This is what really scares European football

FIFA’s proposal to make the World Cup a biennial event is freaking European football at the moment. Other regions are more enthused about Arséne Wenger’s attempt to throw the game up in the air, but Europe feels seriously under threat by this harebrained scheme. 

Once again, the governing bodies give the impression they speak about a more democratic game, but deep-down, financial opportunism really runs football. Not that anyone will sympathise with Europe’s top clubs, who tried their own game of double bluff earlier in the year. It feels, to some extent, like football has become the wild west of global sport and the only thing stopping complete fragmentation is the knowledge most fans are against much of what is being tabled at the moment.

Heart and Soul

There may come a time when this really doesn’t matter and what will determine the drive for more money and ring-fenced leagues and competitions won’t be what the supporters want, but what high finance, media and marketeers demand. Indeed, we have already seen football can exist without fans, albeit a product that lacks heart and soul, but whenever has the softer elements of football ever been taken into consideration by hard-nosed business people?

However, it is the special feeling a World Cup creates that is also under threat. Too much of a good thing is not to be recommended, especially if players become jaded owing to the intensity of their day jobs as club players. Will we ever get to a stage where every club’s top players are only rolled-out for the big games, allowing them to rest for international football?

Moreover, with more and more countries being invited to the ball, FIFA will run out of eligible venues to stage a tournament. Is the future of World Cups likely to be multi-centred or alternately hosted in North America, the Middle East and China?

FIFA’s proposal plays into the hands of people who want financial growth to become the key motivator in the game, if it isn’t already. Listening to recent football business conferences, the dialogue sounds very similar to banking, fintech or technology events, all acronyms, clichés and corporate speak. Likewise, the scripted presentations, extolling the virtues of companies who claim to be people-orientated, socially responsible and eager to tick all the boxes, makes you question their authenticity and real underlying purpose. Football has become a gravy train for lots of peripheral businesses and they all want a piece of the action. Hardly anyone appears to be trying to solve football’s continued polarisation, excesses and moral code, largely because so many are feeding off the back of it.

Devaluation

There needs to be fewer matches, not just because of player fatigue purposes, but also because certain demographics are being squeezed out of the game due to the sheer cost of watching big-time football. Clubs won’t necessarily champion this, even though it is their players, their fans, that are at the sharp end of crowded calendars, because they crave the revenue. 

In 2019-20, European football’s income declined by 13% to € 3.7 billion, while the top 20 clubs, according to Deloitte, saw their revenues drop by 12% to € 8.2 billion. Recent announcements around 2020-21 figures demonstrate the downward trend and the size of some of the losses. Fewer games will, arguably, mean lower revenues from matchdays and this won’t be dovetailed with lower wages. Generally speaking, footballers’ wages are akin to house prices, they seem to always be in the ascendancy.

Somebody needs to be more transparent about FIFA’s agenda, though. At the recent World Football Summit, Jacco Swart of the European Leagues said that, contrary to FIFA’s claims that the fans want more World Cups, the research his group had seen suggested otherwise.

Swart said that additional and more frequent World Cups could devalue media rights of all other major competitions. Furthermore, an expanded UEFA Champions League will also increase the enormous disparities that prevail in Europe. By 2024, participants will be guaranteed 10 matches in the group stage, which will provide more income and widen the gulf between Champions League clubs and their domestic rivals. A problem that currently exists will only get worse. The introduction of the UEFA Europa Conference League was seen as a positive by Swart as it allows more clubs to benefit from European club competition. The money smaller clubs in lesser leagues get from the Europa League and Conference League is a big boost to their finances.

Nevertheless, the financial disparity between the Champions League and UEFA’s other competitions is substantial. Of this season’s group stage, 10 of the 32 clubs have appeared in all of the last five Champions Leagues, with eight featuring in four and four in three. That’s 22 of 32. All of these clubs have a significant advantage over their local rivals from regular involvement. 

Threat

Some football folk are worried that UEFA’s continued expansion of its franchise may continually threaten the position of domestic leagues with the end game being European competitions taking over the sacred weekend slot. “That will be crossing a red line,” said Swart.

There are also concerns from groups like European Leagues that UEFA’s potential € 7 billion fund will not find its way to the smaller clubs across the continent, but will be directed towards the big names who have racked-up huge debts. Swart commented: “The provision of this facility should not lead to further inequality in the system.”

But what can change the current situation? Since the 21st century began, we’ve had terrorism, a financial meltdown, political unrest and a pandemic. If football didn’t live so precariously, it would not have been so vulnerable when covid-19 came along, but the game has, mostly, proved to be robust and resilient. The pandemic tested the business models of the biggest clubs and their reaction was to try and create a self-serving project to compensate for their own parlous financial situations. 

When a club like Barcelona loses its best player because it cannot afford to keep him, something is definitely very wrong. More World Cups would not be part of the solution, they would merely make the problem worse, and instead of expectation and hope, continual carnival would prompt a shrug of the shoulders and weary sigh. When football loses that aspect of its offering, we are in trouble, for even the Romans found that bread and circuses can have limited appeal.

Germany’s Bundesliga braces itself after bull run comes to an end

GERMANY’s Bundesliga is the envy of the world in many ways: affordable ticket prices, high levels of stakeholder engagement, big crowds and successful teams. Furthermore, the Bundesliga and Bundesliga 2 contribute around € 1.4 billion in taxes and duties to the German economy and employ 53,000 people. 

But like all major leagues, the Bundesliga felt the pinch in 2019-20 from the pandemic and they are facing the future aware that the financial consequences of covid-19 has only just started. “This is just the beginning,” said DFL executive committee speaker, Christian Seifert. “No one was prepared for the extent to which the crisis would affect all areas of life, and football is no exception…we know that the pandemic will continue to have a significant impact on society as a whole in 2021.”

In 2019-20, Bundesliga revenues declined by 5.4% to € 3.8 billion and the combined total of Bundesliga and Bundesliga 2 was down by 5.7% to € 4.5 billion, the first time in 15 years that income had dropped. There were, of course, good reasons for that, but the likelihood is that 2020-21 will be even worse for all clubs given they may spend the entire campaign playing behind closed doors.

Of the 18 top flight clubs, 13 generated total revenues north of € 100 million, but only eight achieved a positive result, compared to 14 in 2018-19 and 13 in 2017-18. Bundesliga 2 had seven clubs in positive territory, half as many as 2018-19. 

The lack of spectators in the closing weeks of the season had a negative effect on the league’s finances. Matchday income in the Bundesliga fell by 21% to € 363.5 million and contributed 9.6% to the overall pot. In 2017-18 and 2018-19, matchday contributed 14% and 13% respectively with a recent annual average of € 536 million.

Media income managed to remain strong, partly attributable to successful negotiations by the league, and rose slightly to € 1.5 billion, contributing 39.2% to overall revenues. Advertising also increased marginally to € 889 million.  

The figures relating to Bundesliga 2 underline the huge gap between the two divisions. The Bundesliga earns around five times more than its poorer relation. However, among Europe’s second level competitions, Bundesliga 2 can attract an average gate of close to 20,000 in a normal season. Only England’s Championship has better attendances among second divisions.

For the first time in seven years, transfer activity declined in the Bundesliga, although buying and selling players still accounted for almost € 600 million of income. According to Transfermarkt, in 2019-20 Bundesliga clubs spent € 848 million, with the biggest spenders Borussia Dortmund (€ 134 million), Bayern Munich (€ 126 million) and Hertha Berlin (€ 100 million). The latter two clubs had the highest net outlay, both nursing a negative balance of more than € 75 million.

Despite lower revenues, player wages rose slightly in the Bundesliga, although administrative staff experienced a cut in salary. Given the downturn, it was no surprise that the overall wage-to-income ratio jumped to 44.8% which compared to many European leagues is still relatively low even though it was 2.5 percentage points higher than 2018-19.

The total assets of the Bundesliga for 2019-20 were € 3.95 billion (2019 € 3.8bn), with player values € 1.47 billion (€ 1.2 bn). The league’s equity ratio was 43%, lower than 2018-19 but the second highest in Bundesliga history. 

German clubs continued to fare well in European competition. Bayern Munich won the UEFA Champions League in 2019-20 and only Bayer Leverkusen failed to qualify for the knockout phase of the competition, moving over to the Europa where they reached the last eight. RB Leipzig fell at the Champions League semi-final stage, losing to Paris Saint-Germain. Bayern Munich and Borussia Dortmund are still involved in the Champions League in 2020-21, but all the German clubs have been eliminated from the Europa League. 

German football remains in good shape but there will be challenges in the near future. Seifert concluded in the league’s economic review: “Over the past 20 years, German professional football has established economic foundations on which the two leagues are able to build their future. At the same time, however, it is clear that the massive ramifications of the pandemic will require all of the clubs to continue to act with absolute financial discipline and considerable foresight.” 

Although Seifert’s caution is understandable, few would doubt that Germany’s football organisation is better equipped than most to withstand shocks to the system.

@GameofthePeople

Photo: PA