I am feeling a bit tender from the best weekend of the year weather-wise. Two days spent out in the sunshine drinking quickly takes its toll at my age. A mixture of sunburn and over consumption (food and alcohol) is taking its toll this morning!
I have no issue with clubs selling youth products at inflated prices, and then buying youth products at equally inflated prices to try and create a short term balance of the books. All this does is kick a huge amount of debt down the road.
These badly run clubs are struggling to make ends meet now. these sort of deals are short term and will just lead them to breach the rules further down the line.
I am laughing at the fans celebrating “getting one over” the Premier League, not realising that these deals merely paper over the cracks and increase the likelihood of issues for seasons to come. It is basically like taking out a loan because you are struggling to pay the mortgage.
If you support another club, are reading this blog and have spent your weekend on social media talking about these deals in a positive mind-set, please educate yourself. These deals are not a loophole, they are not something to be celebrated. They just move a problem from 2024 to 2025 or 2026.
At the weekend I also had a giggle over Everton fans welcoming a bid from Newcastle United for Dominic Calvert-Lewin. if it was Arsenal, Manchester United or Liverpool bidding for their star striker, they would be moaning about PSR forcing them to sell and the “Red Cartel”. But as it is their “friends” at Newcastle, they have no issue selling.
It just shows that everything is just posturing and the attack on “bigger” clubs is just a deflection tactic to take away the attention from their badly run clubs.
The narrative of PSR is always that “it stops clubs competing”. But this is not true. What it actually does is dramatically reduce the risk of clubs going into administration due to owners signing cheques they know they can not pay.
PSR is needed to protect the future of clubs. I am sure if the rules did not exist, Everton would have already entered administration. Aston Villa, meanwhile, with their 80% wages to turnover, would have quickly become the “new Leeds”, bankrupting the club for future generations in an attempt to spend their way up the league.
In the 10 years since PSR / FFP came in, just 6 English clubs have gone into administration. In the 13 years previous, 44 clubs went bust!
You get fans of Newcastle complaining that PSR stops their oil rich, sportswashing Sheikhs bank rolling them to success. But I would rather Newcastle’s spending being restricted and them forced to build naturally, then return to a situation where we were losing 3 or 4 clubs a year to administration.
The issue we arrive to is fans want their clubs to be able to spend what they want, regardless of the long term damage it might to do their club. And it is very short sighted.
What we have learned over the last few months is many fans do not care about the long term survival of their club. They are happy their owners bankrupting their future on the off chance of short term success.
And the irony is, if they got rid of PSR, it would not make the likes of Everton, Aston Villa or Nottingham Forest ore competitive. They would still be the paupers in comparison to Manchester City and Newcastle United who could spend even more! And then their fans will be moaning about an uncompetitive league with state sponsored clubs ruining things!
My final thought is be careful what you wish for.
I always remember Everton fans celebrating when Moshri became owner. About how he would be financed by Usmanov and Everton would become a force to be reckoned with again. A few years down the line and after overspending by hundreds of millions and run poorly, the club is on the brink of administration.
Fans need to stop wishing for short term solutions. The only way to sustain success in football is by having a long term plan.
Enjoy your Monday!
Keenos
Updated 21st June.
She Wore Stuff Hoilday map 2024
Please post a picture on here, with where you are or have been this summer with stuff from https://t.co/DYtSIZ36ia
Yesterday it was leaked that 6 clubs were at the risk of breaking Profit and Sustainability Rules, and might have to sell before 30 June to avoid breaching them.
Chelsea, Newcastle, Aston Villa, Everton Nottingham Forest and Leicester City were the 6 clubs named. And as expected, fans of the clubs (alongside Manchester City fans) blame the rules their clubs signed up for, and the “Cartel 6” – their pet name for the “Big 6”.
Oddly, they include Chelsea as part of that Big 6. But the West London club are one of those facing punishment.
The truth is, these clubs are not being punished for being ambitious. They are being punished for being badly run. The Badly Run 6.
Everton – Last season Everton were hit with 2 points deductions, so it should be no surprise they are on this list.
Whilst their fans followed their red brothers and sisters and played the victims, the truth is they are the worst run Premier League club since Leeds United. And a perfect example as to why PSR is needed.
When Farhad Moshiri became major shareholder in Everton in 2016, their fans rejoiced. The expectation was he was a front for oligarch Alisher Usmanov and the Uzbeki would bankroll them to success.
Huge early spending was financed by sponsorship deals linked with the former-Arsenal owners companies. But huge money signings did not translate to success on the pitch.
Everton have continued to balance the books and, with Moshri wanting out, they have been taking out monthly loans from private companies to finance their day to day running.
Everton’s net debt increased to roughly £330m at the end of June 2023 up from £141m a year earlier. And that does not include the £200m they owe 777 Partnerships.
Instead of blaming the Premier League, and pointing fingers at clubs that are run better, they should be directing their anger to their owners.
Without PSR, Everton would be in administrations and plummeting down the leagues.
Chelsea – Is it any surprise that Chelsea are on this list?
Their new owners thought they were being clever, spending close to £1bn over the space of a couple of years, handing out long term contracts to everyone. There is a reason why other clubs never exploited amortisation and only gave out 5-year contracts on average.
The Chelsea plan was clear – to spend huge on young players, give them long contracts to spread out the transfer fee, and then sell academy graduates to balance the books.
Last season they raised £75m by selling Mason Mount, Ruben Loftus-Cheek and Callum Hudson-Odoi. This was topped up by cashing in on the Saudi boom.
It was always known that to stay within PSR, Chelsea would have to continue selling academy graduates and this season they will look to raise funds through the likes of Reece James, Conor Gallagher, Levi Colwill and Trevoh Chalobah.
It is an unsustainable model as it relies on academy graduates the calibre of Mount, James and Gallagher to come through each year, become regulars, and be sold for big money.
Chelsea will be in the “have to sell to buy” for years to come due to the contract situations.
Aston Villa – Villa are being upheld as the team who are “being punished for trying to be competitive; with loads of comments about how they sold an academy graduate for a record British transfer fee and are still in danger of breaching the rules.
There is a bit to unpack on this one, so we will start with Jack Grealish.
For years, any time Liverpool made a big money signing, they justified it by saying “we are just spending the Coutinho cash”, instead of just acknowledging they were a big spending club. Villa is becoming a similar joke with the Grealish money.
Grealish left them in 2021 for £100m. that same summer they signed Emiliano Buendia (£33m), Leon Bailey (£30m), Danny Ings (£25m). £88m and, Bailey aside (when fit), very uninspiring. Reminds me of when Spurs spent the Gareth Bale money on a load of rubbish.
To the above, they then added Lucas Digne (£25m) in January.
In 2022, their fans continued to claim they were still spending the Grealish money as they signed Diego Carlos (£26m) and Coutinho (£17m). A fairly quiet summer was backed up by a busy winter as they signed John Duran (£14.7m), Alex Moreno (£13.2m) and Leander Dendoncker (£13m).
Aston Villa are not in their current position because they have been ambitious, they are in the position because they have bought a load of tripe and wasted that Grealish money. And this is a continuation of what they have done since returning to the Premier League in 2018.
Aston Villa have spent nearly £500m since returning to the Premier League. They are the 8th highest spenders with only the “Big 6” and West Ham United ahead of them. Alongside this, they have consistently had a wage to turnover ratio of 80% – IE they spend 80% of their turnover on wages
Villa have “leapfrogged” other clubs who operate within PSR such as West Ham and Brighton through their spending.
There is a tight line between being “ambitious” and being “wreckless”.
Aston Villa’s owners took the gamble and got Champions League football as a reward. For them the gamble might have paid off. But for many others taking the gamble it does not. Villa could quite easily go the way of Everton if they are unable to sustain their spending.
Nottingham Forest – Like Chelsea and Everton, it should be no surprise these clowns are on this list.
Since promotion back to the Premier League in 2022, Notts Forst have signed 35 first team players. A further 11 have also joined on loan.
The majority of these players came in on short term deals, with sizeable signing on fees. Many have now left for free having seen their contract expire. It is not sustainable to run a club on signing almost a whole squad every summer, and releasing the same amount of players.
They have already been hit with one points deduction, and it will not be a surprise if they are hit with another. A badly run clubs.
Leicester City –The implosion at Leicester City has been on the cards for years.
After their success in 2016, they continued to building a team off the back of the Champions League money and sales that saw them also win the FA Cup and finish top 6 twice. In 2021 there was talk as to whether they had replaced Arsenal as a “Big 6” side.
But they were being quietly propped up by the income from their owners company – King Power. King Power International Group is a Thai travel retail group. They basically own and operate duty free shops across Asia.
When Covid hit, flights were grounded globally. And no flights meant no income for King Power. This is when things started going downhill for Leicester, and also highlights why the Premier League want to protect clubs from having “above market value” sponsorship deals from companies owned by owners.
Leicester City act as a warning to Aston Villa – ambition is not always sustainable and if you recruit players on big wages and do not maintain your league position, the debts will quickly rise.
“Victims of their owners ambition” is how I would label Leicester City’s current predicament. he club continued to gamble, expecting the income to continue rolling in, and it did not.
2 years ago Leicester were relegated. A warning of what could happen if you rely only on owners ambition, rather than running the club well.
Newcastle United – The final club on the list is Newcastle United. I was surprised they are close to being in breach.
Whilst they have spent big since the Saudi’s came in, it felt like they were operating sensibly and working withing PSR – clearly with one eye on the Manchester City case.
Last season they secured Champions League football. This season they have no European football. And that is maybe why they are sailing close to the winds on PSR.
That will be a £50m+ drop in income from 2023/24 to 2024/25. they now have to finance a huge wage bill without any European income.
Are Newcastle a victim of ambition? I would say no. Are they being held back from signing players due to PSR? Probably.
If anyone was to be against PSR, it would be Newcastle. They want to be where Man City are but can not spend the millions that their fellow PetroClub did.
But what is interesting is it is only their fans moaning about PSR, not the owners or management. This makes me think they are happy with PSR and are looking to grow the club sensibly, for generations to come.
Newcastle fans sum up the “fast food culture” that we live in. They want to be bank rolled to immediate success. They are not willing to wait and grow sensibly.
I do not think Newcastle are that badly run. They just have fans who have ideas above their station.
With all of this, it has to be remembered that PSR effects all clubs.
Fans hit out at the “Cartal 6” yet one of those facing punishment is Chelsea.
In January, Manchester United were unable to recruit due to PSR. Arsenal also pulled out of a deal for Mohammed Kudus due to PSR. Liverpool have also face restrictions on what they spend.
It is also nothing new for players to move to bigger clubs, where they will play on bigger stages, earn more money and have a greater chance of success.
I see fans of Everton, Newcastle, Aston Villa and Nottingham Forest moaning that PSR is the reason why they might have to sell Jarrod Branthwaite, Alexander Isak, Ollie Watkins and Morgan Gibbs-White this summer. But none of these were academy graduates.
Was PSR the reason Branthwaite left Carlisle for Everton? Or Isak joining Newcastle from Sociedad? Watkins joined Villa from Brentfod and Gibbs-White moved from Sheffield United to Nottingham Forest.
It seems fans moan about PSR when it is there player looking to move clubs. But when they are signing players nothing is said.
You can not sit their demanding your club sign X, Y or Z player from clubs below you in the league, then cry foul play when a club higher than you signs one of your players.
Chelsea, Everton, Newcastle, Leicester, Aston Villa and Notts Forest are not being punished for their ambition. They are being punished because they are badly run.
Ladies and gentlemen, introducing the Badly Run 6.
Those Everton, Nottingham Forest and Leicester City fans complaining should actually drive their anger towards those in-charge of their clubs for running them so poorly. The rules are their, they all signed up to them, and the losses they made would have put their existence in danger had it not been for the rules.
Everton have been one of the worst run clubs in the league since Farhad Moshiri took over. He acted like a Russian Oligarch but he didn’t have those Ruble’s.
So keen to impress when he first bought the club (and show Arsenal what we were missing out in), he quickly made Everton one of the highest spending teams in the league. But it was recruitment without thought and almost all the big money signings flopped.
As Everton tumbled down the table, they could not finance the huge wages and, with the Moshiri money drying up, lost £373m from 2018-21. They tried to blame Covid but in reality the issue was they were spending uncontrollably.
In fact, #EFC £373m losses over the last three years are by far the worst in the Premier League, around £150m more than the next highest losses, which were made by #CFC £222m. All clubs have been adversely impacted by the COVID pandemic, but Everton’s deficit is striking. pic.twitter.com/siBtqSH1yI
Covid or PSR is not the reason Everton are financially screwed. It is all because they are poorly run. Their fans should be grateful for PSR as the rules curtailed their uncontrolled spending. If it was not for PSR, I am sure Everton would have entered administration.
Nottingham Forest are another club that are poorly run.
Since gaining promotion back to the Premier League in 2022, they have signed 47 players.
Forest fans will point to out that they lost of a lot of players when gaining promotion to the Premier League. This just highlights how poor they were run.
Their promotion was secured by having a squad of loan players and others on short-term contracts. The management of the club were not looking long-term.
And since returning to the Premier League, the transfer philosophy has been the same – 12 of the 47 players have been loan deals, and many others (Lingard, Shelvey) came in on huge money and short term deals.
Compare the way Nottingham Forest have acted on promotion to the likes of Brighton and Brentford. The later two have solid recruitment plans in place and are not looking to fast-track themselves based on overspending in the short-term.
And this is my biggest issue about fans who criticise PSR.
Forest and Everton fans make claims such as “PSR exists to protect the top 6”. This is simply not true.
The real beneficiaries of PSR are all clubs who are run well, and spend within their means. Aston Villa, West Ham, Brentford, Brighton and others. All of these are very well run clubs who have had some level of success in recent years (with 3 of the 4 having European football as a reward).
PSR also exists to give an advantage to someone like Luton Town who, upon promotion, have kept a tight reign on their finances. Why should Nottingham Forest gain an advantage over those teams around them purely because they have an owner who is happy putting the future of the club at risk?
Leicester City were once one of the best run clubs in England.
They recruited well, buying players from across Europe that no-one else was looking at, and were rewarded in 2016 with the league title. But since the death of Vichai Srivaddhanaprabha and the impact of Covid on the King Power International Group, they have struggled financially.
For those that do not know, King Power International Group are a Thai travel retail group whose main business is operated duty free shops. When Covid hit, air travel dramatically dropped which hit the company hard.
Leicester’s biggest issue is that after winning the league, Leicester dramatically increased their spending with an expectation that they would remain a top 8 team, and continue to reap the rewards of European football and finishing in that position.
From 2019/20 – 2021/22, Leicester lost £191m, including a huge £92.5m in 2021/22. They have still not yet published their 2022/23 accounts (when they finished 18th in the Premier League).
It is quite clear that they were spending too much and were in an unsustainable situation. I expect their 2022/23 loss to be north of £100m. Again, their fans will blame PSR but it is not the rules’ fault that they were making huge losses.
One thing I find hilarious is fans blaming PSR for their clubs not spending.,
I see West Ham fans saying PSR is the reason they are not spending big. But 2-years ago that blame was on their owners. Literally nothing has changed in that time, they have just decided to direct their anger elsewhere.
West Ham do not spend as much as someone like Arsenal because they are not as big. They do not have our revenues. And they have owners that run a tight ship to ensure their is a club for the future.
Another to pipe up is Newcastle United.
After one season finishing top 4, their fans got arrogant and thought they have made it. They have since tumbled to 10th and are pointing the fingers at the Premier League.
Restrictions on spending is not why Newcastle have struggled this season.
Since coming under new ownership and under the guise of Eddie Howe, Newcastle have spent in excess of £300m on new players. The problem is not that they have not spent a lot of money, but they have bought some very average players.
They have over £150m spent on Anthony Gordon, Harvey Barnes, Tino Livramento, Chris Wood and Matt Target. These are all mid-table Premier League players. None would get a look in at a “Big 6” club.
Their fans will claim that “they have bought poorly but they should be allowed to spend to get out of the trouble they created”. And this is how poorly run clubs behave – instead of trying to improve how you spend, you just continue spending poorly in the hope you get it right.
As for Manchester City, certain fans do not seem to get their head around the fact that Everton and Nottingham Forest have plead guilty to their charges, whilst Manchester City are appealing them. That is why City have not yet been handed a punishment.
Think in the real world. You are caught speeding once. You accept you are speeding, pay your fine and take the points.
I have been caught speeding 115 times, but I have challenged each and every single charge. I have not pled guilty and am appealing my punishment.
You do not have a case to be heard as you have pled guilty, I am awaiting my day in court as I have appealed. I am still going through the process, whilst your process is over.
It is not unfair that I have not yet been punished and you have, despite less charges. You pled guilty, I did not. It really is this simple.
A final thought on this is when fans point out clubs net spend. It is not obvious that the more you generate in income, the more you can spend (and the less reliant you are on having to make a profit in transfer windows?)
The best run clubs do not rely on having to sell players to fund their next batch of transfers. That is done through the difference between revenue and expenditure. Poorly run clubs need to sell to buy because they are not making enough revenue outside of players sales to buy new players organically.
Fans need to upskill themselves in how process works, and stop blaming the Premier League and “Big 6” for their owners running their clubs into the ground.
She Wore A Yellow Ribbon 