The latest report into football finance by Deloitte & Touche seeks to answer the eternal sporting question: Can you buy success?
The report reveals that for the 1999/2000 season total wages took up 63% of club revenue.
But was this reflected in league performance?
The Premier League's biggest spenders in the year under review were Chelsea, who paid £47m paid in wages and salaries.
Watford at £8.6m - an increase of 60% on the previous year - were the lowest payers.
A comparison of the amount clubs paid in wages and salaries with their finishing position in the league reveals that two of the top four payers - Manchester United and Arsenal - finished in the top two league places.
At the other end of the scale, the three relegated teams - Wimbledon, Sheffield Wednesday and Watford - were among the four lowest payers.
In the 1999/2000 season, the only two clubs to significantly buck the trend that wages correlate with league position were Aston Villa and Newcastle United.
Villa were the 12th-highest payers in the league but finished in sixth position while Newcastle were the fifth-highest payers but only finished 11th in the league.
The report also plots the average league position for the last five seasons of the 1999/2000 Premiership clubs against their annual wages bill for the same period.
The report states: "It would appear... that the more a club pays in wages and salaries, the better absolute performance it will have in the league."
But it is unclear where success leads to bigger wages or whether bigger wages lead to success.
The report shows that only Aston Villa and West Ham achieved above average sporting performance with below average wages.
It makes soothing news for Villa chairman Doug Ellis, the subject of fan protests earlier this season.
On that note, the report states: "The truth is that fans' expectations are high but clubs must manage their business to the best of their ability - and their fans' expectations."
A similar comparison of transfer spending and league position is less comforting for big spenders.
Liverpool, who have spent £58.5m, and Newcastle, who have spent £58.2m, have been the biggest net transfer spenders in the five-year period examined by the Deloitte report.
And comparing transfer expenditure with average league position for 1996/96 to 1999/2000, the report states: "Statistically speaking, it would appear transfer spending doesn't guarantee success."
Arsenal are the most impressive club in bucking the trend, attaining an average league position of just less than second with an average transfer expenditure of £5m.
At the other end of the scale, Newcastle (again) have got poor value for money, spending an average of £11.6m per year but achieving an average league position of seventh.
Having shown that wages bear a closer correlation to success than transfer spending, Deloitte and Touche point out that:
"Consider the fact that expenditure on players is shifting to wages as opposed to transfers - and the transfer market changes will exacerbate that effect - and it looks likely that the Premiership may become further polarised in future years."
Figures from Italy's Serie A echo the English findings, leading the report's authors to conclude:
"Spending large amounts of transfers - on its own - has a relatively poor chance of generating success on the pitch - or so Europe's two largest leagues are telling us!"
The latest report into football finance by Deloitte & Touche seeks to answer the eternal sporting question: Can you buy success?
The report reveals that for the 1999/2000 season total wages took up 63% of club revenue.
But was this reflected in league performance?
The Premier League's biggest spenders in the year under review were Chelsea, who paid £47m paid in wages and salaries.
Watford at £8.6m - an increase of 60% on the previous year - were the lowest payers.
A comparison of the amount clubs paid in wages and salaries with their finishing position in the league reveals that two of the top four payers - Manchester United and Arsenal - finished in the top two league places.
At the other end of the scale, the three relegated teams - Wimbledon, Sheffield Wednesday and Watford - were among the four lowest payers.
In the 1999/2000 season, the only two clubs to significantly buck the trend that wages correlate with league position were Aston Villa and Newcastle United.
Villa were the 12th-highest payers in the league but finished in sixth position while Newcastle were the fifth-highest payers but only finished 11th in the league.
The report also plots the average league position for the last five seasons of the 1999/2000 Premiership clubs against their annual wages bill for the same period.
The report states: "It would appear... that the more a club pays in wages and salaries, the better absolute performance it will have in the league."
But it is unclear where success leads to bigger wages or whether bigger wages lead to success.
The report shows that only Aston Villa and West Ham achieved above average sporting performance with below average wages.
It makes soothing news for Villa chairman Doug Ellis, the subject of fan protests earlier this season.
On that note, the report states: "The truth is that fans' expectations are high but clubs must manage their business to the best of their ability - and their fans' expectations."
A similar comparison of transfer spending and league position is less comforting for big spenders.
Liverpool, who have spent £58.5m, and Newcastle, who have spent £58.2m, have been the biggest net transfer spenders in the five-year period examined by the Deloitte report.
And comparing transfer expenditure with average league position for 1996/96 to 1999/2000, the report states: "Statistically speaking, it would appear transfer spending doesn't guarantee success."
Arsenal are the most impressive club in bucking the trend, attaining an average league position of just less than second with an average transfer expenditure of £5m.
At the other end of the scale, Newcastle (again) have got poor value for money, spending an average of £11.6m per year but achieving an average league position of seventh.
Having shown that wages bear a closer correlation to success than transfer spending, Deloitte and Touche point out that:
"Consider the fact that expenditure on players is shifting to wages as opposed to transfers - and the transfer market changes will exacerbate that effect - and it looks likely that the Premiership may become further polarised in future years."
Figures from Italy's Serie A echo the English findings, leading the report's authors to conclude:
"Spending large amounts of transfers - on its own - has a relatively poor chance of generating success on the pitch - or so Europe's two largest leagues are telling us!"
The financial crisis in English football will cost players millions of pounds. From this summer, clubs will slash their budgets by introducing lower wages, greater use of performance-related pay, shorter contracts, and smaller squads. It will signal the end of a decade of rapidly rising wages for England's 2,800 full-time professionals. The 900 players out of contract this summer will suffer first. The most talented handful will continue to enjoy lucra tive contracts, but hundreds of others face pay cuts and the dole queue, largely because of the collapse of ITV Digital's £315million deal to televise Football League matches.
Clubs in the First, Second and Third Divisions have told Observer Sport that they plan to make much better use of bonuses. Earnings will be dependent on results, league placing, appearances, goals scored, and size of crowds. Out-of-contract players in the First Division earning £6,000 a week will be offered only £3,000-£4,000 of guaranteed income - provided they are retained - with the rest available only in bonuses. More clubs plan to bring in the sort of highly incentivised financial structure already in place at Preston, Millwall and others. Preston players receive a basic salary of £150,000 to £250,000 a year, but can earn far more through results and appearances. Some players made an extra £150,000 that way last year from the club's run to the First Division play-off final. Portsmouth, who are set to record a £5million loss this season despite selling Peter Crouch to Aston Villa last week for £5million, plan to slash their £700,000-a-month wage bill by trimming their enormous squad and bringing in performance-related pay.
Neil Warnock, the Sheffield United manager, spoke for many when he said: 'I think the players have had the good times. This is it, the peak of their wages. The directors want me to trim wages and I can't blame them.' Warnock believes twice the usual number of players will find themselves out of work this summer and on the Professional Footballers Association's annual 'disengaged list' of unwanted pros. A leading agent, who represents dozens of players in all four divisions, said: 'There will be a reality check this summer as clubs finally implement the sort of good practice they should have brought in years ago. Wages could fall by about 20 per cent. Average players, and that's the majority, will no longer get the money good players have been getting. Players probably won't believe it until they see people they know ending up out of work.' Clubs will offer 'take-it-or leave-it' contracts, especially to older players. Shorter contracts, often for two years instead of three or four, will also become commonplace.
Nick Blackburn, acting chairman of Queens Park Rangers, said: 'Lower wages, shorter contracts and smaller squads will definitely happen at clubs across the board. Clubs will do whatever cost-cutting is needed to keep themselves alive. 'Any new players coming to QPR this summer might be surprised at the level of salary we are able to offer. This is financial reality finally dawning. We're lucky that the ITV money is only eight per cent of our income. For others it's much higher.' Many chairmen of First Division clubs are keen to amend the standard player's contract to allow them to pay players less if the team are relegated. The PFA would resist any such move.The League, conducting an inquiry into the future of their competitions and financing, will report to clubs on 18 April. They hope to unveil a wide range of proposals which will guarantee the survival of all 72 teams in their three divisions.
It seems that clubs in the lower leagues, more perhaps than their Premiership 'cousins', need to remember that transfer fees are paid out once, but wages are a liability throughout the period of a player's contract - irrespective of that player's performance on the football park.
Football is a labour intensive business, so wages form a higher proportion of turnover than in most other industries. Whilst football clubs clearly have other overheads to finance, none of these are likely to rival players' wages, in scale.
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