Javier Tebas has a point about state-owned clubs, but is there an agenda?

JAVIER Tebas doesn’t like state-owned clubs, but here’s news for you, Señor, not many people do. They unsettle the playing field still further and although their wealth may level-up clubs alongside those who have been at the top for decades, their presence makes imbalances even worse. In other words, they might create greater competition for football’s hierarchy, clubs that feel their place is at the forefront of the game, but they cast-off so many who simply cannot compete anymore.

As president of La Liga, Tebas has to do the bidding of Real Madrid and Barcelona, among others. This is no easy task, you would assume for these clubs like being the Alpha males of European football and don’t enjoy seeing their position threatened. So Mr Tebas undoubtedly comes under pressure from all directions, but he will surely be aware that a successful Real Madrid does more for La Liga’s marketability than any amount of advertising spend. And ultimately, football is an industry where growth is mostly achieved “organically”, mergers are not really part of the equation. As long as clubs stay within their defined financial boundaries, they can go hell for leather in building their global footprint.

Tebas has launched a few clumsily-guided verbal attacks on Paris Saint-Germain and Manchester City, questioning many different aspects of their operations. It is not out of the question that some legal action may be coming in the opposite direction, but the simmering conflict between Tebas, PSG and Ligue 1 will do nobody any good, and it could even drive a wedge between top European leagues and reignite the European Super League project. Let’s not forget PSG were not among the clubs advocating the ESL and City were quick to withdraw when PR turned nasty. But Real Madrid, Barcelona and Atlético Madrid were all willing partners to the end. Tebas may actually be sitting on something of a powder keg – if European football becomes more divided, opportunists may decide the big clubs really do need their own party.

PSG were not advocating the ESL but Real Madrid, Barcelona and Atlético Madrid were all willing partners.

Tebas has, in the past, spoken negatively about the Premier League and its broadcasting fees. La Liga have made a lot of positive modifications to their own model in recent years, but it’s a fact their blue-riband clubs, Real Madrid and Barcelona, are not as influential as they once were. They may still have enough clout to remain among the elite and Real’s Champions League victory this past season demonstrated they are always capable of winning the major prizes. And while they keep winning the trophy that is most associated with their history, the state-owned clubs have yet to lift it themselves. Of the “new money” clubs, only Chelsea have won the Champions League (in 2012 and 2021).

Are PSG and Manchester City ruining European football as Tebas suggests? Certainly they have artificially raised the bar in both England and France, although in the case of PSG, their extraordinary financial power does make them the ultimate flat-track-bullies. Tebas was very direct in his criticism, which comes after Real Madrid were gazumped by PSG’s huge new deal for Kylian Mbappé. “Listen, Nasser (Al-Khelaifi, PSG’s President), what you are doing is screwing football. It’s as dangerous as the Super League project.”

The news reports claim La Liga understands that the irregular financing of these clubs is carried out either through direct injection of cash or through sponsorship contracts that don’t make sense. As well as the Mbappé deal, Tebas cites the Manchester City signing of Erland Haaland. Interestingly, Real Madrid and Barcelona were both interested in Haaland at some stage. PSG, aware of the concerns around the Mbappé contract, commented: “The first person who needs lessons on conflicts of interest, financial management and market distortion is Javier Tebas.” Furthermore, Al-Khelaifi responded: “Tebas is afraid of Spanish top flight clubs being inferior to Ligue 1 in terms of quality.”

Ligue 1’s Vincent Labrune called Tebas’s outburst “disrespectful smears” and reminded him Real and Barca have broken the world transfer record six times and their salaries remain huge. Although Tebas may feel he is doing the right thing in “calling out” PSG and City, it also sounds like a case of sour grapes given the position some of his clubs have in football’s hierarchy.

That said, Tebas will have significant support from across the football world for being outspoken. Losing out on both Haaland and Mbappé wasn’t just a blow for the clubs willing to buy him, it was also a setback for La Liga, who are eager to replace the Ronaldo-Messi dynamic that has now gone. Over more than 10 years, these two players represented the face of La Liga. Mbappé and Haaland are the next generation, but they are now plying their well-compensated trade in France and England.

And there’s more to come. Newcastle United are likely to fall into this gilded category in the next year. Saudi Arabia’s sovereign wealth fund is behind the consortium that now owns the club, so in theory, they are the richest, or one of the top three richest, in the world. Tebas has already remarked the Saudi takeover was a case of “stealing football”.

The only way anyone can control this type of investor activity is through a type of governance that becomes the antithesis of the free market. Football is, all said and done, a competition and despite the claims the current set of uber-clubs make for an uneven playing field, the game has never been about a level field of play. The more money that is poured into football, the higher the stakes when investors are looking to buy a club. The obscenely-rich come in small numbers, so there’s no way the top 20 or 30 will all be bought by the type of owner PSG and Manchester City have. Levelling up would create the type of league that exists in the US, and that would not sit comfortably in Europe. Salary caps and transfer limits may well have the desired impact, but they, in themselves, would have drawbacks. However opponents of elite football couch it, there’s no easy way to change the status quo. Taking the very rich out of the competition and creating their own plaything may actually help the rest. The inauguration of a super league, perhaps? Whoops, we’re back where we started.

A plan for FA Cup free-for-all and the troubles of Tebas

THE FA Cup is back at the weekend and the process of elimination continues as we reach the second qualifying round. Well over 700 teams have entered this season, so by the time the top clubs enter, most will have waved goodbye for another year. The majority of non-league clubs have little or no chance of ever meeting a big club, so the dream is largely unfulfilled. However, if the Football Association ever wants to make its premier competition more appealing, why not do away with the months of qualifying rounds and mix the whole thing up? In other words, throw Arsenal, Chelsea and Liverpool into the early rounds. Let’s say round one is 512 clubs (256 ties). Have a preliminary round to reduce the 750-odd to 512 and then introduce a free-for-all. Furthermore, introduce a policy of small hosts big, which would really light-up the competition and remove the need for small clubs to incur travel costs. Similar formats do exist, so it’s not reinventing the wheel, but it would provide a genuine boost to the FA Cup. 

Golazzo Live – time for real experts

WHAT a joy it was to see James Richardson hosting Golazzo live last weekend. Some informed chat with Italian football expert James Horncastle, a bit of banter, highlights of the weekend’s Serie A games and then a live match. What’s not to like?  Football hipsters from the 80s and 90s (yes, they did exist), eulogise about Channel 4’s Football Italia, and although you can never recapture the golden age of Serie A, it’s good to see an attempt to reinvigorate interest in the Italian game. We need more of this type of show. A lot of pundits are merely full of cliché and safety-first comments, but genuine, insightful knowledge is often found among journalists. Still, current player interviews are a lot better than those found on The Big Match Revisited from 1974-75, which is currently being screened on TV. Brian Moore’s avuncular commentary, along with other well known mic men such as Hugh Johns, Gerald Sinstadt and John Macklin, provides a stark contrast to today’s style. The player slots are often embarrassing, such as Charlie George, Stan Bowles, Steve Perryman and Keith Robson. We often expect too much from footballers in contemporary post-match interviews, but back in the mid-1970s, it must have been like trying to get meaningful dialogue out of a sulky teenager!

Tebas – who does he like?

LA LIGA’s president, Javier Tebas, has made it clear what he thinks of Paris Saint-Germain, calling them enemies of football and as bad as the European Super League. Interesting – PSG were not part of the mutiny and La Liga’s three biggest clubs, Real Madrid, Barcelona and Atlético Madrid were advocates. Surely, the ESL group were indeed enemies of football, not to mention, La Liga? Tebas must still be smarting after Lionel Messi left Barcelona, ending an era for the Spanish league characterised by the dynamic between CR7 and Messi. He has said that Real have the financial clout to sign both Erling Haaland and Kylian Mbappé, which may be wishful thinking on his part, but surely such a coup would cost big money and do nothing for financial prudence? Tebas has often criticised the Premier for its broadcasting wealth and has spoken out about both Real and Barca in the past. La Liga has just rebranded ElClasico, the match that pits Barca against Real. Perhaps this is a response to the departure of Messi, a reminder that the league still has one of the great products of the modern game and even when iconic players move to fresh pastures, life goes on?

La Liga in profit, but watch the debts

A LOT of people have been quick to write-off Spain: the financial health of its clubs; the declining fortunes of its top names in the Champions League; and the fall of its national team to the status of also-rans.

Spain thrashed Slovakia 5-0 in Euro 2020 to qualify for the last 16, just 48 hours after Javier Tebas unveiled La Liga’s financial report for 2019-20 (not 2020-21 – what takes so long?). While the emphatic result against the Slovaks underlined that Spain, although not in the same class as their treble trophy-winners of 2008-12, are certainly better-equipped than most pundits have suggested. However, despite La Liga making a € 77.4 million profit in 2020, the short-term outlook appears to be challenging for the league and its flagship clubs. 2020-21, after all, was a year without matchday income as games were played in empty stadiums. As with most clubs and leagues, there is worse to come.

Across the league the clubs generated losses of around € 700 million, but half of that total – much to Tebas’s irritation, was down to Barcelona. Equally perturbing for Tebas must have been the involvement of his three standard-bearers in the European Super League mutiny.

La Liga generated € 5 billion in revenues in 2019-20, a record figure for the league and 3.6% higher than 2018-19. PwC estimate that without the burden of covid-19, La Liga would have generated a further € 300 million. Interestingly, over a five-year period, revenue growth has averaged 12% for the league, considerably higher than IBEX 35 companies who have, on average, lost 1.4% in that timeframe. 

While La Liga’s growth has been relatively robust, the future may be very different. PwC are estimating that revenues for 2020-21 could be as low as €3.5 billion, largely due to lower matchday and TV cash. 

In 2019-20, matchday income fell by 16% to € 796 million, while broadcasting revenues were up by 6.3%. The league is modifying the tender for domestic TV rights to allow new broadcasters to enter the Spanish market, a move that could yield up to € 1 billion.

Commercial income rose slightly but has been stable for the past three years. In such a difficult environment, making any sort of profit must have been satisfying, but the € 77.4 million of 2019-20 was substantially less than 2018-19’s € 225 million. Tellingly, La Liga was the only major league in profit. At the same time, net debt also went up to € 745 million, mostly due to increased investments in players and infrastructure.

Against this backdrop, it is unsurprising that some clubs are having financial difficulties. Barcelona and Real Madrid both have huge debts and in the case of Barca, there have been concerns they have systemic issues to deal with. The future of Lionel Messi is a topic of constant debate, with key figures in the Spanish game hinting that Barca will have to trim their wage bill in order to make room for Messi’s package or face the prospect of not being able to register the Argentinian superstar. Memphis Depay, who has now joined Barca from Lyon, apparently agreed a deal last September 2020, but was unable to sign because of the club’s financial problems.

There are also worries that there is not enough new Spanish talent coming through the ranks, although Barca demonstrated they have some outstanding youngsters. Real Madrid were not represented in the Spanish squad for Euro 2020, but given expatriates account for 70% of playing time at the club, is it really a shock? This figure is double the average for Spain and far lower than the averages for the other big five leagues. Similarly, only 16.5% of appearances were made by club-trained talent, somewhat less than Barca’s 30%. Hence, Spain has one of the oldest leagues across Europe, with only Cyprus and Turkey having older average ages.

Spain remains a big exporter of talent, which may also explain why Real’s multi-national squad has few representatives in Euro 2020. Spain’s 2020 squad has 10 home-based players and 10 Premier Leaguers, with just three (all Barca) from the big two. In the 2018 World Cup, there were 17 La Liga players and four Premier League. Real and Barca had 10 between them. It’s no coincidence that one of the most travelled paths for players is Spain to England. Transfer activity, generally, fell by more than half in 2019-20. 

Regardless of the financial woes of some clubs, Real Madrid, Barcelona and Atlético Madrid continue to feature at the top end of football finance lists created by Deloitte, KPMG Football Benchmark and Brand Finance. Indeed, six Spanish clubs feature in KPMG’s European Elite.

On the field of play, Atlético’s title win in 2021 can possibly be partly attributed to the distracting internal wranglings at Real and Barca. But for the third successive season, the Champions League did not go to Spain. Real Madrid were the last winners from Spain in 2018, hardly a crisis for Tebas and co. but by modern standards, a signal that the most recent golden period of Spanish football may have ended. In 2019-20, not a single La Liga club made the last four and in 2021, three clubs exited at the round of 16 stage. Real Madrid were comfortably beaten by eventual winners Chelsea. Three years does not represent a crisis – between 1966 and 1992, there was not a single Spanish European champion.

Spanish football will recover, in much the same way that the country overcome the worst of the financial crisis of 2008-10. La Liga is one of the most tech savvy leagues in the world and has enormous commercial and culture appeal. The current situation at the two biggest clubs, which has the potential to cause existential problems – not just for the clubs themselves, but the rest of the league. La Liga, UEFA and Spain needs the likes of Real Madrid and Barcelona to be healthy. They are both crucial to the football eco-system in their domestic market – they are the giant hippos with smaller birds and animals feeding off their backs. Furthermore, given La Liga contributes 1.4% to Spain’s GDP and over € 100 million to other causes, nobody should overlook the importance of the game in one of Europe’s major economies.

@GameofthePeople

Photo: Arrano via flickr CC BY-NC-ND 2.0