[Music] Hello and welcome to the price of football, the show that looks at the money behind the beautiful game with me producer guy standing in for Kevin Day and Liverpool University's Kiran Maguire, hi Kiran. Hi producer guy, how are we? Okay. I do like the fact that you are wearing a hoodie with your own initials in it. Yeah, I couldn't resist it. I couldn't resist it. So I had been at training this evening. I trained coaching my son's team, Huffengriffins, under 10s, as you know. And last, for the first three seasons I just had a generic Huffengriffins sort of, you know, tracksuit top. But it was time to get a new one because the cups I was getting holes in them and stuff like that. And they always go first. Yeah, and when I went on the website to order a new Huffengriffins hoodie, there wasn't the option for free to have your initials. So I do have the initials, not PG, but GK. And yeah, but it does make you feel like there's something about it. Having your initials on, it does make you elevate to your as a coach, I think. Absolutely. Okay, it's questions day. Let's get straight into it. So our first question is from Luke Zubina. He says, "I have a question relating to performance related bonuses in players contracts, particularly regarding bonuses related to goals scored. Is it common practice for clubs to put a maximum play out in a player's contract in order to protect the club from paying out a load of money if a player is in a particularly rich vein of goalscoring form?" For example, he says, "If Danny Wellbet goes on score 20 league goals for Brighton this season, if, say, he has a bonus of 50,000 per goal, £5,000, that would equate to a million pounds over the season. So Wood Brighton have the possibility of capping the amount they pay in bonuses." And also, finally, says, "Do players get paid goal bonuses in pre-season friendlies?" Right. I, of course, went to our secret agent, all one of our many secret agents, but this particular issue, I'll answer as I do often your second question first, Luke. Pre-season friendlies, sorry, they don't count. Because there's no jeopardy in them, there are no benefits as such. When it comes to player bonuses, I mean, I do get to see contracts and also get to talk to people within the industry. And there is very much these days an emphasis on side-before-self, unless your name's Mocella. And therefore, it is now quite rare to see a goal bonus. And the rational up is, let's say that you were on 50,000 pounds of goal, you're running through, it's two of you against the goalkeeper, you're going to shoot and try to score, rather than do the sensible thing, which is passed to a colleague. So, this used to be more common, but with greater emphasis, as far as modern football is concerned, on the collective ethos, and the tactical and technical elements within football, as opposed to the individual. And we've still got to acknowledge that some footballers are brilliant on an individual basis. It would be out of kilter for an individual bonus in terms of scoring goals, as far as player bonuses are concerned, because if you take a look at the Manchester United accounts, for example, and you go into the footnotes, there is a sectioned in the footnotes, which refers to something called contingent liabilities, and a contingent liability is a possible payment, which will be determined by a and unyet unknown outcome. Now, when it comes to players that unknown outcome could be that the player plays a certain number of games. Now, that is down to merit, rather than scoring goals. It could be linked to the player getting international caps. It could be linked to the player being chosen to play for the PFA player of the season or the Ballon door. So, those type of bonuses, other ones which you see on a far more common basis than for scoring goals. So, I think the the goal scoring bonus is a bit of a historical overhang, but it is now part of the modern myth within football itself. All right. Next question is from Lacklin Norton. Lacklin says, "As a Liverpool fan from Australia, I've been thinking a lot about the backlash against foreign fans taking space away from locals at games and raising ticket prices. I know this proposal probably doesn't stack up financially. I always love it when questions have that, but I'd be happy to pay more for an Anfield ticket if that Anfield ticket, if that extra cost could go towards subsidising tickets for young local fans who couldn't otherwise afford it." He says, "I know clubs would just pocket the profit, but hear me out. We often forget foreign fans want to be surrounded by locals and see the atmosphere there generate, not just see the team. We have home and away sections, so could we also have a visitor section for foreign fans? If this model worked, it could provide increased or stable income for the club, heal the rift between foreign and local fans and help generate better atmosphere as it grounds, improving the overall product. It would also allow clubs to be more transparent around ticket prices. It's an interesting one, isn't it? I mean, we're so used to the idea of home and away, but could there be other sections too?" I do like the fact that an Australian listener starts talking about home and away. "Yeah, very good. I'm even tricked. Very good." This could work in theory. To be fair to Liverpool, they do make a small number of tickets available to local fans, especially young fans, but the system doesn't necessarily work because it's not always thought through. I remember when I first started going to watch football. I was eight years old. If you send an eight-year-old by themselves to watch football in 2025, I don't think that would go down particularly well with the broader authorities. Therefore, that child would have to be accompanied by an adult. It is a local fact. Does that mean that the parent is paying full price yet the child's getting in for a lower fee? I'm ideologically predisposed to want local fans, many football clubs because of the way that they were originally set up because they tended to be close to the factories. They tended to be closer to the mills, especially as we know, a guy in the north of England. They are not necessarily in wealthy areas, as far as individual towns and cities are concerned. Therefore, the demographics of people that want to get at sport, they might not necessarily be wealthy themselves. If you're going to then start to charge the adult of full-price season ticket, the kid ain't going to get in because mum or dad can't afford both. I think there are ways that we can do it. But when you then talk to the broader fan base, especially those elements of the bigger clubs that don't get to watch matches very often, they say, "We want to do a see the team win." Therefore, whatever maximises revenues is the route that we would go down because that would allow us to pay the higher wages and also to recruit more players on higher fees and stay within the cost control constraints that we have within football. In an ideal world, Lapland, yes, I would absolutely support your scheme. I think the hurdles and the practicalities would make it difficult to implement. Yeah, I guess there's a valid point there, though, isn't there, in terms of the sort of transparency around ticketing and potentially making tickets for one-off games more expensive for the tourist fans rather than local fans? Is there any way that could work, I guess? Yes, because that does exist. I mean, I appreciate your Manchester United fan guy, but Manchester United tends to charge the same price regardless of the opposition because he's Manchester United. Now, when I go to Watch Brighton, we've got tier AB and C, and I think we've now got an A plus as well because as a smaller provincial side, there is still an element within a fan base that wants to see Manchester United and Liverpool and the North London side and so on. It is being introduced that you noted by the way that. I heard this was coming in because in the also just interesting.
interested in bottom line, and they're not football fans themselves. And therefore they see this as a way of further leveraging the opportunity to maximize revenues. Certainly when Manchester United were charging 66 pounds for kids' tickets last season, and the club wasn't doing well, there were a few gaps. Very few gaps and nothing compared to the gaps that we saw at Brighton vs West Ham last Sunday, for example. And I think clubs now have to acknowledge that in a time of financial challenge for fans, that they have to go through, I think, more books and perhaps more consideration to match supply and demand. Somebody with an economics background, revenue maximising in a fixed capacity, this is pricey elasticity of demand to heaven for somely like me. I also acknowledge that getting it right is almost impossible. But when you get it wrong, you can get a bit of a backlash. Richard D has our next question. It's one of the most common subjects of questions on the price of football, I think. He says, "I have a question regarding the stadium where West Ham United currently play their home matches." Richard says, "Seeing as the stadium is owned by a public sector body, and the least they agreed with West Ham is not generating the level of income to make it a viable business." I'll let you clarify whether that's true or not. "What is stopping the owners selling the stadium to claw back lost revenue, and should there be a sale, could you envisage West Ham buying it?" Right, I understand where you come from, Richard. West Ham are currently paying around about £3.5 million a year in rent. The maintenance costs, the annual maintenance costs for the city of London, the stadium are in the region of £18-20 million. Now, it has to be said that West Ham occupied the stadium for 25-30 days a year, and your maintenance costs are £3.65, and the stadium is used in the summer for other things. But even so, I've got the accounts of the landlord, and they make for fairly grim reading, as I think any resident of London will know, because ultimately that's reflected or is it contributory back to some of the local taxes that they have to pay. The reason why the landlord, the owner, cannot sell the stadium to claw back lost revenue, is twofold. First of all, who are you going to sell the stadium to? Because the new owner, what are they going to do with it? And secondly, West Ham would have a very good, I spoke to one of our secret lawyers about this, West Ham would have a very strong case for suing for some form of compensation, because they signed in good faith a 250-year lease on the London stadium. And what West Ham would be able to say is, "Well, hold on, we sold the bowling ground, and there's a completely different story there, because if anybody goes into the accounts of West Ham, they sold the bowling ground for, I think, around about £40 million to a company called Bowlin Phoenix. Check it out, kids on company's house." Bowlin Phoenix was only in existence for two or three years, and I think it's fair to say Bowlin Phoenix made a spectacularly good return on that purchase. They resold it to a property company at a far higher price, which I know has made some West Ham fans a bit angry, because they said, "We were sold two things. First of all, that the current owners are really smart business people, and they were going, therefore, you'd expect, if they're really smart business people, you would expect them to have maximised the sale price. And secondly, we were sold a viewpoint that, you're moving to the new stadium, there's an extra 20,000 people turning up, the atmosphere will be better, the football will be better. That's anybody that's been to the London stadium will say, "Well, the West Ham fans that I speak to these days don't like the atmosphere. They don't like the fact that they have to bring up real glasses to see the pitch and so on." So is it fair to say with that least that they signed that West Ham is never going to happen essentially? They're never going to be kicked out? Nothing significant will change, or maybe what the terms could be renegotiated at some point? Well, yeah, but again, why from West Ham's forepoint of you, would you renegotiate the terms? A contract is a contract is a contract. Could it be sold? Yes, if West Ham were paid a large amount of compensation, as the tenant, I remember when I was born in the elephant in Castle, my nan, or as we say in South London, my dear old nan, she had effectively a sitting tenancy and the landlord, because following the rise in prices in London, my nan was paying something like 20 pounds a week rent for this place. The elephant castle is now quite more desirable than it used to be. The house where I was born is now worth considerably more money, but he couldn't get her out. He tried to persuade her through fair means of bail. I mean, we only went by nan, her ability to look after herself, deteriorated to such an extent that we moved her into a home that the tea was able to effectively repossess and then sell it off. So, sitting tenon rights are there to protect the rights of people who either through choice or through financial circumstances cannot afford to buy a property out right. So, I think West Ham in a very strong position here. Neil Blacklock has our next question. He says, "Like Aaron, I'm a rugby league and football fan. With the recent controversial IMG grading system introduced into rugby league, we'll have to explain what that is, with aims to increase non-centralised revenue, investing the sports, sustainability and ensure strong governance amongst others, do you think a similar system could be adopted into football to help curb overspending and ensure investment into infrastructure and development?" Okay, so we need to explain what is the IMG grading system, first of all? Right, the IMG grading system in rugby league is where you look at rugby league clubs over five criteria. Those five criteria are fandom, sort of the relationship between fans. Sporting performance, are what you're doing on the pitch. Finances, the state of the stadium and community engagement. Many of these are very, very laudable. But ultimately, I go along to a football match to see my team win if we win matches we get promoted. What you've got in Super League is that some of the Super League spots are being allocated on the basis of how well you were doing on fandom, finances, stadium and stadium and community. And I have seen similar proposals or suggestions from other bodies that we should incentivize, we should reward football clubs for the non-footballing element. I think that would go down like a lead balloon with the broader fan base. Now, if we've got 92 points, if we finished in the top two, and then you say, "Oh, yes." But they've got a garden at the end of the ground. I remember a few years ago, myself and the Baroness, we were invited to Lewis football club. Now Lewis, the people not familiar, Lewis is the county town of Sussex. And it's where the hipsters of Brighton go to live. That hip of place, anybody who's been there, it's a lovely, quaint old town. And the Baroness went to, they said, "Oh, there's a player of the match award." And we were in the box at half time chatting away. And they said to them, "Yeah, do you want to go and help us collect it?" Well, it wasn't great outside. And you'd met the Baroness. She's a woman that likes to look after herself. And she went to the community orchard garden. Ad Lewis football club, the man on the match rise was some spring onions, organic.
If we didn't get promoted due to the fact that the opposition have got better spring onions than us, I think my legacy fan, elements within me, would potentially self-combust. Yeah, there'd be some blood boiling at that. It would be, I guess, and I guess it's a fundamental part of football, isn't it? In terms of its history that it is based on points, you know, a big game and I guess what is the benefit of what is the main benefit for Super League of doing it this way rather than on Merit in terms of wins? And I mean, I get, you know, Neil is mentioning things like sustainability, because obviously they want them to be more sustainable, but why do it this way? Have these grading? Yeah, and also I was looking at some of the Super League proposals. They're going to change it for 2026 with far greater emphasis on on field, because it's not gone down well with fans, and ironically, you know, you live in greater Manchester Guy, and we've just lost Sauffert, yeah, Wolford Reds, rugby league club, which has gone into liquidation, not even administration, and again, people say, well, what's the difference with liquidation, the liquidator, you know, the accountants come in, they sack everybody, they lock the gates, and they sell off things piece by piece for whatever they can flood them for, at least with administration potentially, you get something to come in and run the business. So yeah, that's 152 years of sporting history of Manchester and an area of Manchester, which as we both know, has both positives and negatives, the biggest positive, I think, that the marquee Smith came from Sauffert. Which a truly great man on so many levels. So, and, you know, the rugby super league are having to change its own rules to reflect the fact that it's not gone down well with fans. I just don't think this would go down well with football fans. It's too much of our cultural history and identity has come through winning football matches. And yes, it's good that you've got clubs that would be benefiting from sustainability. I don't know any football fan who says to themselves, yeah, we lost today, but we're sustainable, you know, that's what's important. We don't think like that as fans, if it's not part of culture. I don't know, this isn't the price of rugby league, but just in terms of that idea of liquidation, so Sauffert Red Devils have been liquidated, as you say. Just in a football, relating it back to a football context, if a club was liquidated rather than went into a administration, what does that mean? Does that mean it's gone forever? Or could it be resurrected in some form like a new co? Well, I mean, Maccalfeild Town football club went into liquidation. Barry F.C went into liquidation. And the new Barry club and the Maccalfeild F.C, so they are Phoenix clubs. And to be fair to Maccalfeild, it is now playing at Moss Road. So they have moved in, but they're in terms of the number of tiers that they've had to drop. And it's the same with Barry. You're not following on. Sheffield Wednesday, when they come out of administration, and we're hoping that will be, I estimate, early January now, looking at the latest pronouncements from the administrator, they will be playing in the championship. Whereas in liquidation, your records are expunged, I think, is the official, what's in the framework? Good word, that is. And your records, and you effectively cease, and then you have to reapply to a different league in a potential different competition. Okay, so that's the key difference isn't it? Liquidation means you're starting from scratch again with a new company. Administration means that the entity can continue from the level it was. Yeah, and also as the administrator, you can transfer the, you know, if it's provided the club has paid the wages, the contracts go to the new employer in liquidation, everything goes. Everything's gone. All right, our final question today is from David Lam, and this is a big one. It's a great one actually because I find myself confused about this sometimes, just because even though I'm looking at this stuff all the time, it just sometimes think, hang on a minute. So this is David's question. Thank you for this one, David. What is the difference between FFP and PSR? David says, I feel like I and others use the two phrases interchangeably when discussing financial constraints in football. He says, as a walls fan, it would be nice to accurately give reasons and explanations as to why we had to sell our best players and are now struggling to win games. So yeah, what is the key difference here in FFP, PSR? Right. Remember, Sellerfield, which became Winscale. Again, I'm losing a large proportion of our Gen Z audience here. We used to have a nuclear facility in Cumbria, which was called Sellerfield, and then it was renamed Winscale because there were a couple of disasters, but there were a couple of minor accidents there. So it was a re-badging. Financial fair play and profitability and sustainability rules are actually the same. In the Premier League, it is the ability over a three year rolling period to lose up to 105 million pounds. So that was a re-badging, but the difference that we should be focusing on is the difference between the profitability and sustainability rules and the new rules which are being introduced from season 26, 27, which is SCR squad cost ratio. And a lot of people have been asking me, "A, what are the differences?" Well, financial fair play, stroke, PSR, that was based on a break-even model. So you look at the total revenues generated by the club. You compare it to the total costs and you're allowed to lose 105 million pounds, and then you would make your adjustments for infrastructure investment, women's team, academy and so on. Whereas squad cost ratios is very much player cost focused, where here you look at every 100 pounds generated by the club and you can spend 85 on player and first team coach wages. Amortization, now very good friend, impairment and agencies. And people have also been querying, "Why is it that six clubs, Brighton, Brentford, Bournemouth, Palace, Follum and Leeds? Why have those six clubs voted against SCR?" And Steve Parrish has had an interesting interview in the athletic a few days ago, where he said that the rules discouraged sort of long-term planning. Now I'm not a big fan of the new rules, but my interpretation of them is very different. One of the reasons why clubs like Palace, Brighton, Bournemouth, Follum and so on were quite happy with PSR is that they were allowed to lose 105 million pounds. But if you take a look at the championship at present, you've got Coventry are absolutely flying. They've not been in the Cretmily for a good few years. You've got the likes of Bristol City and a few others who again haven't had experience that we could have three clubs promoted this season, who have not. The kind of just, Karen's lights just went out and this is your office I presume. Yes, so I'm recording this a quarter past nine in my university office. Some of these turn the lights are sort of on a timer. Detection. So I need to start, I'm now doing a Magnus Pike impersonation to try to keep the lights on. Even I don't get that reference. So who's Magnus Pike? A guy. I don't know who that is. A Magnus Pike, he used to appear on science programs and he was a very passionate scientist and he used to wave his arms about like crazy. So yeah, the over 60s, nowhere I'm coming from. You whipper sappers, but no idea what I'm talking about here. And I am now feeling very, very old. But the reason why of these, what you might call the established middle class of the Premier League aren't happy is that if you were promoted to the Premier League, it's said for every year that you've been in the championship. You could only lose 13 million pounds. But in your first year in the Premier League, you could lose 35. So 35 plus 13 plus 13, your first year in the Premier
you could lose 61 million pounds, so the middle classes of the Premier League had a substantial financial advantage. If we take a look at the point deduction for notting them forest in their first season, which they were traded to the Premier League, they argued, well, we actually lost less money than some of the other clubs, but yet we've had a point deduction. This disappears with SCR, so it's a terrible thing to say, but if I'm bright and born with Palace, my first aim of the season is to avoid relegation. And having, therefore, having a financial advantage over clubs just promoted is something that I'm going to be in favour of, that has been taken away. So therefore, that increases the probability in theory of those clubs being relegated. So why do we make decisions? We make decisions on the basis of short-term self-interest. Those clubs have voted, and there's nothing wrong with that. Yeah, it's business. Those clubs are opposed to SCR because it was not in their short-term self-interest to do so. Just to be crystal clear, then, in terms of our acronyms, is it right to say that we started with FFP? That was replaced with PSR. Renamed PSR. Yeah, FFP. Renamed PSR. But now we're getting, PSR is being ditched and we're getting SCR instead. So it's like a one replacing the next. Is that right? Okay. So FFP, PSR will be consigned to the bin soon. It will be SCR, squad cost ratio. Yes, absolutely. From 26, 27. But I must confess, I have quite a bit of communication with, should we say, that the finance professional sector, and they are rubbing their hands together. The potential scope for challenges to the rules, for clarification of the rules, and so on, is going to open up a huge can of worms. Thanks to everyone who has joined the Price of Football Club. If you'd like to join the club too and get every episode a day early, then everyone else, add free listening and invite to our monthly Q&A sessions, bonus episodes, and more. Go to our website, priceoffootball.com. If you have a question you'd like answered on the show, email us at
[email protected]. Also, anyone else wants to send a message to Kevin, please do. We'll pass it on to him. Send us it to that email address. Don't forget you can follow us on X, and you can find us on YouTube. If you'd like to buy one of our books, you can find all the details on our website, priceoffootball.com. We've just got time for Keirin's custom refair well. As always, thanks for getting in contact. Some of my tweets are apparently of being a bit in flammetry. I'll talk to you about that on the live show. We're still hoping to go live. We want to check the Keirin's health. We're hoping to go on tour to Norway, because that's what you do in the World of Football Finance. We'll confirm that. Kevin's health takes part over everything else. There's a variety of ways that you can support the show. One of those ways is to give us a review on your app. It doesn't matter what you say. You could even say you would rather have the show presented by Thomas Dolby and Magnus Pike. Because if you listen to the song from Thomas Dolby, she blinded me with science. It's got a guest vocal from Professor Magnus Pike. That's one for you to look at on Spotify. Thanks everyone. See you soon. Bye. The Professor of Football.
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