Everton's wage bill is a sign of things to come

Everton spend 75% of their budget on wages. Expect more of the same from other clubs over the coming years.

Everton fans always knew their club didn’t have a lot of money but they may not have known the club was losing money. The recent loss of just over £9 million for 2011/2012 will shock many but the amount that is spent on wages will shock even more.

Three quarters of the cash flowing through Everton is spent on wages. If you are alarmed you should be but this is only going to stay constant and be replicated across many other clubs over the next few seasons.

In the modern climate, think of top level clubs who aren’t spending masses of money in the transfer market; Everton, Arsenal, Liverpool, Barcelona and many more. They are all trying to play it fair and toe the line over UEFA’s Financial Fair Play initiative.

If a club is not spending big money on transfers then that club is going to spend money internally to make sure that the top players don’t leave. Barcelona do this with young players as soon as they go into and come out of their academy.

The pressure to break even makes clubs reluctant to splash the cash and instead they keep it within their club infrastructure. So more is going to be spent on wages and Everton are the case in point because they rarely break the bank over any transfer David Moyes asks for.

The situation is not helped by the inflated wages that players are paid because of the wealthy investment and owners in football. Clubs such as Barcelona create big contracts for their players at a young age as do Real Madrid.

Sides like Chelsea, Manchester City and Paris Saint-Germain all have wealthy financial backers which allow them to approach the best players and offer them the biggest contracts.

This leaves other clubs paying more to their own players just in order to get them to stay put. It is unfair but it’s the way football is structured at the moment and it’s the way it’s going to stay.

The FFP initiative from UEFA says a club cannot spend more than it makes if that club wants to take part in any tournament under the jurisdiction of UEFA. Therefore, clubs will not spend money externally as they need that money just to be sustainable internally.

The answer to the wage problem is a wage cap which will stop this problem from spiralling out of control.

Something along these lines has already been agreed by the Premier League with plans to only allow clubs to increase their wage budgets by a certain percentage each season.

How well this works remains to be seen.

image: © isirya

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