OVER THE coming months, it is likely that independent financial advisors will be contacting their clients to discuss contingency plans should the Labour Party win power. The words “flight capital” come to mind.
Top level football will undoubtedly be impacted by the new administration. If Jeremy Corbyn admitted he would be a threat to City of London-based US banks (actually he is not as they will simply relocate and take their jobs with them), he also represents a challenge for the Premier League and the contemporary culture of English football.
Some might say this is long overdue. Many of the young people singing Corbyn’s name are also disenchanted with the corporatisation of football and would welcome change. Of the current Premier League, only three clubs – Bournemouth, Chelsea and Watford – reside in Conservative seats.
But for every person who rejects Premier football or claims “modern football is shit”, there are waiting lists for season tickets, eager queues at megastores and pubs full of people watching screened football. The game, despite its failings, is still life support for the masses. The Premier, which despite one official’s claim that it is up there with the BBC and the Royals as the things Brits are most proud of, remains a subject that can divide people. In some ways, the Premier League is linked to Blair’s Britain, although Labour didn’t win the election until 1997. Corbyn has already gone into battle with the Premier by claiming in its election manifesto the league has failed on its promise to invest 5% of its TV rights in grassroots football, something that was immediately refuted.
Harold Wilson: “Have you ever noticed how we only win the World Cup under a Labour government?”
If, as expected, a Corbyn Labour government raises taxes and targets the high earners, then the overpaid Premier stars will be caned. Indeed, if the Labour pledge to impose payroll taxes that require a 2.5% “fat cat” levy on anyone earning over £ 330,000 and 5% on over £500,000 goes ahead, football clubs will be in the firing line.
How this will affect the shape of the Premier remains to be seen, but it is likely that a whole sub-industry will spring-up to loophole the system. For every problem, there are always many people making money out of finding a solution – that’s the dreaded capitalism, after all!
Corbyn, an Arsenal fan, has spoken about the need for football to be made more affordable and that clubs need to lower prices – few of us would argue with that sentiment. There are fears that if clubs become victims of the aforementioned levy, they will merely cover the cost by raising ticket prices even higher. The only way lower prices will happen across the board is for Labour to nationalise football, Soviet-style!
Bill Shankly: “The socialism I believe in is everybody working for the same goal and everybody having a share in the rewards. That’s how I see football, that’s how I see life.”
But will a heavily-taxed Britain mean that players from overseas will continue to turn-up in their droves in the Premier? For sure, they won’t be happy to work in a high tax environment and with so much controversy over the “paradise papers”, offshore arrangements will be closely scrutinised going forward. Remember, Zlatan Ibrahimovic complaining about France’s taxation system?
Like the bonus-shorn bankers, Premier footballers will have few sympathisers if they start complaining about tax, but along with the uncertainty and possible restrictive access attributable to Brexit, we could see a certain reluctance when it comes to attracting talent to the UK.
There is already talk of a financial crisis if Labour emerges triumphant in the next election and shadow Chancellor, John McDonnell, has already envisaged a run on the pound, which would possibly make all those foreign players nervous about exchange rates.
A self-induced financial crisis will certainly impact the Premier League, but if footballers were that worried about the state of the economy of their employer’s nation, La Liga would not have enjoyed its flourish during the global financial crisis.
Brian Clough: “Socialism comes from the heart.”
However, in the UK, there’s a huge reliance on broadcasting revenues that could be compromised by a crisis – viewing figures are already showing signs of decline and should that trend gather momentum, the impact could be negative. Another big source of income for Premier clubs, the gambling industry, has also been eyed by Labour, whose deputy, Tom Watson, has called for shirt sponsorship from the sector to be banned. Currently, nine of the 20 clubs have deals with betting firms and you only have to watch a post-match TV interview to see boards full of advertisements for what sometimes appears to be the only growth industry in Britain.
But if this all brings about the deflation of the Premier bubble, then some clubs could find themselves trying to overcome unwelcome hurdles. Most will be fine given their shareholder profile, but they may find that luring top players from the continental Europe and South America will become that little bit more difficult.
Of course, the very concept of multi-millionaire footballers, or indeed any individual earning big money, goes against the current Labour ethos, even among those that live in trendy parts of London like Islington or home counties towns in Hertfordshire – notably the Prosecco-drenched middle Englanders who espouse “socialism” while driving their BMWs and brandishing Arsenal or Chelsea season tickets.
Would an end to Premier League excess be such a bad thing? Increasingly, young people are turning their back on the top flight, largely because of the ticket prices but also because of the obscene levels of compensation given to players in a time when youth unemployment is a major problem and unfulfilled graduates are saddled with tuition-fee debt. The average age among spectators at some clubs is also too high, sending worrying signals about the sustainability of the current model.
There’s no doubt the Premier has become one of Britain’s success stories, but the sceptics will consider the plethora of international owners means a lot of the cash generated does not stay in the country. But there’s a lot of liquidity in the game and even with higher taxes, the Premier should be able to maintain its level of competiveness. Right now, the scenario of a Labour government, even one led by far-left factions, poses only a limited threat to the status quo, but there’s no doubt the possibility is being discussed right now in boardrooms across England.
Football history and UK governments
|1863||Liberal (Palmerston)||Football Association formed|
|1871||Liberal (Gladstone)||FA Cup inaugurated|
|1888||Conservative (Salisbury)||Football League formed|
|1905||Conservative (Balfour)||Alf Common becomes the first £1,000 player||Moved from Middlesbrough to Sunderland|
|1950||Labour (Atlee)||England 0 USA 1 World Cup 1950|
|1953||Conservative (Churchill)||England 3 Hungary 6|
|1958||Conservative (MacMillan)||Munich Air Disaster|
|1966||Labour (Wilson)||England 4 West Germany 2 World Cup final 1966|
|1970||Labour (Wilson)||England 2 West Germany 3 World Cup 1970||Game on June 14, election was won by Conservative on June 18|
|1973||Conservative (Heath)||The Three versus The Six at Wembley||To celebrate the UK, Ireland and Denmark joining the Common Market|
|1973||Conservative (Heath)||England 1 Poland 1 World Cup qualifier||First government to be in power when England failed to qualify|
|1979||Labour (Callaghan)||Trevor Francis becomes first £ 1m player in Britain||Birmingham to Nottingham Forest|
|1985||Conservative (Thatcher)||Bradford fire|
|1985||Conservative (Thatcher)||Heysel Stadium disaster|
|1991||Conservative (Major)||Manchester United float on the stock exchange||The first big flotation, raising £6.7m|
|1992||Conservative (Major)||Creation of the Premier League|
|1996||Conservative (Major)||England hosts Euro 1996|
|1999||Labour (Blair)||Manchester United win the Champions League||United won an unprecedented treble (Lge, FA Cup, CL)|
|2003||Labour (Blair)||Roman Abramovich buys Chelsea||Start of the billionaire owner trend|
|2008||Labour (Brown)||Manchester City bought by Abu Dhabi United Group||Continuation of the billionaire owner trend|
Categories: Money and power