What can we expect in 2012 in terms of the business side of football? It’s an almost unanswerable question because no one knows for sure what is going to happen to the world’s main football economies, those of Europe. Asian countries are, of course, big and growing customers for televised games and the prospects there look reasonably good.
What can we expect in 2012 in terms of the business side of football? It’s an almost unanswerable question because no one knows for sure what is going to happen to the world’s main football economies, those of Europe. Asian countries are, of course, big and growing customers for televised games and the prospects there look reasonably good.
No one is forecasting any significant recovery for European economies in 2012. The big question is whether they will enter another recession. That in turn depends on what happens in the eurozone crisis. Italy in particular has to finance a big tranche of debt in the first three months of the year. If Italy can’t sell its debt, the whole eurozone is at risk. For what it’s worth, my bet would be that although it is possible that Greece may exit, the eurozone as a whole will survive because Germany wants and needs it to succeed.
Football came pretty well out of the crash of 2008. Fans in the stadium continued, by and large, to turn up and fans on the sofa at home continued to pay to watch live football. Benefactors, the ultimate glory seekers, continued to pour money into clubs.
However, football is in less good shape to survive a second hit from the economy. Debts have mounted. In Britain, incomes have been squeezed by wage rises that have not kept pace with inflation, although inflation should ease as the year goes on.
In Spain it appears that the size of the deficit is bigger than was thought and this is going to require even harsher austerity measures. Unemployment is already at 23 per cent. Spanish football is simply not profitable. In large part it has been kept going by public funding, some of it relatively transparent (e.g., for stadiums) other payments less so. But with the country in crisis, vital public funding is slowly being withdrawn.
Italy has deep structural problems in both its economy and football which are not going to be changed in the short term by a government of technocrats. Germany’s economy would be hit hard by a European slowdown and it has structural weaknesses which are talked about less than its strengths. But German football is probably in as good a shape as any major European country to survive a second recession.
What is the case is that there is now a dearth of quality investors. Some have been exposed by the recession and shown to have bigger mouths than wallets. A lot of the investors who were prepared to spend big to obtain prestige through football now have clubs. This makes it very difficult for clubs like Everton that badly need new investment or clubs like Hearts that are beset by financial crisis. Indeed, it looks like another difficult year for Scottish football.
We can certainly expect more clubs to go into administration, although hopefully none will come as close to the brink of extinction as Plymouth Argyle did in 2011. Financial fair play is starting to affect the spending behaviour of big clubs but some of the biggest problems have been in the lower reaches of the Football League and the non-league system where some clubs have disappeared altogether.
So as well as talking about dodgy decisons by officials we can expect fans to be talking about dodgy finances and we will try and bring you informed accounts of the latest developments as they happen.