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Money in club football: for better or for worse?

Money in club football: for better or for worse?

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Published by Pratyush_P
how money has become the most important aspect of a football club
how money has become the most important aspect of a football club

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Published by: Pratyush_P on Jun 03, 2010
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06/04/2010

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Pratyush PeddireddiME08B026HS 20125 November 2009 
MONEY IN CLUB FOOTBALL: FOR BETTER OR FOR WORSE
Abstract
This paper explores the increasingly important role being played by financial power in the game of football. Itfollows the progression of the sport from being The Beautiful Game into a glamorous investment avenue for  people from all over who have cash to splash. It points out the ways in which money has changed the face of thegame forever, before bringing to your attention some concerns that have arisen due to ridiculously highspending by some rich investors. Finally, it tries to answer the age old question whether money can buy on-fieldsuccess. 
The world of football today is abuzz with talk of takeovers, investments and cash-injections.Rich businessmen from all over the world, many of whom do not have a basic idea about thesport, are investing in European football clubs, viewing them as exciting new businessventures, rather than out of love for the game. To compete with them, other clubs have become desperate to find some Sheikh from the Middle East, with his oil-riches, to buy intothem and provide an investment of hundreds of millions of dollars so that they can become“the biggest club in the world”.This paper shall analyze the effects of the huge influx of money into football. It will examine both sides of the coin; how money has transformed the fortunes of English football in particular while at the same time, all this money has led to some alarming new practiceswhich do not set a healthy precedent for the future. The money factor has gained so muchimportance in the sport today, is this a positive or negative change for the welfare of football?Does money guarantee success on the field? Will teams that are not able to find investors fall by the wayside? This paper will try to answers to these questions.
 
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THE RISE AND RISE OF COSTS IN FOOTBALL
 No turnstiles, no tickets, no huge wage demands. Late 19th-century football was a serene place… until money came along and turned it into the monster we love and loathe today.The Football Association, founded in 1863, is the governing body of Football. In its earlyyears football was mainly played on an amateur basis. This changed with the inauguration of the FA Cup competition in 1871. To do well in the competition, clubs started to compete witheach other to attract the best players. The players would be offered financial inducements to play. Although inducements were paid they were not official payments because initially theFA was completely opposed to professionalism.By the mid 1880s this position was no longer reasonable and professionalism was legalised in1885. In 1888, with to the introduction of professionalism, a new format for competition between the clubs was possible and The Football League was introduced to help promote thecommercialisation of football.A transfer is the action in which a player moves between clubs. In general the players canonly be transferred during a transfer window and according to the rules set by a governing body. When a footballer is under contract with a club, he can only leave if the club agrees toterminate this contract. The club to whom the player is transferring will usually pay a capitalsum known as the 'transfer fee', as a way of compensation.Until the 1970s, footballers had earned the same as ‘normal’ people. But with the advent of commercial sponsorship, especially from beer companies, footballers turned into superstarsfor the first time, doing brand endorsements, etc. Once ordinary folk, they had become high-society celebrities, living a life of luxuries.In 1978, Liverpool became the first British club to have a shirt sponsor in Hitachi. Thefollowing year Trevor Francis joined Nottingham Forest for an unheard of £1m, but it was1988 before the first £2m transfer with Paul Gascoigne’s switch from Newcastle to Spurs. Astransfer fees rocketed between 1994 (Chris Sutton £5m, Norwich to Blackburn) to 1996(Alan Shearer £15m, Blackburn to Newcastle) and on to 2002 (Rio Ferdinand £30m, Leeds toMan United), so wages went through the roof.In 2000, Roy Keane became English football’s leading earner with a new £52,000-a-week contract. At the time, £52,000 a week seemed ridiculous. These days pretty average Premier Leaguers rake in that much in while the top players have long since crossed the £100k-a-
 
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week barrier. In September 2009, John Terry signed a new contract with Chelsea for areported £160,000-a-week, making him one of the highest paid players in the English game.The bottom-line is that this is all simple economics. When a team wants to compete with the best teams in the world, it wants to buy the best players in the world. So demand for the best players rises, thereby increasing their market prices. Taking a pay cut is not an option, because there will always be someone else ready to give the talent the big money. Off late,due to some extravagant spending in the transfer market by some individuals, these market prices have become inflated to ridiculous heights.
 HOW MONEY HAS TRANSFORMED THE FORTUNES OF ENGLISH FOOTBALL
Money has transformed football from a simple game to a money-minting goldmine. There isno better example to illustrate this fact than the meteoric rise of the English Premier League,which resurrected the declining fortunes of the sport in its motherland.During the late 80s, the Football League First Division, which had been the top level of English football since 1888, was well behind leagues such as Italy's Serie A and Spain's LaLiga in attendances and revenues, and several top English players had moved abroad.As stadia improved and match attendance and revenues rose, the country's top teams againconsidered leaving the Football League in order to capitalise on the growing influx of money being pumped into the sport through various avenues.In 1992 the First Division clubs resigned from the Football League and the FA Premier League was formed as a limited company. The newly formed top division would havecommercial independence from the Football Association and the Football League, giving theFA Premier League license to negotiate its own broadcast and sponsorship agreement. Theargument given at the time was that the extra income would allow English clubs to competewith teams across Europe.
Where does the money come from?
Television has played a major role in the history of the Premier League. Television rightshave been a vital source of income, helping to create excellence both on and off the field. TheLeague's decision to assign broadcasting rights to BSkyB in 1992 was at the time a radicaldecision, but one that has paid off. At the time pay television was an almost untested

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