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Tuesday 14 June 2011

Thoughts? - A Radical Transformation: Wages to Percentages

     The ongoing financial arms race between clubs in European football will surely strangle the game. As each new billionaire garnishes lavish wages on their new acquisitions the pay scale of each and every other footballer is ratcheted up in accordance, eventually it will reach a breaking point, an event horizon, from which there will be no coming back, perhaps it has already gone too far…. What if this adversarial relationship was reworked and players were paid with percentages of revenue rather than wages?

     Ignoring the obvious flaw that most revenue is tied up in salaries leaving the clubs with little to no extra revenue or profits to redistribute, this system could do a lot for the game. Imagining that salaries were halved, for example, the remaining monies would be available to establish this system

     The amount of the base salary could be determined by values such as appearances, performances, statistics, and even abstract quantifiers such as marketability and loyalty could be considered. Bonuses for reaching certain milestones could encourage players and help make up any shortfalls.

     This redistribution could take the form of percentages. If a club spends 50% of its revenue on base salaries, and a further 25% on associated costs such as the academy system, stadium maintenance and the like, the remaining 25% could be distributed to the players. A top player could earn himself a whole percent or two, while the others would get only points of a percent based on contractual negotiations.

     The legality of such a venture is of a questionable nature, but such a symbiotic relationship would inspire players to make a club better thus increasing revenue and their share of it. It would require the current players to make the decision that the club, and football itself, is more important than themselves.

     One of the flaws of professional sports, something that is cause for a lot of discussion in collective bargaining agreements in the major North American leagues, is that the average career of a professional is so short compared to other walks of life. Some say that pro-athletes die twice, retirement being such a shock to the lifestyle they have pursued since their youth. The conflict between what is best for the individual and what is best for the sport is a constant and difficult battle, often resulting in legal wrangling and work stoppages.

     But the one hope remains that many of these individuals would rather play for less money, than have no game to play at all, forcing them to return to the real world of low salaries, economic hardships, no endorsement deals, and little fanfare or media attention.

     Maybe this system would encourage a club atmosphere with the players all pulling in the same direction rather than concerning themselves with just their own bottom line. Perhaps this could lead to each club becoming a democratic organization were the players care and are consulted on the minutia of the each decision. Maybe that is going a bit too far.

     It could also promote less radical behaviour off the pitch, as players would be more aware of how the image they create and negative publicity can affect their financial projections.

     Some clubs currently limit the percentage of turnover they can spend on salaries, and Financial Fair Play should make many clubs more aware of the responsibility they have to their ledgers.

     As financial losses mount the crux of the argument is that very few clubs actually have any profits that could be shared rendering the plan impossible. If all debt was somehow wiped out – say FIFA, UEFA and other associations dig into their own pockets and long-term sponsorship partners stepped up to help stop the growing addiction - clubs could begin anew from day zero.  These reduced salaries would allow the clubs to become profitable and distribute those amongst the players.

     Of prime importance is that football be able to find a way to sustain itself without the constant search for new sugar-daddies and revenue streams. The continued and rising exploitation of fans is not sustainable; the atmosphere at the grounds, one of the key marketing totems, will suffer as more people simply cannot afford to attend. Diversification of revenue streams is good, but will surely not match the exponential growth in salaries.

     The opening of ‘new’ markets such as North America and Asia – namely India and China – could help stay the oncoming doom, but eventually there will be no more markets to exploit. Plus the detriment that an all encompassing global strategy for European football has on the local game is a growing concern in many fledgling nations. 

     For decades every time a new jaw-dropping salary is announced people say it will be the death of the game. Is this just more of that doomsday predilection or is football really in trouble?

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