team signing but it's easier for them to hang on to Brunica Moraes and Alexander Isaac. Yeah, you're right because other teams can't afford it. So you know there's, you know, maybe there's less going to be less spending. There's also less losing of players as well. So. Potato, potato.
- [11:09]
IO Akinwaleere
Yeah, there's a. There's something we were talking about in terms of, you know, how sort of academy players have been sold for pure profit as a way of sort of balancing the books, you know. But you know, there's also an argument to say that Emil Swift Rowe wasn't getting minute to Arsenal. He's gone to Fulham and look at him blossom. You know there is an argument to say this can be a great thing for young starlets to go elsewhere and actually play football.
- [11:32]
Jacob Whitehead
Yeah, it causes a massive amount of frustration because like instinctively people want to see sort of their own flourish. But I do also think that clubs also leverage that emotion a little bit unfairly when they do have sometimes got themselves into that situation. It is not some sort of Hunger Games, right where they've been forced to grant their first born academy graduate to somewhere else. Like teams get themselves here. Like Newcastle were gutted to lose Anderson, but at the same time they spent £100 million on Bruno Guimaraes and Sandro Tonali. Tonali himself came from a team he grew up supporting in AC Milan. It's not like Newcastle here have sort of been yoinked away. You obviously hope to see players make the best of it like Elliot Anderson. I guess Scott McTominay in Napoli probably counts as another good example. There's probably going to be a few examples where it's not going to work out. But yeah, like I guess sort of it's the beauty of. Kind of beauty of a free market to an extent.
- [12:27]
IO Akinwaleere
Do you see that Matt? The beauty of the free market, as Jacob put it. You know, I mean there's an abundance of academy talent. I'd love them to make first team football for their respective teams. But if it means they're getting minutes elsewhere and I guess in a business sense that these clubs are balancing the books, I mean, surely it's a win win to a certain degree.
- [12:45]
Matt Slater
Well, pfr, well, ffp, psr, whatever it is. Scr, right. All these acronyms. At the end of the day you only get 11 guys on the pitch, right? That hasn't changed. And you know, in some ways, you know, football, football kind of keeps doing this to itself. Doesn't wants Jeopardy. It wants genuine competition. We all want that. And I'm researching a story on something else at the moment and it's led me to do a lot of reading about the 50s and the 60s and the 70s and the 80s. They're having the same conversations, you know, but back then it was rows about maximum wage, it was rows about the sharing, the decision to no longer share the gates with the away teams, you know, let the clubs, let the home team keep the gate, basically. And that immediately was a big advantage for the city clubs, clubs with big stadiums. And then, you know, then we get into sort of the TV rows and how you share that money and then of course into the Premier League breakaway. This is an old, old debate, right? How you share the money and you how to share the resources of the game. Do you go full NFL, full North America and you do engineered competitive balance so you literally share all the good bits, you downward pressure on costs so people are profitable and you share the talent as well. So you create that any given Sunday idea, right, where no team should be bad forever. And we don't want dynasties, we want every weekend who's going to win. Now of course I know it doesn't always play it like that, but if you look over sort of a longer piece, teams in North American sport aren't supposed to stay bad forever. European football, we've done it differently. We are more capitalist than the Americans. We have been comfortable with big clubs being big. The issue has been, I think in more recent years is the big clubs have perhaps got too big. And the fluidity of the 50s, 60s, 70s, 80s has been replaced by what looks like genuine blocs, aristocrats. And the gaps have become chasms. And we've tried to sort of do things with rules to sort of where, you know, to address an issue around debt, but perhaps do something around the competitive balance as well. Because they were mindful it was getting worse, but not doing too much. Because every time they try and do too much, the big clubs threaten to break away. And they did in England 1992. And we've had this ongoing row about the Super League. So every time you try and pump the brakes, apply some downward pressure and you say, whoa, whoa, whoa, the big clubs are too big, there's a reaction. And this debate around it crops up every year in a sort of different thing. So, you know, we're talking now about how the clubs have used their academies as basically a kind of a bank of sellable talent to deal with their psr, scr, stroke, FFP issues. It was an unintended consequence and it has thrown up some examples that you just think, well, no one would have designed it that way. Surely, you know, what are you doing here swapping players like this? And that young player, everyone loves a young player that comes through the ranks. Is that really what we wanted? But it's just the way it is. It's the way the clubs have identified a loophole or a gap or I think it is an unintended consequence. As Jacob's pointed out. Sometimes it works out because actually that player just needed some playing time, but other times I think it's, you know, it's not going to work out. You're listening to the Athletic FC podcast with IO Accumulere.
- [16:26]
N/A
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- [17:00]
IO Akinwaleere
All right, let's move on because, Matt, let's get into what other rules we could see in the post PSR world. You know, one of them is anchoring, which is a new word to the listeners, which essentially limits the club's spending on player costs to five times the amount that the team who finishes bottom of the league receives in prize money and TV revenue. Not complicated at all. Matt, give us a brief explainer on anchoring and also who's in opposition to it as well.
- [17:29]
Matt Slater
So an attempt to sort of tweak and tinker around the edge. So you create a situation where the big clubs can be big and we're going to do squad cost. Okay, but then what is a possible consequence of squad cost? Well, it's a really obvious one, right? If you're tying how much you can spend on your first team to revenue. It massively helps the big clubs for those reasons I said a few minutes ago, they're already big. They've all got big stadiums, they play in Europe, so they have access to UEFA money. That's extra home games, that's more international sponsors. They have all these advantages. It just makes them big. The Deloitte Moneyleague list, which was only published last month, hasn't really changed. And you can just see the gaps. There are tiers within that. What do we do about this competitive balance issue? Anchoring is an attempt to address that. It's very subtle and it probably isn't going to change that much, but it is, by implication a hard cap. And that's the problem. And I'm going to explain the problem. So just to explain what it is, it is something that would run in tandem with squad cost, and it would say that you can only spend a maximum of five times. So the hard cap, the ceiling on squad cost, regardless of how much money you're earning, regardless of where your ratio is, there is a hard ceiling and it is five times the amount that the worst team gets in central income from the Premier League. So if we look at the table, everyone knows 1 to 20, and they share the Premier League media rights out and the sponsorship, the central sponsorship money out. The top team gets 1.8 times the amount as the bottom team. So let's just say, because it's easy maths, the bottom team gets 100 million, the top team's getting about 180 million, and that's made up of the prize money, 3,4 million per place. And you get facility fees, which is every time you're on tv and every club is on for a minimum of time. But of course, the big clubs are on more often because they are the big clubs and they're going for the title. So that's where you get the 1.8 to 1. So this is the problem. Now it's got even more complicated because you could say, well, hold on a minute, all right, I get you don't like this, but what's the problem with squad cost? Because the PFA are also saying, and they've threatened the Premier League. Don't do any of these things. We're still consulting, we're still talking about. It isn't squad cost, okay? They're already doing it with UEFA. What the PFA is saying is the Premier League isn't really being straight with all of us. It knows the only way it's Going to get squad cost through with those mid tier middle class clubs is if anchoring comes in as well. Because anchoring is the break. Anchoring is the competitive measure, the competitive balance measure. So if you're West Ham or Everton or Brighton or Brentford, you want both. Otherwise your man cities, your Chelsea's, your Liverpools and Man United's eventually are unrestrained. We need something alongside squad cost. So the two are together. That's the issue.
- [20:41]
IO Akinwaleere
Yeah, I mean it feels like a democratization of sorts in terms of allowing fair competition. Jacob, but given the high TV revenues nowadays, do you think, do you think it's likely that anchoring will severely hamper the financial power of the big clubs to stop them from accelerating?
- [21:03]
Jacob Whitehead
I think last season no team would have actually broken it, but man, City and Chelsea were very close. I'd say it would be unlikely to sort of absolutely, massively restrain them from what they're doing now, but it stops them from going into that next stratospheric level. It sort of helps you avoid situation like you have in Scotland or Spain where you see much more of a duopoly effectively, it's much more likely to have some element of competitive balance, even if that competitive balance is between six or seven clubs rather than the whole league.
- [21:35]
IO Akinwaleere
Yeah. So in essence, I mean in theory, that shape of the big six, in theory could look very, very different in what, four or five, four or five years time? In essence, in theory, yeah.
- [21:49]
Jacob Whitehead
But it needs everything to go very right for the chasing pack. We need to maximize everything.
- [21:54]
IO Akinwaleere
Still, let's move on. Matt, let's look at something adjacent to this chat around financial rules and that's Manchester City's battle with the Premier League over their associated Party transactions APT regulations. Now, last week we heard that sponsorship rules in place in the league for nearly three years have been deemed to be void and unlawful. Map. Can you explain what rules were deemed unlawful? And more importantly, I guess, is this a big win for City?
- [22:23]
Matt Slater
Right, we are spoiling our viewers and listeners this time, aren't we? With more acronyms. Apt, Right, Associated PI transactions. That's a deal, any deal that you might have with someone that you have some kind of relational link with. So we know that the people own football clubs are successful business people or they're groups of business people and they have other businesses. So a classic example would be a sponsorship deal that your football club would have with your ownership groups, one of their companies. Right. I think we all get, we can all understand that and of course it is particularly an issue if your club is owned by a state or someone that looks like a state. So I know Man City fans will be going, oh, Sheikh Mansour is not the state. Right, okay. We're basically talking about Man City and Newcastle here, okay? Where their owners either are a sovereign wealth fund or they are very closely connected to a sovereign wealth fund that owns pretty much pieces of all the companies from those countries. And we're talking about autocracies where it's very, very hard to work out what is personal, what is state, what is private, you know, just for very obvious reasons. And any expert on the region will tell you that Man City comes to the table with Etihad, eti, Salat, any of the other companies from that region, they are associated parties. So there has to be some kind of assessment. So to make financial fair play, stroke, psr, stroke, str, blah, blah, blah, work, you have to have a way of working out what's fair. Right? So even, let's say we're not talking about golf states, we're just talking about a club owned by a rich guy that owns another company and he says, my company wants to put its name on the shirt of my team and we're going to give you 30 million for it. 30 million a year. The league or UEFA or whoever is running the FFP system has to be able to say, yeah, but you're not very good, or you're not good enough, you're not big enough, you're not famous enough. What's the justification for that? 30 million? Because that's how much. And I've just plot the number out. So don't worry too much about the number. That's how much Real Madrid or Barcelona are getting, or Liverpool or Man United are getting. And they are by any metric a far bigger club than you. All right? So let's be more realistic about this. Let's go look at your peer group clubs. You should be getting about 15. That's what their shirt sponsor is. When they went to the market and they didn't have a related party company that they could go to, that was the shirt sponsors they were able to get. What has happened is post Newcastle takeover, which was October 2021, the Premier League clubs panicked and they thought, oh, my word, we've been through this with Man City, we can't let this happen again. Newcastle are unashamedly, unequivocally, stay owned. They are owned by the public investment fund, that is the sovereign wealth fund of Saudi Arabia. It's very clear they've seen the playbook, the psg, Man City Playbook, how do we stop this? So they decided to tighten up a regime that was called related parties, which is bigger than football. It's in all accounts, all companies accounts, you have to list them. And UEFA have been assessing fair market value anyway, blah, blah, blah. So, you know, it was a tightening up of an existing system, but it was quite a significant tightening up. And the idea would be that the Premier League would make these fair market value assessments. That kind of example I gave where you turn up with a 30 million and they say no, it should be 15 and they would have the power to block them, say no, we are not letting you do that deal. Unfortunately, and it's a long answer because it's complicated, but I'll tell you, I'll leave this bit out for, for the moment. Unfortunately for the Premier League, that is the rules have been deemed unlawful. Can't be clearer than that. It cannot be clearer than that. Now we got the first ruling, I think it was October, late autumn of last year where, yeah, look, this looked like a win for Manchester City. Man City challenged these APT rules. They wanted to do a big renewal of their Etihad deal. They wanted to do a deal with First Abido Bank. They got one through on Emirates Palace. So they had, they'd had issues where they were proposing deals the Premier League and the Premier League was either taking a long time to approve them or it was adjusting them down or it was saying no. Man City challenged them, Man City won. But they still need to be clarification around. Well, what is the tribunal saying here? Is the tribunal saying that Man City's kind of got a point or is the tribunal saying, no Premier League, your rules are actually illegal? So because they're illegal, that means they don't apply. Not just bits of them, none of them. You can't just take the bits of the rules that don't work and pretend that the rest of them are okay. No, they are a package. So they're unlawful. And that's the confirmation we got most recently. To further complicate things, the Premier League have already brought in amended rules. They did that in November and that is what they say is being in operation. Now to further complicate things again, Manchester City have already started a second legal challenge which I'm going to call APT2 against that, those amended rules, what we've just most recently had is clarification. Definite answer. Man City won Apt 1. They won Apt 1. The Premier League had no rules, no APT rules. Between December 21 and November 24, what they had was Their old rules going back, which are called related party rules, which go right back to the beginning of the whole PSR financial fair play regime. I'm sorry, that was a ludicrously complicated answer. But that's because it's complicated.
- [28:21]
IO Akinwaleere
Look at your steam coming out of your ears, man. Like there's a lot to take on. This is really interesting as well because another permutation here Jacob is that the results can actually open the possibility for clubs to claim compensation for deals agreed between December 2021 and November 2024 that may have been undervalued. Now the Premier League must also in turn flip the bill, the legal bill, which could run into what? Tens of millions of pounds. How significant is this ruling in terms of other Premier League clubs and their previous sponsorship agreement? And I'm guessing one of the teams I'm thinking about there is Newcastle.
- [28:58]
Jacob Whitehead
Yes. I mean I guess firstly just to cover off the legal costs. Those come out of the Premier League spot effectively before they're distributed to clubs. Everyone's coming away a few million. Few million sort of less, less wealthy. But I guess for Man City that's money well spent. Yeah, Newcastle are an interesting one actually the two days before the decision came out, Newcastle had representation at PIF's Private Sector Forum. It's basically like a trade fair for all like related parties in Riyadh. You see there's pictures of smiling Newcastle team and it is probably a great place to network and bring in sponsors if you're after related party transactions which could be pretty lucrative. Obviously the rules were toughened in relation to Newcastle entering. They've managed to get deals with three linked companies through. That's seller Noon Saudia. So far not aware of any having been outright blocked due to fair market value. But obviously they could argue that the ones they submitted they did less than they thought because under the rules as they were told they wouldn't have been able to get them through. So they could in theory pass it forward and say we delivered a contract which is 30% undervalued purely to force it through. It's interesting to see how aggressive they go like this to an extent is a club outlook or tactic. I mean Man City, the Tejas, they're head on, they're aggressive. Newcastle a lot less. Since they've joined the league they've kind of been a bit more let's step back, let's make different friends. Amongst these sort of ever shifting alliances. I'd be very surprised if Newcastle were effectively to go first in recoil.
- [30:32]
IO Akinwaleere
And those costs I'M really intrigued from, from both your parts and I'll start with you Jacob, and getting a sense of how you think the Premier League just in general have handled the rules around financial regulations over recent years because it's a bit like Arsenal needing a number nine. They've kind of put themselves in this situation where we are now at a point where a team like Manchester City is picking the bones out of it and going well I'm not sure there's much foundation to your cause.
- [30:59]
Jacob Whitehead
I remember chatting on this podcast a couple of months ago and we're talking about when the Premier League were trying to force through amendments to APT after the result of APT1 and Masters tried to push through these amendments. They call it blue lining where they're just updating some stuff before they'd been the, before the tribunal had to deliver their final, final verdict and we said at the time that's a huge risk because if they lose APT, if they lose APT1 then whatever rules they have to replace it have a very high likelihood of also being found to potentially, to potentially have broken laws as well. And that makes stuff even. It means it basically far easier to strike massive deal deals going forward and, and, and Masters made that gamble and he lost unequivocally like and that is a massive, massive blow that I don't really see that much of a long term future for Masters. There's going to be frustration with him whatever the result of and we're talking about City's 115, 129, 130 here. How many charges you choose If Man City aren't punished, there's fury from the rest of the league if they are punished. Man City are prepared to, you know, try and test off a party. He's also unpopular for procedural reasons like clubs just aren't agreeing in the same way they used to under his predecessors. Just the question is, is it in clubs interest to get him out now? Is it better to have him limp on? If you got rid of him, would it be even better for Man City having someone else coming in or do they kind of like having kind of a weaker figure in charge rather than with regulator on the horizon, do they want someone coming in and bossing him around? Probably depends quite a lot on the leadership of the clubs but I don't think there's groundswell to get rid of him imminently. Just if he is still in this job in two years time I'd be very, very surprised.
- [32:38]
Matt Slater
Yeah.
- [32:38]
IO Akinwaleere
Is this an issue of the Premier League's making Matt?
- [32:42]
Matt Slater
Yeah, I Mean you have to say in certain regards. Absolutely. So Jacob's talked about the risks. I know that Masters is the lightning rod at the moment. You know, he is. He has a board, it's a small boy, there's only five of them. But he does. The Premier League is run by the clubs. I do have to keep pointing that out. It is a sort of shareholder body and the shareholders of the clubs and a lot of what we've been talking about on these pods for the last couple of years is an attempt by the Premier League at the behest of the clubs, not all of them, but the majority of them, to apply the rule book. Has the Premier League and some of it does predate Masters, some of it is on his watch. Has it made mistakes with its rules? Absolutely. Leicester City case, which is a jurisdiction failure between them and the UFL is an absolute shocker. Absolute shocker. This apt issue. Yeah, there was a rush, there was a, there was a rush back in the back end of 2021. Like I said, it was a bit of a panic about Newcastle coming over the hill, which they then doubled down on their mistake in February of 2024 when they came in with some amended rules. And that was the final straw for Man City. Man City had been sort of, kind of quietly seething. But the February amendments really annoyed them and we know now, we didn't know for sure at the time that they were sort of. There was an ongoing Etihad renewal process in train as well as these smaller deals, the, the Abu Dhabi bank and the, the Emirates palace thing. So look, yeah, they've made mistakes, no doubt about it. And Jacob is absolutely right. Post APT1, that kind of initial verdict, there was a row that was well reported between Citi basically saying, do you know what, that ruling is more serious than Richard Masters and the board are telling you. And it's not just a blue pencil case where you can just cross out the bits you don't like. So I was sort of saying that bit about when some rules are found unlawful. They're all unlawful, right. The whole package of them. You can't just take the bits out you don't like. Which was basically what Masters was telling the clubs. Now again, I'm personalizing it perhaps more than I should because Masters was doing this under legal advice. The Premier League have got fantastic lawyers too. There's a really good lawyer on the board. This is a difference of opinion amongst lawyers. I taught sports lawyers about this all the time and some people still think the tribunal have got this wrong. They're being too literal, too corporate, too company, if you like, company law about it. And they are kind of missing the point of what football sport clubs are about. That, you know, trying to apply competition law very strictly to a sporting environment, if you like, is inherently wrong. There are other people say, what are you on about? It is a business. These are companies, they're set up like companies. They've been set up like companies for 100 and whatever it is years and just write your rules better. This is a genuine debate.
- [35:48]
IO Akinwaleere
Foreign.
- [35:53]
Matt Slater
This is the Athletic FC podcast with IO Akamalara.
- [36:01]
IO Akinwaleere
Just before we go, I want to squeeze you to just for a little bit more information because obviously there's so many people who are paying attention to this and many other issues around football and we've had a few questions in and if we can try and answer them as quickly as possible, that'd be amazing. First one's for you, Jacob. This one's from C.J.O. saying how can teams who have been promoted from the championship to the Premier League set their clubs up to compete while staying compliant with psr?
- [36:29]
Jacob Whitehead
Yeah, I thought this is a really interesting question. I could have done a separate article on this. I think it's interesting to start with two teams who have fallen foul of PSR rules since being promoted. So you've got Forest and Leicester. Like Forest is quite interesting. Like they signed so many players and in the scheme of things weren't over by that much. Sort of if they stripped back a bit. Like there's a point where they ultimately didn't care if they're breaking it or not to take the gamble. But you could see how someone could go down Forest route and survive by doing it 10% less. Leicester is a weird one in that they effectively accepted they were going to be punished to guarantee their entry back to the Premier League. They didn't ship all the wages but then they managed to find their legal loophole so they kind of had their cake and ate it. The most interesting case is, I think saying that those two aren't necessarily applicable across the board are Bournemouth and Fulham. We forget, right, they're repromoted quite recently because they're doing really well at the moment. They'd been benefiting from parachute payments. I think without having those parachute payments, it's really difficult to survive and stay PSR compliant. Look at Ipswich. I think this is probably a top 20% outcome for them this season. They've signed pretty well, they've got a really good manager. Still probably aren't going to survive. They probably need the top 5% outcome to go up. But no, what Bournemouth did, for example, is they signed young players. They got players who were just now coming to their prime, like Zibanyi, Yutara, Semeno. The next window when they're up, they got Kirke as Alex Scott. And it meant as they grow, they do miles better. And it speaks volumes of that for why Richard Hughes went on to get the Liverpool job. Because they've been doing really, really well. That's tougher to replicate because that just effectively the answer is recruit well. And like, that's not something you can, you know, it's easy to say, but.
- [38:08]
IO Akinwaleere
United struggle to recruit well at that level as well.
- [38:11]
Jacob Whitehead
Exactly. That means it's a bit more difficult. Whereas Fulham did in a slightly different way. They kind of got more established players on board and as a result they paid a bit more. They ran a bit closer to PSR as a result. Like, you know, you had high wages from the likes of William. You had Joao Pollin, you had Isa Diop. They had a better chance of staying up because they had these players who effectively knew what they're about. But the risk comes later. If they were to get relegated, you're suddenly in a horrible place, sort of wage wise and to an extent, when Leicester got relegated, they're an extreme. They're an extreme case of that. But this is it. Like you're always. There's always going to be a risk when you go up. You've effectively just got to choose the strategy which makes the most sense for you know your strengths. If you think you've got a really good recruitment team, then go young, push it. If you don't, but you think you can set up a good spine, then push that, you just mitigate your risk against. Your strength will be different in each case, but tactically it's really interesting.
- [39:03]
IO Akinwaleere
I tell you what, you've just talked yourself into a job for sporting director for a club there, Jacob. Really good. Really good. All right, Matt, very quickly, this one says, if players, wages and transfer fees haven't dramatically increased, what's making football so loss heavy at the moment? And actually, you know, why can't clubs make any actual profit? I mean, yeah, this is a historical thing. Like, at what point were clubs making crazy profit? Matt.
- [39:27]
Matt Slater
Right, a few things there. One, clubs have never made crazy profits.
- [39:30]
IO Akinwaleere
Yeah, I thought so. Yeah. We spoke about this before.
- [39:32]
Matt Slater
It's not the NFL, right? They don't make profits. They were in the Premier League. They were starting to. What is called washing their face. They were starting to make small profits. Okay. Going into Covid because of the TV deal, because of the downward, dare I say the downward pressure of things like the FFP regime, the influx for American owners who are like, why are you all losing money? This is insane. This is not why we own sports teams. So Covid kind of changed that and they've never really kind of managed to reset it. I keep waiting for sort of everyone to be kind of sane again, but they're not. One of the reasons that they're still losing money or losing money in quite big chunks at times is the premise of the question is slightly wrong. Wages are going up. The wages will always go up. It's sort of the inexorable ways, rising of wages. Literally just before we came on, I was reading on my phone, Brentford, sensible Brentford have just released their accounts for the last season and wages went up 16%. That's a sensible club. That's a sensible mid tier club. A wage bill going up 16%. My God, what's all that about? And they turned a very small profit into another fairly typical Premier League loss of about 30 odd million. Oh, right. Oh, who cares? It's only 30 odd million. So that's the problem. Here we are talking about basically loss making businesses that came out of COVID having lost a lot of money, all of them. And I'm afraid, although I have talked about this in the past, I can understand the logic that it's almost like English football, the Premier League in particular looks around the rest of the industry and went, everyone's suffering. We're suffering a little less than the rest of them because our TV deal's better and we did a pretty good job of restarting from COVID So kudos to Richard Masters for that. He doesn't get much praise but he deserves some for that. Let's go shopping. And in those windows, immediately after Covid, after the resumption, we were the only people shopping. But it's not the same as a free lunch, you know. Yes, they were able to all go out. The Bournemouths of this world were all able to go out and buy really good players from quite established teams elsewhere. But you have to pay for it eventually you have to pay for it. It's all amortized and it appears in your books for years to come. So you know, that's where we're at. So I understand the question. I just disagree with some of the numbers.
- [41:55]
Jacob Whitehead
It's probably worth quickly just thinking about spurs as well, isn't it, Matin? You have a team who actually are decently profitable, make money. And you've got Daniel Levy, massive marches outside. I mean, you know, they have a low wage turnover, but they are making money. And he's the most unpopular guy in the league right now.
- [42:13]
IO Akinwaleere
Yeah, but they're not playing great football. That's always the. The caveat to that as well. Fans want to see great football. All right, that one was from Ian Dodd, by the way. I am Dodd, so I should say. And finally, Matt, this one from Steve Clout says, is the Premier League likely to keep running itself or will there. Will some sort of external regulator be put in place? I mean, they've clearly not been listening to the podcast, have they?
- [42:35]
Matt Slater
Come on, Matt. I know what's going on. Yeah, yeah, yeah.
- [42:38]
IO Akinwaleere
Well, let's end it there, gents. Thank you so much for your time. Honestly, we've got through a lot there. Jacob's got his mint tea over here just to calm himself down. Matt, Jacob, thank you so much for your time and also thank you a lot for listening to that. I know there was a lot to get through. We'll be back tomorrow. The Athletic FC podcast.