Is money destroying football?

Is money killing football?

Words: Raphael Honigstein
Photo: Getty Images/Montage

Is professional football on its last legs? No! This summer’s financial excess is just the beginning says expert Raphael Honigstein
Raphael Honigstein
Raphael Honigstein

Raphael Honigstein is The Red Bulletin’s expert football columnist and also writes for The Guardian and Süddeutsche Zeitung. 
twitter.com/honigstein

This summer’s heavy spending, fuelled by the new  Premier League TV deal (worth around €3.2bn annually, if foreign rights are included) and the imminent restructuring of the Champions League, a move to guarantee more money for the top European clubs, have nurtured fears that the insatiable appetite for money might at last result in the game eating itself. “Football has lost its soul,” former Bayern Munich coach Jupp Heynckes lamented.

But then again, complaints about football’s rampant commercialisation and ear-splitting hype are of course almost as old as football itself. “Nearly everything has been done to spoil this game: the heavy financial interest… the absurd publicity given to every feature of it by the Press; but the fact remains that it is not yet spoilt, and it has gone out and conquered the world ” J.B. Priestly wrote in 1934. (As cited in the excellent The Game of our Lives, by David Goldblatt). 

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It’s just the beginning
 
Forget about crash and burn, forget about the bubble bursting: all the indications are that football’s conquest of the global airwaves has only just started. The Premier League TV deal for mainland China, for example, is currently only worth a paltry £10.7m per year, which works out £0.01per head.

As sporting intelligence’s Nick Harris has shown, that’s a fraction of the value achieved in other key overseas territories for English football. In Hong Kong, viewers pay £12.18 per head per year, by comparison. 

A cockaigne for TV companies

There’s no doubt that the Premier League and Europe’s other top leagues will continue to grow exponentially overseas, as new markets and new technology come online. PL boss Richard Scudamore recently referenced virtual reality in that respect. We’re not too far away from clubs being able to sell matches directly to their millions of fans, all over the globe, without territorial restrictions.

“Domestic TV income in the traditional football countries will not continue to grow as quickly, as the increase in cost for the consumer begins to bite.”

TV companies will probably act as agents in a few years time, in a revenue-share model. Perhaps they will merge with clubs altogether. Rather than forking out huge guaranteed sums, they could take, say 30 per cent, from selling each of the 34 Bundesliga games for a £1 to 400m potential Bayern Munich fans. 

Domestic TV income in traditional football countries will not continue to grow as quickly, as the increase in costs for the consumer begins to bite. But football’s unique properties - the over-riding need to watch it live, the strong brand loyalty  - will continue to command a significant premium over all mainstream content.

Its capacity to deliver millions of eyeballs at its own time of choosing is undiminished - which makes it interesting for non-media companies, too. Big corporations will be increasingly drawn to take stakes, alongside sovereign funds, who regard football both as a sound financial investment as well as a chance to wield some soft power. 

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€200m transfers are just around the corner

So far the maximum outlay for buying a player by any club has hovered around 20 per cent of total turnover. Going by that rate, the days of the €200m transfer are probably only three to five years away, as the super clubs inch closer to €1bn revenue. 

Manager’s salaries will increase, but the most under-paid members of staff, relative to their ability to add value to their teams are currently those tasked with identifying talent. A good sporting director/chief scout, able to sign cheap and sell expensively will be worth millions over the course of the next two or three years as average player fees grow in tandem with overall revenue.

Enormous salaries for scouts and sporting directors?

They will command wages commensurate with their talents or be rewarded with hefty bonuses for their smart investments. In an ideal world, the ever-increasing sums sloshing around the game will bring about more transparency and stricter compliance regimes but any such moves will stem from the pressure of investors - and on investors - rather than the game’s own, notoriously lax endeavours. The running of football is bound to become more professional.

Whether structural imbalances - between leagues but even more so within leagues - will hurt the marketability of the product is not certain. But if they do, football will find a way to address them and keep the ball rolling.

Football never dies

History has taught us that the public’s appetite for the game is just as insatiable as the game itself, and that’s unlikely to change. Nostalgia won’t go out of fashion either, in the future. In ten years time, there’ll be those who’ll fondly look back at the relative sanity of the gold old days of 2016  - when football was not as commercialised and so much “more real”. 

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09 2016 The Red Bulletin

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