Would Scrapping The Loan System Be Such A Bad Idea?

Time to ditch loan deal? (Image from wikipedia)With transfer fees climbing year after year, there appears to be little solace for clubs who are barely struggling to make ends meet. The gap between those who have and those who have not is widening at an alarming pace, with a few clubs pulling away from the crowd thanks in part to their wealthy owners. The Bosman ruling, which came into effective in 1995, was meant to offer some rest bite from the fast pace rise of transfer fees, with clubs now able to pick up a player at no cost when their contract expired. The ruling offer hope to many that dreamed of making a star signing but could not afford it and for a time, it looked to be the case. But now the Bosman is working against clubs who are watching in vein as the top clubs stockpile the best talent in over bloated squads.

Bosman ruling allowed for freedom of movement when a contract expires(Image from PA)
Bosman ruling allowed for freedom of movement when a contract expires(Image from PA)

Placing limitations on squad sizes and requirements around the percentage of home grown talent as part of that squad will go some way to helping the problem. But by limitations, we do not mean the current guidelines in place. In the Premier League, teams are required to submit a list of 25 players, of which 8 must be home grown (defined as anyone who has been registered with any club in the English or Welsh leagues for three seasons prior to their 21st birthday). In the Premiership, the five biggest clubs – Chelsea, Liverpool, Arsenal, Manchester United and Manchester City employ between them 167 first team players and are currently loaning out 95 players to other clubs. This 95 is made up in its majority by Under 21 players but also includes international players like Gareth Barry, Pepe Reina, Romelu Lukaku, Marko Marin, Park Chu Young and Wilfred Zaha. These players in particular have left their respective clubs in search of first team football but the club does not want to let them go fully as they may need them at a later date. The clubs have figured out how to retain the top talent but also adhere to the Premier League rules and regulations around squad sizing, making a mockery of the entire system. The loan deal between two clubs allows the player to go and play for another club for a set period of time, sometimes for an agreed fee or a percentage of that player’s wage.

Gareth Barry - Everton player by loan  (Image from Getty)
Gareth Barry – Everton player by loan
(Image from Getty)

From a football prospective this makes complete sense but in the business world, it would be absurd. Football is a job and the players are employees of a company much like any other business but when was the last time you heard of a company allowing one of its employees to go and work for a competitor? Would Google ever lend a programmer to Microsoft or Adidas allow a designer to go and be creative for Nike? No, of course they wouldn’t. But in football the loan system is a legitimate business transaction. Clubs in the lower leagues rely on loan deals as they cannot afford to buy players so clubs will argue that the loan system is crucial. Larger clubs will argue that it gives their younger players first team football and the ability to further develop their skill sets before being exposed to first team football at their own clubs.

Nike and Adidas ae unlikely to allow job sharing  (Image from Getty)
Nike and Adidas are unlikely to allow job sharing
(Image from Getty)

If the loan system was abolished and clubs were held to tighter reins on squad sizes, including limitations on the volume ownership of players over 21, clubs would have to be more selective on who they chose. This would mean that purchasing would be limited to filling the available spots and more players would be available for transfer. With less demand, prices should fall making them more affordable clubs with tighter budgets. The benefits remain the same, with quality players like Gareth Barry getting regular first team games at Everton but as an Everton player rather than being still a Manchester City player. The move would also force English clubs to follow their French counterparts in fielding more home grown youth players instead of sending them out on loans. Exposure at the top levels will speed up their development quicker than playing at a slower pace against arguably weaker opposition week in week out. Look at Cesc Fabergas or Wayne Rooney as examples of young players who were thrown into the deep end in the Premiership at an early age instead of being sent out on loan and how they blossomed into the players they are today. Yes both were unique talents but taking more risks will help England to discover the next Ross Barkley or Luke Shaw quicker than before. The French benefited from this enforced change by watching their national team 10 years later lifting the World Cup on home soil with players who emerged based on these rule changes.

Discovering the next Ross Barkley by ditching loans?  (Image from PA)
Discovering the next Ross Barkley by ditching loans?
(Image from PA)

There are arguments for and against the loan system including some well known ones such as journalist Martin Samuel and Arsenal coach Arsene Wenger who both believe the loan system is damaging the game. Managers like Roberto Martinez see the benefits of the system mostly because they are using it to their advantage. Others agree arguing that the game will suffer and lower league football will be killed off if the loan system disappeared but those voices appear to be coming more from the bigger clubs rather than the football league teams themselves. The football world feared the Bosman ruling when it happened but the positive effect of it was that it changed the way that clubs treated players and their contracts, preferring to renegotiate and keep them rather than lose them for nothing. Scrapping the loan system may have a similar affect, this time on the transfer market, helping to lower the cost of transfers in the long term but like the Bosman ruling or the changes made to squad sizes in France, we will only find out if it is introduced sooner rather than later.

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