My Economic Research Council talk: “Are footballers the bankers of modern sport?”

On Monday 20 January 2014, I gave a talk at the Economic Research Council, “Are footballers the bankers of modern sport?” In their own words, “The Economic Research Council, Britain’s oldest economics-based think tank, is dedicated to extending the reach of economic education, debate and leadership. In support of this, the ERC raises the profile of economic conversations; we host events to cultivate wider accessibility, inclusion and civic participation.”  You can read the text of my talk below; you can read more about the Economic Research Council at, and follow them on Twitter at @EconResCouncil.



Before I begin this talk in earnest, I should quickly highlight the three things that, in my opinion, make me able to give it. The first thing is that I briefly worked in the corporate world, having first studied law at university and then qualified as a solicitor in the City, at a firm now known as Hogan Lovells.  During that time, I did training in the fields of, among others, capital markets and banking litigation; where, of course, a fair number of banks were our clients.  I should also say, to preclude any criticism of these institutions that I may make in this talk, that some of my best friends are bankers.  The second thing is that, having left the legal profession – about ten years ago now – I went on to write and broadcast about football.  The third thing is that I am a poet, and anyone who knows any poets will know that we are always trying to ask questions about the world around us, no matter how pointless those questions might initially seem.

But I think that this question – whether footballers are, indeed, the bankers of modern sport – really matters.  I first thought of it about two-and-a-half years ago.  There just seemed to be a handful of key parallels between the fields of banking and football.  Whether you’re a leading banker or a footballer, you’re in possession of a specialised skill which, if carefully honed, can earn you so much money that by your mid-thirties you may not have to  work again.  Whether you’re a leading banker or footballer, your wages will be the subject of much discussion – some of it disgusted, some of it envious – by millions of people who don’t think you deserve what you earn.  You may feel unfairly stigmatised and targeted.  You may find yourselves scapegoated and stereotyped, with the general public seeing one particularly reviled individual – say, Sir Fred Goodwin or Luis Suarez – as representative of your entire profession.  You may find yourself singled out for unfair scrutiny, rather like you are in talks like the one I’m giving right now.

Of course, if we explore my analogy much further, much of the comparison begins to fall away.  After all, bankers, unlike footballers, don’t spend much of their working life being jeered by tens of thousands of strangers.  They don’t provide us with jaw-dropping entertainment, they don’t have their careers ended prematurely due to injury, and they don’t have people wearing shirts with their names on the back, or drunkenly singing their praises in the street.  And perhaps the premise of the talk itself is flawed, implying as it does that all bankers and footballers are making millions of pounds: when, in fact, it’s only those at the very top of either field who are making those eye-watering sums.

Yet bankers and footballers have one crucial thing in common:  which is that their perceived excesses are being held up as symbols of systems in need of profound reform.  And, imperfect though my analogy may be, I felt that this topic was worth some further reflection.

Let’s look at football.  The game’s growth has been remarkable: in just a hundred and fifty years, it has, to use an Internet term, “gone viral”, and is now the most popular sport on the planet.  Yet there are several severe indications that this popularity is being excessively exploited by those who run the game.  The most striking of these has been highlighted by Dave Boyle in his 2012 report for the High Pay Centre, “Football Mad: Are We Paying More for Less?”.  Here he wrote that “since the creation of the Premier League in 1992, top footballers’ salaries have mushroomed, rising by 1508% to 2010…Over the same period average wages [i.e., those of the ordinary UK worker] increased by just 186%.”

That’s neither here nor there, you might say: what a football club pays its players is entirely its own business.  But the problem, continues Boyle, is that these superheated salaries have hit the ordinary fan particularly hard. “Fans are now paying up to 1000% more to watch their teams play, all in order to support their club’s gargantuan wage bills,” he writes. “Fans watching at home are similarly seen as a captive market, whilst those who want to watch at the pub are paying more – or finding their local can’t afford it, given the 10,000% increase in pay TV subscriptions.”

Well, so what, you might say: if you can’t afford to watch the games live, then that’s tough luck.  Stream them online.  Well, yes, there’s that argument.  But the overarching point is that football’s running costs are such that the game itself, in its current form, may become unsustainable.  Somewhat alarmingly, Boyle observes that “since 1992, over half of England’s professional football clubs have been formally insolvent. Most only survived because the wider community received less of what they were owed in order to ensure players continued to get all of what they were promised.”

This might sound like I’m having a go at footballers, many of whom, after all, have come from poor backgrounds and might therefore be entitled to a few years’ worth of huge earnings.  But it’s ultimately not about them: it’s about how the game is choosing to allocate its resources.  Boyle notes that “the amount spent by clubs on wages has…increased dramatically. The percentage of turnover spent on players has increased, from 48% of turnover in 1997, up to 70% in 2011.”  Clubs are spending more and more money on recruitment, in order that they are not left behind.  Directors, instead of ensuring football’s long-term future, are chasing quick results, desperate for same-season gratification. Accordingly, revenues are not flowing down to football’s grassroots; they are not even trickling down. They are evaporating.  The message from Boyle’s study seems clear: just as we had a financial crash, we may soon have “a football crash”.  Football is developing a serious case of tooth decay: however, even as the game is crying out for a round of root canal surgery, we keep on feeding it bowlfuls of sugar.  Sooner or later, this is really going to hurt.

Here’s the thing about football.  Even within a successful team, there are key contributors whose skills are undervalued.  Players who score goals tend to earn more money.  Of the top ten best paid footballers in the world – a list led, unsurprisingly, by Cristiano Ronaldo, Leo Messi, Falcao and Zlatan Ibrahimovic –  seven are forwards, with one playmaker (David Silva), one midfielder (Yaya Toure) and one defender (Thiago Silva).  What’s more, when it comes to individual accolades, it’s very rare that anyone other than a forward or an attacking midfielder gets much recognition.  In recent times, only a few players have bucked this trend, with Fabio Cannavaro the only defender to have been named the World Player of the Year since its inception in 1991.  Football rewards those who most conspicuously provide the glory, but I think that it is wrong to do so.  In 1998, Zinedine Zidane scored two goals in the final of the World Cup, helping his team to a 3-0 victory against Brazil.  Yet Zidane, widely feted as the leader of that team, was arguably not even its second or third best player throughout the tournament.  Lilian Thuram, Didier Deschamps and Marcel Desailly, for example, could have laid claim to that role.

Zidane, to his credit, was aware of the true value of lesser-heralded players.  In 2003 Claude Makélelé, an outstanding defensive midfielder,  was sold by Real Madrid to Chelsea. Makélelé had asked to be paid half as much as Zidane, a suggestion which was ridiculed by Madrid’s president, Florentino Perez.  “We will not miss Makélelé,” said Perez. “His technique is average, he lacks the speed and skill to take the ball past opponents, and ninety percent of his distribution either goes backwards or sideways. He wasn’t a header of the ball and he rarely passed the ball more than three metres. Younger players will arrive who will cause Makélelé to be forgotten.”

Zidane took a different view, referring to Makélelé as the engine of Real Madrid’s Bentley, and the club captain, Fernando Hierro, was even more effusive in his praise.  “I think Claude has this kind of gift”, said Hierro, a few years later.  “He’s been the best player in the team for years but people just don’t notice him, don’t notice what he does. But you ask anyone at Real Madrid during the years we were talking about and they will tell you he was the best player at Real. We all knew, the players all knew he was the most important. The loss of Makélelé was the beginning of the end [for us… You can see that it was also the beginning of a new dawn for Chelsea. He was the base, the key and I think he is the same to Chelsea now.”  Perez might disagree with Zidane and Hierro’s assessment of Makélelé.  But, regardless of his view, it’s notable that his club haven’t won the UEFA Champions League in the eleven years since he sold this player of supposedly average technique.

What does all of this have to do with bankers?  Well, I think that we as a society have a problem.  I think that we have a system which gives excessive rewards to people whose gift or ambition happens to be making money.  I don’t wish to sound like a hater: after all, my three best friends from university are all millionaires, and I’m pretty sure my best friends from law school are by now too.  It’s just that we’re living in a world where the costs of living are rising so fast for everyone that only the most affluent are able to stay afloat with any measure of comfort.

I had an argument a few months ago with a friend, who works in the City, when I voiced concern about the distribution of wealth in the UK.  Her position was that if people wanted to earn what she did, then they should simply become bankers and work the hours that she did, which were in the region of eighty, ninety and sometimes a hundred per week.  But, I said, what about those people who don’t want to become bankers?  What about those people who just wanted to be able to afford a house not too far from where they worked?  What about nurses, for example, who earn just ninety per cent of the average wage in the UK, many of whom are finding themselves priced out of London?  I happen to biased, because I come from a family of doctors, but I think that if our society is a football team, then the nurse is its Makélelé.  Just like Makélelé for Real Madrid, nurses are doing essential work which, relative to its importance, is largely undervalued and unsung.

I mentioned before that I was a poet, and part of being a poet is looking at how language evolves.  One theme that has consistently concerned me over the last few years is the way that we seem to revere people with a great deal of money, as if the wealth itself were a measure of their character.  The media often speak of someone as having a net worth of x million pounds, of being worth x million pounds, as if their value as a human being were somehow in direct correlation with the content of their bank account.  This is a worrying narrative, as the flipside of that view – no matter how subconsciously it is adopted – is that those who earn less are somehow worth less.

This is a pressing issue in the world of football, just as surely as it is in the wider world: that those who have little cash are given less consideration than those who have a lot.  There are several clubs who have excellent charitable programmes in their communities, which aim at engaging young people.  Yet those same clubs, particularly in the Premier League, often charge ticket prices so high that the average young person cannot afford to attend their games with any degree of regularity.

It is tempting, at a time like this, to look enviously at Germany.  There, notes the report, “clubs are owned by their supporters, who must control at least 50+1% of the votes within a club.   That ensures a degree of accountability to fans (which works to keep ticket prices lower) and has prevented oligarchs and other wealthy individuals taking over clubs.”   There is, of course, nothing inherently wrong with a wealthy individual’s takeover – you will not hear many complaints from Chelsea or Manchester City fans, for example – but the question becomes a more vexed one when those individuals, as in the cases of Portsmouth, Malaga and Manchester United, have financial goals that are at variance with the club’s best interests.

Fortunately for football in the UK, following excellent lobbying from supporters’ organisations – chiefly among them, the Football Supporters Federation – some of these issues have been addressed.  Most notably, as a result of the Away Fans Matter campaign, some clubs have agreed to cap the cost of away tickets at twenty pounds.  This initiative has attracted the support of Swansea, Norwich City, Hull City, Newcastle United and West Ham United, and the hope is that Football League clubs will follow suit.  As a result of this advocacy, too, the Premier League has announced a £12million Away Fans’ Initiative, under which “clubs must use the money to reduce ticket prices for away fans, subsidise transport or otherwise enhance the matchday experience”.

There are two things that I like about this example.  The first is that the football clubs acknowledged the existence of their supporters as vital to their survival.  The second is that there was a willingness to accept that the financial balance in football, at some level, is wrong.  It feels especially poignant to speak about financial imbalances this evening, given the release today of an Oxfam report which states that the wealth of the 1% richest people in the world is 65 times that of the poorest half of the world.  In the words of Winnie Byanyima, Oxfam’s executive director, “it is staggering that in the 21st Century, half of the world’s population – that’s three and a half billion people – own no more than a tiny elite whose numbers could all fit comfortably on a double-decker bus.”

To this statement, some might say: so what?  No-one is entitled to wealth.  No-one is entitled to a high standard of living.  No-one is entitled, for example, to enjoy accommodation in the world’s finest cities.  So what if you find yourselves shunted out to the suburbs?  You should find a job that pays more money.

Well, I disagree with that.  I’m going to sound a bit naive for some tastes here, maybe even somewhat romantic: but I read a paper by the New Economics Foundation and the Cripplegate Foundation a few months ago, whose conclusions made me feel a little sad.  The paper, “Poverty In Islington”, looked at the cost of living in the borough, and predicted that by the end of the decade a family would need to earn more than £90,000 to live there.  The result, argued the paper’s authors, was that “this will leave Islington polarised – with very wealthy families at the top, a youthful, transient and childless sector in the middle, and those on low incomes at the bottom, living in social housing.”  What’s happening in Islington is happening across the capital, in a city where the cost of homes rose last summer by ten per cent in just one month.

I think there’s something wrong with London, a city I love as much as any place on earth, turning into a place that only the affluent can afford to enjoy.  London’s greatest strength has long been that it is a town that welcomes everyone: now, though, the accelerating prices of almost everything are making it a much less accommodating place.  The same, too, is true of football; the tipping point for many people coming in the 2011 UEFA Champions League Final, when the cheapest ticket was £176.  The following year, a chastened UEFA reduced the same ticket to £60.

In conclusion: are footballers the bankers of modern sport?  I’m not sure that they are: but the question has hopefully been a useful prompt to examine wider issues in the game and the world around us.  I believe that it takes all sorts to make a happy, thriving society, just as it takes more than just a bunch of strikers to make a successful football team: and I hope that, for the sake of both the beautiful game and the world around us, that we stop showing so much deference to high finance, and once again start putting people first.

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