Football League talks tough on spending
The movers and shakers of the 72 Football League clubs will fly to Cyprus on Wednesday for their two-day annual general meeting.
It might sound like the pretext for a jolly in the sun but Football League chairman Greg Clarke is optimistic that some important decisions will be taken during the get-together to help safeguard the future of his clubs.
The Premier League's proposal to overhaul the youth system in England is one item on the agenda, with Clarke adamant that Football League clubs will resist anything that threatens their ability to develop top-quality young talent.
But arguably the most significant point under discussion is the issue of spending. Given Championship clubs have been unwilling to embrace any plans to restrict their ability to fulfil their Premier League ambitions in the past, it is sure to be a hot topic of debate.
"As football has got more and more attractive and popular, the game has sadly become financially weaker," Clarke told me. "The Football League clubs currently have around £700m of debt - and more than 80% of this is in the Championship."
Clarke's predecessor, Lord Brian Mawhinney, achieved much during his time as chairman. He rebranded the League and improved transparency by persuading clubs to release details of the amount they paid to agents.
Clarke, however, is impressed by the willingness of clubs to embrace ways of controlling costs. Perhaps the impact of the recession combined with reduced television revenue from 2012 means they are more receptive to taking a long, hard look at their bottom line.
"I recently went to a meeting of clubs at Milton Keynes and thought the level of support for finding a way of solving their financial problems was gratifying," said Clarke. "They were not being dragged kicking and screaming. The vast majority want to do something."
Each division has a working party to discuss methods of controlling costs and reducing debt. League Two already has a salary cap in place that limits a club's spending on players' wages to 60% of turnover. Clubs in League One are looking at the possibility of introducing a similar system.
The solution being proposed in the Championship is a variation of Uefa's Financial Fair Play Initiative, the long-term aim of which is to make sure that clubs will only be able to spend what they generate. In other words, they must live within their means. Premier League clubs will sign up to the Uefa initiative and those that do not meet the criteria risk danger of exclusion from European competition as early as the 2014-15 season.
"We have come up with a number of scenarios for the Championship, recognising things like parachute payments," added Clarke. "These have been discussed and been favourably received. They are being reviewed by owners and chief executives in Cyprus."
Clarke feels "prudently optimistic" that a system to control spending will happen in one form or another precisely because this is an initiative being driven by the clubs. The cynic in me thinks that the bigger clubs focused on reaching the top flight will be disinclined to sign up to any system that might clip their wings in the transfer market.
Clarke is honest enough to admit that introducing any system designed to control spending will require a change of mindset. Clubs are naturally competitive and their aim is to be more successful than the others in their division. What will be discussed in Cyprus requires a degree of co-operation not seen before. It also requires clubs to accept that regulating spending would not damage the competition.
"At the moment, it only needs one or two clubs to start spending a lot of money to begin what I would term, an arms race," said Clarke. "You cannot solve this club by club. They have to cooperate and agree mutually binding rules."
Clarke is unsure exactly when a set of rules might be introduced in the Championship or what exactly they will look like but he believes clubs realise something has to happen. He is hopeful that various ideas will be trialled and refined over the next couple of seasons.
Perhaps in an attempt to underline to clubs the importance of watching what they spend, Clarke will take the opportunity in Cyprus to present a set of different scenarios based on what he thinks the Football League landscape might look like in five years. The worst suggests the current level of debt double. Even the best case scenario predicts an increase of some kind.
"There are long-term costs embedded in our business and we cannot turn them off overnight. Things like deals for stadiums and conracts for players," said Clarke. "Many are the consequence of decisions taken many years ago but we can start to make things better. The worst case does not have to happen There is a choice that we can make."
Clarke is an upbeat and optimistic man. When I asked him about the scale of the task facing him, he argued it was not so much a huge challenge as a huge opportunity.
I also think that he genuinely cares about what happens to his clubs. Clarke watched his first football match in 1967, stood on a wall behind a goal in the rain as Leicester City and Stoke City contested a goalless draw. He claims that football has been in his DNA ever since and is keen for his clubs to remain an important part of their community.
"I'd like to see a return to a situation where the majority of clubs can be afforded by the local community rather than looking for investment from another country or continent, from people who have no long-term commitment," said Clarke.
The Football League is a good product and continues to perform strongly. Although attendances fell by 6% last season, more than 16m passing through the turnstiles for the seventh straight year.
And Clarke, who has toured 68 clubs and attended countless different other functions in his first year in the job, is impressed by the willingness for change.
"When I joined the Football League, I was told that football was conservative but I have met a lot of pragmatic people who are extremely aware of the challenges," he said.
It is why Clarke believes that clubs will endorse plans to control spending and reduce debt when they meet in Cyprus this week.