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Slipperduke

The Camden Cad
Joined
Aug 24, 2004
Messages
4,333
Location
North London
How very retro. There was a time when any game between Arsenal and Manchester United was epoch-shaking. They were the two giants of the domestic game, battling out their own private war while the likes of Chelsea, Liverpool and, this'll make you laugh, Newcastle could only look on from the sidelines. But then Roman Abramovich arrived and United slipped out of contention. By the time that they got their act together, Arsenal were reduced to fighting for fourth place with Tottenham. Amazingly, this is actually the first time since 2005 that the two sides have met in a genuinely crucial game of football.

But while one kind of dominance makes a surprise return, another could be on its way out for good. If you believe Arsene Wenger, and as he has a Masters' Degree in Economics it might be a good idea, the financial superiority of the English clubs is at an end. This summer will see the start of a seismic shift in the balance of power as the rest of the continent suddenly discovers that their money goes a lot further with the world's super-agents.

According to Wenger, there are two reasons for this. One is the fading power of Pound Sterling, the Hull City of the international currency market. Liverpool signed Fernando Torres in 2007 for Euro39m, which at that point was just over GBP26m. If they were to sign him for Euro39m now, it would cost them GBP35m. Would Liverpool be able to buy him now? Absolutely not. From here on in, there are very few clubs who could.

If only that was all. Wenger has pinpointed new tax rules as another reason for the world's best players to seek employment elsewhere. The UK Government have just announced a rise in the highest tax band. Anyone who earns more than GBP150,000 a year, i.e. every footballer in the top two divisions, will have to cough up 50% of it to the taxman. I'd love to be a fly on the wall when the Manchester United human resources team explained that one to Cristiano Ronaldo. Never mind the fact that it's going to stop anyone coming to play in England, it's probably going to make a lot of established stars want to leave. If you believe certain sources at the Emirates, Wenger has already fallen victim to this. Mathieu Flamini was rumoured to have been ensared, not so much by AC Milan's money, as Italian tax regulations. It's a different game these days, isn't it?

But while this is all bad news for the likes of Liverpool and Chelsea, who struggle to bring players from the academy to the first team, it actually works out rather nicely for Arsenal and Manchester United. Wenger may get all the credit for his policies, but Sir Alex Ferguson is every bit as enthusiastic when it comes to young players, as this week's confirmation of Rafael's contract extension shows. Both clubs have respected scouting networks, excellent youth academies and, most importantly, a proven track record of actually giving their rookies a chance to play in the first team. That's going to pay dividends if the days of super-transfers are over.

Perhaps then, this is not so much of an old school one-off, as the first clash in a new period of dominance for the old guard of the Premier League. When new money is battered by the financial storms, old power reasserts itself. It may not matter too much who loses at Old Trafford. In a couple of seasons time, they could both be winners.
 

EastStandBlue

Life President
Joined
May 29, 2005
Messages
15,477
I'm not entirely sure by Wenger's predictions... Kaka showed that, whilst theres a platform of top players guided by their wallets, the elite players are almost always guided by their medals collection and sentiment. Ronaldo doesn't want to join Real because they'd offer him a larger pay packet than United, because they wouldn't, he wants to join Real because of his boyhood fantasy of playing in the famous all white kit. Kaka didn't join the revolution at Man City because of his affinity with the Rossoneri.

Flamini is a bit of an odd case... If you read the BBC Interview with him last week, he comes across as being an "All for one and one for him" character, no sentiment involved as long as he's at benefit.
 

Firestorm

Pedant
Joined
Oct 25, 2003
Messages
15,210
Location
Immersed in the accounts
Anyone moving to Italy will pay 43% on over 75,000 Euro's
In The UK it would be 50% over Euro 170,000

With the different other tax bands a player earning GBP 75K per week would ,compared to someone earning exactly the same amount in Italy (assuming a rate of 1.12) , pay 5250 Euros's (GBP 4686) per week more (243K PA) in tax (whilst still taking home 2M+ in the year)

I dont think the tax bands will matter a great deal in the end, however the effect the drop in the exchange rate will have on a foreign stars perception of what they should be paid may well do, similarly to the transfer fee scenario Slips mentioned
 

Yorkshire Blue

Super Moderator⭐
Staff member
Joined
Oct 27, 2003
Messages
35,888
Location
London
How very retro. There was a time when any game between Arsenal and Manchester United was epoch-shaking. They were the two giants of the domestic game, battling out their own private war while the likes of Chelsea, Liverpool and, this'll make you laugh, Newcastle could only look on from the sidelines. But then Roman Abramovich arrived and United slipped out of contention. By the time that they got their act together, Arsenal were reduced to fighting for fourth place with Tottenham. Amazingly, this is actually the first time since 2005 that the two sides have met in a genuinely crucial game of football.

But while one kind of dominance makes a surprise return, another could be on its way out for good. If you believe Arsene Wenger, and as he has a Masters' Degree in Economics it might be a good idea, the financial superiority of the English clubs is at an end. This summer will see the start of a seismic shift in the balance of power as the rest of the continent suddenly discovers that their money goes a lot further with the world's super-agents.

According to Wenger, there are two reasons for this. One is the fading power of Pound Sterling, the Hull City of the international currency market. Liverpool signed Fernando Torres in 2007 for Euro39m, which at that point was just over GBP26m. If they were to sign him for Euro39m now, it would cost them GBP35m. Would Liverpool be able to buy him now? Absolutely not. From here on in, there are very few clubs who could.

If only that was all. Wenger has pinpointed new tax rules as another reason for the world's best players to seek employment elsewhere. The UK Government have just announced a rise in the highest tax band. Anyone who earns more than GBP150,000 a year, i.e. every footballer in the top two divisions, will have to cough up 50% of it to the taxman. I'd love to be a fly on the wall when the Manchester United human resources team explained that one to Cristiano Ronaldo. Never mind the fact that it's going to stop anyone coming to play in England, it's probably going to make a lot of established stars want to leave. If you believe certain sources at the Emirates, Wenger has already fallen victim to this. Mathieu Flamini was rumoured to have been ensared, not so much by AC Milan's money, as Italian tax regulations. It's a different game these days, isn't it?

But while this is all bad news for the likes of Liverpool and Chelsea, who struggle to bring players from the academy to the first team, it actually works out rather nicely for Arsenal and Manchester United. Wenger may get all the credit for his policies, but Sir Alex Ferguson is every bit as enthusiastic when it comes to young players, as this week's confirmation of Rafael's contract extension shows. Both clubs have respected scouting networks, excellent youth academies and, most importantly, a proven track record of actually giving their rookies a chance to play in the first team. That's going to pay dividends if the days of super-transfers are over.

Perhaps then, this is not so much of an old school one-off, as the first clash in a new period of dominance for the old guard of the Premier League. When new money is battered by the financial storms, old power reasserts itself. It may not matter too much who loses at Old Trafford. In a couple of seasons time, they could both be winners.

Interesting point about the tax, I hadn't thought of that. I suspect some of the clubs may have schemes in place to try and minimise players' tax liabilities - I heard Arsenal's contracts were structured so that Arsenal paid a substantial sum to an off-shore company for the intellectual property rights of the players.

A lot of Man Utd's scouting success comes from their ability to pay big wages. It isn't as if other clubs haven't wanted to sign the players that have opted for Old Trafford. Other clubs have invariably scouted the same players but have lacked the financial muscle to sign the players.
 

Ron Manager

formerly Libertine
Joined
Jan 21, 2007
Messages
5,626
Location
Brisbane, Australia
The overall key to the financial dominance of English clubs though is TV rights. In an ongoing recession will people stop spending on other luxuries (meals out etc) and stay in and watch the football for their relatively small monthly subscription? If they do just that then demand for TV rights will stay high and the Premier League will continue to enjoy income streams way above that of the rest of the world.

Also, the rest of Europe is suffering in the current economic situation as well. I'm no expert but surely the strength of sterling against the Euro will continue to fluctuate and other countries may have to increase their taxes on high earners too?

A levelling of the playing field in Europe would be good for the game, I just don't think it's neccesarily a foregone conclusion.
 
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