Football clubs now cash machines

An English football coach once wryly noted football’s relative importance to life and death. But he said nothing about commerce. In Turin, Fiat cars and Juventus football club are both owned by the Agnelli family.

One union called a strike after Juventus decided to spend more than €100m on 33-year-old Cristiano Ronaldo, complaining that the Agnellis should instead invest more in Fiat. Yet clubs can absorb these high salaries. True, the cost of players rises inexorably. Less understood is that club finances have improved markedly.

In the English Premier League all but one team made an operating profit in the 2016 season, says Deloitte. Four years earlier, fewer than half of those same clubs did. Lucrative media deals have not only improved the lot of English clubs but German, Italian and Spanish ones too.

Not all of the money disappears into the coffers of players and their agents.

EVIDENCE

While there is evidence that debt levels for top clubs have increased with wage demands, rising cash flow appears to support this leverage.

Player transfer fees have soared since 2012. Against earnings before interest, taxes, depreciation and amortisation — a cash earnings measure — net debt of eight major clubs has dropped precipitously, according to FT analysis.

That suggests at least some clubs can sustain their heavy player spending.

The financial fair play regulations of the Union of European Football Associations — an attempt to control uneconomic expenditure — has also had an effect.

Fiat workers may have scored an own goal. Juve’s recent trend of paying up for stars has paid off, with seven successive Italian league titles and some decent finances to boot. London, July 13