soccer

Are UK taxpayers subsidizing poor spending habits in the Football League?

Yes.

on-level-termsWell, I think so. That’s the conclusion I reached after reading Chapter 7 of Ted Philipakos’ excellent forthcoming book, On Level Terms.

That might not be Philipakos’ conclusion. He’s an agent and an academic who clearly has a solid grasp of the 10 cases he discusses in the book, but he plays the role of dispassionate reporter here, passing no judgment but simply summarizing these complex cases in plain English — a difficult task he does well.

He starts with U.S. cases, leading off with the big one, Fraser v MLS — the players’ 1997 lawsuit against the then-new Major League Soccer. That suit is a full chapter in my book Long-Range Goals, and I was flattered that he cited me. But he adds valuable insight, especially in following the case through the Court of Appeals and diving headlong into the murky world of single-entity law.

Next up: two cases from the old NASL that might change some impressions of the good old days, one more antitrust-ish case and a concussion case still in progress.

The European cases are another interesting grab bag, ending with a TV-rights case I’d never heard of. As you’d expect, Philipakos has a good solid chapter on the Bosman case, which established greater player movement and wiped out a lot of restrictions on foreign players. That case made the Premier League the melting pot it is today, and the federation arguments made at the time sound positively quaint even though they weren’t made that long ago.

So what’s the deal with Chapter 7 and my clickbait headline?

The issue here is the Football Creditors Rule, which ensures clubs seeking protection from creditors must pay off their “football creditors” — players, clubs to which they owe transfer fees, etc. — in full. Other creditors — say, the UK tax agency known by the cumbersome name Her Majesty’s Revenue and Customs — might only get a few pennies.

Seems fair — until you see how many clubs abuse it. “Sure, we’ll sign you to a multimillion-pound contract even though we don’t get EPL TV money and we only draw 8,000 fans per game. If we go broke, we’ll just go into administration and tell the rest of our creditors to shove it.”

So as I’m reading it, Football League clubs can still keep paying 90 percent of their revenues in player payroll, and if they can’t pay their taxes, that’s just too bad for the rest of the country’s taxpayers.

Am I wrong? And does anyone find that disturbing?

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