Archive for the 'Soccer Business' Category

Sep 12 2013

Profile Image of Lindsey Barrett

Too Darn Hot

 

For the first time in its history, the FIFA World Cup is set to be held in a country in the Middle East; the  2022 tournament will be held in Qatar.  The federation’s awarding the bid to Qatar was seen by many as bold and forward-thinking– as Sepp Blatter, FIFA’s president, pointed out, “It was time to go to the Arabic world”, as soccer is a game played “not only in Europe, but around the world.”  If we’re operating under the idea that soccer is the true lingua franca, we should act like it.  But symbolic changes bring with them technical ones as well; there are distinct differences between a global tournament being held in Qatar and one held in Switzerland, the most glaring (sorry) of which would be the heat.  The summertime temperatures in Qatar often reach 120 degrees; it poses a very real safety risk to the players to force them to play through such conditions.  And so a number of a FIFA officials, headed by Blatter, have floated the idea of a November-December Cup, when the weather would be all but ideal with a range between the mid 60’s and 80’s.

Yet Blatter is facing substantial opposition, primarily from critics who object to the scheduling conflicts such a move would create.  Shifting the Cup from the summer to the early winter would mean changed TV schedules, professional schedules; in other words, a shift could threaten profits for the television networks (namely Fox and Telemundo, who’ve paid a combined 1 billion USD for the rights), the clubs, and the players as well.  All for a competition which, for all the bragging rights winning confers, is not as financially profitable as typical club play. There’s mumbling about contradicting tradition as well, but that argument has less ultimate validity when you juxtapose it with the image of strikers fainting like schoolgirls on the pitch.

And yet in all the objections raised, it seems the wellbeing of the players has been completely lost in the shuffle.  Sports is a business like any other– but like any other business, neglecting workers is both morally reprehensible and ultimately counterproductive.  Assuring that a club’s best players are only barely recovered from heatstroke before beginning their regularly scheduled season doesn’t much help their bottom line.

This is hardly a problem unique to soccer; you need only look to the NFL’s most recent settled class action on the TBI’s of thousands of its players, or Joe Nocera’s columns on the abuse of NCAA athletes , to know that treating players like chattel is a sports-wide problem, an odd contrast with the immense monetary value our society tends to accord them.  Hopefully, in this small instance at least, the incidental fact that soccer players happen to be human won’t be forgotten.

2 responses so far

Dec 27 2012

Profile Image of Andrew Wenger

UEFA Financial Fair Play

Introduction

            Over the last 20 years European soccer has gone through an exciting but dangerous period of global expansion.  When Rupert Murdoch’s Sky TV signed the English Premier League to a $115 million television rights deal in 1992, he set the European club sport on a terror of worldwide expansion.  The Spanish Empire of the 1700s is the only conquest that rivals the expansion of European soccer.[1]  With the additional capital, individual clubs could grow.  More potent, though, was the exposure the clubs garnered worldwide through the advent of technology.  This exposure turned community institutions into global brands that have been wielded with a capitalist’s fist.  The dangerous part is that this expansion has gone unregulated.

In European soccer, regulations are largely non-existent.  Thus it is a utopia for any ambitious owner to attempt to lead their club to the apex of European soccer, the UEFA Champions League.  Many clubs have attempted to attain this goal by building a team full of talent.  Clubs have used modern financial instruments such as leveraged buyouts and excessive amounts of debt.  They have given their plans fancy names such as the “Galacticos Project.”  This sometimes-dangerous process of building a talented team is where regulation is lacking in protecting European club soccer.  In 2009, UEFA did a study of the 655 European soccer clubs and learned that half of them ran a deficit the previous year.[2]   The lack of financial regulation has recently allowed several soccer clubs to go into bankruptcy because they could not pay their creditors.  In response to such occurrences, there is increasing pressure to implement some financial regulations to help protect the solvency of the world’s game.

This post will first investigate how the idea of Financial Fair Play (FFP) was created.  I will examine what some European Leagues already do to curb financial delinquency.  The post will then gloss over concerns skeptics have of the new regulations before delving into how the regulations are structured and how they will be governed.  This will be followed by questions pertaining to how UEFA will be able to achieve their desired goals that FFP is supposed to achieve.  Finally, it will discuss critiques and suggestions meant to improve the current FFP model.

Introduction to FFP

Financial Fair Play is the brainchild of UEFA president Michel Platini.  Mr. Platini did an October 2009 interview with the Wall Street Journal just a month after the UEFA Executive committee accepted the idea of Financial Fair Play.  In it he said, “’I was a leader on the field,’ Mr. Platini, 54, … ‘Now, I should be a leader for the game. To me, it is a game — with many, many things attached.  It has to remain a game, or nobody will save it.’”[3]  His goal is to protect the game of soccer and level the playing field so all can compete equally.

Platini admitted to spending extensive time with sports franchises in the United States to learn how they were so successful, for he claimed they weathered the financial crisis in 2008 better than anyone else.[4]  The reason American sports leagues weathered the crisis so well is due to the uniqueness of the leagues.  “The main role of the leagues (MLB, NFL, NBA, and MLS) within this framework is to implement rules aimed at furthering the collective interest of the teams in achieving joint profit maximization.”[5]  At the highest level of each league, the team owners and commissioner work together to succeed together as a league rather than destroy one another.  This is done by strategically placing teams, sharing revenue, and imposing restrictions on labor markets to ensure competiveness.  These are aspects that are innate to American sports ideology but would not work in the free capitalist markets of European sports.

The French and German soccer leagues already have a form of financial governance.   France’s Lige 1 has the Direction Nationale du Controle de Gestion (DNCG) that oversees every club’s financials and has the power to levy appropriate sanctions on clubs that do not protect the financial sustainability of their club.  Germany’s German Football Federation requires each team in the DFB to apply for a license each season that allows them to compete in the league.  The license application is based on the financial solvency of the clubs.  These regulations do not guarantee that every club will be exempt from financial troubles, but they do protect the entire league from spiraling into a debt-funded competition.  These regulations have protected the French and German leagues from the widespread financial follies that have plagued the English Premier League, Spanish La Liga, and Italy’s Seria A.
Financial Fair Play will be based on the DFB policy of issuing licenses to clubs, which will allow them to participate in UEFA sponsored competitions.  The FFP regulations have been set out with six goals in mind.

  1. To introduce financial discipline
  2. Decrease salary and transfer fee pressure
  3. For clubs to compete within their revenues
  4. Long term investment in youth academies
  5. To protect the long term viability of club football
  6. For clubs to settle their liabilities with creditors on a timely basis[6]

The way Financial Fair Play will work is that over a five-year period soccer clubs will be required to slowly balance their books.  The implementation process was expanded to give clubs more time to comply and the 2012-13 season is the first year that introductory regulations will be in place.  The five-year process will ease clubs towards a balanced budget.  So, in theory, at the conclusion of the five-year period they will only be allowed to spend as much as they make.   The hope is to end the frivolous spending that often runs clubs into extreme debt.  The two chambers of the Club Financial Control Body will regulate this process.[7]   The CFCB will have the power to expel clubs from UEFA competitions if individual clubs do not make the appropriate actions to adhere to the new regulations.  Mr. Platini has repeated that FFP is a provision soccer clubs have asked for.

General FFP Concerns

Even though European clubs have asked for additional regulations, this does not mean that FFP has been met with open arms.  The biggest concern for the overall game is that FFP will create a status quo for big clubs.  Clubs will be required to operate within their revenue streams.  This clause protects clubs from over exerting themselves financially.  The flip side is that clubs with large amounts of revenue will be able to maintain their current financial dominance.  FFP inhibits smaller clubs from borrowing to fund future growth, which is normally how businesses grow.

A big component of FFP is prohibiting an owner with deep pockets to personally fund the team’s growth, but with the requirement of a balanced budget this is no longer possible.  The concern is that clever clubs will increase their revenues by signing exceptionally large sponsorship deals, sometimes with a company their owner is closely affiliated with.  Manchester City’s owner Sheikh Mansour is a Deputy Prime Minister of the United Arab Emirates and four of Manchester City’s eight main sponsors are companies owned by the UAE government.  A main job of the CFCB will be to watch for shady accounting practices aimed at avoiding FFP regulations.

Other major concerns are how the actual FFP regulations will take into account the customs and tax policies of each individual league.  For example, the FFP regulations say that each club must audit their books under their own national conditions.  Well, higher taxes in certain countries will have serious ramifications for the amount clubs can reinvest in the club.  It is also very ambiguous about what can be discounted concerning certain charity payments and investments in other parts of the club.  Third party ownership is not covered in FFP and this could lead to a rise in clubs only owning a portion of a player’s rights.  This would keep the club’s initial costs low but force the club to share the future proceeds from the player’s sale with the third party.  The final concern is that some of the larger clubs are investing their excess capital in non-soccer related investments, like housing projects or a Real Madrid resort in the Middle East.  How does the return on this investment play into Financial Fair Play?  Will the bigger clubs be allowed to count their return as revenue and thus have larger budgets to invest in the team?  It is going to be a full time job to make sure that FFP creates an equal playing field from top to bottom, or if it is simply a guise of equality.

FFP Structure

As stated before the goal of financial fair play is to force clubs to operate on a balanced budget or be penalized by UEFA.  What that simply means is that clubs must make more money than they spend.  The tricky part of FFP is discerning what portions of a club’s income and expenses play into this equation.  Article 58-1 of the UEFA Club Licensing and Financial Fair Play Regulations 2012 edition states that relevant income is,

Gate receipts, broadcasting rights, sponsorship and advertising, commercial activities and other operating income, plus either profit on disposal of player registrations or income from disposal of player registrations, excess proceeds on disposal of tangible fixed assets and finance income. It does not include any non-monetary items or certain income from non-football operations. [8]

Article 58-2 follows and states that relevant expenses are,

Cost of sales, employee benefits expenses and other operating expenses, plus either amortisation or costs of acquiring player registrations, finance costs and dividends. It does not include depreciation/impairment of tangible fixed assets, amortisation/impairment of intangible fixed assets (other than player registrations), expenditure on youth development activities, expenditure on community development activities, any other non-monetary items, finance costs directly attributable to the construction of tangible fixed assets, tax expenses or certain expenses from non-football operations.[9]

UEFA has done their due diligence and clearly stated what income and expenses UEFA participants should apply in their financial statements necessary to receive a license.

Once a club has figured out what is relevant income and expenses, the club then submits a financial report stating whether the club finished with a positive balance.  Though it is not as easy as simply finishing in the green.  Article 61 states that there is an acceptable deviation of 5 million Euros.[10]  This number is subject to change for if the equity partner can supply the difference, up to a certain amount, the club is able to pass the solvency test.  As stated earlier, FFP is in a 5-year implementation process.  This process is directly felt in Article 61 because in 2013-14 and 2014-15 owners can contribute up to an additional 45 million Euros to help their club break-even and 30 million Euros in 2015-16, 2016-17, and 2017-18.  After which time UEFA will make a decision about a lower amount.

Another fact about Financial Fair Play is that the break-even requirement is also supplemented by an extended monitoring period.  This monitoring period is for the 2-years previous to the 2013/14 season and 3-years there after.  This means that clubs may have a deficit in one of the three years but, as long as they post a surplus for the aggregate of the three years, they pass the test.  So, a club can post a surplus in T-1, T-2 but not T,  as long as the reported deficit is within the acceptable deviation for all 3 years, then the club passes the break-even requirement.  This entire process is defined in detail in Article 63.

The break-even requirement is not the only stipulation that dominates the FFP regulations, though the toughest to comply with.  Article 62 lays out 4 indicators that are monitored to determine if a club is in jeopardy of being denied a license to compete.[11]  These indicators are Negative Equity, Break Even Result, Going Concern, and Overdue payables.  Break even has already been discussed and dissected.  Negative Equity is based on a net liabilities position that has deteriorated as compared to previous reporting periods.  This means that clubs must actively manage their debt to keep their debt at consistent or reduced levels that can be earnestly managed.  Negative indicator 62-3-iv protects all club employees from being denied payroll.  It means that clubs must be able to pay all club employees and other vendors it owes money to.   The final indicator UEFA uses to judge clubs is in article 62-3-i.  It is titled “Going Concern.” The indicator will be breached if “the auditor’s report of the club included an emphasis of a matter or a qualified opinion/conclusion in respect of going concern.”  This clause allows UEFA to reserve the right to expel clubs that are putting their club in dangerous waters financially, but outside of the previously stated regulations.  These are the major aspects of UEFA’s Financial Fair Play regulations that are used to grant clubs a one-year license to compete in UEFA competitions.

If a club or individual is found to be in breach of these regulations the UEFA Club Financial Control Body (CFCB) has the ability and power to levy penalties on guilty parties.  The CFCB is made up of two chambers, the investigatory chamber and the adjudicatory chamber.[12]  Members serve a four-year term with an unlimited number of terms.[13]  The Control Body adjudicatory chamber can, under article 21, warn, reprimand, fine, deduct points, withhold revenue from UEFA competitions, prohibit registration of new players in UEFA competition, restrict the number of players a club can have in UEFA competition, disqualify a club from competition, or withdraw a title or award.  Similarly, the body can warn, reprimand, fine, suspend, or ban an individual from competition.[14]  These penalties are the same penalties that have been used in the past.  What will legitimize the CFCB is the precedent they set and the equality they have among cases as they proceed with their task of defending the FFP regulations.  A key factor is that Article 28 states that prosecution is barred after five years of the incident.

The CFCB has already punished several clubs for failing to meet the FFP regulations.  As of September 11th 2012 the UEFA CFCB imposed sanctions against 23 clubs (Index A) by withholding prize money and setting an October 15th deadline for the clubs to prove that their finances are in order.[15][16]  UEFA has also disqualified three clubs, AEK Athens of Greece, Gyor of Hungary, and Besiktas of Turkey, from the 2012-13 Europa League Season.  These are the first of such actions, which exhibit that UEFA is deadly serious.  The problem is finding out to what degree the clubs breached one of the four indicators so as to provide a base line for comparing future decisions.

FFP Concerns

One innate problem with UEFA club football and the FFP regulations is that the tax policies throughout Europe vary greatly and can have a huge impact on a club’s final financials.  In Europe players’ salaries are all done on a net basis so that they can be compared from one league to another.  Each club must pay the players’ taxes.  These taxes can add up very quickly when you are paying a top player a net salary of 10 million Euros and the income tax rate is 50%.  Well, since his salary is net 10 million Euros, you end up paying 15 million Euros for his services.  That extra 5 million Euros is a big difference when you are competing against another club in a country with a 15% tax rate.

The top bracket in the Premier League, for example, is 50% on income above 200,000 pounds ($316,000). In Russia, for foreign nationals, there’s a 13% flat rate. In France, if President François Hollande follows through on his campaign pledge, iast will be 75% on anything over 1 million euro ($1.25 million).  What does this mean? The take-home pay of a soccer player grossing $10 million could be as little as $2.8 million in France and as much as $8.7 million in Russia.[17]

This article has it wrong, however, because many players negotiate their contracts on a net salary basis so as to avoid paying high taxes, and their club ends up footing the bill.  FFP does not address the differing tax issues.

There are also problems with the terms and language within the regulations.  Article 58 of FFP regulations was discussed earlier and, as stated, it lays out what is and is not “relevant income and expenses.”  There are loopholes in UEFA’s criteria.  In article 58-1 “finance income” is considered relevant.  That is a very vague term.  What is stopping a club from gambling on risky and complex financial instruments in an attempt to side step the regulations by classifying the gambles as “financial income” to get ahead?  Or, in another instance, to lend money to a wealthy owner’s parent company at an interest rate that is above the market rate?

Similarly in Article 58-2 “expenditure’s on community development activities” are not considered relevant expenses.  If Arsenal redevelops the area around their new Emirates Stadium, they are developing the community and reinvesting in it, but this redevelopment will surely bring a profit from the increased property values.  Where does this fit into the guidelines?  On a positive note youth development is a discounted expense.  It is the goal of FFP to promote self-sustaining clubs and youth development is one way to cut expenses on transfer fees.

The biggest problem with the Article 58-1-2 is the term “non-football operations.”  Real Madrid is building a resort in the UAE with its brand name attached.  Since the resort is using the Real Madrid brand, does that make it a football operation?  If the team plays preseason exhibition games there does that make it a football operation?  Others agree with this sentiment,  “If a company says ‘We’re genuinely trying to build a global brand, this is a global club and we think this is what this deal is worth,’ it becomes quite difficult for UEFA,” said Daniel Hall, a partner at global law firm Eversheds. “It’s something that is very much open to subjective opinion and that is where there may be legal disputes.”[18]  Where is the clarity?

The last part of Article 58-4 states, “Relevant income and expenses must be adjusted to reflect the fair value of any such transactions.”[19]  Fair Value will have to be interpreted on a case by case basis but whose judgment will be used to make this decision and how will equality be maintained?  Building on this point, Article 11-1 states that UEFA, the licensor, will “ensure equal treatment.”[20]  Article 11 also states in subset 2 that, “The licensor guarantees the license applicants full confidentiality with regard to all information submitted during the licensing process.  Anyone involved in the licensing process or appointed by the licensor must sign a confidentiality agreement before assuming their tasks.”[21]  How can anyone outside of the license process judge if equality or fair value is being achieved  when the entire process is private? The FFP regulations stated that the goal is to protect the long-term viability of club football.   The fans are the heart and soul of club football.  But if they do not know their club’s financial position, how are they supposed to hold their club accountable?  How are they supposed to hold UEFA accountable?  UEFA states it will be equal but the ability to be absolutely equal and confidential with such vague regulations guarantees that problems will arise.

It gets even more interesting in Article 15 “Special Permission.”  UEFA reserves the right under the FFP regulations to grant special permission to lower division clubs if they earn UEFA qualification on sporting merit but are unable to go through the licensing process. [22]  This part of the regulations allows UEFA one of the many loopholes in the FFP regulations to make decisions as they please.  This article, however, only applies to lower division clubs.

Article 61 covers the amounts club equity owners can contribute to make up the club’s deficit.  This clause is perplexing for FFP was created to eliminate the ability for owners with deep pockets to bank roll their club.  Now UEFA is simply limiting the amount they can contribute but, nonetheless, still sanctioning it.

Finally UEFA throws another loophole into the regulations with 62-3-i “Going Concern.” The indicator will be breached if “the auditor’s report of the club included an emphasis of a matter or a qualified opinion/conclusion in respect of going concern.”  Without a numerical value “going concern” is open for interpretation and possibly inequality.  The regulation is meant to give UEFA the ability to govern new situations that cannot be imagined.  But it also gives UEFA and the CFCB the possibility to abuse their power.

Proposed Changes

Financial Fair Play in its current form is flawed.  Club football in Europe needs regulations to protect the institution.  It is the institution of club football that is in jeopardy of failing, not the game itself, as Michel Platini said in the previously mentioned Wall Street Journal article.  He said, “To me, it is a game — with many, many things attached.  It has to remain a game, or nobody will save it.”[23]  A few clubs that enter bankruptcy do not threaten the game of soccer but the institution of club football.  It is an institution that is exciting but must be tweaked.  Where FFP fails  is that it is too vague and bloated with red tape.  Its ultimate failure is that it attempts to fix club football by regulating the clubs in UEFA competitions instead of regulating the market within which UEFA clubs participate.

The largest expenditure clubs must burden is that spent on players.  For example, Manchester City spent 107 percent of revenue on wages last season (2011-12), and Inter Milan 104 percent.[24]  Stephen Dobson points out that players can attract such large salaries due to the capitalistic nature of the labor market and the marketability players have, as they are able to reach millions via technology.[25]   Unfortunately, this market is inefficient; there is not enough supply of elite level players to supply the many clubs that need their services.  This is true with players’ salaries but more evident in the transfer market where teams will pay millions of Euros for a player’s services.  This expensive outlay of capital does not guarantee the necessary dividend payments consistent championships would supply.

The authors of “Soccernomics,” Simon Kuper and Stefan Szymanskisaid, said “We studied the spending of forty English clubs between 1978 and 1997, and found that their outlay on transfers explained only 16 percent of their total variation in league position. By contrast, their spending on salaries explained a massive 92 percent of that variation.”[26]  Clubs spend millions on a new signing in hopes that one man will lead the team to glory.  It is apparent clubs are being repaid for one of their two major expenditures, player salaries, but transfer fees are wasteful spending.

To protect European club soccer UEFA must regulate the transfer market instead of regulating the clubs.  When there is a transfer it is compared against the last player to get the largest transfer fee.  A number that is going to continue to rise as there is no shortage of demand for the “best player in the world.”  What UEFA must do is either cap the amount of money a club can spend in the transfer market in one year, or cap the amount of money a club can spend on one player.  In doing so UEFA will establish a numerical value that can be applied to the best player in the world at any time.  If a club feels it is prudent to borrow money to invest in players within the cap then they can go ahead and roll the dice.  To expand you have to take risks, but the current FFP regulations limit a club’s ability to take those necessary risks and, in turn, simply protect the status quo consisting of clubs that currently have large revenue streams.

European club football is in a time of crisis, and just like a sovereign nation might issue a commodity prices freeze, UEFA needs to issue a transfer market fee freeze.  Players’ salaries have shown that they are directly related to a team’s return on expenditures, so I would advise a free market to continue.  Transfer fees in contrast are an unregulated market and one that does not equate to a desirable return on capital.

An updated FFP must also eliminate confidentiality.  Club football exists because of the fans that support their team and buy the team’s merchandise.   The fans and supporters have a right to know what is going on with their favorite club.   Additionally, UEFA should follow the DFB model and require clubs that participate in UEFA events to have a portion of their club owned by fans.  It may not be 50 percent, but involve the fans and make them a part of decisions.

To truly level the playing field, supporters must be given a larger voice in their club.  Financial statements must be made public and the transfer market has to be capped even if just for a crisis period to curb the exponential rise of transfer fees.  Are these solutions clubs would welcome?  That is the true conundrum of FFP.  The top clubs collude together to stabilize the market of European club football that ensures their financial dominance.  These top clubs will not agree to provisions that knock them from their position of dominance.  That is why any “so-called” Financial Fair Play regulations are not fair but a guise of equality to portray to the media and fans.

Conclusion

UEFA’s FFP is an honest try to fix the crisis in European club soccer, but it is by no means the solution.  It does a good job of beginning the process and conversation of protecting club football.  It is simply red tape that the larger clubs will be able to find ways through, for they have the resources to do so.  This red tape was brought on by capitalist expansion.

With the first major television rights deal European football has been on an explosive global expansion.  Football clubs were once simple local institutions where the fans were the club and the club was the fans.  Clubs like Millwall where Ultras define ‘“Millwallism” as a state of living and breathing relationship for one’s club that defines what it means.’[27]  As technology infiltrated European clubs it grew their ability to touch lives globally but also distanced them from those that matter most, the ones that were there from the very beginning.  They are the local, hometown fans that defined the club and the club defines them.  Now clubs must worry about the viewership of fans in remote parts of the world when their club is located in London, England for example.  Technology has distanced European club football from those that first defined the institution and must now find a way to balance them in the global and local marketplace.



[1] Kuper, Simon, and Stefan Szymanski. Soccernomics: Why England Loses, Why Germany and Brazil Win, and Why the U.S., Japan, Australia, Turkey and Even Iraq Are Destined to Become the Kings of the World’s Most Popular Sport. New York: Nation, 2009. Page 80.

[2] Dennis, Phil Dawkes & Ian. “Adopt Arsenal Money Model – Uefa.” BBC News. BBC, 01 Nov. 2011. Web. 9 Oct. 2012. <http://news.bbc.co.uk/sport2/hi/football/9358589.stm>.

[3] Hughes, Rob. “THE SATURDAY PROFILE; Former Star on the Soccer Field, Now Trying to Level It.” The New York Times. The New York Times, 31 Oct. 2009. Web. 9 Oct. 2012. <http://www.nytimes.com/2009/10/31/world/europe/31platini.html?_r=1>.

[4] Ibid.

[5] Dobson, Stephen, and John A. Goddard. The Economics of Football. 2nd ed. New York: Cambridge UP, 2001. P. 15.

[6] “Financial Fair Play.” UEFA.com. UEFA, n.d. Web. 10 Oct. 2012. <http://www.uefa.com/uefa/footballfirst/protectingthegame/financialfairplay/index.html>.

[7] Ibid.

[8] UEFA Club Licensing and Financial Fair Play Regulations. Nyon, Switzerland: UEFA, 2012. PDF. Article 58-1.

[9] UEFA Club Licensing and Financial Fair Play Regulations. Nyon, Switzerland: UEFA, 2012. PDF. Article 58-2.

[10] UEFA Club Licensing and Financial Fair Play Regulations. Nyon, Switzerland: UEFA, 2012. PDF. Article 61.

[11]  UEFA Club Licensing and Financial Fair Play Regulations. Nyon, Switzerland: UEFA, 2012. PDF. Article 62.

[12] Procedural rules governing the UEFA Club Financial Control Body. Nyon, Switzerland: UEFA, 2012. PDF. Article 4.

[13] Procedural rules governing the UEFA Club Financial Control Body. Nyon, Switzerland: UEFA, 2012. PDF. Article 5.

[14] Procedural rules governing the UEFA Club Financial Control Body. Nyon, Switzerland: UEFA, 2012. PDF. Article 21.

[15] “Football: Uefa Hands out First Financial Fair Play Penalties.” BBC News. BBC, 11 Sept. 2012. Web. 5 Nov. 2012. <http://www.bbc.co.uk/sport/0/football/19557934>.

[16] Dunbar, Graham. “UEFA to Decide next Month on 23 Clubs in Financial Difficulty | Sports , Football | THE DAILY STAR.” The Daily Star Newspaper. The Daily Star, 5 Oct. 2012. Web. 5 Nov. 2012. <http://www.dailystar.com.lb/Sports/Football/2012/Oct-05/190196-uefa-to-decide-next-month-on-23-clubs-in-financial-difficulty.ashx>.

[17] Jones, Matt Scuffham, Rhys, and Neil Maidment. “Special Report: Soccer’s New Goal: Kick the Spending Habit.” Reuters. Thomson Reuters, 12 Aug. 2011. Web. 6 Nov. 2012. <http://www.reuters.com/article/2011/08/12/us-soccer-fairplay-idUSTRE77B15820110812>.

[18] Ibid

[19] UEFA Club Licensing and Financial Fair Play Regulations. Nyon, Switzerland: UEFA, 2012. PDF. Article 58-4.

[20] UEFA Club Licensing and Financial Fair Play Regulations. Nyon, Switzerland: UEFA, 2012. PDF. Article 11.

[21] UEFA Club Licensing and Financial Fair Play Regulations. Nyon, Switzerland: UEFA, 2012. PDF. Article 11.

[22] UEFA Club Licensing and Financial Fair Play Regulations. Nyon, Switzerland: UEFA, 2012. PDF. Article 15-1.

[23] Hughes, Rob. “THE SATURDAY PROFILE; Former Star on the Soccer Field, Now Trying to Level It.” The New York Times. The New York Times, 31 Oct. 2009. Web. 9 Oct. 2012. <http://www.nytimes.com/2009/10/31/world/europe/31platini.html?_r=1>.

[24] Jones, Matt Scuffham, Rhys, and Neil Maidment. “Special Report: Soccer’s New Goal: Kick the Spending Habit.” Reuters. Thomson Reuters, 12 Aug. 2011. Web. 6 Nov. 2012. <http://www.reuters.com/article/2011/08/12/us-soccer-fairplay-idUSTRE77B15820110812>.

[25] Dobson, Stephen, and John A. Goddard. The Economics of Football. 2nd ed. New York: Cambridge UP, 2001. P. 214.

[26] Kuper, Simon, and Stefan Szymanski. Soccernomics: Why England Loses, Why Germany and Brazil Win, and Why the U.S., Japan, Australia, Turkey and Even Iraq Are Destined to Become the Kings of the World’s Most Popular Sport. New York: Nation, 2009. Page 48.

[27] Robson, Garry. No One Likes Us, We Don’t Care: The Myth and Reality of Millwall Fandom. Oxford: Berg, 2000. P. 137.

All graphs were derived from The Swiss Ramble.

One response so far

Sep 01 2012

Profile Image of Grant Allard

Why Football is Part of the Creative Economy

Football is part of the creative economy because its value lies in ideas. Typically when we think of football, we tend to think of it as “big business.” Real Madrid made over $695 million in the 2011 fiscal year and the combined net worth of the top five richest clubs for 2011 is over $5 billion. But to put this into perspective, we need to realize that the combined value of the world’s five richest companies is nearly $2 trillion. We can all see that in the grand scheme of things, football financially pales in comparison to other sectors of industry. Yet football is both immensely powerful and popular. In FIFA’s latest Big Count, 270 million people—or four percent of the world’s population—are involved in football in some way. Further, more people watch the World Cup Final than any other single sporting events. This leads us to ask—is football really a business at all?

Football is, at the very least, is a part of the creative economy. According to the New England Foundation for the Arts, the creative economy refers to a sector of the economy that derives its value from producing and distributing “cultural goods and services that impact the economy by generating jobs, revenue, and quality of life.” Linking football to the creative economy likens football to artists, cultural nonprofit organizations, and creative businesses. This means that we can liken footballers to actors, dancers, sculptors, painters, educators, and other job paths associated with enriching society with a vibrant culture.
We can find evidence for thinking about football as generating the product of culture by looking at a few examples. First and most notably, many countries’ politics are linked to football. The best exemplar in the last decade is Silvio Berlusconi. He made his rise to prominence in football with his involvement in AC Milan’s top administration. After all, he named his political party after a football chant—Forza Italia!

I argue that football is part of this creative economy because it produces and distributes cultural goods that directly impact quality of life and the connections between people. We first must take up the fact that football impacts the quality of people’s lives because this will lead us to understand the way that it creates jobs.
Soccer impacts the quality of life because the experience connects us with others and allows us to escape the pain, troubles, and hurt that we experience in our daily lives. Jordi Royo, a psychologist at the Palliative Care Unit and Home Care Team at the Fundacio Hospital Sant Jaume y Santa Magdalena in Mataró, Spain, demonstrated in a poster that cancer patients’ symptoms were lessened or alleviated while watching soccer matches. But we don’t need to be cancer patients to understand how soccer shapes our views toward life.
A soccer game is a performance. The players are actors in a drama whose laws govern play but do not predetermine it. The spectators come from different perspectives on the world to share the game. We typically think of soccer as being played in blue-collar, industrial cities, whose workforce turns out to support the local team; yet, (as Pelada would remind us) soccer is also played in schools, in jails, and by construction workers. And now, more than ever, soccer is a global game that brings together not only working class laborers in industrial centers but also white-collar workers from cultural centers such as Barcelona, Milan, Munich, and Liverpool. In this way, soccer becomes a cultural institution that defines our own identity.
The cultural centers I mentioned above were large industrial centers before they were cultural centers with outstanding soccer clubs. Kuper and Szymanski, authors of the book Soccernomics, point out that the aforementioned cities were industrial towns during the early development of the sport. These industrial cities have become cultural centers because they forged an identity from their soccer teams. Where capital cities focused on the standard cultural products such as fine arts, museums, government institutions, and business headquarters that come along with being a capital, these industrial cities defined themselves by their soccer clubs because it was a comparison point between cities

Hooliganism would seem to be a phenomenon that threatens the nexus between people because it pits city, ethnic, and class identities against each other in a violent way. Hooliganism though is universally derided as a major problem for the game. It is something that nearly anyone can recognize. Thus hooliganism is a structure—that even though it pits people against each other—is part of the common shared language that surrounds soccer. Hooliganism is a problem because it is a disjunction between seeing the big picture and hyper-focusing on certain particulars. The hooligan focuses on the fact that other fans belong to a certain group-identity that supports an opposing team and thus must themselves be bad. He loses his ability to see the contextual picture of how violence destroys his connection to the world because of the intoxication that he feels when connecting to a few radicals. As the hooligan focuses on his own identity, he loses sight of the sport and its creative power.

Soccer is a creative enterprise that connects people across political, geographic, and temporal boundaries. It is creative both because of the “product” the players produce on the field, but also because of the “products” the fans make, such as fan tributes, blogs, and cultural memes (chants, songs, fan clubs, etc.). Soccer contributes to humanity because it allows people to create new ideas and cultural institutions. Soccer then is part of the creative economy, because it emphasizes our humanity. And while some people become exorbitantly rich, the majority of people involved in football seek to create experience within a domain that underlines our connections to one another as human beings.

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Aug 12 2012

Profile Image of Andrew Wenger

What is Soccer’s Business?

The business of a soccer club is to produce a winning team. At the end of the day sports are a form of entertainment. Too often, though, actions taken place in the board room or at the negotiating table take away from the entertainment displayed on the field. At times, the aggressiveness and sometimes greediness of clubs leads to failure on the field. Specifically, the mountains of debt some European clubs have amassed in recent years often do more harm than good for a club. Last year, players in La Liga — one of the world’s richest leagues — nearly went on strike when one club failed to pay wagesEarlier this year, Rangers FC entered administration after they could not pay some $77 million the club owed in taxes. I visited Rangers when I was younger on a European tour and since that time have considered it one of the oldest and most notorious club in Europe. The same has happened to F.C. Portsmouth for the second time in as many years. In both cases, the financial problems were the result of poor management decisions. When clubs with such great histories are suffering in this way, we have to ask ourselves whether there are fundamental problems with the way the business of soccer is being managed in many places.

In 2005, Malcom Glazer used the financial tool of a leveraged buyout (LBO) to purchase Manchester United for $1.5 billion and make the company private. In the end, I would argue, this action ultimately hampered the team’s ability to keep or purchase new star players. A leveraged buyout is where the takeover artist will borrow the majority of the cost to purchase the new company against the company’s future cash flows and current assets. More often than not in a LBO the new owners will have to sell key parts of the new business to pay down the debt. In the case of a soccer club their assets are their stadium and training grounds as well as their players. Manchester United, for instance, sold Cristiano Ronaldo to Real Madrid for a record transfer fee of  $132 million. Even with the sale of Ronaldo, United has been unable to manage their mountainous debt payments and recently reissued shares of the club on the New York Stock Exchange for public purchase. Glazer raised $300 million dollars in the IPO, half will be used to pay down the $663 million in remaining debt. NYT blogger Graham Ruthven claims Sir Alex Ferguson may even benefit financially from the IPO. The IPO took place on Friday August 10th, with a $14 price. A price that was significantly supported by the underwriters of the IPO throughout the day.  But what if the $800 million spent on interest payments and banking fees could have instead been spent on increasing the player and fan experience at Manchester United? Even with the new issuance, control of the club will be retained by the Glazer family as they will retain 67% of B shares which have voting power, so little will likely change in the general approach taken to the finances of the club.

As you can see from the photograph below, the actions by Glazer have outraged many fans of Manchester United, who consider that he has in some ways taken the club from them. They have a point. After all, as a “brand” a club is not only made up of it’s players and managers, but also of the fans and the tradition they carry with them.

Another instance of over spending and debt damaging a club is Leeds United, formally of the Premier League. Rather than piling on debt through a LBO , the club borrowed to purchase players. Leeds were a big club in the 1980s and 1990s, culminating in a Champions League semi-final place in 2001. But the club was ultimately undone by their Chairman Peter Ridsdale’s idea to go for it. He proceeded to use shady financial products to purchase players with borrowed money using future ticket sales as collateral. Essentially the fans loyalty. Ultimately it failed and the club had to sell assets at a blistering pace as the club entered administration: the stadium Elland Road (pictured below), training ground at Thorp Arch, and any player that was worth a nickel, including some considered to be part of England’s golden generation. Great players were sold at a severe discount due to the team’s financial troubles. The club also suffered demotion to England’s third tier and have since had to claw themselves back from the brink of extinction.

The idea of corporate borrowing is nothing new. Most companies must borrow to fund future growth. But there is a line between intelligent borrowing and getting caught in a credit crunch. Just like the many U.S. home owners who over-extended themselves between 2003 and 2008, soccer clubs may soon find themselves unable to pay their debts. In Europe, several countries — Spain, Greece, Ireland, Portugal and Italy — are desperately trying to reorganize its debt in order to make payments. Fiorentino Perez, the Chairman of Real Madrid and creator of the “Galacticos” is in the midst of de-leveraging in his real business, A.C.S., or Actividades de Construcción y Servicios. The company is one of the largest building services companies in the world. As he has done with Real Madrid, Perez has orchestrated huge loans, creating $12 billion in debt that the company has since had to sell assets to cover. Real Madrid, meanwhile, is currently $500 million in debt because of the money it has spent creating the “Galacticos” (pictured below). Many in business have believed that  borrowing to fund instant success is the winning formula.But the formula only works as long as growth outpaces debt obligations.

The authors of the book “Soccernomics,” Simon Kuper and Stefan Szymanski, make a compelling argument that the outlandish transfer costs that have become the norm in professional soccer are not the way to success. “We studied the spending of forty English clubs between 1978 and 1997, and found that their outlay on transfers explained only 16 percent of their total variation in league position. By contrast, their spending on salaries explained a massive 92 percent of the variation” (48). They conclude that the market for player wages is efficient while the transfer market is well not efficient. You can see this inefficiency at work in many cases. Tottenham Hotspurs, for instance, transferred Jermaine Defore to Portsmouth and Robbie Keane to Liverpool for a combined $52 million only to bring them back a year later under new manager Harry Redknapp. Soccernomics provides the ultimate example of transfer market inefficiency. “In 1983 AC Milan spotted a talented young black forward playing for Watford. The word is that the player Milan liked was John Barnes, and that it then confused him with his fellow black teammate Luther Blisett.” Milan bought Blisett. This type of almost comical folly may be why, down the road, Milan has had to sell two of their most valuable players this summer to pay down debt — Zlatan Ibrahimovic and Thiago Silva (below), both to now super-wealthy club Paris Saint-Germain. AC Milan has run a total deficit of  245.4 million euros in the last 5 years. The spending of some of the biggest football clubs in the world is out of control.

Many clubs feel that they must take on such debt to keep up with the “Jones’s” — clubs like Manchester City and Chelsea, whose  billionaire owners are not worried about the bottom line of the clubs they own. Sheik Mansour from Qatar bought Man City for a measly $330 million but then proceeded to spend close to double that on stocking his team with talented players. He was only following the lead of Chelsea owner Roman Abramovich (pictured below). UEFA reported that more than a quarter of the 650 soccer teams in Europe are spending $16.50 for every $13.50  of revenue. Running a deficit is fine for the super rich owners who care about nothing else than winning. Unfortunately not every team is owned by an owner with bottomless pockets. The massive television contracts in Europe are giving clubs increasing revenue. In June 2012 the English Premier League signed a record $4.7 billion/3 year television deal and the German Bundesliga signed a $3.2 billion/4 year deal. The deals were a 72% and 52% increase over the previous deals respectively. Compare those numbers with the $115 million Rupert Murdoch’s News Corp. paid for the television rights to the Premier League in 1992. But even with the rising revenue teams are still forced to borrow to compete with the billionaire owners of the world. European teams currently run a collective $1.5 billion deficit.

Some are trying to stop the process. Michel Platini (pictured below) has launched the Financial Fair Play (FFP) plan, which is meant to force European clubs to balance their books by the 2013/14 season. If clubs fail to balance their books they will be excluded from UEFA competitions.But what if Real Madrid, Inter Milan, Manchester United, Chelsea, Barcelona, Bayern Munich, Manchester City refuse to follow the rule and are kicked out of the Champions League. Mr. Platini, what happens then? Riddle me that?

Perhaps clubs will have to start running teams like my namesake, Arsene Wenger. Are we related? I  guess we will never know. He is a fantastic manager though. It is said Wenger uses statistics to judge a players future output on the field compared rather than over-evaluating a player’s past performances. He has a degree in Economic Sciences from the University of Strasburg in France: from an economic perspective, this player evaluation model makes much more sense than the approach taken by other clubs. It is similar to judging a blue chip stock. You don’t make your decision to invest on the stock’s previous performance but attempt to judge its future performance by looking at the fundamentals of the company presented in their financial reports. As players, our statistics are our financial reports.

Perhaps the Financial Fair Play plan will alter a shift in professional soccer in Europe. Barbara Berlusconi has underlined the need for change: “Soccer teams will have to transform into proper companies. If you can only spend what you get, then you have to keep costs in check and increase revenue. It’s a challenge that can become an opportunity.” This change in soccer will be a positive one if it improves what is produced on the field, or simply forces owners to be smarter with how they spend their money. The thing is soccer clubs are not like regular companies. The authors of Soccernomics say it best: “The business of soccer is soccer,” they note, and clubs “are more like musems: public-spirited organizations that aim to serve the community while remaining reasonably solvent.” The irony of what is happening today in so many clubs is that running a soccer club with pressure to make money may ultimately contradict its stated goal of winning on the field!

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Oct 11 2011

Profile Image of Charles Guice

Why English Football Will Adopt the NFL’s Rooney Rule

PFA Chief Executive Gordon Taylor

Early last month, senior executives from the Professional Footballers’ Association (PFA), the League Managers’ Association, the Football Association (FA), the Football League and the Premier League met with Cyrus Mehri, an American lawyer who, along with the late Johnnie Cochran and a labor economist, Janice Madden, drafted and successfully petitioned the National Football League (NFL) to adopt the “Rooney Rule,” the requirement that NFL teams interview at least one minority candidate for any head-coaching vacancy. PFA chief executive Gordon Taylor, who invited Mehri to speak, favors bringing the Rooney Rule to English football to increase the number of black and minority ethnics considered for and ultimately hired as managers.

Response to the meeting was swift and varied widely. While many agree that the number of black managers and coaches is surprisingly few, there is little agreement on how to address the issue or, as some have argued, whether any disparity exists at all. What may have been lost in the debate, however, are the clues that the decision has already been made, with the remaining point of discussion only being when and how the policy will be implemented.

Named after Dan Rooney, the chairman of the committee appointed by the NFL to review potentially discriminatory hiring practices, the Rooney Rule was ratified voluntarily by the thirty-two franchise owners in 2002. Under considerable public pressure, as well as the threat of legal action by Cochran and Mehri, the owners agreed to implement the rule the following year. The impact was immediate; within nine years, nineteen blacks had been named as head coaches for American football teams, and both coaches competing in the 2007 Super Bowl were African-American.

As early as 2003, a number of former players, such as Viv Anderson, England’s first black international, John Barnes and Luther Blissett, formed a group allied with the PFA and began petitioning for more black coaches and managers. Ten years earlier, Keith Alexander had become the first black to be appointed when he hired as manager for Lincoln City FC. But five years later, when Paul Ince became the first British-born black manager of a Premier League side, he was only the third to manage a professional league club.

While there have been 33 appointments since the 1992-93 season (apportioned amongst 17 individual managers), only two blacks are currently managing, Chris Hughton at Birmingham City and Chris Powell at Charlton Athletic. And a number of observers—within the sport, the media and amongst fans—have questioned whether the lack of black managers is a direct result of institutionalised racism.

That racism was once rife in English football is indisputable; in his memoir, First Among Unequals, Anderson wrote of bananas thrown on the pitch and hearing racist slurs when he first began playing. And though often rare now—as well as illegal in the UK—BME players have been subjected to racial abuse as recently as the 2011/12 season.

In 2008, some within the game began urging that the Rooney Rule be adopted in English football. Chief amongst those were blacks who felt they had been denied opportunities to even interview for open managerial vacancies. The most recent push for parity, however, began in earnest earlier this year.

Ellis Cashmore and Jamie Cleland, two researchers at Staffordshire University in Stoke-on-Trent, published the results of a survey of 1,000 fans, professional players, referees, coaches and managers. In their study, Why aren’t there more black football managers?, Cashmore and Cleland reported that more than 50% of the respondents believed that racism existed in football’s top ranks, and fully a third supported the adoption of a “British” Rooney Rule.

And in March, during an interview on BBC Radio 5 Live, Taylor publicly signaled his intent when he said:

All I can think of is that if things don’t start to improve we’ll look at a rule that demands that clubs have to at least have a good selection and include former black players—fully qualified—as coaches. Our job is to try and get them in the first place fully qualified then there’s no excuse not to interview them, and, then, to get them involved with the interview process.

Several months earlier, the FA had replaced the FA Coaches Association with the Licensed Coaches’ Club, addressing one of the common reasons Taylor cited that is often given for the lack of non-white managers—fully qualifying candidates. Developed to ensure that coaches kept their training and qualifications current, the Licensed Coaches’ Club was also established to ensure that persons interested in coaching—at any level of the game—gained the proper qualifications.

Over the summer, the FA launched a second component of its broader initiative; an equality drive aimed specifically at promoting coaching opportunities to black and minority ethnic (BME) communities. Coach, a film produced by the FA, is specific in its intent: to increase the number of black and Asian coaches in management positions, spotlighting both the professional and grass roots game.

At the film’s premiere at Wembley Stadium, FA Chairman David Bernstein commented, “the football family recognises the underrepresentation at the top level.” “Hopefully,” he went on to add, “today is the start of redressing that imbalance.” But Lord Herman Ouseley, the Chair of Kick It Out, the PFA/FA campaign established to bolster equality and inclusion in football, addressed what is likely one of the issue’s most significant factors when he said, “it’s important that football is showing to the world in this country how it can lead.”

Because absent from many of the discussions is an acknowledgement that English football has become a lucrative global enterprise. In addition to advertising, ticket sales, naming rights and merchandising, broadcasting rights—reportedly £1,4bn/US$2,17bn for the 2012/13 international rights alone—now constitute a substantial portion of revenue for the twenty premier league clubs. The Manchester United fan base, for example, extends outside of the UK to millions worldwide, and other clubs, such as Arsenal and Manchester City, are also looking to significantly expand their numbers of international supporters.

Setting aside the debate as to whether BMEs are intentionally excluded from coaching positions, the perception amongst a significant number is that they are, and multinational enterprises must strive to avoid any hint of bias and discrimination—as well as the associated adverse publicity. Correspondingly, how English football is perceived vis-à-vis its hiring practices can have a direct impact on its revenue and profit.

Additionally, while the debate has largely been shaped around the sizeable number of black players in the league, the focus of the current PFA and FA initiatives is on British-born black and minority ethnic groups. On the March 5 Live programme, Taylor remarked:

I find it astonishing that we can import the likes of Jean Tigana and Ruud Gullit and there’s no problem, but our own lads who have grown up in this country have not been given a chance to be fairly represented.

Considering that British-born BMEs only constitute 15% of the players in the top division—with a combined average of 18% in the Football League—Taylor’s statement is worth noting, particularly given the higher percentages, which are so often quoted. (The higher figure, currently 28%, represents both British and foreign-born players.) It is conceivable, then, just as their NFL counterparts concluded in 2002, that football’s governing bodies have determined that it is more prudent to formalise its hiring practices before they are legislated.

Notwithstanding the moral and societal implications, it has become an imperative that British football reflects the sports’ diversity, both on the field and in the back office. Because in what has become a £7,7bn/US$12bn entertainment industry—one that contributes substantially to the larger economy of Britain—English Football must maintain its competitiveness as “the world’s most favourite league,” as well as its appeal to an increasingly global audience. Adopting the Rooney Rule, which is neither affirmative action nor a requirement that BME candidates be hired, may simply be good business.

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Aug 12 2011

Profile Image of Joaquin Bueno

Champions on Strike

The headline in El País said it all: “The strike of champions.”

As of Friday, August 12, the AFE (Spanish Footballers’ Association) union resolved to strike for at least the first two matchdays of the Spanish professional football season.

Their reason is  a crisis in Spanish football related to the credit bust that, thus far, has left at least 200 players in First and Second Divisions owed €50 million in wages.

Furthermore, the players are standing against the increasing incidence of their colleagues’ wage payments being delayed, sometimes for months. What’s more, they are demanding stricter oversight from Spanish football governing bodies to prevent such situations from occurring.

The way they see it, Spanish football should be looking more in the way of countries such as Holland or Germany, where club team spending is much more controlled. They even point to the Premier League, where a team like Portsmouth, declared insolvent, is punished with relegation.

In contrast, in Spain football teams have been juridically ignored regarding their spending and labor practices. To highlight the situation: Zaragoza owes its players millions from last season, yet have already signed eight new players, one of whom cost €8.6 million. Players, bound to contracts, are unable to escape the situation, and, furthermore, since there are no legal provisions to punish the nonpaying clubs, are forced to stay on since they haven’t been paid and their only hopes of getting payed are by staying put.

While many have mocked the idea of football players being slaves, one can also understand the bad positions that teams often put players in. Imagine, a young man gives up his schooling with the idea of being a professional footballer. He does so with the idea of building a career, and focusing every bit of energy on it. Yet the shelf life of an average player is shorter every season; the reality is that football is only a solid career until one’s early thirties, when the body gives out.

At this point, the situation for Spanish players is such that there is no guarantee that they will even get the financial benefits of that career. What’s more, the boom in the Spanish football industry, parallel to the boom in the economy firmly tied to real estate speculation and excessive spending, has seen teams spending exorbitant sums on players–many of them quite bad–from all over the world. The past 15-20 years have seen a global expansion in the game–via TV rights and merchandising–that has favored cosmopolitan teams with universal appeal.

Now, with the burst of the bubble and the drastic slashing of banking credit (not to mention the possibility of increased regulation), many teams are beginning to look like sinking ships. Very expensive ships with no life rafts.

What’s more, since credit has dried, very few teams are able to get any, and we could have guessed that those with that luxury are Real Madrid and Barcelona. Both teams continue to sign players left and right, paying high wages and enjoying the profits of their all-encompassing appeal in every corner of the world.

In many ways, it’s becoming a two-horse race; a look at revenues in Spain, compared to similar charts for league titles in the last ten years, shows that there is one Real Madrid, one Barcelona, and a field full of also-rans.

In a Spain (and a Europe) in which the common people are being forced to swallow “austerity measures” (cuts to social spending and increased taxes), that makes the idea of the football business somewhat more ridiculous. While small and medium businesses in Spain, still a strong economic force, are finding their credit to be cut, they see a sector of the Spanish economy not bound to the same basic rules. Solvency, spending what one can afford to pay, paying one’s employees.

And yet, the press, while highlighting the strike (though not so much its financial implications), still warms up to the idea of the start of the new season, not to mention the Fabregas saga. The nationalistic Madrid-based papers (especially AS and Marca), as well as the Catalan dailies (such as Sport),  have also given these lastly mentioned stories much more prominent attention.

At the same time, as the 15-m movement against the austerity measures continues to be vociferous in Spain, El Pais also featured an article about former Sporting Gijón footballer Javi Poves, who quit the sport for “ethical reasons,” motivated by his anarchist political beliefs.

The 15-m, short for “15th of May,” protestors have been staging nonviolent protests since May against what they view as governmental and corporate irresponsibility in the economic crisis. They demand, among other things, accountability and the upholding of workers’ rights.

And interesting bedfellows the two groups, footballers and protestors make, at least in terms of our discussion here. As the football season approaches once again, so do we get closer to finding more about the true depths and consequences of the global economic crisis. Football, more than ever, parades the fantasy that all is well, that the world is in order, and that the best team wins, again and again.

 

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Apr 12 2011

Profile Image of Laurent Dubois

An Idea Whose Time Has Come

It’s one of funnest and most satisfying sports within the sport of football: complaining about the tedious, predictable, if not nauseating commentary foisted on us by the networks. With barely disguised pleasure, we chat or tweet our criticisms of the uninvited guests who join our football watching party. We wonder: Have these guys ever watched a soccer game? Where do they come up with the stream of absurd statistics? Who is the person next to them finding the most obscure pieces of information to pepper the commentary with? (“The last time a man with a Polish name scored a goal against a goalie from Egypt, it was 1922. The match was ended prematurely when a flock of chickens entered the field.”)

There are obviously exceptions, with some people and some matches better than others. But sometimes, I can’t believe that I’m watching the most interesting thing on earth while listening to what might be the most boring people on earth. I know it’s not entirely their fault: there are limits to what can be said, borders around what constitutes acceptably neutral sports discourse. But it largely excludes a flood of potentially interesting stuff to comment on during a match: commentary on hairstyles, rants and screeds about the referees, commentary on weird fan behavior, skewering of FIFA or some other guilty institution, polemical discussion of club, national or international politics. Maybe we have friends that we like to watch matches with who can give us this, but we can’t always watch with them in our scattered alienated late capitalist existence.

Do we really have to stay in this prison? That, my friend, is what I have been wondering ever since, during the U.S.-Argentina friendly match a few weeks back, the always astute and thought-provoking Jennifer Doyle tweeted an explosive suggestion: “We need pirate match broadcasting.”

She set me a-dreamin’.

The technology is all in place: many of us watch matches online anyway, and it’s easy enough to set up a streaming audio link on a blog or webpage. So here is what we’ll do: we turn on the network, gleefully press “mute,” and tune into one of our friends — Jennifer Doyle for international women’s football, Grant Wahl on the MLS, Liz Hottel for the pained philosophizing that is the only way to survive Arsenal matches. Once the door is opened, who knows who we will discover? It will be a free-wheeling wild west, with a cacophony of voices narrating the twists and turns of the most fascinating theater on earth. There will be no limits, nothing off-limits: they can curse, make fun of people, be mean, go on crazy tangents. If they need to call up meaningless statistics, google and wikipedia will provide as much — if not more — than what they scare up on TV. Any language, multiple languages — singing, chanting, gurgling, shouting with glee or despair.

It will be the beginning of a beautiful, revolutionary world. A football spring of sorts, a technology driven freeing of the mind from the containment of commentary as we know it.

The time has come. Are we ready?

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Nov 04 2010

Profile Image of Jeffrey Richey

Bye-Bye Bielsa: The Governance of Soccer and Chile’s Forking Path

Recent news reports from South America indicate that the coach of Chile’s national team, Marcelo Bielsa, will be leaving his post with immediacy.  To the casual observer, this comes as a shock.  Bielsa has been credited with restoring discipline and professionalism to a national soccer association known more in recent years for scandal than for footballing feat.  Chile’s positive performance in the World Cup, though terminated in an emphatic loss to Brazil, confirmed a national soccer renaissance, accompanied by the flourishing of local talent like Alexis Sánchez, Humerto Suazo, Matías Fernández, Gary Medel, and others.  Having spearheaded this project, the former Argentine national team coach Bielsa has come to enjoy wide celebrity in Chile.

Instrumental in the hiring of the Marcelo Bielsa and the resurrection of Chilean soccer has been Harold Mayne Nicholls, until today the president of the Chilean soccer federation (ANFP).  Mayne Nicholls has argued passionately for the equitable distribution of television funds among all first-division clubs.  Other recent institutional prerogatives include obliging clubs to invest in youth development rather than focus solely on player exportation, and ensuring clubs’ financial contributions to league infrastructures.  These measures have placed him in opposition to the presidents of almost all major Chilean club teams.  According to an article published by journalist Ezequiel Fernández Moores in the Argentine daily La Nación*, almost all major Chilean clubs are now owned by conservative businessmen or corporate groups who vehemently oppose the policies of Mayne Nicholls.  The recent ascendancy in Chilean soccer of Spanish businessman Jorge Segovia, whom club presidents have marketed as a replacement for Mayne Nicholls, is seen by many as engineered by recently elected President of Chile Sebastián Piñera, who according to Fernández Moores maintains major stock holdings in the Chilean giant Colo Colo.  For their part, club presidents see in Segovia and Piñera sympathizers dedicated to the deregulation of Chilean soccer, allies who will free clubs from the financial obligations described earlier–not least of which is the assurance that television deal profits go exclusively to Chile’s biggest clubs.  In Chile’s national association, as in many others, it is first-division club presidents who vote in and remove the association head.  Their threats to depose Mayne Nicholls came to fruition this week.

A surprising twist came with Marcelo Bielsa’s vow to resign as national team coach were Mayne Nicholls to be sacked.  “I’m friend to no league official, but Mayne Nicholls and I share an ideology,” he said in a two-hour press conference yesterday.  “It’s impossible for me to work with Mr. Segovia.”  True to his word, when earlier today the council of club presidents dismissed Mayne Nicholls to replace him with Segovia, Bielsa reiterated his intention to quit.  Even more surprising was the willingness of club presidents to do away with, perhaps, the most popular soccer coach in the history of Chile.  The crowds protesting Segovia’s election in downtown Santiago and the demonstrations of support outside the association training grounds where Bielsa makes his home have failed to sway the decision to elect Segovia.  So have the 80%+ approval rates Bielsa commands in political-style surveys (themselves a reflection of his cultural importance).

As in Argentina, on display here are not only institutional decisions that appear linked to the highest levels of national government.  We see also reflected in Chilean soccer the country’s wider political dilemma: to adhere to or challenge an economic, political, and social system that–successful though it has been–has its roots in the Dirty War and the dictatorship of Pinochet.  Backed by the majority of Chileans, Bielsa and Mayne Nicholls–hardly icons of the left–chose their path.   Recently elected by his own Chilean majority and enjoying record approval ratings in the wake of the magnificent mining rescue, Piñera and his friends at the ANFP have too.

Further updates to come.

Photos from La Tercera

*Cancha Llena is La Nación‘s sports section, included in the paper but marketed as a stand-alone publication.

“The Chilean Way,” published in Cancha Llena on November 2 by Ezequiel Fernández Moores.

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Sep 25 2010

Profile Image of Laurent Dubois

The Global Production and Marketing of Athletes

We had an interesting discussion here last Wednesday on this topic. You can link to the audio of the presentations at itunes-u here: The first two (by me and Achille Mbembe) focus on football in Europe and Africa, and I highly recommend Achille’s intervention, starting at about 15 minutes. He thinks and talks about football a lot, but hasn’t presented on it in an academic context very frequently.Video of the event will be up shortly and I’ll post a link of that here when I can.

And here’s a short summary of the event by Duke Today.

Achille and I will be doing another event specifically on the South Africa World Cup in early November here at Duke.

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Jun 30 2010

Profile Image of Joaquin Bueno

Domenech becoming international political outcast

World Cup 2010: Raymond Domenech fails to take blame for France fiasco | Football | guardian.co.uk

This article from the Guardian highlights the extent to which the French football crisis is becoming one of international proportions, now being taken up at the highest levels of the French government.

At first glance, one might think: why should politicians have any role in talking to a football coach?

To begin with, the coach, in the end, amounts to a sort of indirect government appointee. France, like most nations, has a federation of sport that oversees association sports in general. In most cases, heads of football federations are appointed by the federations of sport, whose heads are in turn appointed by ruling political parties.

Perhaps even more importantly, the Domenech crisis is bringing to the forefront the role of football in creating a national image that has repercussions not just politically, but economically and socially. The French are now struggling to cope with a backlash stemming from this “tarnishing of the French image.”

One did not have to look far to see the impacts of the unprecedented discord and ultimate failure of the French team. From Facebook to the printed news to ESPN, the headlines orbited around the idea of the spoiled, whining French who put their egos before the team.

While Domenech may have been a horrifically bad manager (and he was), what got the attention of the world was the attitude of the players, performing (or not) on the biggest stage in the world. The extraoirdinary airing of the French dirty laundry will go a long way to create overwhelmingly negative images of France throughout the world. We don’t need to list all of the bad stereotypes that will be vastly reinforced by this whole incident, but one can imagine the repercussions, whether it be in marketing or even day-to-day identity creation.

In the end, however, Domenech will be only a scapegoat, held responsible for the actions of many, as well as his own. As Laurent Dubois shows in his book, ’98 was an opportunity in which a positive ideal of Frenchhood could be presented, despite its detractors. While it did not last forever, one would be hard-pressed to deny its impact on the national imagination and how it continues to endure. With this latest, disastrous chapter in French football history, one would hope that things are fixed as quickly as possible in order to restore the lustre on a global image that has been more than slightly tarnished.

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