Sheffield Wednesday and Promotion/Relegation Revisited

Danny Minj at CaughtOffside reflects on the near-liquidation of Sheffield Wednesday recently and laments the snobbishness in the rest of society towards venerable historical institutions such as these old giants of the football league like Sheffield Wednesday.  For those not aware, since Wednesday have plumbed the lower leagues of English football for many years now, Sheffield Wednesday is a football (soccer) club that has been in continuous existence since 1867 yet they were only saved from ceasing to exist any more by a last-minute bail out by an eleventh hour loan from the Co-operative Bank.  I personally think that, along with Crewe Alexandra and Hamilton Academicals, Wednesday have one of the most distinctive club names in football.  I don’t know whether they should remain in existence just because of that though…

Wednesday in the current season are gracing League One, the third division of English football, and have made a mixed start.  It is their second recent spell at this ignominious level on the footballing ladder in the last decade having been founder members of the Premiership back in 1992, and as the linked BBC article details, they have debts of the order of £20m, not something easily eradicated on the kinds of revenues generated by League One football (their attendances are holding up just below the 20,000 mark but TV companies don’t really care for these lower divisions).

It’s been argued by many in various places (e.g. here) that the promotion/relegation system encourages financial instability and perhaps Wednesday are poster boys for these kinds of arguments: After relegation from the Premiership they invested big to try and get back into the big time but the uncertainties inherent in football (why we all love it) meant they didn’t make it, and all of a sudden loans became harder to pay back so players had to be sold to make repayments, debts accumulated and before long the club was relegated instead of being promoted.  It’s a pattern repeated in many, many places: Leicester, Southampton and Leeds (their problems related to being “promoted” into the Big Four teams hitting the Champions League regularly) immediately spring to mind.  None have yet retained their status in the “big time”.

But is it really promotion and relegation causing the problems?  Promotion and relegation have been part and parcel of English football almost since its inception over 100 years ago yet such rampant financial instability is only a recent phenomena.  This suggests to me it is something else that is driving the instability: The incentive structure has changed since the Premiership entered existence in 1992.  The financial gains now from promotion to the Premiership are monumental, and it is surely this carrot that is driving the instability as club owners within touching distance of the promised land take risks on a game so beautifully uncertain as football.

What is the solution?  I don’t know, but it strikes me that it is not abandoning promotion and relegation…

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