The Crunch

When I’m not crafting questionable homilies about Ipswich Town’s attacking play, you can find me at my day job as a labour historian (small ‘l’ as in the act of labouring, rather than big ‘L’ for the political party), attempting to explain the ways in which economic forces shaped the lives of ordinary Britons across the Twentieth Century to often perplexed undergraduate students. Consequently, I rather resent the way the modern era obliges fans to comprehend those forces in football in order to have a vague grasp of what’s going on. We’re invited to pore over financial reports, to learn the rules to Financial Fair Play, Profit and Sustainability Rules, Salary Management Cost Protocols. We end up pondering how decisions our club make affect compliance or looking with faux-concern over the transfer dealings at other clubs. “Oh, they’ll be in trouble with FFP” said in a tone that really means “I wish we’d done that signing.”

We are all experts in the political economy of football now, reading balance sheets and analysing structure, systems and decisions. The absolute nadir of this entirely unwelcome development can be found at the elite level, where fans of Manchester City, Chelsea and Liverpool throw financial regulations at each other as banter. Manchester City fans producing a banner to honour Lord Pannick, the lawyer defending their 115 breaches of financial regulations, was something I wish I could forever unsee. It’s down there in my own personal football Room 101, next to Premier League fans chanting V-A-R, V-A-R, V-A-R when forlornly hoping for a penalty.

Alas, much of this bitter knowledge is my own fault. I know people who go to the football who are not monomaniacal obsessives, who show up on match days innocent as new-borns. They barely know whether Kieffer Moore is on loan or permanent, let alone anything about Preston’s 2021/22 balance sheet. But I suppose if I’m stuck with this compulsion to engage with this stuff, I should bring to bear at least some of the skills inculcated in more than a decade of work learning about economic systems and their effects on people, even if it’s very much a busman’s holiday.

The first thing that occurs to you when you look at how football clubs behave as economic actors is that almost every decision these institutions make is absolutely deranged. Across the English Football League there are 92 professional football clubs. They are ostensibly profit-driven businesses but the only time any of them are in the black is when they are accidentally unable to spend all their money quick enough for it to fit into this year’s account book. Up and down the leagues most clubs spend a lot of their time arguing how unfair it is that they aren’t permitted to make losses that are even more unsustainable than the losses that they currently post. That is when they aren’t themselves teetering on the brink of extinction.  

Brighton CEO Paul Barber is the only person in the game I’ve seen talk about the strangeness of this situation out loud, “Only in football would we argue about wanting to lose more money.” It seems irrational, but one of the things you learn quick as a social historian is that rationality isn’t a singular thing. Most of us inhabit our own world view, convinced that rationality is binary, things either make some sort of logical sense or they don’t. We especially tend to think this about economic motivations. “He did it for the money” is one of the simplest possible logics we understand.

But rationality is plural, our way of thinking through decisions is shaped by the shared norms within our milieu. For the different interest groups in football the norms place almost zero value on the careful husbandry of resources. Neither fans, nor managers, nor (usually) owners care much for a balanced budget, preoccupied as we all are with the quality of the team on the pitch. All three groups are broadly pushing in the same direction – maximising as far as possible your expenditure on players relative to the competitors. Strangely this holds true not just for those individuals (and the occasional nation state) that own a club for status, prestige and influence, but even for owners like ours, whose interests are purely commercial and profit driven. I imagine it must be alarming for Arizona’s Public Safety Personnel Retirement System that the main financial question the owners, managers and customers of Ipswich Town Football Club seem to ask is “just how much money are we allowed to lose?”  

Until a few years ago you got the sense that the answer to that question for most of the EFL was, “as much as we damn well please”. Part of the general common sense was that if you took over a football club and spent lots of money on it everyone would be very happy indeed. The fans, they’d be delighted. New striker?  No further questions, thank you very much. The broadcasters? More transfers, more money, more players, more hype, more excitement! The owners? Impressing people with your enormous largesse is the main point of owning a football club! The FA and the Football League, they all wanted the same thing, didn’t they? Some rules were put in place as a sop to public opinion because the occasional 100-year-old vital civic institution went bust, but they weren’t really serious, were they?

Well, nobody makes a tool that isn’t intended to be used and whilst everybody in football remains unconvinced that the purpose of a commercial business is to make more money than they spend, there are plenty who recognise that a modicum of restraint suits their more limited means relative to their peers. Still, the mindset that the authorities’ indulgence of reckless spending would continue indefinitely only really seemed to disappear when points deductions slowly rolled in. Birmingham City, Derby County’s and Reading’s punishments in 2018-19, 2021-22 and 2022-23 respectively seemed to concentrate minds. Now most Championship teams appear to be trying to more or less conform to the rules, even if some of their efforts (Hull City) look a little implausible from the outside. The upside of that shift is that nowadays you see increasingly fewer teams in the Championship who aren’t more or less net zero on transfer spend. According to Transfermarkt, our 2023-24 official net spend of £3.9m, which felt pretty abstemious to most of us, is actually the fourth-highest in the division, behind Millwall (£5.3m, who knew?) Hull City (£6.38m) and Stoke City (£13.2m). Presumably that £13.2m had been burning a hole in Stoke’s pockets since Harry Souttar left last season. Unsecured spending has tended to disappear since the big stick came out.

This recent spate of compliance took a while to fall into place. After the arrival of Financial Fair Play rules in European football in 2011-12, first teams tried to suss out whether they were really going to get punished, then they tried to work out how to conform with the letter rather than the spirit of the laws and finally they just tried to cheat. The same process unfolded slower in the Premier League. Maybe the extra broadcast revenue made it harder to max out the permitted losses, maybe fancier accountants and lawyers bought a little more time. Yet most clubs weren’t seemingly taking the possibility of punishment very seriously until this season.

Only this Summer did you see rumblings that teams like Wolves were reigning in their spending to avoid punishment, whilst others like Nottingham Forest and Chelsea were under pressure to sell to a deadline to make sure the right numbers went on the right balance sheet. Yet even then Nottingham Forest kept hold of Brennan Johnson and Chelsea Mason Mount until after the due date, presumably in the hope that a bit of special pleading would get them off the hook if they got in any trouble. Don’t take my car, I’ll have the money to you by next week, I swear! Only the points deduction imposed on Everton in December 2023 fully concentrated minds and effected major change in the culture.

When it came to January it seemed like that change was extensive. Window on window expenditure in the Premier League cratered this year, from a net spend of £619m in January 2023 to just £72m. The market was absolutely dead, near enough as dead as it was during the Covid Lockdown season of 2020-21 (also £72m). Deader than it really should have been, I think. The threat of points deductions might well have acted as a stimulus to clubs to sell players but that never materialised either. Sales from the Premier League amounted to just £31.8m this January, compared to £100m the year before.

To me this sudden austerity looks rather like the sort of “beggar thy neighbour” protectionism that you see in the wake of the Wall Street Crash. In the 1930s many governments responded to a global trade depression by raising taxes on imports to protect domestic industries’ share of their home markets. Since they all did it at once, they deepened the recession because everybody was doing it, so no-one could export anything. The 2024 January crunch is not Premier League clubs suddenly getting poor, it’s more that having noticed the market was dead, they decided to protect their assets and hold on to their fringe players, because the dead market meant they wouldn’t be able to replace them cost-effectively. They reinforced the crunch by participating in it. This cycle brought transfer activity to a halt, with the main effect being that you couldn’t acquire a Premier League reserve player for love nor money.

This inconvenienced Ipswich Town more than almost anyone else. Sat as we are on a golden (and perhaps fleeting) opportunity to reach for the stars, we were in “go for it” (within reason) mode for strikers and basically no-one would sell one to us. In the circumstances, rustling around in the dirt and coming up clutching Kieffer Moore and Ali Al-Hamadi was damn near miraculous. Moore was the only striker of serious Premier League pedigree to move anywhere this Winter window and he moved to Ipswich, even if it was sadly too late to rescue us in Lancashire last weekend. Some seem to be under the impression that we’ve acquired something of a one-trick-pony and a bit of a journeyman, but I think they’re going to be surprised by what a excellent all-round striker he’s become. Moore might well be the most elite player to appear for us since the 2000s.

Back in the Premier League, my assumption is that this crunch is likely to be temporary. The culture of top-flight football in this country is simply too dependent on player trading as part of the entertainment and there’s just too much money sloshing around for it to be this depressed for too long. Like Barcelona over the past few years, clubs will work out what “levers” they have to pull to remain compliant with the new powers and then press on with their usual recklessness. To an extent you already see the likes of Manchester City adapting to the new rules of the game, with their small squad and regular big-money sales. Winning the transfer window has become so central to the circus, that they’ll all be back living on the edge soon enough, even if the authorities have slightly increased their vigilance.            

Kieffer Moore v Preston North End

Minutes 45

Goals 2

Accurate passes 7/15 (47%)

Chances created 1

Shots 7

Shot accuracy 4/6 (67%)

xG 1.38

xGOT 2.69

Big chances missed 1

Blocked shots 1

Touches 30

Touches in opposition box 15

Successful dribbles 1/1 (100%)

Passes into final third 4

Dispossessed 1

Tackles 0

Recoveries 1

Ground duels won 3/4 (75%)

Aerial duels won 8/9 (89%)

Was fouled 2

Fouls 0