Impact of PSR on the 'Big Six', how matchday revenues are calculated
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Hello and welcome to The Price of Football, the show that looks at the money behind the beautiful game with me, Kevin Day, and Liverpool University's Kieran Maguire. It's Boxing Day, Kieran, and nothing says Boxing Day more than football in the afternoon and listening to The Price of Football in the morning. You've still got your Christmas Day headache.

You've got your two-hour session in the toilet to come, because you ate too much yesterday. But you can get through it by listening to a special pod done by Kevin Day and Liverpool University's Kieran McGuire. There's no point in me asking you if you've had a nice Christmas Day, Kieran, because as everybody knows, we're recording this.

in advance of the festive season somewhat relaxed I mean if producer Guy had his way we would actually be doing this live because he says we're like professional footballers we should give up Christmas for the sake of the podcast it's not a view that we both share I won't even ask you how you are because you're exactly how if people want to know how Kieran is listen to the start of the Christmas Eve podcast

Because that was half an hour ago and nothing's changed in between time. I've not taken my eyes off him. He's still in front of me. He's still not dressed as Father Christmas. Shall we get straight into these questions, Kieran, so they can hear your voice rather than mine? Greg Spires has our first question, Kieran. Greg Spires says, it's a long one. Snap yourself in. My question is regarding player wages and how accessible knowledge of player wages are to clubs when they negotiate transfers.

Excuse me. I support QPR. And there's been a lot of talk amongst fans about the wages of some of our current players. And why we recruited them on such high salaries when we have such a shoestring budget.

This got me thinking about how clubs gain the knowledge about a professional, a potential transfer targets, current wage and wage demands in order to negotiate a wage that will entice the player without blowing the club budget out of the water. When a club identifies a target, do they already know that the player's wages are within the budget or do they have to inquire with the selling club or with the player's agent about the player's availability and gather information about the player's current wages requirements?

that way, which is a kind of, I sympathise with him because I, as you can tell by already, am unable to speak in short sentences. I like a meander. I'll get to you eventually. So I like Greg's cut, but essentially, how much do clubs know in advance about the wage demands of a transfer target?

Yeah, it always intrigues me that this phrase wage demands. Yes. Because every time I've gone for a job, they said, this is what we're prepared to offer you. So it tends to be. Fair point, yeah. But again, this is part of, I think, a broader narrative that we have from the media that players are somehow not worthy.

of the weekly, well, in fact, they get paid monthly of the salaries that they receive. And there's some sort of militant body within the football community that's pricing the poor billionaire owners out of existence. The way that it broadly works, and I spoke to one of our secret agents, is as follows. You identify a player that is of potential interest to your club. You then discreetly,

and without any trace, contact the player's agent to put out a few feelers. Effectively along the lines of, look, we are sort of interested in your client. Would they broadly be amenable to moving in the summer or January? And what's their current salary? Because

The conversation could stop there for two reasons. A, the player's completely settled. And if it's a League 2 to a League club, another League 2 club or something like that, the chances are you're not going to blow them out for water sadly. And the agent is under no obligation to reply, but one of the duties of the agent is to look after the options available to their client. And they will say, I'll have a quiet word.

Gets back to them within 24 hours. Look, perfectly happy here. I've got another two and a half years remaining, six months remaining, whatever it's going to be. But we're willing to have a conversation. And on the back of that, then when the...

formally starts, there will have been communication between the two clubs. So although we say that the window opens on the 1st of January, if you are talking about your, we have A, B, C, D targets, you know, you want your first choice that we'd like to recruit as a centre-half and so on.

So there would have already been some communication between the prospective selling club and the prospective buying club with a tentative offer. If that's acceptable, then that deal can go through very, very quickly. So the selling club would probably not reveal the salary because that would be a breach of confidence. But the agents...

They, well, loose lips sink ships, we often say. I've worked with many agents. I found out amazing things about player deals, which I wasn't aware. And clearly it would be unprofessional of me to put that in the public domain. And I don't. But agents talk to other agents and agents talk to the club and the football industry. We think of the football industry as being big. It's not. Because the number of players that,

in individual clubs you've got 92 92 clubs with 25 players that's actually a very very small profession so it's a very small industry and everybody talks as well so you you do find out from the agent and you use that as a a benchmark if we're looking at a league two club you know he's on two and a half grand a week we're anywhere you know we're only paying our lads 1800

we'll give it, we'll give it a swerve. Thank you. Um, if it's the other way round, then you've got a bit of wiggle room, um, to offer a bit more. So it's, it's, it's done in a, in a professional manner. There's no doubt about that. And, um, you then sort of proceed with, with an offer. Nobody's, if I've got two and a half years remaining on the contract and I'm the first team player, the chances are I'm not going to take a pay cut. So, you know, you need to find that out to begin with. Um,

What you would do is if you're a good agent, if you say, oh, you know, that's very interesting. You're the third club that's contacted me this month to inquire about my client's interests. And that's how we end up with some of the legendary stories that have arisen in relation to football. And, you know, that's an agent doing their job for their client. Yeah.

You talk about the normal recruitment process, Kieran, whether it's the employer who sets the salary, but in a way, these are players being headhunted, aren't they? In the same way that when the government knock on your door to ask you to be the independent regulator, they would expect you to say, well, this is how much I want to entice me away from Liverpool University and the Price of Football podcast. So it

It's not a normal recruitment process, really, which is why. But again, you're absolutely right when the press wage demands. But this is one of those rare occasions when the potential employee probably has a lot more influence in normal businesses, don't they? Yeah. Yeah. I've not been approached about the independent regular job, but I have been approached over the course of the last 18 months about that.

some other jobs and it was very much along the lines of this is what with you know would you be interested in this and

And I'm a very, very privileged person. I don't know anybody that loves their job as much as I love mine. And I've turned down more money and I've turned down the opportunity to live a lot closer to home. That's part of the reason why I've actually now moved to a place in Liverpool as well. But it is a consideration that you go through. And if somebody offered me a huge amount of money, then that's a completely different conversation. But, you know, a

a bit more here or there. And I'm not blowing smoke up your backside or that of Producer Guy. It would take a hell of a lot of money for me to give this up. This podcast has transformed my life in terms of just giggles and fun and having something to look forward to. And you can't put a monetary value on that.

I can. £30 a week, I'd be off to Lineker's pod like a shot. I'd still give you a call every week because I'd miss you. You know what our listeners are like. You say you haven't been approached about the independent regulator job, but all our listeners go, oh yeah, he signed an NDA, didn't he? That's why he can't say anything. Lewis Garrard has our next question on this short Boxing Day pod.

Lewis says, what's your view on the impact of FFP PSR rules on the traditional big six versus those who are pushing to challenge them? It seems very glaring that while the financial rules are designed to make football sustainable, it feels that the clubs with longer term success will always remain at the top as their budgets will be larger in perpetuity and restrict those challenging the status quo. I'm not sure if you include Newcastle as one of those challenging the status quo, they're

that their budget is potentially as large as anybody else in the top six above them. It is, but PSR prevents them from being a challenger. So, I mean, first of all, Lewis said the financial rules are designed to make football sustainable. That is the PR. That is the way that the Premier League likes to shape and couch the discussion.

But it's not because if you take a look at PSR, it allows clubs to lose £105 million over three years. That's not sustainable.

So, yeah, the first thing is by calling it profitability and sustainability, it ticks neither of those two boxes. For me, it is a restriction of trade. I don't know many other businesses where a challenger company is not allowed to invest in its future in order to become more competitive.

And I can absolutely understand the frustration and the gnashing of teeth coming from the fans of clubs such as Aston Villa and Newcastle. I've always said aspirational stroke, ambitious clubs with incredibly wealthy owners who are being restricted, who are being restrained by a function of history. Because if PIF had acquired Newcastle

or if Edens and Sawiris had acquired Aston Villa in 2005 or 2003 when Abramovich acquired Chelsea. Chelsea were allowed to lose as much money as they wanted in those days. So what we have here is a historical anomaly.

The reason why PSR and FFP were introduced was not to stop Chelsea, PSG or Manchester City. It was to stop another Chelsea, Manchester City or PSG, threatening the rather cosy relationship that a few clubs had with effectively automatic qualification.

for the Champions League and an increasingly smaller pool of clubs who could win that competition. So for me, the rules are anti-competitive. They have reduced the jeopardy to a certain extent. If we take a look at the new rules that are coming in with the 70% of revenue being paid on wages,

Manchester City's revenue, £700 million, 70% of that is 490. Newcastle's revenue, even with the deals they've managed to get through, say, £300 million, 70% of 300 is 210. So the likes of Manchester City, Liverpool, Manchester United have got a £280 million wage advantage to begin with. How do you reduce that? And people say, well, you can do that organically over time.

Yes, but when we were discussing the decision by INEOS to cut bonuses or to stop the Steward of the Month or Steward of the Week award at Manchester United, yes, it can be achieved organically over time, but that paid for itself in 17,120 years. And I don't think football fans are that patient. Yeah.

When you refer to it as a restriction of trade, Kieran, does that imply that the whole FFP system is open to a legal challenge, maybe by a club like Villa or Newcastle, to say that it is anti-competitive? Potentially, yes. Given that both of those clubs have voted for the rules, then I think that becomes more complicated and complicated.

I don't think the clubs want to go down that route. But I'm sure if we spoke to one of our secret lawyers, they would say it's a possible. Now, it could be deemed that there are broader issues. Effectively, if you want to play football, you're always going to play football elsewhere and simply not be a member of the Premier League might be the answer. If the Premier League has a set of rules, has a set of rules

um as a set of restrictions in terms of spending money and that is the constitution of the premier league given that it's a member's club and you know you think about something such as the groucho club yeah when it before it was closed down one of the rules was you you can't have you can't use a mobile phone in it i believe now could could a member you know potentially sue the groucho club say well yeah i lost out on a uh yeah on on a

on a position, on a job offer on the back of that. They could, but when you join the club, you effectively sign up to the rules that are in existence. ♪

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Christopher Lutton has this question, Kieran, on Boxing Day. I was in a really good, cheery Boxing Day mood. I'm sorry about that. That's all right. As Ali would say, it's very difficult to predict what's going to set me off. We'll be happily watching something on telly and somebody will mention Anne Boleyn and I'm gone. Christopher Lutton says, you talked about how a club buying a player will amortise the transfer fee over the duration of the player's contract.

But would it be possible for the selling club to do something similar? For example, if a club sold a player for 50 million and they were looking ahead and thought they might be over the FFP limit in the following year, could they say we'll book 25 million of the transfer fee this year and 25 million next year to help them comply with the FFP limit the following year? An interesting one, Kieran. It is an interesting one, Christopher. I'm sad, however, to disappoint you.

Because the asset that the selling club has in its financial statements is the registration certificate, which gives it the unique use to the player's services. And that registration certificate has value. Now, if I sell the player on the 30th of June 2024, I no longer have the rights which come along with the contract.

And therefore, I cannot say on the 1st of July, I've got an asset of any value. It is a crazy anomaly in the sense that we've got amortization, which effectively says that if you buy a player, you spread the cost of buying the player over the life of the contract. But when it comes to selling a player...

the profits are recognized what we refer to as a point in time. And that point in time is on a particular date and goes into a particular year. Certainly what we do see is clubs accelerating and decelerating deals around the 30th of June.

I think there's going to be a further complication arising for those clubs that qualify for UEFA's tournaments because UEFA's new set of rules are based on a calendar year. So you might be doing some things on the 1st of January or the 31st of December to formally go through, which makes life slightly more complicated. Stephen Powell has the last question on this special but truncated Boxing Day podcast.

Kieran, Stephen says, when you mentioned match day revenue, does that just mean season ticket and single game ticket sales? Or does that revenue figure include food, beverage sales, parking, et cetera? Well, I'm delighted to come out with a price of football cliche. The answer, Stephen, is it depends. It depends upon the philosophy of the individual club. I saw the accounts of

one Premier League club whose matchday revenues went down by 25% from one year to another. And it couldn't make sense because I looked at the price of season tickets,

They'd gone up slightly. I looked at average attendances. They'd been maintained and it made no sense whatsoever. So I discreetly contacted the club and they said, actually, what we've done is what we're including. We've switched from match day to commercial, the burger sales and the car parking come and so on. So it is down to the discretion of the individual club. They are fully aware that,

And there's the likes of our very good friend, Swiss Ramble, and of course myself and other people that do this, who compare the numbers. And what they might decide is perhaps we want to look better in terms of match day revenue or commercial revenue and so on. One of the things that I was asked to do, which has been sent to senior people, shall we say, is...

I've worked out the amount of match day revenue per fan per match for certain clubs in the Premier League. And it doesn't look too great from a club's point of view. I think Chelsea ended up top of the table at £91 per fan per match. Yeah.

And they're going, well, we're supposed to be an inclusive game. We're trying to encourage people to bring their kids along. And so clubs can be a bit fast and loose with the numbers in terms of shifting them to where they want to shift them. I'll say no more than that. Speaking of burgers, Kieran, I was at the Emirates, as you know, a couple of weeks ago for our annual being cheated out of the Carabao Cup by a linesman.

experience who I can only assume the linesman forgot there was no VAR and just thought well he's clearly offside but I won't put the flag up because they'll sort that out upstairs but and it's a lovely stadium it's still very new but it's like I've never seen a stadium with more burgers sales around it it's fantastic it's like the old days it's like a proper 70s football experience and

The smell of fried onions is driving 6,000 Palace fans up. We've missed it. It's just wonderful. There's a festive note to end the Boxing Day pod on, isn't there? If you have a question you'd like answered on the show, email us at questions at priceoffootball.com. Don't forget, you can follow us on Twitter X and find us on our YouTube channel. If you'd like to buy our book, you can find details on our website, priceoffootball.com. I hope you're having a lovely holiday period if you're taking time off work.

If you're having to work because you're in an emergency service, I suggest you stop listening to this because you've probably got calls to take. And we'll be back with another holiday questions pod on New Year's Eve.

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