May 13 2010
Archive for the 'Soccer Business' Category
Jan 13 2010
David and Goliath? Again? Villarreal eliminated by second division strugglers Celta
On paper, the upset of a regular top-4 side like Villarreal by strugglers languishing near the bottom of the rather unglamorous Spanish second division seems impressive. Real Club Celta de Vigo, from the rapidly growing and impossibly gray industrial city of Vigo, are currently in 14th place in segunda, just 4 points from the drop zone. [let's not forget that demotion from the 2nd division means wallowing in the entrails of the infamous segunda B, veritable quagmire of further ignominy]
Villarreal are in themselves a curious story. The town they are based in, Vila-Real, barely has 50,000 inhabitants (compare that to Vigo’s population of nearly 500,000). Their stadium, El Madrigal, has a remarkable capacity of 25,000 people. Imagine: if the stadium were to sell out at any time, that would represent 50% of the populace of the town. I could just imagine the Camp Nou filled with 800,000 spectators, whistling at their team for failing to connect 24 passes in a row, or for not signing the latest Dutch successor to Cruyff…
Despite their unlikely size, the team from Vila-real has been a staple in recent European competitions, stopped only by Arsenal in the semifinals and another time in the quarterfinals of the Champions’ League. Some of you might recall Eeyore-like midfielder Juan Roman Riquelme’s infamous penalty miss: the color flushed out of his face and he appeared like he was about to vomit for the entire run-up to the failed spot kick. Had he scored the kick, we might have seen another all-Spanish final pending the outcome of extra time (Arsenal went on to lose to Barcelona).
A big reason for their continued success has been the retention of key players, despite losing some big names to bigger teams. Despite losing Pepe Reina, for example, to Liverpool, they replaced him with a more-than-qualified Diego Lopez, a backup at Real Madrid, and made a handsome profit in the process. Similarly, Diego Forlán’s absence has been readily filled by Giuseppe Rossi, Italian international striker, and Nilmar, a current Brazilian international. This is a team that was able to offload their biggest star ever, Riquelme, who was blacklisted by then-coach Manuel Pellegrini. Perhaps their biggest blow was losing their Chilean coach to Real Madrid; this season started horribly for them, as they adjusted to the coaching change. Since then, going into the winter break, the team has reorganized under Ernesto Valverde, and the proof was in their impressive 1-1 draw with Barcelona just over a week ago.
Celta, on the other hand, had a much more illustrious past in the Primera (I refuse to use the improperly anglicized “Primera Liga,” the “First League,” because it makes no sense, and is not what the league is called in Spain: la Primera División). The team earned the nickname “Eurocelta” for their exploits in Europe in the early 00′s, knocking out some big teams in the UEFA Cup, while at the same time playing some of the best football in Spain. Big names came and went for Celta as well. Santiago Cañizares once tended goal for Celta. Michel Salgado was the hometown boy before also being snapped up by Real Madrid. The great Claude Makelele made his name playing in Vigo (not to mention wrecked his first Ferrari there). [on a side note, this brings us to the growing issue of major stars wrecking Ferraris and other overpriced sports cars. Cristiano Ronaldo, Rio Ferdinand, Karim Benzema (TWICE now!)]
In contrast to Villarreal, we can’t say that Celta were wise about replacing players in a profitable fashion. The team, overextended in European competition and at home, was finally broken by a lack of top-class players and a relatively successful yet taxing Champions’ League campaign and went down to Segunda that same season. And things haven’t looked much better since. Likewise, the city of Vigo worries about its industrial bases. The fishing industry, Vigo’s biggest, looks tired amidst worries about overfishing, dwindling fish stocks, higher oil prices; the car industry [Citröen sponsor Celta and have one of Europe's largest factories in Vigo] is equally important and imperiled.
With all the talk of the financial crisis, we can think about the idea of the club being a bad business; Soccernomics, a recent book by Simon Kuper and Stefan Szymanski, discusses this issue in detail, raising questions about just why people continue to invest in this money pit of a sport. Owners are a beleaguered bunch, they emphasize, and considering the heavy crisis already being felt by many small team owners, debt-ridden and struggling to make a profit, things have gotten worse for even big teams in European leagues. A recent Guardian article points out that a team like Manchester United is disastrous on many levels, with dubious administration and massive debts that look like they might go unpaid.
For the small team, one explanation is provided as to why people continue to invest in soccer: it is a cultural institution that provides thrills and joy, heartbreak and defeat. Celta beating Villarreal won’t turn the tides of minnows struggling against the current of the global marketplace; such a victory does, however, vindicate the idea that “anybody” can win, though we shall see how far this fairy tale goes for the celestes in 2010. As I consider them my hometown club, having witnessed the glorious “EuroCelta” years, a part of me wants to not be deceived by false hope!
Dec 16 2009
Documentary on African Football
Stefan Lovgren, a documentary filmmaker who has worked on a many previous films about Africa, is now making one about football in Africa. It focuses in particular on one football academy in Ghana to tell a broader story about African football, the hopes and exploitation of footballers, and the broader context surrounding the history 2010 World Cup in South Africa. Lovgren was here filming during our October conference on “Sport, Race and Power,” and interviewed Gerard Akindes, Peter Alegi, Paul Darby, three conference participants, for the film.
He’s shared a few short clips from the film with me, including one that explores how football is being used in Sierra Leone to deal with the effects of years of war there among children, and it looks wonderful! Once I know about when and where the film will be aired, I’ll share more information here.
To learn more about the documentary visit Lovgren’s blog.
Nov 23 2009
Wi9an Athletic
You have probably heard of Wigan’s destruction while facing Tottenham Spurs this past Saturday. Just in case you have not, here is a link: Tottenham-Wigan Athletic.
Wigan took their first step towards the Premier League in 1997 when they won the Third Division under John Deehan. Paul Jewell then earned promotion to the First Division with a points tally of 100 in 2002/03, just his second season at the club. The club promoted to Barclays Premiership in the season of 2004/2005 and have beaten all expectations. Wigan’s first ever EPL game was a home match against the previous champions Chelsea, which they lost 1-0 as Crespo scored 30 seconds before the final whistle (Crespo\’s goal). After a successful run Wigan found itself in the 2nd position in the league by November. The Latics were creating wonders in the Football League Cup simultaneously. Having left Arsenal out of the cup in the semi-finals, Wigan reached the final in the same season, losing 4–0 to Manchester United. Latics eventually finished the season in 10th place – the club’s highest ever league placing.
The upcoming years were not that great. The club hardly stayed in the EPL in 2006/2007 and stayed as a mid-class team in the other seasons. Unorthodox to the way EPL works, the club has changed 3 managers since the season of 2006/2007, Roberto Martinez being the 4th one to continue.
I was very interested in the way Wigan was going to handle the loss. Martinez apologized from the supporters and called the loss ‘unacceptable’. Yet, a bigger move came from the players yesterday. I do not if this will ease the supporters’ anger or not, but the following news is from the Wigan’s website:
Wigan Athletic players to personally refund Tottenham tickets
The club have announced that the players of Wigan Athletic have decided to personally refund every Latics fan who bought a ticket from the DW Stadium ticket office for the match against Tottenham Hotspur yesterday.
Latics had a sizeable following at White Hart Lane and skipper Mario Melchiot, speaking on behalf of all the players, said today: “We feel that as a group of players we badly let down our supporters yesterday, and this is a gesture we HAVE TO make and pay them back for their tremendous loyalty.
“There is not a lot else to say, just that as a group of professionals we were embarrassed by the way we performed, we feel it was below our standards and this is something we feel we owe to the fans.
“Now we have to draw a line under the game, focus completely on training this week and bounce back on Saturday.
“We are professionals, we will take it on the chin and move on but it’s important that we do not take our supporters for granted.”
The club has confirmed that every supporter who bought a ticket for the game from the DW Stadium ticket office should contact the ticket office and refunds must be claimed on or before Friday 4th December 2009.
Nov 10 2009
African Football Panel Response- Ghana emerging as a national football power?
Ghanaian players feel the need to play for countries abroad for a high salary in order to provide for their families and achieve a standard of living above the extreme poverty line. However, this leads to a downward spiral of national development opportunities through football. If Ghana is robbed of its best players, how will they be able to achieve success as a national team? While the international powerhouse teams reap the benefits of acquiring highly talented players from a small third world country for salaries and benefits considered minimal by the powerhouse’s standards, the domestic team is suffering. Paul Darby referred to this phenomenon as “deskilling” of the domestic game. What will the lasting repercussions of the deskilling of the game in Ghana and other third world countries trying to emerge as a national power (or at least made a local impression)?
Nov 04 2009
Liverpool versus Lyon, tradition versus “soccernomics”
Karim Benzema, seen during his days with Olympique Lyonnais. The 21-year-old striker was sold to Real Madrid last summer for €35 million. (Wikipedia Commons)
I’m something of a latecomer to following professional club soccer. Although I played the sport growing up in Western North Carolina and have watched every World Cup final since 1990, I’ve been oblivious to the comings and goings of the top European and South American leagues—mostly due to my typically spartan television habits.
That’s all changed. I now subscribe to Fox Soccer Channel, GolTV and Setanta, and tonight, I’ll skip Game 6 of the World Series in favor of DVR replays of Aston Villa-West Ham in their midweek Prem fixture and Lyon-Liverpool in Group E of the UEFA Champions League. If I’m still awake (perhaps after watching the ninth inning of the baseball game), I might zip through Barça-Rubin Kazan in Group F of the Champions League.
One reason I’m finding soccer so interesting is that, because of its global reach and the preponderance of international competitions and freely moving players, it seems more relevant and resonant than the traditional American sports. I love a good baseball or basketball game as much as the next person, but American sports leagues are closed shops, provincial and protectionist. No matter how bad the Pittsburgh Pirates or the Los Angeles Clippers become, for example, their place in their respective “major league” is assured.
There are virtues to the socialization of American sport. The leagues are well-organized and stable, and the owners (with the significant exception of baseball) have entered in agreements that share revenue and limit spending on player salaries. And, for those who think it’s important for teams to perform in an unpredictable fashion from year to year (“parity”), the NFL and NHL offer excellent models—one that Major League Soccer seems intent upon refining further.
Professor Dubois invited me to contribute to this blog, and I think my interests will largely be in the area of business and globalization. In light of today’s game between Lyon and Liverpool (2:45 p.m., broadcast live on Fox Soccer Channel), I want to draw attention to a just-published book, “Soccernomics,” by Simon Kuper and Stefan Szymanski. It’s a must-read for anyone interested in understanding the business—and the future—of the game, and I expect to return to it in future posts.
One section is especially interesting and timely. In a chapter devoted to examining why most soccer clubs lose money, there are a few appreciative pages focusing on the rise of Olympique Lyonnais (OL). After the authors argue—at length and convincingly—that the business of soccer is a poor one in theory and in practice, they visit with OL’s owner Jean-Michel Aulas in Lyon, France’s second-largest city, located in convenient proximity to the Alps, to Italy, to Paris, to the Riviera.
It turns out that OL, despite being in existence for a century, has generally been an indifferently performing club in a bourgeois city more known for food, wine and cinema than for sporting enthusiasm. During Aulas’ two decades of ownership, however, Lyon has become the 12th wealthiest club in the world in 2008, according to the Deloitte Football Money League.
There are a number of reasons for OL’s success, Kuper and Szymanski argue, and most of them have to do with Aulas’ determination to run his team like a real business. Most top clubs, despite being described as “wealthy,” are actually saddled with debt in the hundreds of millions of dollars, pounds and Euros. Liverpool takes the field in Lyon this afternoon as the world’s second richest club, with income in 2007-8 of about €351.2 million—more than twice that of OL. (The others in the top five are, in order, Real Madrid, Manchester United, Barcelona and Bayern Munich.) But Liverpool also carries debt estimated earlier this year of £350 million, while Manchester United’s debt is close to £700 million. (Note the two different monetary units in this paragraph.)
As Kuper and Szymanski explain, there’s no danger that Liverpool and Manchester United and their fellow profligates will fold. But this reckless environment does leave room for an efficiently managed if rather bloodless club like Olympique Lyonnais.
While the authors write admiringly of Lyon’s branding of such things as OL Beaujolais, OL bottled water, OL hair salons and OL taxicab services, what is particularly pertinent in light of this afternoon’s clash is the French club’s strategy on the player transfer market. Every summer and winter, the soccer press is filled with talk of high-profile transfers, but as the “Soccernomics” authors argue, these players are almost always overvalued. Aulas and his team of soccer managers, however, never pay top dollar for an established star; instead, they sign prospects when they’re in their early 20s and then sell them a few years later the minute another club offers too much money for them. Hence, Michael Essien, Florent Malouda, Éric Abidal and Karim Benzema all became superstars in their early- to mid-20s playing for OL before they were sold for big bucks to Chelsea, Chelsea, Barcelona and Real Madrid, respectively.
Aulas boasts to the authors that he has a price on all his players, and that he anticipates big sales by having cheaper replacements for his stars at the ready. Liverpool, on the other hand, is an old-fashioned, badly run club that wins championships in spite of its owners (so desperate are the Liverpool supporters that they are attempting to form their own ownership bid—an effort supported by the British government but thus far unsuccessful).
Right now, the Scousers are in a terrible run of form, having lost six of their last seven matches in all competitions and suffering escalating calls for the sacking of gaffer Rafael Benitez. The principal reason for the team’s struggles, however, is the injuries to their two of their best and most expensive players, Steven Gerrard and Fernando Torres.
A third player, however, is also mentioned in the media’s diagnostic conversations about Liverpool’s struggles: midfielder Xabi Alonso, who was transferred to Real Madrid last summer for £30 million. “If only Liverpool hadn’t sold him,” their supporters—and players—moan. But, viewed through the prism of Lyon’s business strategy as depicted in “Soccernomics,” Liverpool and Alonso were correct to take Real Madrid’s money. Actuarially speaking, the 27-year-old Alonso is at the peak of his game and his marketability. Although he gave his best years to Liverpool, he will collect his biggest checks from Real Madrid.
Where Liverpool failed was in not making adequate preparations for Alonso’s departure and not preparing for the inevitable drop in production and susceptibility to injury of the 29-year-old Gerrard, whom Lyon likely would have sold a year or two ago.
So, this afternoon’s game is a battle between old and new. It’s also a must-win for visiting Liverpool, who will play without Gerrard and without a full-strength Torres—among other hobbled squad members. Lyon, meanwhile sits in first place in the Group with nine points from three games. A win will put them through to the knockout phase early next year.
It’s hard to believe that limping, debt-ridden, dysfunctional Liverpool could be a sentimental favorite. But then, it’s also hard to love a club like OL, whose owner describes his Champions League aspirations thusly:
Aulas says it is only a matter of time before [OL] wins the Champions League. “We know it will happen; we don’t know when it will happen. It’s a necessary step to achieve a growth in merchandising.” (Kuper and Szymanski, p. 67)
Nov 01 2009
Argentinian Government Guarantees the Right to Football
Do citizens have a right to watch football? The Argentinian government has recently proposed that they do. The Washington Post – which as the previous post on this blog attests has recently been providing interesting coverage of the politics of football in Latin America — reports in an article published today that President Cristina Fernández de Kirchner has sealed a deal that will make watching local football free for the Argentinian population.
As is increasingly the case nearly everywhere — including in Africa, as Gerard Akindes explained in a presentation here at Duke this past Thursday during a conference on “Race, Sport and Power” — people have had to pay to watch football on television in Argentina, either through a subscription to cable or through pay-per-view. Private media companies control most of the diffusion of football throughout the world, turning a great profit from diffusing the global game. The result is that many people can’t afford to watch. But Kirchner, in a politically astute move that some suggest may help stall or even reverse a steady decline in her popularity in Argentina, has signed a deal with the national football association through which the Argentinian government wrested broadcasting rights to professional games in Argentina away from Clarin Group. Now games are shown free on television.
Significantly, the article reports, Kirchner presented the move in a statement that made a link between private media control over football in contemporary Argentina and the ways in which the military dictatorship in the country mobilized football — particularly during the 1978 World Cup in the country — football by the military dictatorship in the country: “Only those who paid could watch a game of soccer, because they kidnapped the goals . . . I do not want any more kidnappings. I want a free society.” The statement, along with the deal itself, were criticized in Argentina. But they made clear that, at least in her mind, the battle over access to football is part of a larger political struggle in Argentina to somehow transcend the legacy of the dictatorship, which twisted together brutal political repression with the celebration of free market policies.
One critic opined that it would be better to provide Argentinians with free access to food than free access to football. But while that might well be a good idea, football is a kind of necessary nourishment for many people, notably in Argentina. In Villa Fiorito, the article concludes, the poor neighborhood on the outskirts of Buenos Aires where Maradona grew up, a man who makes his living “scavenging for recyclables from garbage in elegant districts” sat down at a “rickety dinner table” laid out with “beer, cheese and salami” to watch a game (Racing Club vs. Argentinos Juniors) he wouldn’t have been able to see before. “I’m going to be thankful for this all my life,” he said, “because football has been brought into my home and the homes of my neighbors.”
Oct 07 2009
Standing alone on the terraces: The decline of the local game
Everyone who has a vague interest in soccer knows the big global brands and superstars; the Manchester Uniteds and the Real Madrids, the Kakas and Messis of the global game. We see them plastered across the back pages of newspapers and adorning front covers of glossy magazines. Television coverage of major soccer matches is all-pervasive. You can watch a Liverpool game in Liechtenstein, a Barcelona match in Bangladesh and an Arsenal fixture in Afghanistan (probably). Hiking in the mountains of Lesotho, far away from home, I ended up having an in-depth discussion on the relative merits of Wayne Rooney and Dimitar Berbatov with my Basotho guide. The global brands are consumed on an enormous scale.
Yet who has heard of Tiverton Town, Evesham United or Truro City? I’m guessing not many of you, if any of you (for your information, all three teams play in the Southern Premier League in England, the seventh rung of English football). While record amounts of money is being pumped into the English Premier League, from billionaire club owners to major sponsorship deals, looking further down the ladder reveals a very different picture.
Having been introduced to Tiverton Town in the late 1990s by a friend of mine, I soon became an ardent supporter, always there, always belting out the songs on the terraces. During this time, the club experienced great fortune. Two trips to Wembley in two years resulting in two FA Vase wins (the equivalent of the FA Cup for non-league teams) in the late 1990s swelled the club’s coffers, allowing them to improve the ground and thus being eligible for promotion further up the football pyramid. Ten years later, after having lived around the world, coming back to watch a Tiverton game is a very different proposition. Success has dried up and the fans have stopped coming. Tiverton used to get between 800 and 1,000 fans to the opening game of the season. Now they’re lucky to reach the 400 mark. The slump in gate receipts means that money is tight. The club shop has stopped stocking replica shirts as they can’t afford that outlay of capital in the hope that enough fans will buy them and the satellite TV subscription has been cancelled. The raucous atmosphere has been replaced with a few people clapping. The future looks bleak.
This isn’t just a single story but indicative of a wider malaise in English football. The success of the Premier League and the increased access to the games has bled the smaller teams of their fan base. Especially in such times of economic hardship, why spend £8 a time to watch a bunch of postmen, school teachers and plumbers play when you can watch arguably the best football league in the world in the comfort of your own home or in the pub? Come winter time, who is going to brave the cold, the rain, the wind and the snow to stand on the terraces to watch a low grade game? The answer, I fear, is not many. Many of those who do will be talking about how their Premier League side is doing rather than concentrating on the game they are supposedly watching, checking the latest scores on their cellphones and discussing their fantasy football teams.
The global brands are just the visible part of the football iceberg; there is much more that gets forgotten. If we are to talk about soccer in a globalized society, let us not forget the many local aspects of the game.
Sep 23 2009
Football Match Used to End Modern-Day Feud
We read about football being used for conflict resolution so often in this course. What we see, however, are epic matches in the EPL which rarely serve such a purpose besides entertainment and victory. I thought it was fascinating that Puma and Adidas used football to create modern day peace between their two companies. By mixing teams with players from each company, football was used as the medium to get employees to interact…very cool stuff.
Sep 17 2009
Young Players Under Contract and Football’s “Slave Trade”
We’ve talked briefly in class discussions about what some have called the “slave trade” in young players from the developing world to the power clubs in Europe. There have been two stories in the past week that have brought to light the related issue of European youths who sign binding contracts.
The big story was that of Gael Kakuta who, at age 16, was under contract with the French club Lens but left the club to sign with Chelsea. The punishments doled out are staggering: Chelsea must pay Lens 130,000 euros compensation; Kakuta is suspended for 4 months and must pay Lens 780,000 euros for breach of contract; and most noteworthy of all, Chelsea was issued an unprecedented 16-month transfer ban. For the next two transfer windows, Chelsea is forbidden from registering any new players.
The second is more recent and of a smaller scale, but in one sense a little closer to home: Leeds United, the English League One side for whom Duke University’s own Mike Grella now plays (he has one goal on the year so far), has just had one of their developing 16-year-old players scooped up by Everton. While a tribunal has awarded Leeds 600,000 GBP (could rise to 1.5 mil if the kid plays well), Leeds chairman Ken Bates is saying that money is an insufficient deterrent to “predator clubs” and adding that league points should be deducted, forcing teams that make these types of moves to pay the price in the standings.
(The irony, of course, is that Leeds United would’ve been mentioned in the mix with those very “predator clubs” had their mangled finances not led to the downfall of the club about 6 or 7 years ago. Improper financial practices actually led Leeds to receive a devastating 15-point deduction in 2007-08, so when Bates mentions point deductions he knows of what he speaks.)
The first thing that jumps out at me is that, in both of these instances, the story is always framed around the club: whether its reparations to Leeds or the punishment for Chelsea or Everton, what happens to the player is always a side note (perhaps because the issue deals with players who are so young that they haven’t established themselves on the field yet and aren’t yet of public interest).
How does the issue of exploitation of youth change when the element of the “one-way ticket out of Africa” is removed from the equation? Regardless of background, are these kids really old enough to make contract decisions (and are their parents/guardians pushing them for the right reasons)? Also, does Chelsea’s punishment fit the crime or is it extreme? Is Ken Bates right to call for penalties in the standings as well? (As a Leeds United fan, I personally would say that the times that Bates is right are few and far between, but this could be one of the few.)
I’d love to hear other opinions on either of these stories or the broader “football slave trade”.
– Brad Colbert
