AT a time of widening income inequality, paying £89m for a footballer is madhouse economics, writes Bill Jamieson
What is it that Jose Mourinho, Manchester United’s new manager and a Dutch tulip have in common? Both, it seems, have succumbed to an outrageous mania.
In 1639, at the height of a speculative frenzy, the price of a Dutch tulip bulb soared to a record 2,500 florins, equivalent to a substantial house in Antwerp or ten times the annual income of a skilled craftsman.
Today, a similar mania now looks in full swing in the football world. Mourinho (himself on £10 million a year, three-year contract) is planning to pay Juventus of Turin £89 million for the footballer Paul Pogba – a world record.
As if to add piquancy to this absurd figure, Old Trafford is paying this sum just four years after the player left the club to join Juventus for £1.5 million.
Even in the crazed world of professional football, the size of this payment has triggered consternation. Arsene Wenger, the manager of rival Premier League club Arsenal, says Pogba’s valuation is “completely crazy”. Liverpool’s Jurgen Klopp says he would not spend that much on a single player even if his funds were unlimited.
Mourinho has retorted that their comments are “not ethical”. With what breath we have left, we can only gasp at the emergence of Mr Mourinho as an arbiter of ethics.
Talented though Paul Pogba may be – he is a French national footballer adept in central midfield positions – this is a staggering sum which has set a new bar even in the super-sum world of player transfers.
Just how far can this bar be set? How soon will it be before we read of the £200 million transfer – by which time we will be even more inured to this other-world excess?
Questions have long crowded in on the crazed world of football transfers and player wages – all the more acute given the backcloth of stagnant economic growth, rising concern over income inequality and continuing austerity for the rest of us.
Some of the most deprived areas of the country seem to support such super-clubs with ease. How can sums like this amid such poverty possibly be justified? What is it that enables football clubs to appear to suspend the basic laws of economics? And is there anything that could bring this crazed spiral to an end? After all, it is not as if Mr Mourinho has blown the club’s wage bill on a single player. He is now said to have reached his required star-studded squad total – to no less than 23.
As for Premier player wages, it is like a stroll down Millionaire’s Row. Raheen Sterling of Manchester City is on £180,000 a week, Mesut Ozil of Arsenal is on £190,000, David Silva of Manchester City on £200,000, Yaya Touré and Sergio Aguero, both of Manchester City on £240,000 and Wayne Rooney of Manchester United on £260,000.
Outrageous spending is one thing. But who’s paying for all this is the greater question. The fact is that the bill is being picked up by tens of millions of people who may never have gone through a stadium turnstile in their lives.
The cash flows from TV deals and commercial and advertising sponsorship. The regular fans on the terraces pay relatively little. Indeed, annual ticket prices at Man U at £532 for the Stretford End and £950 for the Alex Ferguson Stand are cheap compared with season ticket prices at the top London clubs – £1,250 at Chelsea, £1,895 at Tottenham Hotspur and £2,013 at Arsenal.
The fact is that football is now a global game with the top English fixtures followed by tens of millions world-wide. This is the most widely followed sporting league in the world and TV viewing has exploded. When the first episode of Match of the Day was screened 50 years ago there were more than twice as many people inside Liverpool’s Anfield stadium to see the home team play Arsenal than there were watching on TV later.
Today MOTD pulls in an average audience each week of between four and five million. Interspersed though it may be with tedious experts, it is an unfailing combination of escapism, athleticism, passion, and with outcomes less predictable than those earnest hours of relentlessly bleak and “relevant” TV drama. Mega-transfer fees only add to a curiosity laced with schadenfreude. When star players are acquired for £89 million who would not switch on to see if they were really worth all that money?
Last year the English Premier League sold television rights to its games for a record £5.1 billion – 71 per cent more than previously. Sky paid £4.2 billion for five of the seven TV packages while rival BT paid £960 million for the other two in a record TV rights auction. Sky paid 83 per cent more than it did in the last round. Little wonder shares in Manchester United, quoted in New York, jumped five per cent as investors salivated at the cascading jackpot. Advertising revenue chipped in another £884 million.
Scottish football can claim to be untouched by this mayhem, with several clubs struggling to avoid administration or going out of business altogether. The Scottish Premiership’s total annual wage bill is reported to stand at £48.9 million, a figure dwarfed by the wage bill at Chelsea alone at £215 million.
However, huge disparities abound across Scottish clubs. One report recently claimed that Celtic’s average player salary at £17,345 a week is 25 times higher than that on offer at Ross County (£692).
However, clubs both north and south of the Border point to the large sums they pay out on youth player training, stadium upgrades and facilities, anti-racism and anti-bigotry programmes and all manner of community activities and support, valued in 2013 at £45 million.
Little of this social responsibility spending, however, softens the concern felt by many that star player spending has soared out of control. And it is widely seen as further evidence of the widening gap in rewards between the top and the bottom of pay scales across the country as a whole.
It resonates with the news earlier this week that the bosses of Britain’s largest public companies earned an average of £5.5 million last year, and have enjoyed a 10 per cent pay rise while wages in the rest of the economy lag far behind.
This relentless rise in executive pay continues to feed anger and resentment in a way football player wages do not. And despite censure from politicians and teeth-grinding by regulators, it all seems unstoppable. Doubtless FTSE-100 bosses will be quick to claim that their pay is positively modest compared with footballers.
Meanwhile the pub TV screens get bigger and the coverage more hyperbolic. We are mesmerised by this excess. At least in the Dutch tulip mania prices suddenly collapsed and the frenzy came to an abrupt end. But with Mourinho mania there seems no peak too high – and no sign of the bubble bursting.