PSR-friendly homegrown deals jar with the moral fabric of football

Lewis Dobbin probably didn’t grow up dreaming of a “mutually beneficial” swap deal.

His dreams were closer to what happened on December 10 last year, when he scored for Everton in stoppage-time at Goodison Park.

“It was a bit of a blur,” he told the Liverpool Echo in May. “I had dreamt about it but I had never really thought too much into the celebration because I knew if I was to score I wouldn’t know what to do. My emotions just took over. It is my boyhood club. I have been here since the age of 11. Hopefully, I get many more.”

Dobbin’s dream moment will not have a sequel. The 21-year-old has been sold to Premier League rivals Aston Villa. Separately, we are told, Everton have signed Tim Iroegbunam — an academy graduate from Villa Park.

That’s not to say Dobbin did not want this move to Villa Park. Why wouldn’t he? He will likely receive a pay rise and is joining a team competing in the Champions League. Considering Everton’s plight, and their recent financial uncertainty, that is without doubt a step up.

But it was surely not on his horizon heading into the summer.

The real question is whether this deal, involving a player with 12 Premier League appearances last season for Everton and a reported eight-figure sum, and that of Iroegbunam heading the other way, would have happened at all if it were not for the pressures of Profit and Sustainability regulations (PSR).

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The answer is surely not.

Dobbin, it seems, is just one of a handful of academy players involved in a last-minute carousel before June is out. Elsewhere, Villa are selling Omari Kellyman to Chelsea for £19million. Ian Maatsen will move the other way in a separate transaction. There has been talk too of Newcastle’s Yankuba Minteh joining Everton, with Dominic Calvert-Lewin heading the other way too.

The common thread between these clubs is they are all battling looming PSR deadlines — namely the end of June, which is the end of the accounting year. By buying and selling their academy products, it will help brush up the books. In trading card parlance, academy players are ‘shiny’ cards when it comes to PSR. An academy player can be registered as pure profit on the accounts. Those they sign using that relief can have their fee spread out across the length of a player’s contract, through transfer fee amortisation.

It is a neat accounting trick, which is not against the rules. But there is something distinctly off about shuttling academy graduates across the country to make the sums add up. Sure, there is no point overly moralising about an industry that is hardly the bastion of opportunities. Just one per cent of academy players make the grade and the rest are left to forge their lives with shattered hopes and a disrupted education.

But this is not the pathway they are sold in the younger age groups.

So how did we get to a place where selling the kids became a trump card for avoiding rule breaches — rules that, ironically, exclude investment in youth football from their profit and loss calculations?

The clubs are hardly blameless. For all the issues with PSR, they are the ones who are close to breaching the rules that they signed up to. If they restrained their spending then they would not have this issue in the first place.

But it does underpin why this current system of financial regulation is no longer fit for purpose. For one thing, these transfers are not entirely get-out-of-jail-free cards. They just allow the clubs to kick the can down the road, adding more debt to the pile, through another amortised transfer which means the clubs will continue to flirt with a rule breach in the years that follow. Chelsea, for instance, registered a £205million amortised transfer cost in 2023, according to their accounts, a figure that is undoubtedly higher now. With their latest signings, it will continue to grow too.

Kellyman will move to Chelsea for £19m (Clive Mason/Getty Images)

But there are also potentially wider implications of a loophole that privileges the sale of academy players. While the focus for now will be on the likes of Dobbin, and those involved in the big-money sales to bolster the books, there are likely knock-on effects for talent down the age groups too, as clubs become more aggressive at trying to sign young talent.

That is not necessarily a new thing; the pursuit of the best players has always been fiercely competitive, even at an early age. But the growing importance of academy sales only heightens the demand for the best crop of youngsters. Recruitment at that age, particularly where essentially a school kid moves long distances, is far more disruptive and, at times, questionable. There could well be a renewed focus on improving standards, but it is already adding fuel to a raging fire that can, and sometimes does, veer into a murky, perhaps under-regulated world of inducements and even exploitation too.

The need for change is clear. The proposal by Aston Villa recently to raise the £105million losses threshold looked like a bout of self-interest, but considering this figure was introduced back in 2013, there is no doubt that inflation, particularly within the industry itself, has had a big impact. A £10million transfer today does not carry the same weight as the equivalent a decade ago. Putting aside the ballooning costs of football wages and transfers, even taking the Bank of England’s inflation calculator puts £105m in 2013 at £142m in today’s money.

That would just push the envelope higher, though, and would not stop misspending at clubs. But there is also an argument to suggest that a retrospective system, like PSR, is not as effective as, say, La Liga’s squad cost limit, which provides a budget for clubs before the new season. The current system allows a club to fall into difficulties before then being punished.

And that’s before mentioning the other loopholes. While some have been closed, like that of capping amortisation at five years, not all have been combatted. Last month’s failed attempt to stop the use of profits from the sale of fixed assets like training grounds and stadiums in PSR calculations reflects this.

There does, ultimately, have to be a system though. The risks of a wild west are well documented, from Portsmouth and Bolton to Leeds and Bury.

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Financial calamity is real. It is also important for competitive balance, preventing any one club from blowing away the rest of the competition financially. That has underpinned the Premier League’s success, in that it shares its wealth better than other leagues have done previously. The move towards a harder salary cap, through ‘anchoring’ (where the maximum expenditure is tied to a multiple of the bottom club’s central broadcasting revenue), perhaps keeps competitiveness in mind.

A lower anchoring threshold may make a big difference but as it stands, the new proposals due from 2025-26 — squad cost controls, where 85 per cent of revenue can be spent on transfer costs, wages and agent fees — would not necessarily preclude more academy swap deals if clubs veer closer to the line. That is a loophole that must not be forgotten when the new system comes into force. Fans love a homegrown hero, but watching their academy talent be sold as makeweights in an accounting exercise does not quite have that same appeal. It jars with the moral fabric of the sport.

(Top photo: Getty Images)