Redslo’s First Anniversary

This is my blog’s  one year anniversary.  The past year has been an interesting one for Southampton FC.  A year ago, many fans of the club and football experts throughout England were convinced that the club was in total meltdown and relegation was virtually inevitable.  A smaller group of people, including myself, saw no reason to panic.  Later today Southampton is playing in European Football for the first time in many years.  I do not believe I am overstating our case by saying we were right. 

I am happy with the first year of my blog and, with just a few exceptions, the relatively warm acceptance I have received from the Southampton FC community.  Like everyone else, I am looking forward to today’s game and the rest of the season.

Since I posted statistical information about my blog every ten thousand page hits, I am not going to go into any detail on that subject in this post other than to note that in the first year I received 33,544 page hits of which  7,047 occurred in the first week. 

I am still trying to figure out what I should write about.  Obviously, I am only going to write about subjects that interest me at least a little bit, but I do want to write things people want to read.  With that in mind, the response to my three most recent posts is both informative and mildly discouraging.

 

When Les Reed gave his recent interview about transfer dealings I decided to transcribe the interview and post it on my blog.  I have done this before with Southampton related interviews and the transcripts tended to get an above average number of page views.  While there is a significant amount of work in producing a transcription, the process is not a particularly intellectual endeavor or one that requires any specialized expertise.  Nevertheless, the Les Reed interview post was wildly popular producing over 900 page hits in one day—the second most ever.  I believe there were approximately 1200 separate views of the transcript. 

Shortly thereafter, I did an update to my earlier posts about Southampton European roster issues.  (By the way, I have been told that the proper term is “squad” not “roster”.  To an American, the term “squad” refers to the players whereas the term “roster” refers to the list of players.  I suppose I could call it a squad list but I am not sure that helps.  In this one area, I have knowingly decided not to adapt the English usage)  This post required some expertise in that I had to study the European Competition roster rules and research the various players to determine their proper status.  However, the update itself did not require that much additional work because I had already posted on this subject twice.  Nevertheless, by the standards of my blog, the post was fairly popular.  I estimate that somewhere between 200 and 250 people looked at it.

A couple of days later, I posted an update on the new Financial Fair Play rules.  I had been working on this post for over two weeks since UEFA issued its new Financial Fair Play rules.  I had to undertake a fairly detailed analysis of the rules to try to figure out what had changed.  This required reading more of the UEFA regulations then I had any real desire to read.  I also had to search the web to see what other people had said on the subject to ensure that I was not overlooking anything important.  In the end, I produced a summary of the rules and their potential effects which (as far as my Googling had determined) contained information that had not been published anywhere else on the internet in English (other than in the regulations themselves, of course).  Given the vast amount of attention that has been devoted to the Financial Fair Play rules and their consequences, even by Southampton fans, I thought that this post would be of interest to many people.  However, I am not sure even 100 people looked at it.

To put it another way, there does not appear to be any direct correlation between the amount of work I put into an article and my readers’ interest in that article.

Obviously, readers are free to read what they want to read and I am free to attempt to accommodate those interests as much or as little as I want.  Nevertheless, as I have stated, the relative lack of interest in my Financial Fair Play post was discouraging.

I have decided to expand the scope of my blog to include things that are not 100% (or even 1%) Southampton FC related.  I will occasionally post about other subjects that interest me.  Some of these “off topic” posts will be as much for my convenience as anything else because putting things on the blog gives me a place where I can find things easily in the future.  I am optimistic that some of these posts will be of interest to some of my readers (or that I will find new readers who are interested) but we shall see.   I am not sure what these new posts will be about except that I intend to post a monthly list of books I have read.  I will probably include short discussions of some of those books.

When I do post about something that is not Southampton FC related, I will not advertise my post on the various Southampton FC fan forums so people eager to read about Southampton FC and Southampton FC only will not be tricked into reading my opinions on American politics, Movies, or my reading list. 

In any case, I look forward to another year blogging about Southampton FC and another great season for the club.  I will go on the record right now as predicting that the upcoming season will be objectively better than the last season.  By this I mean that we will either finish with more points in the Premier League, a higher place in the Premier League, in the top half of the Premier League while progressing through to the knock out phase of the Europa League, or we will win a trophy while avoiding relegation.  This also means that I predict we will not be relegated.

 

Thank you to everyone who should be thanked for the past year--especially Southampton FC itself.  I never expected that I would grow to love another sports club at my age. 

The New Financial Fair Play Rules

UEFA has released its new Financial Fair Play (FFP) rules.  They are found in the 2015 edition of the “UEFA Club Licensing and Financial Fair Play Regulations.”  I posted an article about the proposed changes last May when UEFA announced there would be changes to the FFP rules.  That article is here.  This article will be more easily understood if you have read that article.  Go ahead. I will wait for you.

My initial analysis of the new rules suggests that Gabriele Marcotti was almost exactly on target with his understanding of the proposed new rules.  The new rules only slightly modify the prior rules.  They do not reopen football to unlimited spending by rich club owners, but they do make provisions to alleviate the impact of the rules in some situations and to allow clubs to come to UEFA with a long term business plan that will break even plan even though it involves interim losses.  Before I discuss the actual changes, I should discuss several FFP developments that are not direct results of these rule changes, but can still have a significant effect on FFP.

MANCHESTER CITY AND PSG

Last season, Manchester City and PSG were subject to fairly stringent restrictions on spending and European squad size based upon their violations of FFP rules.  These restrictions were imposed pursuant to “voluntary settlement agreements” which can be found here and here.  Last month, it was announced that Manchester City and PSG will not be subject to same level of restrictions in the upcoming season.

These changes were not a direct result of the new FFP rules.  The changes are a result of the clubs’ compliance with the terms of their settlement agreements.  It was always contemplated that, if the clubs behaved themselves, they would be subject to greatly reduced restrictions in 2015-2016.  I cannot be sure that the limitations on the two clubs have not been loosened more than originally contemplated, but the fact that UEFA has banned Dynamo Moscow from European Competition for a year (see here) should make it clear that the FFP rules are still being enforced.  Dynamo’s violation was pretty extreme, however.  They lost over 302 million Euros when they were only allowed to lose 45 million.  Dynamo reported compliant results, but the adjustment to fair market value of their sponsorship deal with their “main shareholder” added at least 257 million Euros to their losses. 

THE COURT CHALLENGE

A second major change in FFP—unrelated to the new rules—arises out of the recent, partially successful court challenge to the FFP regulations.  See here. 

I have been unable to find a copy of the text of the decision on line so I can only go by the news reports which may not be completely reliable.

A court in Brussels referred the FFP challenge to the European Court of Justice and imposed a stay on the FFP rules that would reduce the maximum allowed loss for the current three year reporting period from 45 million Euros to 30 million Euros.  UEFA has appealed and claims that their appeal blocks the court’s ruling.  As a result, I have no idea what FFP limit is currently in effect.  A cautious club will try to keep their losses under 30 million Euros but it may not be necessary.  By the time it finally ends, this case might change nothing or it might eliminate FFP entirely.   As far as I can tell, UEFA plans to continue to act as if it is fully in effect.  However, they might have trouble imposing a penalty on a club that loses between 30 and 45 million Euros.

THE NEW FFP RULES

The actual new rules are found in Annex XI and XII of UEFA’s regulations.  The new rules are less definitive than the old rules.  Even though most things have not changed, the changes that were made leave a great deal of room for interpretation.  However, the core requirement that a club must limit its losses over a three year period to 30 million Euros remains unchanged.

VOLUNTARY AGREEMENTS

The rules now contain the brand new Annex XII covering “Voluntary Agreements for break-even requirement.”  These agreements can cover a period of up to four years.  However, not every club is eligible.  No club that has been a party to a prior voluntary agreement, a discipline measure, or a settlement agreement in the past three years can apply for a voluntary agreement.  If I am interpreting this correctly that means that there are 34 clubs that are currently ineligible to apply including PSG, Manchester City, Dynamo Moscow, and Hull City.

Clubs must also fulfill one of three other criteria:  they must have just qualified for European competition in the upcoming season, but not the current season; they must have fulfilled FFP requirements and qualified for European competition in the current season; or, they must have undergone a change in ownership or control in the past twelve months. 

If a club wishes to seek such an agreement they must apply by 31 December for the subsequent season.  For leagues on the normal European schedule this requires clubs to apply before they know for certain that they have qualified for European Football.  This deadline creates a logical conflict with two of the three possible eligibility requirements. Only the change in ownership criterion makes sense as the rules are written.  Possibly, the club must apply by December 31 without knowing whether they are actually eligible, but the final decision on the application will not be made until the end of the season when both FFP results and European qualifications are known.

The application must include a detailed financial plan for the future “based on reasonable and conservative assumptions.”   Funds covering the projected losses must be irrevocably committed in advance in a way that ensures the money will be there when needed.  UEFA gets to monitor the club very closely.

It is not clear what sort of business plan UEFA is looking for.  A business plan that proposes to spend huge amounts of money on football players and their salaries in order to qualify for the Champions League will probably not be viewed as “based on reasonable and conservative assumptions.”  If, for example, the owners of Crystal Palace, Aston Villa, West Ham, West Brom, Bournemouth, Stoke, Newcastle, and Sunderland all came to UEFA  with a business plan to spend their way into the Champions League, those plans will probably not be approved.  After all, we know that no matter how much money these clubs spend, they are not all going to qualify for the Champion’s League on a regular basis.  Quite likely, none of them will. 

A business plan for the club to build a giant, new stadium and use the vast increase in attendance to afford increased salaries in the future might pass muster, but FFP already excludes spending on new or improved stadiums so there would be no need to go to UEFA with such a business plan.  The same is true of a plan to expand the youth system or training complex.  Those expenses also do not count under FFP.

A club that is heavily in debt might reasonably present UEFA with a business plan calling for the owner (or, more likely, the new owner) to pay off the club’s debts and thereby eliminate the ongoing burden of the interest payments.  This would allow the club to spend more on transfer fees on a sustainable basis.  If a club was paying 50 million Euros a year in interest, UEFA might approve a business plan which called for the new ownership to pay off those loans—in their entirety—in three years and, in addition, contribute up to 50 million Euros a year to be spent on transfer fees or salary while the loans are being paid off.  The club could characterize this spending as reasonable and sustainable because, once the loans are paid off, the additional 50 million Euros would actually be available to spend every year. 

Of course, I do not run a football club. It may be obvious to the people who run football clubs exactly how a club can spend vast sums of money on players or other expenses that count against FFP  in a way that would guarantee increased future income even under ”reasonable and conservative assumptions.”  The fact that I do not know how to do this does not mean it is not possible.

EXCHANGE RATES

There is a new rule governing currency exchange rates.  If a club fails the FFP test due to the changes in exchange rates with respect to the Euro but would pass the breakeven test in their local currency, the rules state that the club “should in principle not be sanctioned.”  There is no indication as to when that principle would not apply.   This rule will normally only help clubs whose local currency has appreciated relative to the Euro.  However, there might be times when fluctuating exchange rates result in a club making payments or receiving income at a time when the exchange rate has just changed for the worse.

MAJOR ECONOMIC PROBLEMS

There is now a provision that makes allowances for “Major and unforeseen changes in the economic environment.”   UEFA is now permitted to take into account “quantifiable financial impact on the club of extraordinary national economic events” assuming the events are both temporary and beyond the normal fluctuation of the economy.  One would assume, for example, that if Greece left the Euro and, as a result, Greek clubs could not comply with FFP, they would not be sanctioned—assuming the Greek clubs seeking to play in European Football did not cause Greece to leave the Euro.  Presumably, if this provision and FFP had been in effect in 2008, there might have been a wholesale suspension of sanctions for violating FFP in the face of the Great Recession.  On the other hand, the continued poor economic environment caused by the European’s elite’s insistence on austerity will not be an excuse because, apparently, it is not temporary.

STRUCTURALLY INEFFICIENT FOOTBALL MARKETS

There is now a provision calling for the UEFA to consider whether a club “is operating in a structurally inefficient football market.”  The football market is defined as the territory of the UEFA Member Association.  Structural inefficiency is determined yearly based upon a “comparative analysis of the top division clubs’ total gate receipts and broadcasting revenues relative to the population of the territory” of the football market.  The provision provides no guidance as to what should be done with this information, but it is fun to speculate. 

I do not have access to all the information I need to evaluate structural inefficiency, but I can take a couple of stabs at it using information from the internet.

I found a link (here) to the total television receipts for the top leagues in England, Spain, Germany, France, and Italy.  I assume this was for the 2013-2014 season.

I divided the television receipts in euros by the populations of the various countries.  England, not surprisingly, came in first at 32.9 euros per person.  Spain came in second at 16.6 euros per person.  Italy, France, and then Germany followed at 13.9, 7.4 and 6.1 euros per person respectively.  To determine the actual figures for structural inefficiency I would need to have the total gate receipts for each league.  I do not have that information.  Nevertheless, television revenue is such a large part of the revenue stream in modern football that these figures are not completely meaningless. 

I also looked at Wikipedia and found a list of total revenue for the leading sports leagues from around the world.  (Here.)    I cannot vouch for its accuracy, of course.  Wikipedia did not provide the numbers I actually needed.  My first calculation using just television revenue was too under inclusive.  The total revenue calculation is too over inclusive because it includes commercial, player trading, sponsorship, and miscellaneous revenue all of which are not included in UEFA’s determination of whether a country has a structurally inefficient market.  I combined the Wikipedia income numbers with Googled population figures and did the division myself.  The countries are listed in order of total revenue.

The revenue per person, (in euros) for various countries is:

England                                 68.4

Germany                              28.2

Spain                                     41.4

Italy                                       27.9       

France                                  22.7

Russia                                    6.2

Turkey                                   7.4

Holland                                26.9

Portugal                              28.4

Ukraine                                 6.2

Belgium                              24.4

Scotland                             37.2

Switzerland                       21.1

All of these figures are high because they include too many types of revenue.  There is also no guarantee that the revenue that does not count is consistent across the various countries.  The English, German, and Spanish numbers, for example, should be lower due to relatively high sponsorship and commercial revenue.   Portugal and Holland likely have relatively high player trading revenue.  These numbers also do not account for the fact that some leagues do not contain 20 clubs.  I have no idea how or if UEFA intends to account for that problem.

However UEFA might calculate the structural efficiency of a football market, England is going to come out on top.  This may mean that English clubs will be held strictly to the FFP rules, but clubs from other countries will not.  In particular, Russia and the Ukraine look like strong candidates for more lenient treatment in future FFP calculations.  This could be of particular significance to clubs like Dynamo Moscow.  Possibly, under these rules, their spending, which was previously viewed as excessive would be viewed as reasonable because of the structural inefficiency of the Russian football market.

It is certainly not clear how much consideration structural inefficiency will receive.  If UEFA decides that the French football market is exactly half as efficient as the English football market does that mean that every French club should be able to make its FFP calculations as if they had twice their actual revenue?  Or will they only be allowed to pretend they have twice their actual television and gate revenue?  Or will all French clubs be required to use the same bonus fake revenue number based upon the average “missing” revenue for the typical club in Ligue 1?  Or will UEFA just double the amount of allowable losses? The answer is almost certainly none of the above, but that is the problem.  Right now no one can know how the structural efficiency rules will work.

Possibly, UEFA will determine a normal level of structural efficiency and only give special consideration to clubs from nations below that level.  Clubs from nations above that level might all be treated the same so England would retain its advantage over Italy and Germany, but not over Russia and the Ukraine.

Depending upon the methodology adopted by UEFA, English clubs may face a tremendous disadvantage under FFP.  Possibly, clubs from other countries will be able to spend more than they earn whereas English clubs will not.  Of course, such rules would only be a significant advantage for those clubs owned by sufficiently rich people. 

SUMMARY

The one certainty about these new rules is that they have transformed the FFP rules from the certain to the uncertain.  Prior to these changes (and the court decision) the FFP rules, for all their complexity, could be clearly explained.  Now they cannot.

Take, for example, PSG.  They are currently almost completely out of the FFP doghouse except that, because they have entered into a voluntary settlement agreement, they are not eligible to request a voluntary agreement for three years.  On the other hand, by any reasonable standards that might be applied under FFP, the French football market is less efficient than the English football market.  Can PSG expect to be treated more leniently in the future if they report excess losses?  How can they know in advance since they are specifically excluded from seeking a voluntary agreement?  Can they argue that their rich owner should be able to spend much more money than the rich owner of Manchester City because of France’s structural inefficiency?  Do the high French income tax rates factor into this at all?  I don’t think anyone knows.

EFFECTS ON SOUTHAMPTON FC

It is not clear how or if these changes will directly affect Southampton FC.  Most likely they will not have a very significant direct effect.  Southampton does not need to seek a voluntary agreement that involves deficit spending because the Liebherrs have, in effect, already created and followed such a plan.  It is not clear if there is a further “reasonable and conservative” spending plan that would improve our situation.

On the other hand, the fact that voluntary agreements might be available to help out other Premier League clubs could hurt us.  In my prior post, I speculated that a new rich owner might buy Aston Villa or Crystal Palace and put in huge sums of money.  A voluntary agreement would explicitly allow this.  However, it appears likely that the new owners could not just put in money to pay permanently higher salaries and transfer fees.  The increased spending must be sustainable from other sources by the end of the voluntary agreement.  That being said, however, there may very well be ways that a famous old club like Aston Villa or a London based club like Crystal Palace could use additional money to permanently improve their financial position.

Depending on how the structural inefficiency language is implemented, the new Financial Fair Play rules have the potential to greatly weaken England’s position in European competition.  Almost certainly, the structural inefficiency rules will never help English clubs spend more money so they can only result in benefits to clubs from other countries.  Of course, only those clubs with rich owners can benefit significantly but there are rich owners of clubs in Russia, France, and the Ukraine who would be willing to pay higher salaries and transfer fees even though they are losing money.  These clubs will be able to compete with Southampton to sign good young players who want pay raises.  Absent this change in the rules, once the new TV contract kicks in, there would be only ten to 15 non-English clubs in Europe that could compete with Southampton on wages.  That number could be significantly higher after the structural inefficiency rules are applied. 

Earlier this year I published an article entitled “Financial Fair Play: Friend or Foe?” and concluded that, overall, FFP was Southampton’s friend.  The answer is no longer clear.  It still provides us with structural advantages over most clubs throughout Europe. However, we will now, very likely, have more competitors for the younger players with potential we seem to want to sign.

Southampton’s European Roster Update (16 July 2015)

Edited:  I overlooked Martina in my initial posting, which was stupid, because I wrote this because we had signed two more players.  This changed my analysis somewhat significantly.

This is my second update relating to our European roster issues for 2015-2016 in light of recent transfer activity.   My two earlier posts can be found here and here.  I have repeated some things from the earlier posts.  The current Europa League rules can be found here.

Of particular note, we have to submit our first roster on 24 July 2015.  Subsequent rosters (assuming we progress) must be submitted on 10 August 2015 and 1 September 2015 (for the group stage).

Southampton will have to submit two lists, an “A” list and a “B” list.  The “B” is for players who were born on or after 1 January 1994 and were eligible to play for Southampton for any two uninterrupted years since their 15th birthday.  If they are only 16, then need to have been registered with Southampton for the last two years.  There is no limit to the number of players who can be registered on the B list so it requires no additional analysis.

Southampton can register up to 25 players on the A list.  However, at least eight players must be “locally trained” and at least four of those players must be “club-trained.”  The other four can be “association-trained.”

“Club-trained” players are ones who have been registered with Southampton for three full seasons between ages 15 and 21.  The seasons can include the ones where the player turns 15 or 21.  Southampton has only one club trained player:  Lloyd Isgrove.

An “association-trained” player is one who has been registered with one or more clubs from the same association for three seasons or 36 months between the ages of 15 and 21.  Obviously, all club-trained players are also association-trained players for the nation in which the club is registered.  If a club does not have enough club-trained or association-trained players, it must leave the roster spots empty.  This means that our “A” list can only have 22 players on it because we do not have enough club-trained players.  This is not a problem right now because we only have 22 players to fit onto the A list. 

CURRENT ROSTER OF “A” LIST PLAYERS

Other                    Association Trained         Club Trained

Clasie                    Bertrand                              Isgrove

Fonte                    Davis, K               

Gardos                 Davis, S

Gazzaniga            Forster

Juanmi                  Long                     

Mane                    Rodriguez

Martina

Mayuka                                               

Pelle                     

Ramirez               

Soares

Stekelenburg

Tadic

Wanyama

Yoshida

In my last post, I speculated about the possibility of getting rid of Osvaldo, Ramirez, and Mayuka.  One-third of that has happened.  Current rumors suggest that Ramirez may stay with the club.  I haven’t read any speculation about the fate of Mayuka.  If they both stay with us it means that we do not have a roster spot for the center back  that we all know we need.  This means that one of them is going to have to go--unless we are planning to put off the problem by not registering Forster until January.

At this point I am assuming, contrary to my earlier speculation, that we will be keeping both K. Davis and Gazzaniga on the roster for Europe.  I would feel more comfortable with a better back up goal keeper, but it seems clear that the people running Southampton FC are ok with things as they are.

Because Premier League rules do not currently require club trained players, we could sign three extra players for domestic competition only.  One of those players must be home grown.  If we do not register Forster for the first half of the season we could sign an additional home grown player.  An additional home grown player could also be signed if Isgrove is left off the EPL roster.  However, I think it is doubtful that we could keep these extra players who were not eligible for the Europa League happy so I doubt we will sign any extra players unless we are eliminated from the Europa League before the group phase.

On the other hand, if Ramirez and Mayuka are not really going to be with the club this season, then there are two more openings that can and should be filled--one with a center back.  I would suggest that if we sign anyone else other than a center back or a goal keeper this summer either Mayuka or Ramirez is not going to be here on 1 September.

These numbers also explain, in part, why Elia and Duricic were not purchased.   They fit into our roster last season because we did not have to worry about the club trained requirement so we had 25 roster spaces.  Now there is simply no space for them because we only have 22 roster spaces.

I Transcribed Les Reed’s 10 July 2015 Interview with @bigadamsport

Edit:  Changed "rumor" to "rumour" because Les Reed is English.  If this had been an interview with Ralph Krueger I probably would have left it alone because both spellings are ok in Canada.

This is a transcript of the 20 minute interview between Les Reed and @bigadamsport.  The audio can be found here.   As always, I have taken the liberty of eliminating words that were verbal ticks, false steps, or just plain unnecessary.  I have omitted words when they do not add clarity or meaning such as, for example, @bigadamsport’s early reference to “early season” which he immediately corrected to “early summer”.  On the other hand, I left in Les Reed’s early “Um, yeah” because it actually added some meaning and I did not feel right replacing it with “you are correct, sir.”

For those of you who are interested, my secretary transcribed the first draft and I then listen to it over and over again as necessary to fix things since she is not an expert on football or English accents.  (And, no, I am not claiming to be an expert on those subjects either—just more of one than she is.)

And we are off:

BA:  This summer compared to last summer: from the outside you can say, oh it feels the same.  Early summer players going out.  Perhaps, later summer players coming in.  Does it feel the same or is that too general?  From the inside does it feel different to last summer? 

LR:  Um, yeah.  It is not as traumatic as it was last summer because it wasn’t just transfer window.  It was coach, the first team staff, and the rumour mill about off the field and the rest of it.  So we haven’t had to contend with any of that this time.  The other difference is we actually got three players in before anyone went out so that was slightly different.  It doesn’t make a lot of difference to me because whether deals are happening or not, I am still doing the work and my team and the recruitment team are still having to be very, very busy making sure we’ve got all our ducks in a row and that we have covered all the bases and so on.  So from that point of view, it is much the same.

BA: Is the business model that?  Does a club the size of Southampton have to have a business model like what we see happening?  In other words, instead of the fans worrying about players going out, is that just part of reality under the way you plan things and the club’s board are?  As in you need to make money on players.  You need to find new players.

LR: No, I think it’s changed a little bit from selling players as part of the business model.  The reality of what you have to face is that, in essence, we’ve been labeled a feeder club.  I think we are more of a showcase club and I think we do things well in terms of talent identification, recruitment, developing our own young players, and we are pretty good at spotting talent at other clubs that maybe nobody else has seen or nobody else wants to take a chance on. I remember criticism when we bought Jay Rodriguez and yet now we’ve got a player who is back in form—banged in two goals the other day—looking great and potentially will pick up his England career again.  So, I think we’ve had a good record at doing that but then of course what we do is bring them out here at St. Marys and we showcase them and everybody else who’s, perhaps, not so good at doing that has a look over the fence and what they have is the resources and the finances.  I think it’s fair to say that when they go, they go to big clubs and they go to big clubs for a lot of money.  Whilst that’s not our business plan, what we do work on is the basis that if they go, that money will be reinvested in the way that we do it, in picking up talent again and moving forwards. The reality of it is, we are not in a position to compete with those Champion's League clubs on salaries and it’s both the revenues that we can generate and it’s also, to a certain extent, Financial Fair Play because we came up with the League One salary into the Championship, Championship salary into here.  The percentages that you can increase that by within short term cost control are not very big compared to what the big clubs can do.

BA: Nicola always said that Financial Fair Play hurt clubs that were ambitious that weren’t the 50 or 60 thousand pound a week clubs.

LR: Correct

BA:  That’s probably the case, but does it stop you breaking into the top six?  Obviously, you still want to remain ambitious.

LR:  Yeah, yeah.  I don’t think it does and I think too many clubs in and around us in the Premier League are happy to accept that situation and we’re not.  It’s not what we’re all about but we know we have to do it step by step.  But providing we prepare ourselves to be ready to take the opportunity when it comes—that’s the best we can be.  We were close this year.  We had a very, very good first half of the season.  In the top four or five most of the season and we have to make sure that next season that we improve on that so that if a team does fall away from the normal Champions League group and there is a door to go through that we are the best prepared of the other teams to do it.  I think we believe that that could happen.  I am not so sure the others really do.  That’s our advantage.

BA:  Is that ultimately the most frustrating thing about the Alderweireld saga is that having discovered him when others hadn’t necessarily spotted his class and then to see him disappear at the last minute.  Fans would be like, if we are ambitious why didn’t we keep him?  That is the obvious thing to ask you.

LR:  At the end of the day, we are ambitious and we did everything we could possibly do to keep him.  I probably worked on Toby for the whole year.  He had a great year here.  He loved it here.  He settled into the area and we had discussions about a long term contract and the rest of it and all the indications were that this is where his heart was and this is where he wanted to play.  The confusion came in with the option with Atletico and the fact that we exercised our option.  We believed that they had missed the opportunity, the window to buy us back out of it.  All talk of a legal case was really around the fact that we believed the player wanted to be here and, therefore, pursuing a legal route in order to exercise the option was all based that the end result would be Toby Alderweireld would sign for us.

BA:  There is no point in following the legal avenue, if he ultimately wants to go to Spurs.

LR:  Absolutely! Yeah.  He, um

BA:  Do you have any regrets about thinking we should have signed him in January?  I wish we had pushed on …

LR.  We couldn’t sign him in January.  It wasn’t part of the agreement.  That was the problem. The terms of the agreement were that we had to wait until now to make to make our intentions clear and at which point they had a window to basically give us our deposit back.  The fact of the matter was, on Tuesday morning, I was booked on a flight to Madrid.  We’d parked the legal argument.   We’d gone down the line of ok we need to make a proper market value bid.  We did that.  I was booked on a plane to go to Madrid on Tuesday and got a call on Monday night around eleven o’clock to say that Toby had decided that he wanted to go to Spurs.  So two things there:  whilst we believed our bid was better than Spurs and I was on my way to negotiate the deal the player was Atletico Madrid’s player not ours and, therefore, he had the choice.  I was concerned that it was financial because we felt we had a contract in place that was acceptable. I was prepared to renegotiate that but the reason I was given was that Toby had decided that the Tottenham was the place where he felt he could develop his career.  Once that happens, there is nothing that you can do.  There is no point.  Atletico were prepared to negotiate a proper transfer.  The legal argument now just doesn’t sit. 

BA:  We know that if players want to go, they generally go.  In the world, that is often the way.  You have to make the best of what it is.  Morgan Schneiderlin obviously is the next link to that because it’s no secret that having staying last summer he’d like to move on to possibly a Champions League club, Manchester United, whoever.  How is that progressing?  Is it progressing?  Is it going to work?

LR:  You know what, I’d like someone to give me the answer to that question.  It’s well documented that we had a bid that we turned down, some 15, 16 days ago.  It hasn’t really progressed since then.  We’ve had contact, but it’s not the normal kind of let’s sit down and negotiate.  It’s been a little bit of “yeah, we are interested, you know, and we’ve made a bid.”

BA:  It must not be big enough.

LR:  So no, no.  So, therefore, where it’s left is anybody that is interested in any of our players have got to match the asking price.  In terms of Morgan there is not a lot we can do.  To be fair to Morgan, he’s been very professional.  He’s training properly.  He’s with the squad.  We’ve not had any tantrums or anything like that and we sit and wait.  I don’t know how long it would go on.  I think what is most important about it is that there is some conclusion as quickly as possible and then we know whether we move on or whether Morgan gets his head around the fact that he is going to be playing here next season. 

BA:  Seems unlikely that he will be joining United for their USA tour on Sunday,

LR:  Unless something happens rapidly—and I don’t see that happening—that’s likely.

BA:  It’s good that you say about his positive response to you, because I was thinking what on the earth happens if nobody comes back in?  Nobody hits the value and the bloke is left knowing he wants to go but perhaps understanding that you have a valuation for him.  That is not going to be fun for you or him. 

LR:  No.  To be fair to Morgan, he, as I said just now, is a good professional and, I think, if the reality was that no one was really pushing hard to get him—after all if you really want a player and you are a top four club then you go and get him.  I am pretty sure he would get his head down.  He has two years left on his contract and there is very little anyone can do unless a club really wants to come in and make the attempt.  I don’t see Morgan wanting to go through any other club than a Champions League club and, therefore, it’s up to them to decide that he is their number one choice and they are going to come up with the right money. 

BA:  You have to spend last summer and this summer a lot of time dealing with or seeing fans and everyone dealing with things coming out of the Northwest, whether it be Liverpool or Manchester United, well before deals were done and briefings and everything else.  But this one is quite clear isn’t it?  This player is worth this much, if you want him, you pay the money. 

LR:  Yeah.  Absolutely. 

BA:  Are you confident that this summer, like last summer, will turn out for the best, whatever happens? 

LR:  Yeah. Yeah.

BA:  I say it because of the panic at the start of last summer, but actually you were all proved right in the end. 

LR:  Yeah.  I am very confident.  All the right things are in place.  They were last summer.  The way we go about things is very diligent.  You know we get our heads down.  We work hard through the summer.  Well, we work hard all year round.  We have structures in place which will mean that if we get a disappointment, we can deal with it.  We can then move on.  We can solve it.  We saw that last year and we’ll do it again. 

BA:  The ultimate question is, I guess, when you look at the season ahead can you fight on all four fronts and not suffer the Euro Elite curse that clubs suffer?  You would love to maintain your position in the Premier League in the top eight.

LR: Yeah.  I think we need to talk all that down.  I don’t believe it.  I think it’s a fantastic inbuilt excuse for not having a good season.  Aston Villa did not have a good season last year and they weren’t in the Europa League.  Anyone can have a bad season and I think it’s quite a convenience to have something to blame it on.  If you look at Chelsea, they will play off quite a small squad.  They fight on all fronts and they are the champions.  There is a lot to be said for that.  I think this is something that has crept in over the last few years.  I think that having a big squad, as people call it, can bring in as many problems as it can bring in answers.  Over history, most successful teams tend to get the same team out week after week.  The other thing is, I think what we are good at, is manage it.  There is an issue.  Find ways around it.  We have a fantastic medical sports science department.  There is a fantastic synergy between them and the coaching staff.  Football league clubs play 60 games a season and manage it.  So I think we’ll have like the right recovery strategies in place and, hopefully, we will progress in the competition.  And, actually, players don’t get tired when they’re successful.  I see no reason why we shouldn’t buck the trend and actually prove it can be done.

BA:  The balance of academy products coming through the pathway and signing players will be important this season because you want to get the squad that can handle it but then balance it with your budget and everything else.  Do you see many of the academy boys that we haven’t yet pushing especially with the Europa front?

LR:  I think there are more boys on the preseason camp now with Ronald then there has ever been before from the under-21 squad.  Our fans know we had a good under-21 squad last year.  They are beginning to kick on.  Then you got players like Turnbull and Stephens who were fighting for promotion with Swindon last year—fantastic experience—played at Wembley.  Why shouldn’t they be staking a claim during preseason to get in that squad?  Harrison Reed and Matt Targett stepped up last year. Why shouldn’t they stay in that squad?  So when the two preseason camps are over and we’ve had a look at how those young players perform, I believe with the purchases that we are making and the purchases we intend to make, supplement that with young players who I am getting lots of inquires about from Championship clubs, top Championship clubs, clubs who feel that they can get promotion next year. So I see no reason why they shouldn’t step into our larger squad to supplement the cups and the Europa campaign.

BA:  As a layman with no football background apart from watching it for many years, when people say to me what do the Saints need, I have been saying a central back, a center midfielder, if Morgan goes for sure, a general, and, perhaps, a fox in the box [type?] another striker they don’t generally have.  How confident are you that you can give fans a couple of signings that they can lick their lips with?

LR:  I think you’ve got to be very, very careful.  You have to buy the right players in the right positions who can do what you want them to do.  They don’t have to be big names.  We’ve suffered from signing big names in the past who didn’t deliver who’ve been very, very costly for this club and that the cost therein has effected the budget we’ve got and, therefore, we have to get that right and make sure we don’t make similar mistakes.  If that fox in the box happens to be Jay Rodriguez who we didn’t have last year, happens to be Ryan Seeger, unfortunately he’s injured at the moment, or if it’s someone we purchase then we’ll be happy.  It’s actually delivering on the pitch rather than delivering the big name that’s going to wet everybody’s lips

BA:  Bu you and Ronald are on the complete same song sheet?

LR:  Oh, absolutely! Yeah, yeah.  Nothing happens at this club without Ronald and myself, with the collaboration of other staff, identifying what we need and then once Ronald’s bought into it, then my job is to go and get it done.

BA:  And that’s you talking about value and not you making an excuse for not spending big money.  You are saying it won’t necessarily need to be. 

LR:  No, no ….

BA: One of those areas you think needs it?

LR:  We’ve got a good budget to complete the signings that we would like to complete and we’re not going to spend money we haven’t got.  I think for our fans, who will remember six years ago, they may read in the papers and the media certain clubs spending significant sums of money and high wages.  They are spending money they haven’t got and they’re banking on them being in the right place at the right time when that money comes through.  We know that is not the road to making sure that….  Listen we want to stay in the Premier League like everybody else, but we want to stay where we are in the Premier League and above.  We are not going to throw loads of money at just surviving in the Premier League.  We are going to stick to our plan.  Keep our focus.  Be patient.  Get there step by step.  The big thing about a long term future at the top end of the Premier League is getting the business off the field right as well as the football business and that’s what we’re trying to pursue. 

BA:  Just finally, one of those players that just came to my head who perhaps didn’t deliver the big money a few years ago was Gaston Ramirez.  He was back with the squad.  Is he a player that has a future in the club or is he one of those that because he was out on loan all season we should just presume….

RL:  No.  I think what we have to remember with Gaston is that he came here as a very young player, inexperienced, but with a big tag.  He come straight from the Olympics.  He hadn’t done any preseason training and he hadn’t had a break.  The following summer, he was playing for Uruguay in the World Cup qualifiers.  Didn’t get a break.  He’s been here for the last two seasons—hasn’t done preseason.  The reports I am getting back now from the camp—because he came back refreshed, had a holiday, didn’t play for Uruguay over the summer.  He’s had a season in the Premier League so he’s matured.  Whilst it wasn’t a great season successfully at Hull, he played games in the Premier League—not as many as we would have liked—but he’s now had a rest.  He’s now fully fit.  He’s come back and he’s training well and reports are that he’s doing well.  He can earn himself a place and if that happened we know he’s got the talent and we wouldn’t want to go out and buy someone with that talent at an enormous cost when it’s latent and it may be there.  If he can do that with Jay Rodriguez coming back it’s like making two new signings anyway.  How much would you have to pay for that kind of quality?  So, yeah, we’re pretty confident that if Gaston earns his place and he’s got a lot to prove to Ronald but Ronald has said that everyone has got the opportunity, everyone’s got the chance.  Nobody would be more delighted then, I think, our fans and the rest of the squad if Gaston really kicked on this summer.   

 

Miscellaneous Other Salaries According to Football Manager 2015

After posting the salaries from the Football Manager (FM) 2015 data base for all 20 of last year’s Premier League clubs, I thought it would be interesting to do the same for clubs in other countries.  However, there was no way I was going to tabulate every salary for every club from every top league in Europe.  Instead, I have elected to select three or four clubs per country which might be of interest.

As I stated in my earlier salary posts, I do not know how accurate these figures are.  The salaries do not include performance, appearance, and other bonuses.  On the other hand, last summer when I was considering Financial Fair Play issues FM’s base salaries fairly closely corresponded to the information released by Southampton for the players’ salaries as a whole.

I listed the top 20 weekly salaries for each club.  All numbers are in thousands of pounds per week.  These numbers are taken from the final FM 1015 database which was set at the end of the January 2015 transfer window.  No subsequent transactions are recognized, including contract extensions and transfers.

COMMENTARY

Looking at these numbers it becomes pretty clear why Southampton can hope to sign players away from many of the better European clubs.  No clubs in Portugal, Holland, or Belgium can pay salaries that are competitive with Southampton.  In France, only PSG pays higher salaries than Southampton.  The other clubs all pay less.   Five German clubs pay roughly competitive salaries but only Bayern Munich consistently pays massively higher salaries than Southampton.  In Italy only the four teams I listed plus a couple of others pay comparable or better salaries.  In Russia only four clubs pay close to competitive wages.  In Spain the three clubs I listed pay better wages and three others pay wages that are competitive with Southampton.  To put it another way, from purely a salary perspective, we are only competing with 20 to 25 other clubs in Europe—outside the Premier League itself, where we are competing with 19 other clubs.  When the new TV contract kicks in, our relative position will improve even more.

The fact that we are not easily able to sign all of (for example) Lyon’s best players away from them suggests that players are not lying when they claim to be interested in something more than money.  Players do stay at clubs like Lyon or Porto to play Champions League football or to have a chance to win domestic trophies.  If this were not true the movement of the best players to the Premier League would be far more pronounced than it is now.

Of course, the fact that there are clubs in Germany, Spain, Italy, and France that pay far more than Southampton (and most other Premier League clubs) is another reason we cannot sign Lyon’s best players.  Lacazette, for example, would be a great signing for Southampton, but other, richer clubs will pay both Lyon and Lacazette himself more than we can afford.  The current rumor is that he has been offered to Arsenal for £21 million. 

On the other hand, these numbers suggest that there is no reason we cannot continue to cherry pick the best available players from around Europe who will be happy to come to Southampton for a big raise and the chance to player in the Premier League.  They will not be lying when they say that they moving to a big club like Southampton is a dream move—even if two or three years later they move to Liverpool or Arsenal and say the same thing again.

The clubs are listed in alphabetical order by nation.  Some long names have been shorted to fit.

BELGIUM

I was going to summarize three Belgium teams but it turned out there was little point.  Very few Belgium players make over 10K a year.  Only five made 20k or more a year four of them were from Anderlecht and two of those players were on loan from Chelsea.

FRANCE

LYON                                                     MONACO                                            PSG

Gorcuff                 60                           Toulalan               60                           Ivrahinovic          250

Lacazette             35                           Berbatov             60                           Cavani                   185

Risevas                 31                           Moutinho            59                           Matuidi                 150

Grenier                30.5                        Carvalho              43                           Silva                       130

Gonalons             30                           Dirav                      28.5                       Luis                        105        

Malbranque       25                           Stekelenburg     28.5                          Cabaye                 79

Mruemba            23                           Traore                   26.5                        Motta                   64

Bedimo                20.5                        Kondogbia          23                            Maxwell               64

Daho                     20                           Raggi                     17                           Pastore               60

Ferri                       17.5                        Abdennour         16.3                        Van der Wiel      57

Kone                     17.5                        Carrasco               16.3                        Lavezzi                  56

Umtiti                   17.5                        Silva                       14.5                        Digne                    44.5

Jallet                      17                           Germain              14.5                        Moura                  43

Tolisso                  14.3                        Traore                   13.8                        Sirigu                     42.5

Fekir                      11.8                        Martial                  10                           Camara                 24          

Rose                      11.3                        Bakayoko            9.8                          Aurier                   24

Lopes                    9.5                          Echiejile               7.5                          Douchez              20.5       

Ghezzal                 8.8                         Subasic                 5.0                          Verratti                 18.5

Benzia                   8.8                          Kurzawa               3.4                          Marquinhos       11.5

Yattava                 7.3                          Wallace                 1.5                          Rabiot                   7.8

GERMANY

BAYERN                                                DORTMUND                                       WOLFSBURG

Gotze                    170                         Reus                    140                         Gustavo               100

Ribery                   170                         Hummels             64                           Rodriquez           86

Alonso                  145                         Mkhitaryan         57                           Schurrle               86

Neuer                   140                         Kagawa                57                           DeBruyne            71

Schweinsteiger   140                         Blaszczykwski    50                           Naldo                    63

Lahm                     140                         Piszczek              50                           Jung                       57

Lewandowski      130                         Immobile             43                           Trasch                   57

Thiago                  115                         Sahin                     43                           Benaglio               43

Muller                   115                         Kehl                       43                           Hunt                      43

Alaba                     100                         Weidenfeller     42.5                        Schafer                 42.5

Robben                  100                        Kampl                   42.5                       Perisic                   40

Reina                     86                           Aubameyang     42.5                         Dost                       33.5

Boateng               85                           Pap…poulos       42.5                        Ochs                      33.5

Martinez              85                           Bender                 42.5                        Vieirinha              33.5       

Rafinha                 71                           Ramos                  40                           Pilar                       33

Dante                    71                           GroBkreutz         35.5                        Guilavogui           32.5

Pizarro                  64                           Schmelzer           35.5                        Bendtner             29.5

Benatia                 57                           Duim                     29.5                        Klose                     28

Rode                     50                           Ginter                   28.5                        Caligiuri                28

Badstuber           50                           Subotic                 28.5                        Felipe                    14.8

 

HOLLAND

I was going to include three clubs from Holland including Ajax and Feyenoord, but the salaries were so low there was no point.  According to FM, no one owned by a Dutch club is making £15K a week and very few are making even £10K.

ITALY

AC MILAN                           INTER                                    JUVENTES                           ROMA                  

Mexes                 100         Podolshi               100         Pogba                   115          De Rossi              165

de Jong                 88           Vidic                      80          Tevez                    115         Pjanic                    80

Honda                   68           Palacio                  80          Vidal                      100         Gervinho             73

Lopez                    63           Hernandez          75           Buffon                  100          Strootmon          70

Essien                   63           Guarin                  70           Pirlo                       95           Castain                 65

Muntari                63           Ranocchia            55          Llorente               88            Totti                       63

Pazzini                  63           Hondanovic        50           Marchisio            88             Iturbe                   58

Alex                       63           Medel                   45.5       Chiellini               88            Cole                       58

El Shaarawy        60           Campagnaro      40           Borzagli                  63           Ijajic                       47.5

Menez                  55           Kovacic                 37.5        Evra                       63           Nainggolan         45

Destro                  50           Kuzmanovic        37.5        Lichsteiner          50           Astori                    40

Rami                      50           Shagiri                   35.5        Bonucci            50           Yanga-Mhiwa    40

Abate                    45           Jesus                     35           Caceres               45           De Sandis            37.5

Cerci                      41           Nagatomo           32.5        Asamoah             40           Manolas               37

Zapata                  40           Dodo                     30           Pereyro                32.5      Doumbia              35.5

Armero                37.5        Jonathan             30           Pepe                     32.5        Torosidis              32.5

Van Ginkel          37.5        D’Ambrosio        27.5        Ogbonna             30           Maicon                32.5

Suso                      35           Icardi                     25           Morata                 25           Keita                      30

Doli                        32.5        Andreolli              22.5        Storai                    25           Holebas                31

Bonera                 30           Obi                         17.5        Padoin                  20           Ibarbo                   18.8

PORTUGAL

FCP                                                        SLP                                                         SPOTTING LISBON

Martinez              74                           Salvio                    33.5                        Labyad                  37

Tello                      41.5                        Luisao                   29.5                        Capel                     19.8

Quaresmo           29.5                        Julio Cesar           29.5                        Patricio                 14.8

Rolando               27.5                        Gaitan                   24.5                        Lopes                    14.8

Walter                  22.5                        Samaris                 24                           Slauchev              12

Casemiro             22.5                        Jonas                     22.5                        Montero              10.8

Herrera                22.5                        Fejsa                     19.8                        Rosell                    7.5

Angel                    17.8                        Sulejmani            18.5                        Adrien                  7.5

Campana             15                           Lima                       16.3                        Tanaka                  7.5

Oliver                    14.8                        Pereira                 16.3                        Mauricio              7.5

Brahimi                 14.8                        Silvio                      14.8                        Salomao               6.8

Adrian                   14.8                        Airton                   14.8                        Shikabalo             6.8

Danilo                   13.5                        John                      14.3                        Viola                      6.8

Aboubakar          11.5                        Artur                     13                           Gould                    6

Andres                 11.5                        Pizzi                       12.8                        Rubio                    5.5

Marcano              11.3                        Talisca                   12                           Silmai                    5.5

Sandro                  11.3                        Farina                    11.3                        Cedric                   4.5

Helto                     11.3                        Amorim                11.3                        Wilson                  4.5

Izmailou               11.3                        Sidnei                    11.3                        Oliveria                 4.1

Reyes                    11.3                        Djuricic                 10.8                        Heldon                 4.1

FM lists only three other players as making more than 10k a week in the rest of the league.  Two of those players are on loan.

RUSSIA

CSKA MOSCOW                                  DINANO MOSCOW                         ZENIT ST. PETERSBURG

Akinfeev              35.5                        Kokorin                 71                           Hulk                       97

Eremenko           34                           Kuranyi                 70                           Garda                    80

Ignashevich        28.5                        Zhirkov                 57                           Garay                    79

Fernandez          25.5                        Denisov                 57                           Witsel                   63

Tosic                      23                         Valbuena             48.5                        Danny                   48.5

Berezutskiy        23                           Samba                  43.6                        Rondon                 48.8

Berezutskiy        23                           Dzsudzsak           35.5                        Kerzhakov           43

Dzagoev               22.5                        Gabulov               35.5                        Tymoschuk         43

Natkho                 22.5                        Hukocan              34.5                        Criscito                 38

Musa                     16.5                        Ionov                    28.5                        Ansaldi                 31.5

Wernbloom        12.3                        Douglas                  28.8                        Ryazantsev         31

Cauna                   12                           Vainqueur           24.5                        Anyuhov              31

Milanov                11.5                        Buttner                24.5                        Lombaerts          28.5

Nababkin             11.3                        Shunin                  23.5                        Fayzulin                26

Schennihov        11                           Kozlov                   21.5                        Malateev             24.5

Panchenko         7.5                          Granat                  18.5                        Arshavia               23.8       

Oliseh                   6.8                          Manolev              12.5                        Shatov                  23

Chepchugov       5.8                          Yusupov               11.8                        Smalnikov           21.8

Strandberg         3.8                          Berezovskly        6.3                          Lodygin                 17

Yefremov            1.6                          Rolenberg           2.4                          Neta                      6.3

SPAIN

ATLETIC MADRID              BARCELONA                       RED MADRID                      SEVILLE

Koke                      170         Messi                    525         Ronaldo               500         Gameiro              42.5

Torres                   100         Suarez                  325         Bale                       325         Vitolo                    38.5

Mandzukic          90           Xavi                        205         Benzema             235         Banega                 37

Griezmann          79           Neymar                 190         Rodriguez            175         Bacca                     33.5

Alderweireld      78           Iniesta                  190         Casillas                  175         Mbia                      29.5

Turan                    63           Alves                     180         Kroos                    175         Iborra                    27

Miranda               53           Rakitic                   165         Ramos                  160         Krychovwiah      27

Tiago                     42.5        Mascherano       150         Modric                  130         Vidal                      26

Juanfran              42.5        Pique                    150         Coentrao             120         Reyes                    25.5

Garcia                   42.5        Busquets             150         Marcelo               120         Pareja                   25.5

Cerci                      41           Sony                      135         Pepe                     115        Del Moral            22.5

Godin                    34           Alda                       83           Arbeloa                83         Deulofeu            21.5       

Cani                       32.5        Pedro                    83           Varane                 71           Aspas                    21.5

Baptistao             32.0        Adriano                 83           Illarranendi         71           Arribas                 19.3

Jimezez                32.0        Bravo                    83           Hernandez          70           Carrico                  18.5

Guilavogui           31.5        Ter Stegen          80           Varela                   71           Navaro                 17.5

Assaldi                  31.5        Vermaelen         79           Isco                        58           Tremoulinas       12.8

Moya                    30           Mathieu               68           Khedira                58           Cicinho                 12.5

Oblack                  29.5        Afellay                  49           Silva                      50           Cristoforo            12.3

Siqueira                29.5        Deulofeu             43.5        Navas                    35.5        Cohe                     11.5