Tuesday, August 2, 2011

Does Saying No to Racism Mean Saying No to FFP?

One of the interesting trends during the summer transfer window has been Liverpool's apparent interest in signing British players. Actually, not just signing them but (it would seem) overpaying for British players. A recent joke sums it up well: "Joey Barton has been released on a free. Liverpool have submitted a £30m bid."

Now, I have no idea why Liverpool has signed these players. Maybe it has nothing to do with their being British. Maybe these are just a players that Liverpool thinks have some talent others have missed.

I don't want to speculate about what Dalgish and Comolli are thinking. But Liverpool's buying does raise an interesting hypothetical: what if some team (not Liverpool) thought that they could make more money by signing white players? What if they thought they could sell more jerseys with more white players on the team?

This hypothetical does not worry me too much under normal conditions because I actually don't think the purpose of a football club is to make money. The purpose of a football club is to win trophies.

Indeed, despite how much some fans complain about clubs that spend a lot in order to win (e.g. Chelsea, Man City), fans also have unbridled scorn for clubs that actually try to make money rather than trying to win. The fact that Newcastle has not (yet) spent the money gained from selling Andy Carroll and Kevin Nolan to buy new players has rightfully been pilloried. Arsenal has also not been spending, and if they do not spend by the end of the summer (especially if they sell Cesc and or Nasri), I would similarly expect outrage.

Owners that want to win — either instinctively or because fans hold their feet to the fire — should not display the sort of racism described above. If a black player is better than a white player, the owner who wants to win will sign the black player, even if that does mean selling fewer jerseys.

At least, they would have in years past. But what about today?

With financial fair play (FFP), the situation is not so nice. If the white player will sell more jerseys, then he is effectively cheaper under FFP rules because the jersey sales cancel out some of the fees and wages of the player. Hence, FFP may be creating a situation where the game is systematically biased in favor of white players.

To those who think there is no alternative but to adopt FFP, I would point out that that this argument does not apply to salary caps, like those used in the NFL and NBA, because the limits are applied only to wages not to the total revenues of the club (which includes jersey sales).

Is this scenario described (of systematic bias in favor of white players) likely to arise in the EPL? Hopefully not. But the fact that FFP would seem to incentivize racism adds to the list of problems with FFP that others have pointed out. Unlike a salary cap, it is anti-competitive: it makes it harder for teams lower in standing now to move up. It may even be anti-competitive in a legal sense, i.e., it might be illegal.

Above all, this gives yet one more counter-argument to claims that FFP is necessary to save football. FFP creates many new problems, ones that comparable approaches in other sports (like salary caps) do not have. Hopefully, UEFA will come to their senses and look at salary caps instead, but don't hold your breath.

Update: Some may not like the alternative of a salary cap (perhaps because they don't want the league to be "that equal"). However, salary caps are not the only alternative. Another is a "luxury tax" like that used in the MLB.

In this system, there is a limit on salary but it is not a hard limit. Clubs can spend more than the limit, but the league charges them a tax on this excess amount and (I think) distributes the money to the other teams. This allows clubs in major cities to retain some advantage. However, the luxury tax also does not have the problem of incentivizing racism. It is still in the best interest of every club to pick the best players regardless of race, just as with a salary cap.

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