Lord Mawhinney has outlined the key challenges facing the football industry during a keynote address at the Leaders in Football conference in London this week.
The Football League Chairman addressed senior figures from across football with an honest, realistic and thoughtful appraisal of the state of the game.
The event, at Chelsea’s Stamford Bridge ground, brings together 1,000 senior executives from international Clubs, leagues, federations and associated companies.
Mawhinney tackled a series of tough issues including: Club debt and sustainability, player contracts, growing wage levels and the transfer window.
On the hot topic of Club debt, Mawhinney insisted that Clubs should not be prevented from going into the red as long as that debt is manageable, however, he also raised concerns about the long term viability of the industry model.
“As a former Government Minister, I have had exposure to hundreds of businesses. Very few of them were debt free because debt is an integral part of running and growing a business. Debt is not the problem in football, unsustainable debt is.”
“Lots of Clubs are chasing a dream paid for by their owner’s wealth. They are defying economic gravity simply because their owners are rich. There is nothing wrong with that. Rich men have always been involved in football. But increasingly, being a rich man in football is not enough. Today what is required is to be very rich.”
Lord Mawhinney continued this theme by outlining his concerns about the effect of rising player salaries on the long-term viability of the game.
“bq. In 2007/08 in the Championship, research from Deloitte shows that Clubs spent an average of 87% of revenue on players’ wages. Is there any business in the world where such a percentage would be sustainable?”
“We have been involved in a long debate on the controversial subject of whether control of squad wages should be exercised centrally. My sense is that while League 1 and 2 Clubs would welcome this, Championship Clubs are more divided and still to be persuaded.”
The League’s Chairman also argued that for football to demonstrate that it takes financial issues seriously then it has to demonstrate a greater level of respect for player contracts.
“Player contracts are in danger of becoming worth less than the amount spent on the lawyers and agents who put the words on paper. Why is this not a matter of broader concern to an industry that prides itself on regulation?”
“The lack of respect for contracts also flows in the other direction. Players voluntarily sign agreements which should bind them for a given period. Increasingly, however, they appear to have little compunction about behaving in ways that can undermine the legal agreements they have signed.”
The transfer window also came under the spotlight from Lord Mawhinney who called for FIFA to “exclude our domestic market from the transfer window regime.”
He insisted that,
“Were that to happen, that bit of football’s broad base which we represent would be strengthened to the benefit of English football, and football more generally.”
“I cannot believe that a player transfer tomorrow between Peterborough and Accrington Stanley or Wolverhampton Wanderers would be likely to cause sleepless nights in Rome, Madrid or Barcelona. But the freedom to do so might reduce sleepless nights in Wycombe, Reading or Burnley.”
But despite his insistence on the advancements needed in the game, Lord Mawhinney reassured his audience that football is moving in the right direction.
“Our vision is not one of doom and gloom,” he added. “Despite issues with players’ contracts and wages, rising debt levels and a transfer system that penalises smaller clubs, The Football League is healthy. Attendances remain above 16 million per season, revenue and profile are rising and on the pitch excitement continues until the very last match of the Play-Offs. The League’s market value continues to rise. All of us will work hard to ensure that remains the case.”