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Here we present articles and further material concerning world soccer - news, analysis and opinion on the finances and political economy of football outside the UK.

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Platini plan threatens top European clubs - 31/1/10

Michael Platini's 'Financial Fair Play' plan could threaten a number of top European clubs. The Uefa president believes that over a period clubs should not be able to spend more than they earn. Some of Europe's leading clubs have built up big debts and could face exclusion from the Champions League. One could think that was a case of Uefa shooting itself in the foot, but that is not an unknown phenomenon. Uefa's only public statement on the subject so far is vague, saying there is 'an obligation for clubs whose turnover is over a certain threshold, over a period of time, to balance their books or break even.'

The rules will be framed by an independent 11-person Club Financial Control Panel, chaired by the former prime minister of Belgium, Jean-Luc Dehaene. He was once blocked by the UK from becoming president of the European Commission because of his lack of belief in the market. The aim is to introduce the rules in the 2013-14 season. Both the panel and Platini accept that debt cannot be outlawed, but want it to be manageable if it is on a club's books. Uefa are aware that if they banned most of the biggest clubs from the competition there would be danger of a breakaway league. They also accept that its rules are susceptible to legal challenges.

The leading debtor clubs are:

  • Manchester United, £727m
  • Real Madrid, £629m (Real themselves say only £296m)
  • Barcelona, £436m
  • Internazionale, £386m
  • AC Milan, £348m
  • Arsenal, £297.7m
  • Liverpool, £240m (apx)
  • Juventus, £147m
  • Roma, £136m
  • Bayern Munich, £96m
  • Chelsea and Manchester City, zero

Drive to clean up Chinese game - 24/1/10

Police in China have started a crackdown on corruption and match fixing. Police took in for questioning Nan Yong, the head of the country's football federation; Yan Yimin, a vice-president of the football body; and Zhiang Jianqiang, head of the referees' committee. It is difficult to fix matches without the compliance of referees. In the last three months at least 21 officials, players and club officials have been arrested on allegations of match fixing, or of gambling in matches which is illegal in China. Alongside table tennis and basketball, football is one of the most popular sports in China. But the country is punching well below its weight in international rankings. It did not come close to qualifying for this year's World Cup finals in South Africa and is ranked 93rd in the world behind the likes of Iceland and Haiti.

Attendances at matches have fallen in the domestic league which has been tarnished by complaints about the 'black whistles' - a reference to corrupt and biased referees. China's president, Hu Jintao, has let it known that he is 'very concerned' about the state of the game, which helps to explain the crackdown by the Ministry of Public Security. Ren Jie, the head of the China Anti-Football Gambling Alliance, a group set up to expose corruption in the game, said the match fixing was a result of the huge illegal gambling rings that have been established around the sport.

European match fixing scandal hits the beautiful game - 21/11/09

At least 200 European football games are being investigated after police said they had dismantled an alleged international criminal ring suspected of running Europe's biggest ever match fixing scandal. German prosecutors and police stated that the gang allegedly obtained more than €10m in illegal betting proceeds by manipulating the outcomes of games in nine countries, including three in the Champions League. Peter Limacher of Uefa commented, 'This is without a doubt the biggest scandal to ever hit European football.' All the games under investigation took place this year. They include matches in Croatia, Slovenia, Turkey, Hungary, Bosnia and Austria. Police sources indicated that the number of games involved and circle of suspects could increase. Police in Germany, Switzerland, Austria and London conducted 50 raids and seized €1m in cash. Those detained are suspected of offering payments to players, coaches, referees and officials in exchange for influencing the outcome of games on which ring members would place bets.

There are fears that match fixing could be the next big problem facing football. It is as old as the game itself, but the frequency of bribery scandals seems to be increasing, driven by the growth of gambling. It has even been alleged that three matches at the last World Cup were fixed by Asian gamblers. If fans come to believe that the product they are watching is rigged, they may no longer be attracted to the game. Corruption scandals in Italy seem to have hit attendances there. Rowing was a phenomenon in 19th century Britain before it became tainted by match fixing. The bigger gambling companies have started to set up investigation units with sports authorities to prevent damage to their reputations. However, some argue that the growth of online gambling, and in particular gambling during the course of an event, makes effective control more difficult.

La Liga To Change Match Times? - 8/11/09

Kick off times in the Spanish Primera reflects the pecking order of clubs. The least favoured clubs tend to begin their matches at five on Sunday unless they are playing one of the big teams in which case they are given a slot at seven or eight on either Saturday or Sunday. The most favoured slot is tapas time at nine or ten in the evening which is when you are most likely to see Real Madrid or Barcelona. However, the Spanish league is considering moving some clashes to an Asia-friendly 3 p.m. Real Madrid are said to be behind the idea with their interest in marketing opportunities in Asia. However, Spanish fans are not happy about the plan. There are also concerns that it would be commercial suicide to go head-to-head with the Premier League in the Far East market.

Strike Threat in La Liga - 7/11/09

Spanish clubs have threatened to go on strike following the announcement of Spanish Government plans to remove tax laws that give La Liga a big advantage over the English Premiership. The so-called 'Beckham Law' allows high-earning foreigners to pay 24 per cent income tax instead of the 43 per cent levied on locals. The Spanish League (LFP) have warned that their clubs will face a bill of more than £90m and could kill the competition. The law coincided with David Beckham signing for Real Madrid from Manchester United in 2004. It was designed to attract foreign executives to the country, but has helped Real Madrid and Barcelona to sign some of the best players in the world on contracts that would not be affordable to rivals across Europe. The law, due to come into effect on 1 January, would affect foreign players earning more than €600,000 a year. It would instantly add £2m a year to Cristiano Ronaldo's contract at the Bernabeu. The LFP calculate that the reform would add €100m to the bill for Spanish football. A players' strike is one of the responses being considered by the LFP.

Bwin Extend Real Madrid Sponsorship - 29/9/09

Having gone on a £200m spending spree this summer, news that Real's shirt sponsorship deal with Austrian online betting group Bwin has been extended by three years (until 2013) will come as some relief to the club's accountants and creditors. At least one line of income has been secured. The deal could be worth up to 20m euros ($29.1m; £18.3m) a year from the renegotiated agreement. Real Madrid president Florentino Perez said Bwin was "a loyal partner which understands sport", a slight dig perhaps at previous sponsor BenQ, the German handset business of Taiwan's BenQ Corp, which went bust.

State Bails Out Argentine Football - 23/8/09

It had to happen sooner or later: a government bailing out a financially inept football industry dissatisfied with its television contract. And what was the betting that it would happen in Argentina, a fanatical football nation where presidents know they have to engage in crowd-pleasing populist politics? Nevertheless, this is quite a step even for the country's populist First Family, president Cristina Fernández and her husband and predecessor Néstor Kirchner. The president ended a two-week delay in the start of the football season by signing a $155m a year deal to broadcast league matches on state television, replacing an existing and far less generous cable contract. Matches will now be available on Channel 7, a terrestial station which is free to air. Ms Kirchner portrayed this as a blow for the poor. Fans may be grateful that the season has at last started and she may be able to recover some of the loss of prestige she suffered in a legislative election in June when her government lost its majority in the lower house of Congress. It is also perhaps convenient that one of the main partners in the discarded cable contract is Clarin, a Buenos Aires media group with a daily newspaper of the same name that has been increasingly critical of the Kirchners.

Clarin intend to sue and political opponents have pointed out that in a recession there were better things the money committed to the 10-year deal could have been spent on. However, the underlying issue from a football perspective is the state of the game in Argentina. The country produces some of the best players in the world, but most teams are on the financial rocks with deep and growing debts, the result of poor management, corruption and a weakening international market for star performers. Many clubs have been unable even to pay salaries and together they owe the government $100m in unpaid taxes. Even though fewer Argentinian stars are now making the move to Europe, there are still many that play there for bigger salaries so many clubs field teams made up of a mixture of youth players and veterans.

Argentina is the classic case of a potentially rich country ruined by its politicians. The damage spills over into football because this is a country where football and politics is inextricably linked. Winning the World Cup in 1978 gave the military junta then in charge a much needed popularity boost and it has even been alleged that they bribed an opposing team to ensure Argentina's progress. The junta went to the lengths of abolishing relegation to build support when popular teams were threatened with going down to a lower division. Mauricio Macri, the mayor of Buenos Aires, built his reputation by successfully running Boca Juniors, the capital city's biggest club alongside River Plate where the club presidency is currently being contested. Such jobs are keenly sought despite the financial problems and whoever wins may have a bigger pot of television money, seemingly provided by the Kirchners, but actually by the taxpayer.

Sports Goods Industry Lines Up for World Cup - 15/8/09

The sports goods industry is hope that next year's World Cup will help it to revive its flagging fortunes. Puma, the continent's leading football brand, particularly hopes to boost sales. Chief executive Jochen Zeitz commented. 'The soccer championship in South Africa will be a home match for us. Nobody has such a deep understanding of the African market as we have.' In the past year the continent accounted for about 3 per cent of Puma's €2.5bn revenues. This may seem a small slice of the total market, but sales of football, shoes and apparel have doubled every two years in Africa. Puma is confident that revenues on the continent, with its almost 1bn inhabitants, would continue to grow faster than elsewhere. Puma, which is trying to make up lost ground on rivals Adidas and Nike, may not have as big a marketing budget for the World Cup as these competitors. But it sponsors 11 African teams, as well as Cameroon football star Samuel Eto. Puma is a supporter of the 'Cotton made in Africa' initiative which aims to improve the lot of African cotton farmers. Unfortunately, US and EU subsidies to their cotton farmers squeeze them on the world market.

However, Mr Zeitz has warned that a good World Cup cannot compensate for the state of the world economy. All sporting goods makers are grappling with the effects of the global economic crisis, currency volatility and higher sourcing costs. Puma's profits sunk to almost zero in the first quarter of 2009 as it launched a €110m restructuring programme. But its profit rebounded to €63m in the second quarter, representing a slight year-on-year increase. In some ways Puma, which is majority owned by French retail conglomerate and luxury group PPR, has weathered the economic crisis better than its rivals. Analysts considered it has streamlined its cost base effectively while Adidas was obliged to undertake a speedy restructuring because of problem areas that hit profits hard.

Debt crisis threatens Argentine season - 6/8/09

Argentine football fans face the prospect of a delayed start, and possibly the suspension, of the coming season. Argentine Football Association (AFA) spokesman Chequis Blaio said that 'No games will start at any level.' Not surprisingly, this upset some of the most dedicated fans in the world and the AFA headquarters was sprayed with graffiti. Tension between the country's top clubs and cable television providers has been brewing for weeks as the country's top league teams trying to extricate themselves from debts estimated at $300m. Argentina has been hit by the global recession and many commentators consider that the current government has mismanaged the economy, doctoring statistics to make out things are better than they really are. To try and solve the debt problem, the AFA is lobbying to squeeze more money from television rights. AFA supremo Julio Grondona is pushing for $720m per season, almost three times the current rate. 'The money that television gives us doesn't suffice. Once and for all, we want figures that football deserves,' the embattled AFA president said.

Top-flight football is currently accessible on a pay-per-view basis. The AFA, which has long complained that television rights are undervalued, is pushing to move games to open view and have cable television rates increase accordingly. Mr Grondona thinks that everything would be sorted with an extra 12 pesos ($3.14) monthly subscription. But any increase is highly unpopular with the football-mad public who claim they already pay more than the international average. These complaints have some justification particularly if one considers GDP per capita. However, the television industry is not prepared to back down. Instead, they have offered a $40m upfront payment to deal with current debts. As far as the AFA is concerned, this is nothing more than a sticking plaster. And, as is so often the case, the fans are caught in the middle.

B League Decline in Spain - 19/7/09

Aside from those teams relegated from La Liga, Spain's second division has also included the reserve teams of the country's top soccer clubs, known as B teams. These B teams allowed sides to nurture new talent at minimal cost, as well as to recycle older players. But reserve teams cannot play in the same division as their senior team, and are thus ineligible for promotion to La Liga. Reserve teams are also no longer permitted to enter the Spanish Cup. In short, there is often no incentive for a reserve side to do well. This was illustrated last season by Sevilla Athletico, Sevilla's reserve side, which won one only one game all season and was relegated to the third division, known as Segunda B. Following the Bosman ruling, young players who do not quickly make it up to the main team move on to other sides. When players move on, they are often replaced by younger players who are not up to the standards required, unless they are foreign players.

Villareal B was promoted from the Segunda B two seasons ago and is one of the few sides in Spain to invest in developing new talent. Team president Josι Mauel Llaneza told El Pais. 'We invest around €5m in young players and around 40 per cent of that amount goes to the reserve side.' Villareal B coach Juan Carlos Garrido said, 'We try to find a balance between young players who want to move up and older players who are happy playing at the second-division level. I have to say we are a bit tired of playing against second division sides who are not really interested in winning and are barely able to play well enough not to lose every time.' Espanyol B, who moved from the fourth to the third division, partly through the use of more experienced players, think there is too much pressure on younger players to move up. The side's coach, Josep Manel Casanova, commented, 'If a player is any good, then he is immediately on track to move to the main team, or to another in the second division. The agents are as much to blame. It creates a lot of instability.'

Real Supremo Demands Euro Super League - 5/7/09

Florentine Perez, the recently elected big-spending president of Real Madrid, wants a European Super League and is ready to take on Uefa if they do not adapt the Champions League to better suit the ambitions of the biggest clubs. 'We have to agree a new European Super League which guarantees that the best always play the best - something that does not happen in the Champions League,' Perez said on Spanish television. He indicated he would push for a breakaway 'closed shop' competition if Uefa does not consider his proposal. He says that he does not want to replace domestic competitions, just guarantee that top clubs could rely on participating every season in a lucrative elite competition, no matter where they finish in their domestic league.

The last serious attempt to form a rebel European league in the late 1990s was led by A C Milan. Uefa responded by offering more Champions League places to clubs from the stronger domestic competitions, notably England, Italy and Spain.

Potential members of such a league include:

  • England - Arsenal, Chelsea, Liverpool, Manchester United
  • Italy - A C Milan, Internazionale, Juventus
  • Spain - Barcelona, Real Madrid
  • Scotland - Celtic, Rangers
  • One each from France (Lyons); Germany (Bayern Munich); Greece (Olympiakos); Portugal (Porto)

Expatriates Dominate Champions League - 25/6/09

Expatriate players dominated the 2008-9 season in the Champions League, according to data from www.eurofootplayers.org. Expatriates made up 55.9 per cent of all players, 2.1 per cent more than last season. They also played just under 60 per cent of all minutes played. The club that used the most expatriate players was Arsenal with 82.8 per cent in the squad and 92.7 per cent on the pitch. As in last season, the North London club was also the club with the youngest players, 22.7 years on average. With 90 players, Brazil was the most strongly represented country, but the number of Brazilians was 17 down on last season. France, Spain and Italy, followed by Argentina, were next in the rankings. England was represented by only 30 players, positioning it 7th in the ranking, just ahead of Germany. The club that played the most home grown players (46.7 per cent) was also the winner, Barcelona.

How will Real Madrid pay for Ronaldo? - 14/6/09

Real Madrid have said that they have a €300m transfer budget his summer, but €68m went on Kaká followed by €92m on Ronaldo. It is understood that €100m will come from cash in hand, €100m from additional revenues hopefully generated by new players and €100m from bank loans. The Spanish economy may be in dire straits, with banks not lending to anyone, but they have been prepared to give Real Madrid a four year €300m facility. Real has been hit by the loss of sponsors and corporate hospitality during the recession, but it is still among the richest clubs, if not the richest, in the world in terms of cash flow and assets. With 50 per cent of the commercial rights, and the chance that signings like that of Ronaldo, will boost merchandising income, the club believes that the deal makes business sense. A club insider told the Financial Times, 'It is better to buy Ronaldo for €92m than pay €20m for a player of slightly less calibre and profile.'

Real's spending is being masterminded by Florentino Perιz who was restored to the club's presidency on June 1st. He has promised to spend heavily to restore the club to the summit of Spanish and European football. His 'galacticos' spending spree at the beginning of the decade was underpinned by the proceeds of the redevelopment of the club's old training grounds on Madrid's northern fringe. Pιrez is the chairman and main shareholder in construction group ACS. As Spain's largest builder and civil works contractor, the company has been hit hard by the global recession. But ACS is in better shape than most, which is a testament to Mr Pιrez's commercial acumen and a huge circle of influential friends and contacts. He has a net worth of £1bn and was taken to his first Real match at the age of four. During his first presidency of the club from 2000 to 2006, his big spending ways and ambition won him many admirers.

Spanish Football Broadcast Rights Settled For Next Three Years - 12/6/09

While most of the Spanish sports media concentrated on the double transfers of Kaká and Ronaldo to Real Madrid, another important football-related event occurred last week in the Spanish capital. After three years of court cases, confusion and chaos the broadcast rights to La Liga and the Copa del Rey (the Spanish FA Cup) were finally settled. From next season and lasting until season 2011/12, following an accord between Sogecable and Mediapro, all matches will be shown on Digital + except for the final of the Cup which is considered an event of national importance and will therefore be shown on terrestrial free-to-air. The agreement means Digital+ get the Sunday night match exclusively with the rest of the games shown on a non-exclusive basis - two games a week on pay TV and the rest most likely to be shown on a pay-per-view basis.

The dispute had started in 2006 when an agreement was drawn up between Sogecable and Mediapro which meant any future rights acquired by Mediapro had to be transferred to AVS (owned by Sogecable), while it had to pay for transmitting AVS games and not show any others. By 2007/08 Sogecable was insisting that Mediapro held to the 2006 agreement, while Mediapro on the other hand believed that the agreement was void. From 2007, Mediapro had been steadily acquiring individual broadcast rights from football clubs, reaching agreements with all of Spain's leading football teams, including Barcelona and Real Madrid, for five years starting season 2009/10 (the Real Madrid deal alone was worth €1.1bn and that with Barca €1.0bn). To the anger of Sogecable, Mediapro had been showing some first division matches live through its free-to-air La Sexta channel while AVS had been transmitting the same matches through its pay-per-view channel Digital+.

Confused? So was the judge presiding over the dispute. It was he who had originally ruled that he did not want to prohibit games being transmitted that could be contrary to the legal obligation to transmit free-to-air games of "national general interest" and it was this ruling that had allowed the dispute to fester. Not only that, but although the broadcast schedule has been settled the case for Sogecable's compensation is still continuing.

Serie A The Fastest Growing League - 7/6/09

Serie A was the fastest growing league in Europe in the 2007/8 season reveals the latest Deloitte Football Finance report. Total revenue increased by €357m (34 per cent) to €1.4 billion. The change of mix of clubs in Serie A for 2007/08, notably Juventus' return, contributed two-thirds of the increase. The other clubs increased revemues by c. €120m aided by new broadcasting contracts. La Liga recorded a 8 per cent (€112m) growth in revenue to €1.4 billion, placing it joint second with the Bundesliga which grew by 4 per cent (€59m). La Liga's growth was driven by Real Madrid and FC Barcelona, the world's highest and third highest club revenue earners in 2007/08.

Total wage costs for the 'big five' European leagues were €4.8 billion, €588m (14 per cent) higher than in 2006/07. All of the 'big five' leagues experienced significant wage cost growth, with Serie A (€250m) and the Bundesliga (€105m) providing the largest increases. The wages/revenue ratio of La Liga was 63 per cent whilst Serie A's was 68 per cent. France's Ligue 1 joined Serie A in returning operating losses due to limited revenue growth outweighed by significant wages and other costs growth.

 

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