Category Archives: Football Business

Watch and Learn: A Day out at the Hong Kong Homeless World Cup Fundraiser

In the era of the Premier League, the Champions League, the World Cup and live television broadcasts, it’s easy to forget what football really means to those of us in Hong Kong.

There’s no shame in that. No one here really roots for China in international football—politics aside, China is as far from a footballing powerhouse as it can be, and its national football team is more likely to be an almighty embarrassment than any source of pride—and Hong Kong football just can’t compete on an international level.

That the Hong Kong Football Association is constantly trying to find ways to drum up interest in the Hong Kong Premier League despite such fanatical following of European football week in, week out, is a damning reflection of the dominance of imported football content over “real” football.

So to spend a couple of hours at the fundraising tournament for Hong Kong to send a team to the 2014 Homeless World Cup in Chile, hosted at the MacPherson Stadium in Mong Kok, was a welcome break and a reminder of the place football can, and does, have in our lives.

The ubiquity of European football—the Premier League is the king of all leagues, due to the massive influence that Britain had over Hong Kong culture and daily life during its occupation until 1997—and footballing superstars have over football fans here is always interesting and mildly amusing.

There aren’t many structured youth football programs here, probably because the fierce academic competition and rigorous education system here lends parents to send their kids off to after-school tutoring and other resume-strengthening activities rather than ferrying them to football training. So instead of any dribbling drills or passing practice, kids are out practicing free kicks and long shots in their own attempts to replicate what they see on their TV screens.

So instead of any natural interest in pickup football on the streets leading to a fanatical following of TV football, it’s actually the other way round: It’s what we see on TV that compels us to play.

Small wonder, then, that any game on the public concrete and asphalt fields usually features frequent breaks in play and generally peters out in intensity after 30 minutes: There’s no stamina or physical strength underneath the flashy tricks and occasional golazo attempts.

I myself am guilty—a frequently-used, self-deprecating yet depressingly true description is that I’m a Steven Gerrard who plays with the intensity of Dimitar Berbatov. That in itself—the yearn to score blockbusters and take set pieces but not willing to do the dog work on the pitch (or, more accurately, not willing to put in the effort to gain the stamina to do so)—is more or less indicative of the general “attachment” to football here.

Hong Kong commits itself to watching imported football rather than actually playing it.

It was both slightly amusing and mildly vindicating to find out that one of Hong Kong’s most well-known and well-regarded Cantonese football commentators, Mr. Lee Tak-nang, was not only present at the event as an emcee of sorts, but that he was the vice-chairman of the Homeless World Cup Hong Kong organizing committee. (He decided to turn up in a Brazil jersey.)

But it was the presence of another famous football name in town, and a revelation from a photographer that really hit home.

Detinho, one of the best players to play in Hong Kong in recent years—he signed for famous local club South China aged 33, proceeded to score 52 goals in 56 league games over three years, and is still going strong for Citizen—was a spectator. According to the photographer, who was also one of the organizers, “even Detinho needs to start looking for a job.”

Detinho, a household name in Hong Kong football
Detinho, a household name in Hong Kong football

 

Unlike the stars we see on TV, who boast flashy lifestyles and command weekly wages that are enough to make most people’s eyes water—even the wages of an average Premier League footballer, if managed right, mean that he can retire with financial comfort—here was Detinho, a local star by all accounts, needing to “start looking for a job.”

What about the others?

“Well, the goalkeeper is a compulsive gambler who just likes playing football.” The goalkeeper in question, of course, is the starting goalkeeper of the Hong Kong representative team that will travel to Chile for the Homeless World Cup. He’s a gambling addict, a “problematic” member of society.

Founded by Mel Young from Scotland and Harald Schmied from Austria, the Homeless World Cup had its inaugural tournament in Graz, Austria in 2003, after the idea came about at a Cape Town conference on homelessness. Hong Kong first sent its own team two years later, courtesy of the fundraising and coordination efforts of the Society of Community Organization and Wofoo Social Enterprises of Hong Kong.

The 2005 tournament saw Hong Kong send its first ever representative team to Edinburgh, after they managed to raise about HKD240,000 in funding, according to the official Homeless World Cup website. They finished 21st out of 27—just about in line with their professional counterparts.

It was evident that both the organization and the cause have come a long way: A total of 24 teams, including those from such companies as A.S. Watson Group, Konica Minolta and Bubble Yum, paid HKD15,000 each to enter the fundraising tournament on Saturday.

Many of the post-match write-ups about the fundraising event focused on Sunday instead—the event took place over the weekend at the same venue. Sunday was the more newsworthy date: Members of the Legislative Council, as well as a few celebrities, took part in an exhibition match, with controversial politician “Long Hair” Leung Kwok-hung featuring as one of the players. Carrie Lam, the Chief Secretary for Administration of the Hong Kong Government, gave a keynote speech highlighting the impact of homelessness in society.

But that very occurrence belied the fact that homelessness was the issue at the crux of the event, for the media and the celebrities—barring Detinho and Mr. Lee—didn’t show up on Saturday, which was when the real action took place.

Saturday was when the teams that actually paid a large sum of money took to the concrete fields and played 4-a-side. Saturday was when those 24 teams each had their own supporters—coworkers, friends et al—cheering them on the pitch, occasionally complaining and cursing (as football fans are wont to do).

It was only on Sunday when, after the qualifying rounds on Saturday, the Hong Kong representative team actually won the fundraising tournament, the first time in the fundraiser’s 10-year history.

(Edit: My original piece had Sunday down as only a “celebrity” exhibition match. I’ve since had it clarified that Sunday was the final that saw the Hong Kong team win.)

 

The Hong Kong representative team warms up on the side of the mini pitches.
The Hong Kong representative team warms up on the side of the mini pitches.

Turns out you don’t actually have to be homeless to play on a Homeless World Cup team.

I was told at the event by a few members of the organizing team, as well as a new friend who had introduced me to the event and to members of the team, that “they can’t really pick actual homeless people, just to ensure that the team does decently at the tournament.”

This was where the subsequent coverage of the fundraiser in Hong Kong and the official Homeless World Cup website seem to differ slightly: A Wall Street Journal report said that participants qualified by having been homeless at some point in the last five years, while the official tournament website seems to emphasize the “homelessness” of participating players.

 

(Edit: I’ve since had it clarified with the Homeless World Cup organizers that participating players must meet one of the following criteria:
– Have been homeless at some point after September 1, 2009, in accordance with the national definition of homelessness;
– Make their main living income as a street paper vendor;
– Asylum seekers currently without positive asylum status or who were previously asylum seekers but obtained residency status after September 1, 2009 (only two members of a team may have non-national passports; all other players must have a national passport of the nation they represent);
– Currently in drug or alcohol rehabilitation and also have been homeless at some point in the past two years

So while teams might not pick players who are currently homeless, all players on the Hong Kong team meet at least one of the above criteria. This expansion in the eligibility requirements is down to the interpretation that homelessness is the result of other vices like alcohol and drug abuse, and not the cause.)

 

In hindsight, choosing to go on the Saturday turned out to be the right decision. I didn’t return for the higher-profile Sunday, but in a strange way the lesser attention and commotion on site on Saturday meant that the focus was solely on the football and on the cause that the entire tournament supported.

For a fundraising event for a charity tournament abroad, you’d think fashion and design would be one of the lowest priorities on the day. Yet taking center stage, sandwiched right between the two mini pitches, was a row of mannequins dressed in the Hong Kong team jerseys of years past—perhaps to commemorate the 10th anniversary of the Hong Kong representative team.

 

Mannequins modeling Hong Kong team jerseys for previous tournaments
Mannequins modeling Hong Kong team jerseys for previous tournaments

 

After an hour or two onsite, I started to make my way back to the bustling streets of Mong Kok and head off to my next destination via the subway. Next door to MacPherson Stadium is a favorite hangout of local youths, where street dancers, band performances and middle-aged ladies dressed in bizarre costumes singing karaoke on the sidewalk share a pedestrian-only walkway.

Right at the end of the street, there were two teenagers just beginning a football freestyle routine, complete with catchy electronic background music. I saw people come and go without much interest. It was the least-noticed and least-observed performance of the entire street.

After 15 minutes, I had to get going. The skills on the street were all well and good, but the first game of the new Premier League was kicking off in a couple of hours. I had to eat first before I could sit down and watch my football.

The Business of World Cup Branding and Sponsorship

After the 32 participating nations announced their World Cup squads and most domestic football leagues around the world wrapped up their seasons, the attention has turned firmly to the action that has now begun in stadia across Brazil this summer.

Cue the spectacular advertising campaigns put on by brands and companies the world over, in a bid to cash in on the World Cup. Traditional sportswear powerhouses like Nike and Adidas have gone head to head in the production of high-budget commercials and promotional projects featuring footballing superstars, while companies that by nature don’t have anything to do with football—take Pepsi and Samsung, for example—have built a roster of star players to feature in their campaigns.

From official “FIFA Partners” to “National Supporters,” from “FIFA World Cup Sponsors” to unrelated companies targeting the football-fan demographic, the World Cup this summer features a multitude of brands competing for their ideal target market—FIFA has even designed and implemented a three-tier sponsorship structure to amplify and increase the profitability of the marketing frenzy in their flagship tournament.

Even the footballing action is and will be dominated by sponsors: the flashing billboards adorning each stadium, the official live broadcast coverage partners, the athletic gear worn by the players—given the frenetic advertising environment, perhaps international football should receive some credit for not yet caving into the lucrative practice of featuring official sponsors of national team kits.

The nature of the World Cup, and the reverence with which its fans and participants treat its ultimate prize, mean that football will be the main star in Brazil this summer. But that hasn’t stopped—and won’t stop—the considerable momentum that the branding and sponsorship activities have built over the years in their evolution into a prominent sideshow to the tournament.

How It All Began

It wasn’t always this way. There was a time when the World Cup—even professional football altogether—was just about the sport. But the phenomenon of television changed things forever.

The impact of television on the World Cup’s worldwide commercial boom cannot be understated: According to TIME, the number of TV sets worldwide “increased more than twentyfold” from 1954 to 1986, “from a little more than 30 million to more than 650 million,” laying the foundations for a truly groundbreaking moment in football history.

While the first live World Cup games, broadcast in Europe for the 1954 tournament held in Switzerland, reached only a handful of audiences due to the low number of matches shown, the potential of television and TV advertising was already apparent. In 1974, new FIFA president Joao Havelange turned his organization into a modern international NGO upon taking office, as he put in place the infrastructure, people and income-drive of a corporation to conquer the world of football and reap the ensuing economic benefits.

After the rapid expansion of the World Cup tournaments under Havelange’s watch—he added eight participant slots to the tournament, while also introducing other versions of the World Cup, including the U-17 and U-20 iterations, as well as the Confederations Cup—came the idea of corporate sponsorship to help bear the costs of hosting a global tournament in one country.

Thus came money-spinning deals with Adidas and other big-name corporations like Coca-Cola to finance the tournament, while television advertising, which had grown to become a huge cash cow with the boom of TV, led to increased premiums for marketers to get their spots and campaigns onto World Cup TV screens.

The Golden Era of World Cup Sponsorship

The sponsorship boom that began under Havelange has been taken to unprecedented new levels during the tenure of current FIFA president Sepp Blatter. According to a UPenn study, the stellar lineup of corporate FIFA sponsors (otherwise known as their “partners”) for the 2010 World Cup in South Africa included Adidas, Coca-Cola, Emirates Airlines, Hyundai-Kia Motors, Sony and Visa—who were “guaranteed exposure in the tournament stadium” and would receive “direct advertising and promotional opportunities and preferential access to TV advertising.”

The cost involved in partner-level sponsorship of the 2010 tournament was a commitment of a minimum of between 100 and 200 million euros through 2014, while “FIFA World Cup Sponsors” would collectively invest around 50 million euros through 2014.

As a result, FIFA’s revenues from the South Africa tournament reached a staggering $1.022 billion, and FIFA was to provide $420 million to all participating national teams and the football league teams providing players to those national teams. $30 million would go to the World Cup-winning team (Spain), while first-round teams automatically qualified for $8 million each. $1 million in preparation costs were provided to each participating football association.

So, yes, it’s a sporting achievement and an indication of a country’s footballing proficiency to qualify for a World Cup—but it’s also a great way for national football associations to make money. Football—and the World Cup—can no longer be considered as its own entity, separate from the clutches of money. After a period of explosive growth and the influence of a few key players, the World Cup and money have become intimately intertwined.

FIFA has ridden on this wave to further corporatise and globalise itself. Since introducing the World Cup in the United States in 1994, a move that proved to be a stunning success (USA 1994 still holds the total attendance record and average all-time attendance record), the World Cup has since traveled to Asia (2002), Africa (2010), and will go to Russia in 2018 and the Middle East in 2022. According to the Telegraph, Blatter has even entertained the idea of hosting the 2022 tournament across several countries in the Gulf region, which would multiply the brand and advertising exposure for FIFA’s partners across geographies.

To Sponsor or Not to Sponsor?

It’s not only the football that wins, however—after all, there has to be an inherent attraction to becoming a World Cup sponsor in the first place. Otherwise, brands wouldn’t be tripping over themselves to secure eye-watering contracts with national teams, players and the tournament itself.

So grand is the World Cup stage, that even smaller brands and smaller teams involve big sums of sponsorship money. Spain’s Joma sponsored Honduras in 2010 for $2 million a year, while China’s Hongxing Erke Group paid $7 million a year for the North Korean team.

But the battle is always at its most intense at the top of the footballing hierarchy, simply because a brand’s association with a team’s success will do wonders for its own brand performance, not least in terms of direct revenues. The UPenn study cites forecasts that the Adidas’ sales in the domestic Spanish market would grow by 8% if Spain won the World Cup in 2010 (they did), which would mean an overall 50% increase in Adidas’ sales from previous forecasts for 2010.

A continued association with success is also the driving force behind Nike’s contract with high-profile teams like Brazil, Portgual and the Netherlands, which guarantees a high level of visibility for the million-strong World Cup audiences around the globe. As the apparel hits stores worldwide ahead of, during and after the tournament, money will flow into the coffers of these high-profile brands, and even more so if their sponsored national teams perform well.

This explains the recent trend of new national team kit designs almost once a year: Brazil, England, Germany, Spain, Argentina and France are all examples of world-famous teams who have launched high-profile events and flashy marketing campaigns in conjunction with big-name sportswear companies and top international stars. And there are still those companies outside the sports arena that have allocated major funds and expensive campaigns to up their branding and advertising ante with the World Cup on the horizon.

Without doubt, the growth in sponsorship opportunities have provided many an ambitious brand to take advantage of World Cup to reach out to bigger audiences and rake in the ensuing benefits. But this path must be treaded properly.

The danger is that new kit launch events and over-the-top advertising campaigns have become hype machines that serve no purpose, and the risk is that the ever-expensive replica kits—one of the many inevitable products of the evolution of branding and sponsorship into World Cup sideshows—have become out of reach financially for that most important demographic when it comes to the most famous football tournament on earth.

For what is the World Cup without the common football fan?

 

This article first appeared on Outlook India, as “The Branding Business: How branding and sponsorship have evolved into a prominent sideshow to the World Cup.”

Power Ranking the 2014 FIFA World Cup Stadiums

With the World Cup just around the corner, excitement is well and truly brewing. Construction workers in Brazil are frantically putting the finishing touches to a stellar lineup of stadiums ready to host fans the world over for a month.

There have been many obstacles along the way, notably the well-publicized construction delays that have led to criticism directly from FIFA, but it looks as if the construction will be carried over the line in time for the tournament—just.

Here we rank the 12 World Cup stadiums this summer, based on a number of criteria: geographical location, game significance, structural features and importance to the community.

Let us know your thoughts in the comments below.

 

All stadium information provided by the World Cup Portal, the official Brazilian Federal Government website on the 2014 FIFA World Cup.

12. Arena Pantanal (Cuiaba)

12. Arena Pantanal (Cuiaba)

Jose Medeiros/Associated Press

Geographical Location

Cuiaba’s Arena Pantanal is last on our list, and its geographical location is a major reason behind its low ranking: There is no team in the state that plays in Brazil’s top football division, making this 41,390-seater a likely candidate to become a white elephant after the World Cup.

After the tournament, the arena will “turn into a new leisure venue for locals,” according to the World Cup Portal, which goes to show just how unimportant this stadium location was in the first place.

 

Game Significance

That the ground will only host four group stage matches doesn’t help its ranking on our list either.

While Chile-Australia, Russia-South Korea, Nigeria-Bosnia-Herzegovina and Japan-Colombia are all interesting matchups in their own right, the fact that none of the big boys will be on show in the Arena Pantanal says it all about its significance.

 

Structural Features

Since it is a brand-new stadium for the World Cup, modern architectural features and fan-friendly accessibility factors do redeem the Arena Pantanal somewhat.

It has 90,000 square meters of promenade surrounding it, while 20 entrances, 79 turnstiles, 20 staircases and 12 elevators will provide fans a spacious environment to enter and exit the stadium.

There are also 32 food kiosks, three restaurants, 97 boxes and 66 lavatories, making it a fan-centric modern structure.

 

Importance to the Community

Legacy inside and outside of football is very much part of FIFA’s lexicon when it comes to hosting World Cups across the world.

In the Arena Pantanal’s case, since there is no local first-tier team that will be able to make use of such a grandiose new construction project, there is no choice but for the stadium to turn into a multi-purpose venue after the tournament.

Whether that is “important” to the local community or simply a convenient reason for Cuiaba to be a host city is entirely up to you.

 

11. Arena Da Amazonia (Manaus)

11. Arena Da Amazonia (Manaus)

Jose Zamith/Associated Press

Geographical Location

The Arena da Amazonia is another stadium whose geographical location just doesn’t help itself.

Sure, you can argue that hosting a World Cup match so close to the Amazon makes for an exotic experience, but the traffic and the climate there—not to the mention the sheer distance from everywhere else—makes Manaus a royal pain of a venue.

There’s a local adage that goes: “There are two seasons in Manaus—summer and hell.” And there’s a whole article on CBS News (and other various news outlets) on just how challenging the Manaus location is.

 

Game Significance

The most high-profile match here is Group D’s clash between England and Italy—not that Roy Hodgson and his team will enjoy traveling such a long distance for an already tough match on paper.

Manaus was never going to host more than the standard four group-stage games: It would have presented too much of a logistical challenge otherwise.

 

Structural Features

What you can’t deny is the spectacle that the Arena da Amazonia is as an architectural feat. The 45,500-seater takes inspiration from an “indigenous straw basket, full of Brazilian fruit,” according to the World Cup Portal, which is its most distinct feature.

Seven colors in various tones of yellow, orange and red are represented in the stadium seats, while the stadium facade itself looks like a basket from the X-shaped metal modules. (We considered moving it up our rankings because of these unique features.)

 

Importance to the Community

Yet for all of its vibrant colors, the Manaus area really doesn’t have a pressing need for a state-of-the-art new football stadium, not least because of the transportation problems the city will likely encounter for its matches.

Here‘s a revealing statement from the Telegraph that shows just how “important” the stadium will be:

There has been some speculation that it might be used as a prison after the World Cup to relieve overcrowding elsewhere.

Legacy indeed.

 

10. Arena Da Baixada (Curitiba)

10. Arena Da Baixada (Curitiba)

Alexandre Carnieri/Associated Press

Geographical Location

Outside of sports, Curitiba has long been recognized for its central role in Brazilian economics; indeed, it was awarded the Global Sustainable City Award in 2010, which recognized the city’s sustainable urban development.

The Arena da Baixada finds itself in one of the most desirable cities in Brazil.

 

Game Significance

Despite its ideal location, the Arena da Baixada plays host to a disappointing four matches this summer, and none of the fixtures on show in Curitiba is a mouthwatering clash.

 

Structural Features

With a capacity of 43,000, the Arena da Baixada is a respectable arena that is also the home stadium of Atletico Paranaense, who also own and operate it.

Rising like a concrete box in the middle of the city, the Arena is a structurally impressive stadium: Its ground facade is almost see-through, meaning that people outside of the stadium are able to look inside towards the ground.

The 48 kiosks and four restaurants for food, as well as the 884 underground indoor parking spaces, make it a strong contender in the accessibility category.

 

Importance to the Community

Construction delays and failure to meet the agreed FIFA timeline is one of the reasons the Arena da Baixada ranks so low here. As of May 15, it was one of three World Cup stadiums yet to be completed, according to Yahoo!, while a test match in mid-May saw bulldozers parked outside with construction material piled up.

Curitiba was nearly excluded from the tournament outright because of “chronic delays that were caused mostly by financial shortcomings.” Certainly not encouraging.

 

9. Estadio Beira-Rio (Porto Alegre)

9. Estadio Beira-Rio (Porto Alegre)

Gabriel Heusi/Associated Press

Geographical Location

In terms of location, the Estadio Beira-Rio in Porto Alegre is arguably one of the most fitting venues in Brazil to hold World Cup matches. The city features one of the most intense cross-town rivalries in Brazilian football—Internacional and Gremio.

It is also the southernmost stadium out of all 12, which means that colder temperatures are likely.

 

Game Significance

With five matches to host, the Estadio Beira-Rio slightly outperforms its predecessors on this list. France, the Netherlands and Argentina are among the high-profile teams to play their group stages matches in Porto Alegre, while it is also set to host a round-of-16 match.

 

Structural Features

Unlike the stadiums at Cuiaba and Manaus, the Estadio Beira-Rio is not a completely new structure; rather, the redeveloped design accentuates the already striking facade to present one of the most memorable out of the 12.

It also hosts a respectable 50,000 seats, and after redevelopment, the stands have been moved closer to the pitch for a better fan experience. The 22 bars and snack bars and the 44 shops will add to a few good days out in Porto Alegre.

 

Importance to the Community

With football such a prominent part of the Porto Alegre community, the Estadio Beira-Rio commands an even more premium location, on the banks of the Guaiba River and extremely accessible from the main hotels and the airport.

The only major piece of negative news is that as recently as this March, its mayor claimed that it might drop out of the World Cup because of insufficient funding (via the BBC). For such a football-mad city, that is quite unbelievable.

 

8. Arena Fonte Nova (Salvador)

8. Arena Fonte Nova (Salvador)

David Campbell/Associated Press

Geographical Location

Known as the capital of happiness in Brazil, Salvador is host to the annual Central do Carnaval, and it seems natural to bring the World Cup to a city with a party atmosphere.

Situated close to the seaside, the Arena Fonte Nova enjoys a spectacular view and stands out as a space-age construction amid buildings of modest height in a bustling city.

 

Game Significance

The Arena Fonte Nova will host six matches this summer, with four group matches (featuring such heavyweights as Spain, the Netherlands, Germany, Portugal and France), a round-of-16 match and a quarterfinal.

 

Structural Features

With a capacity of 55,000, Salvador’s stadium is one of the most impressive constructions to feature this summer. Having been constructed for the Confederations Cup, the Arena Fonte Nova has a distinctive “horseshoe” area that will support 5,000 removable seats for the tournament only.

Perhaps worth noting is the fact that it was the first to secure a naming rights agreement among the 12 World Cup stadiums, with the Brazilian brewery Itaipava signing a sponsorship deal worth $100 million lasting until 2023.

Construction faults led to blind spots from several areas inside the stadium during its inaugural match, however, while heavy rain caused a section of the roof to collapse in May 2013, affecting this otherwise remarkable stadium’s ranking on our list due to safety issues.

 

Importance to the Community

Salvador’s central role in Brazilian entertainment will likely have been a big factor behind the decision to host World Cup matches in the city, while there are already longer-term plans for the stadium after this summer: It will be one of the venues used for the football competition in the 2016 Summer Olympics.

 

7. Arena Castelao (Fortaleza)

7. Arena Castelao (Fortaleza)

Fabio Lima/Associated Press

Geographical Location

Fortazela is one of three major cities in Brazil’s north-east alongside Recife and Salvador, both of which are also World Cup host cities this summer.

 

Game Significance

The Arena Castelao will play host to six matches this summer, including four group-stage matches, a round-of-16 match and a quarterfinal.

Besides featuring crowd favorites such as Uruguay, Germany and Ivory Coast, Fortaleza will also see the Brazilian national team play on home soil in a Group A game against Mexico, which is sure to be a spectacle.

 

Structural Features

The Arena Castelao seats an impressive 63,903 people and has been refurbished to make the World Cup this summer.

An interesting architectural feature is its glass skin, which reduces heat inside the stadium. Its huge roof is also coated with a material that “allows for the circulation of air in the stadium,” and “provides soundproofing and ideal shade for television broadcasting.”

 

Importance to the Community

Surprisingly, the Arena Castelao has hosted two large-scale and high-profile religious events. In 1980, Pope John Paul II brought 120,000 followers to the celebrations of the 10th National Eucharistic Congress at the stadium.

In 1995, 50,000 followers gathered for the farewell of Dom Aloisio Lorscheider, the archbishop of Fortaleza, confirming the stadium (then yet to be redeveloped) as an important center-piece in its citizens’ lives.

 

6. Itaipava Arena Pernambuco (Recife)

6. Itaipava Arena Pernambuco (Recife)

Ana Araujo/Associated Press

Geographical Location

The Itaipava Arena Pernambuco is situated in the western suburbs of the Recife metropolitan area, one of the most important geographic locations in all of Brazil.

Recife itself is known as the Brazilian Venice, what with the rivers, small islands and more than 50 bridges found in its city center. Its famous 8km Boa Viagem Beach adds to its overall allure as an important cultural and leisure destination.

 

Game Significance

The Arena Pernambuco’s fixture list isn’t terribly impressive: Apart from four group-stage games that may throw up a few interesting twists in the World Cup, it will only host an additional round-of-16 match.

 

Structural Features

The seating capacity of the Arena is 46,000 and it’s a standard modern stadium designed to be accessible and convertible. There are plans for it to be used as a venue for concerts, conventions and other events after the World Cup.

The strong emphasis on sustainability impressed us. A solar power plant implemented in the stadium will generate 1MW of installed capacity and will be able to meet the average consumption of 6,000 people when the venue is not filled. Impressive.

 

Importance to the Community

One of the things that attracted us to Recife was its potential for a strong and positive legacy after the World Cup. According to the World Cup Portal, the Pernambuco represents the beginning of a new urban center named the “World Cup City,” a 242-hectare area that “aims to bring together housing, offices, educational institutions and leisure areas.”

The completed area will include a university campus, a hotel and convention center with other commercial, residential and entertainment complexes, and is predicted to generated 10,000 direct jobs until 2024. A noble effort if it ends up going through.

 

5. Arena Das Dunas (Natal)

5. Arena Das Dunas (Natal)

Jobson Galdino/Associated Press

Geographical Location

Natal is well-known for its tourist attractions, with its natural scenic landscapes, beaches, historical monuments and the famous Carnatal, giving the city a unique aura.

The Arena das Dunas finished construction in January 2014, replacing the old Machadao football stadium that was demolished in 2011 to make way for the new project.

 

Game Significance

For a stadium of such breathtaking beauty, it is a travesty that it will only host one truly high-profile match (Italy vs. Uruguay in Group D) among its slated lineup of four group-stage matches.

 

Structural Features

Probably one of the most striking and visually stunning stadiums in World Cup history, the 42,000-seat Arena das Dunas features a facade and roof made up of 20 petal-shaped modules, “designed to be higher on one of the stadium’s side, giving the impression that sand dunes—common in the region—are moving,” according to the World Cup Portal.

Sustainability, now a key element in all stadium construction, also plays an important role in Natal’s World Cup stadium: Its roof captures rainwater, up to 3,000 cubic meters of which may be reused in its lavatories and for pitch irrigation.

 

Importance to the Community

Just like Recife project, the Arena das Dunas is planned to be the center of an exciting new district, featuring a shopping center, commercial buildings, world-class hotels and even an artificial lake.

 

4. Estadio Nacional Mane Garrincha (Brasilia)

4. Estadio Nacional Mane Garrincha (Brasilia)

Tomas Faquini/Associated Press

Geographical Location

There aren’t many locations more high profile than a capital city, and that’s exactly what Brasilia is. A relatively recently planned and developed city, Brasilia provided a more central location for a capital city than Rio de Janeiro.

Given its political importance, Brasilia naturally pays less attention to football. Yet the Estadio Nacional Mane Garrincha is still a force to be reckoned with.

 

Game Significance

The Estadio Nacional Mane Garrincha will live up to its capital-city billing and play host to seven matches this summer: four group-stage games, in addition to a round-of-16 match, a quarterfinal and the third-place match.

Out of the four group-stage matches, Colombia vs. Ivory Coast and Portugal vs. Ghana will provide two interesting spectacles.

 

Structural Features

Named after legendary Brazilian footballer Garrincha, the stadium is one of the most easily recognizable in Brazil and hosts a remarkable 71,000 people, making it the perfect venue for high-profile matches in the World Cup this summer.

Its distinctive UFO-like design, which looks like a narrow bowl supported by a multitude of columns around the side, adds to the myth that surrounds one of the most iconic venues in world football.

 

Importance to the Community

Unfortunately, this is where the Estadio Nacional Mane Garrincha loses out. Not only will football continue to play second fiddle to politics, but the stadium itself will court controversy due to the sheer amount of money invested in it.

According to this AP story, fraudulent billing has led to a huge increase in building cost: At $900 million, it is now the second-most expensive stadium in the world, despite there being no major professional team in Brasilia. Authorities will need to navigate the political minefield or risk having the first major demonstrations start right under their noses.

 

3. Estadio Mineirao (Belo Horizonte)

3. Estadio Mineirao (Belo Horizonte)

Marcus Desimoni/Associated Press

Geographical Location

The Estadio Mineirao is the largest football stadium in the state of Minas Gerais, where Belo Horizonte is its most populous city.

Its bustling activity makes it one of the most important cities in the south-eastern region of Brazil, while its urban planning—inspired by that of Washington, D.C.—has won international accolades for urban revitalization and food security.

 

Game Significance

Now we’re getting right into the thick of the action. Besides hosting four group games, Belo Horizonte will also feature a round-of-16 match and a semifinal, making it one of the most high-profile venues in the World Cup.

 

Structural Features

The Estadio Mineirao first opened back in 1965, making it one of Brazil’s most iconic football stadiums in its long and illustrious history. Its post-refurbishment 62,160 seats make it one of the continent’s largest, while its distinctive circular, Coliseum-like structure make it one of the most recognizable venues in South America.

Once again, sustainability is the hip word of the moment: 90 percent of the rubble produced by the building site was reused, according to the World Cup Portal, while a rooftop solar power plant converts enough energy to cater to the demand of 1,200 medium-sized households. Not a bad feat at all.

 

Importance to the Community

By way of sheer longevity, the Estadio Mineirao has become an institution in the minds of the Brazilian football public.

The promenade area outside the stadium itself will be used as a social space to host events alongside leisure, cultural and sporting events staged inside the arena.

 

2. Arena De Sao Paulo (Sao Paulo)

2. Arena De Sao Paulo (Sao Paulo)

Mauricio Simonetti/Associated Press

Geographical Location

The home stadium of Brazilian powerhouse Corinthians will be called Arena de Sao Paulo during the World Cup.

The city of Sao Paulo itself is well-known: It is the largest city in Brazil and plays a huge role in the country’s commercial, financial and entertainment activity.

 

Game Significance

Probably the second-most important stadium in terms of game significance this summer, the Arena de Sao Paulo will host four group games, including the opening match between Brazil and Croatia, as well as other heavy-hitters such as Uruguay vs. England, the Netherlands vs. Chile and South Korea vs. Belgium.

It will also host a round-of-16 match, as well as a semifinal.

 

Structural Features

For a stadium of such high profile and importance, the Arena de Sao Paulo actually has a surprisingly low standard capacity. It was only to meet the FIFA requirements for an opening-match stadium that 21,200 removable seats were added to form the current 68,000-seat capacity.

Structurally, it is one of the most impressive World Cup stadiums on show this summer. The stadium complex will feature a pedestrian mall as well as other spectacles such as a performance fountain and large gardens.

Stadium acoustics were also a key consideration during the planning and building of the stadium—it will duplicate the current noise level supporters create during games—while, as in several other host stadiums, rainwater reusability is a key sustainability feature.

The Sao Paulo project was awarded the Best Commercial Project and the Best Overall Project awards in the 2011 Grande Premio de Arquitetura Corporativa.

 

Importance to the Community

Public accessibility and capacity management are two of the most impressive features of the Arena de Sao Paulo.

Express trains will connect to the stadium during the World Cup, linking it to the city center in just 20 minutes, according to FIFA.com, while the metro and train stations have the capacity to handle 100,000 passengers an hour.

 

1. Estadio Do Maracana (Rio de Janeiro)

1. Estadio Do Maracana (Rio De Janeiro)

Daniel Basil/Associated Press

Geographical Location

Is it any surprise that the most high-profile stadium in Brazil will host the most-profile match in the World Cup this summer in its most high-profile city?

Rio de Janeiro is arguably Brazil’s most famous city—and deservedly so, given its iconic status in both tourism and popular culture. It’s known for its natural settings and historical monuments, while its beaches and carnival atmosphere only add to the cultural significance of the city.

 

Game Significance

You can’t get any bigger than this. Forget that the titular Group B clash between Spain and Chile will take place at the Estadio do Maracana; forget that six other matches will take place; the Maracana will host the final, which might very well feature the home nation.

 

Structural Features

Having first opened in 1950, the Maracana is probably the arena most steeped in Brazilian football tradition out of all the 12 World Cup stadiums, making it the perfect choice to host the showpiece event of the whole tournament.

A major reconstruction project was undertaken to prepare for the 2014 World Cup: A new one-tier seating bowl, featuring yellow, blue and white seats alongside the green pitch make up the Brazilian national colors, while a new fiberglass roof was installed.

 

Importance to the Community

To see the cultural importance of the Maracana to the Brazilian public, see the number of non-World Cup events that take place at the stadium.

Besides the record-breaking concerts put on by the likes of Paul McCartney and Madonna, the Maracana will also host both the opening and closing ceremonies of the 2016 Summer Olympics and the 2016 Summer Paralympics.

 

This article first appeared on Bleacher Report.

How Brazil Hopes to Get Rich off the 2014 World Cup

With less than two weeks left before the World Cup kicks off this summer in Brazil, all the attention has understandably been on the football side of things, with all participants playing warm-up friendlies to ready their squad for the tournament.

For the Brazilian government and footballing authorities, who have attracted criticism for repeatedly missing construction deadlines for the World Cup stadiums, perhaps the recent attention to the friendlies makes for a welcome respite.

After all, most of the coverage in the past year or so (this is an example from The Washington Post) has focused on the state of the host nation. (I wrote an article on that only a few months ago.)

But the public protests in Brazil have not gone unnoticed. In fact, the demonstrations that started during last year’s Confederations Cup have provided a controversial backdrop to the upcoming World Cup: How will officials be held accountable for the massive overspending they have committed in their preparations for the tournament?

It is imperative that there is an answer to how Brazil and its citizens stand to benefit from hosting a glamour tournament like a World Cup—not just from glory and hype alone.

Let’s take a look at how the 2014 host nation hopes to make money off the latest installment of the World Cup—but as we see, not all the hopes and proclamations may ring true.

 

Jobs and the Local Economy

 

Eraldo Peres/Associated Press

 

Brazil’s tourism minister, Vinicius Lages, told AFP, via Yahoo: “The Cup is not an economic panacea but a catalyst for Brazilian development. It was a key factor behind Brazil finally overhauling its infrastructure.”

The World Cup, he predicted, would add about $13.6 billion to the Brazilian economy—already the world’s seventh largest—in 2014 alone.

It doesn’t stop there.

report by Ernst & Young Terco on the social and economic impacts of the 2014 World Cup concluded that the tournament “should generate 3.63 million jobs/year and R$63.48 billion income for the population in the period 2010-2014, besides an additional R$18.13 billion in tax collections.”

EY’s projected impact on the national production of goods and services stood at R$112.79 billion, while the sectors most benefiting from the event—defined as economic activities with major increased output—were civil construction, food and beverage, business services, utilities, information services, and tourism and hospitality.

All of which sounds glamorous and sexy, but there have been contrasting reports on the actual long-term gains as a result of hosting the World Cup—and they aren’t quite as pretty.

Moody’s report on the impact of the tournament on different industry sectors concluded that “the 32-day event will provide short-lived sales increases that are unlikely to materially affect earnings and disruptions associated with traffic, crowding and lost work days will take a toll on business.”

Then there is the very real possibility that the “World Cup effect”—defined by IBTimes.com as the phenomenon of countries being more harmed economically from hosting the event, as seen from South Africa 2010—may take hold in Brazil.

Four years on, the same uncertain material benefits from a World Cup are still yet to be transparent. As cited in the IBTimes.com article,University of Maryland professor Dennis Coates noted that even the 1994 World Cup in the U.S.—claimed as one of the most successful and transformational ever—ended in an income reduction of $712 million for the average host city relative to predictions.

 

The Tourism Industry

 

Eraldo Peres/Associated Press

 

Vinicius Lummertz, Brazil’s national secretary of public policies, toldThe Rio Times last November of his optimism that Brazil’s tourism industry would stand to gain enormously from the World Cup:

We hope tourism in Brazil rises to a new level after the World Cup. With infrastructure improvements that increase the competitiveness of Brazil as a tourist destination, and the high exposure of the country abroad, I expect to see a significant increase in foreign tourists—but mainly more Brazilians traveling through Brazil.

The Tourism Ministry predicted that tourists home and abroad would spend R$25 billion during the tournament, when 600,000 foreign and three million Brazilian travelers are estimated to visit the country.

The massive spending on infrastructure by the Brazilian government in recent years in preparation for the World Cup has likely been to maximize the revenue the country can make during the tournament—and with an eye on the future as well.

The EY study quoted above addressed such needs for investment in order for tourism income to be realized:

Once the actions that are required to enable the country to capitalize on the opportunities generated by the World Cup are completed, the event may result in an increase of up to 79% in the international tourist inflow to Brazil in 2014, with even possibly higher impacts in subsequent years. In the period 2010-2014, that figure should be as high as 2.98 million additional visitors.

The tourist inflow directly and indirectly induced by the World Cup is expected to account for additional income up to R$5.94 billion for Brazilian companies.

Yet before Brazil can throw a metaphorical carnival to celebrate their upcoming economic benefits, a few sobering updates on the tourism front may dampen the mood.

According to Claire Rive of The Rio Times, “The tourism sector in Brazil has had to adjust their inflated estimates concerning the expected influx of tourists…leading to big discounts on local and international flights and accommodation during the tournament.”

The reduction in projected tourist numbers has led to discounts on airfare prices and package tours, while demand for accommodation has “substantially decreased and prices have decreased.”

 

And, of Course, Corruption

 

Eraldo Peres/Associated Press

 

That a World Cup involves staggering amounts of money and an opportunity for businessmen and government officials to make a quick buck is no surprise—and Christopher Gaffney, professor at Rio de Janeiro’s Federal University, agrees strongly.

“There’s collusion of the Brazilian governmental elite with the business elite, and the game is rigged in their favor,” Gaffney said(via Yahoo). “This was an opportunity to make a lot of money and that’s what’s happened.”

But adding to the depressing reality that corruption will form a huge proportion of Brazil’s money made from the World Cup is the astonishingly public manner in which the embezzlement has been carried out.

See the case of the lead builder of Brasilia’s Mane Garrincha Stadium, already the world’s second-most expensive football stadium.

The Associated Press ran a story this May alleging that Andrade Gutierrez, a construction conglomerate, and Via Engenharia, an engineering firm, made up a construction consortium that billed the government $1.5 million for the transportation of prefabricated grandstands for the Brasilia stadium—a fee that was initially thought to cost just $4,700.

Auditors pointed out that “wasteful cutting practices or poor planning added $28 million in costs,” while “$16 million was lost when Brasilia’s government inexplicably failed to enforce a fine against Andrade Gutierrez for a five-month delay in completion of the main portion of the stadium.”

According to Al Jazeera, the same firm made political contributions totaling $37.1 million after confirmation of which cities would be hosting tournament matches, and after it was awarded stakes in contracts totaling “nearly one-fourth of the World Cup’s total price tag,” four years after it contributed a measly $73,180 in municipal elections, a 500-fold increase.

Moreover, auditors found $275 million in alleged price gouging with just three-fourths of the $900 million Mane Garrincha Stadium project.

The most damning part?

“Funding for Brasilia’s stadium relies solely on financing from the federal district’s coffers, meaning every cent comes from taxpayers.”

What comes around, goes around.

 

This article first appeared on Bleacher Report.

Anfield Redevelopment Underlines Liverpool’s Financial Rejuvenation Under FSG

Ahead of a crucial Premier League title decider against Chelsea this Sunday, Liverpool this week announced their expansion plans for Anfield, while managing director Ian Ayre today credited, via the Telegraph, the role of current owners John W. Henry and Fenway Sports Group in their financial rejuvenation.

Both the Anfield redevelopment announcement and the revelations behind the dire financial situation at Liverpool have not only boosted the feel-good factor around the club, who are five points clear in the Premier League and poised to win their first league title in 24 years, but also highlighted just how important FSG have been in their resurrection.

The Reds now seem a stark contrast to what they were just a few years ago, when Tom Hicks and George Gillett were in constant internal battles with then-manager Rafael Benitez and released plans for a new stadium in Stanley Park that got nowhere, a symbol of their failed reign that disillusioned supporters.

John W. Henry led FSG’s takeover in 2010, which saved the club from administration and that has subsequently transformed Liverpool’s fortunes on and off the pitch.

As Ayre claims that “the club is in a fantastically sustainable position now,” let’s look at just how Liverpool have been rejuvenated financially under the reign of Henry and FSG—and whether this can be sustained going forward.

 

 

Chris Brunskill/Getty ImagesCorporatization of Liverpool as a Global Business

It’s easy to say we were 10 years into a stadium move and it’s about time we are back in the Champions League, but if you think about where we were financially, just because you’re Liverpool it does not mean you have a right to get back up there. There are plenty of teams who could have slipped and slipped, despite new owners, so it’s an unbelievable achievement to get back where we are today. That is testament to the people who invested in it and worked on getting us back there.

Ian Ayre’s proud proclamations of the FSG-led transformation, dipped in bitter memories of the Hicks and Gillett reign, will reverberate around Anfield as a resounding endorsement of the way John W. Henry has run his sports empire.

Joshua Green of Bloomberg.com has encapsulated Henry’s reign at Major League Baseball club Boston Red Sox in a wonderfully revealing article on their baseball dynasty, and similar principles from Henry’s financial and business background have been applied to Liverpool.

The inevitable truth in the sports world these days is that it is becoming more and more of a global business, and Liverpool have, in many aspects, finally caught on.

When looking at models for sustainable growth in world football, perhaps Arsenal is always the go-to club given the building of their new Emirates Stadium and the well-known financial management of Arsene Wenger, but it’s no surprise that Ian Herbert’s column for the Independent draws comparisons with “the kind of machine that the Glazer family have developed at Old Trafford.”

That Manchester United have set up offices around the globe to push their marketing and sponsorship efforts is indicative of their aggressive expansion as a corporation; Herbert writes that their “far-sighted establishment of regional and global corporate sponsorship deals began well over a decade ago.”

This has only recently surfaced at Anfield—though, of course, it is a case of better late than never—with all kinds of backroom appointments boasting titles we would otherwise associate with financial organizations and the business world in general.

Liverpool, who have for years been in the top 10 of Deloitte’s Money League rankings despite missing out on the Champions League, have finally gotten in the sponsorship act and have begun raking in the millions as a result of the commercial push. Their announcement this week of a partnership with US restaurant chain Subway, per the Liverpool Echo, is only the latest chapter in their fast-growing business empire.

 

 

Liverpool FC/Getty ImagesAnfield Redevelopment: Finally Done Right?

When looking to expand the financial income of football clubs, the issue of stadiums will always come into the equation.

After all, gate receipts was the reason behind Arsenal’s decision to move from Highbury to a new stadium, and Manchester United, having expanded Old Trafford over the years, have been raking in a minimum of £3 million every home match since its capacity has come close to 76,000, per ESPNFC.

So it’s no surprise that much has been made over Liverpool’s next step in terms of their stadium: The question was always whether to develop the iconic Anfield, which would have a capacity ceiling due to construction constraints, or to move into their neighboring Stanley Park, which would require massive payments that might hamper their other financial activity, much as Arsene Wenger has experienced.

This Mirror Football article, in light of the new stadium redevelopment announcements, revisited the failed and widely mocked plans for a 60,000-capacity stadium in Stanley Park, which were first suggested in 2002 and then revisited in the Hicks and Gillett reign. They promised a “spade in the ground” within 60 days of their 2007 acquisition of Liverpool, but proved unable to finance the construction project.

By contrast, the £150 million redevelopment currently mooted will cost less than a third of the Stanley Park plans, and will likely eventually take the total seating capacity to 58,000 after expanding two main stands, according to Chris Bascombe of the Telegraph.

Surrounding all the recent fanfare has been the club’s shady policy of “buying up houses around the stadium and leaving them empty, driving the local area into dreadful decline” since the 1990s, which David Conn has uncovered in his revealing Guardian column.

The club apparently “used an agency to approach some residents, while some houses were bought by third parties then sold on quickly to the club. That left residents with the belief…that Liverpool were buying up houses by stealth, to keep prices low,” a tactic that has not gone down well with local residents.

But as Ayre and the club have published their plans publicly and also apparently been in dialogue with the local councils and residents with their Anfield redevelopment plans, the chance is there for FSG and the current hierarchy to redeem errors made in years past and commit to a bright future for the local area and the local community.

The public consultation of fans’ opinions on the Anfield redevelopment, through a public online survey on their official website, is a good start. The right opportunity has finally arrived for FSG to leave a positive legacy in the city of Liverpool, far beyond just bringing the football club back in the green.

 

 

Christopher Furlong/Getty ImagesLooking Ahead to a Promising Future

This week’s announcement of the Subway partnership is the latest sponsorship arrangement Liverpool Football Club have landed in 2014 alone: The likes of Vauxhall and Dunkin’ Donuts all joined the Liverpool corporate partner list this calendar year.

Following the money-spinning and multi-year deals with Standard Chartered Bank and Garuda Indonesia, an airline, Liverpool may even solicit financing for the expansion of the Main Stand via a “lucrative naming rights deal with a major sponsor,” according to James Pearce of the Liverpool Echo. Following Macron’s naming-rights announcement with Championship club Bolton Wanderers, announced this week as well via BBC Sport, naming rights may well and truly have entered the English football mainstream—Arsenal’s Emirates Stadium and Manchester City’s Etihad Stadium are but two famous examples.

For Liverpool, it’s been a story of financial rejuvenation, underlined by Ayre’s comments regarding the long and difficult journey of infrastructure-building at the club since FSG’s takeover:

When I came here seven or eight years ago, there were all these stories of the club shop being closed the day after the [2005] Champions League final [win over AC Milan in Istanbul], and only having a couple of sponsors. Over a long period of time, we have been trying to lay the foundations and build the infrastructure that services a great club like Liverpool.

As the club look to cash in on their successes in the Premier League this season—they confirmed, with their win over Norwich City last Sunday, a lucrative return to the Champions League next season—and continue to bear the fruits of their commercial exploits, their highest-ever annual turnover of £206.1 million this past year will surely be eclipsed considerably in a year’s time.

Add to that the image of the club as a young and energetic force, spearheaded by a visionary young manager in Brendan Rodgers and featuring a host of young stars in the team, as well as the rejuvenated Anfield stadium and surrounding area—confirmed to go through this time—and you have, for the first time in many a season, a healthy outlook for Liverpool Football Club for years to come.

To think that the Reds were “seconds from disaster” before John W. Henry and Fenway Sports Group swooped in for their rescue act.

What a roller coaster it’s been—and long may it continue.

 

This article first appeared on Bleacher Report.

How Manchester United’s Global Brand Is Affected by Missing the Champions League

An underwhelming season for Manchester United has been capped by the news this week that the Old Trafford club had dismissed beleaguered manager David Moyes, who succeeded Sir Alex Ferguson last July.

As rumors have surfaced aplenty across various media outlets speculating the causes of Moyes’ downfall and what exactly went wrong in his tenure at United, the club have appointed Ryan Giggs as their interim manager as they strive to look forward to the future.

Their underwhelming performances this campaign have led to a disappointing failure to qualify for the Champions League next season, as they are now well and truly mathematically out of reach of the Premier League top four, for the first time in 19 years, which has led to some concern about the direction of the 20-time title winners.

For a club of United’s size and stature, how costly would missing out on the Champions League be for their future and their brand image? How will they pick themselves up from the wake of their recent managerial departures—first Ferguson and now Moyes?

Let’s explore how Manchester United’s brand will be affected by missing the Champions League across three rough timescales: The short, medium and long terms.

 

 

CHRISTOF STACHEShort Term: A Harsh Economic Hit

The immediate future of Manchester United as a preeminent footballing superpower is murky at least: The notion that they are not a “sacking club” has been dispelled after Moyes’ dismissal, even though his results perhaps made his position untenable.
To fall from the lofty achievement of winning the Premier League title last May to a current seventh place with no hope of making the top four this season will rightly be considered a disaster from the club’s point of view, given Sir Alex Ferguson’s longevity and record of success, which helped built an image of the club as a perennial contender and a winning institution over the years of his legendary reign.

So to fall from conquering England less than 12 months ago—and conquering Europe six years ago—to the prospect of regular Europa League football, or even no European action at all, will be a massive reputational dent: How can United keep up their global reputation if they’re not even continental?

In the wake of David Moyes’ sacking, Manchester United will miss out on a reported £50 million due to a failure to qualify for Europe’s elite club competition alone, according to Simon Goodley of the Guardian, who suggests that the same riches that are available to competing clubs will serve as a double whammy on top of United’s losses, considering their debts.

Goodley’s comparisons of United’s current situation with Bayern Munich’s in 2007—that they would need to spend massively to improve their squad without European football in a bid to catch up with their competitors—led him to estimate a potential £100 million summer outlay in transfer fees alone.

Which doesn’t include the wage expenditures for their high-earning star players and the considerable compensation that Moyes and his staff will no doubt fight for.

Make no mistake: As United count the costs of missing out on the Champions League, it’s not just to their reputation in the short term as a global sporting brand, but also a blow to their already shaky financial situation.

 

 

Jon SuperMedium Term: The Rebuilding Must Be Done Right

Considering the massive financial commitment that the club will need to make to steady the ship and turn it around, the short-term hit will only be compensated by an ambitious and focused rebuilding job done at all levels of Manchester United.
This involves many aspects across the front and back of the club, not least including a revisiting of the overall backroom structure in place at Old Trafford, which Gabriele Marcotti of ESPNFC suggests should include a Director of Football to alleviate the workload of the modern football manager, and a thorough review system to ensure that players are not signed for inflated fees (see Marouane Fellaini) or rewarded with bumper contracts despite being clearly surplus to requirements (see Nani).

That United have splashed £64.6 million on just two signings will not be lost on any observers: If anything, it will serve as an “eyes light up” moment to the agents of United targets and a major obstacle for the club to overcome. A quick glance at Liverpool’s eye-watering spending in the summer of 2011 will make for a horrifying prospect for many a Red Devil fan.

But besides the playing staff that have been the public face of United, both on and off the field for better or worse over the years, the figurehead that leads them to silverware and sustained success will need to be appointed as well.

The bullish nature and at-times extraordinary proclamations of Sir Alex Ferguson all added to the Manchester United aura and myth, which were almost instantly shattered by the defeatist and pessimistic utterances of David Moyes, who also oversaw the transformation of Old Trafford from a home fortress into a cauldron of fear.

They messed up a managerial appointment once; they can’t afford to do it again.

 

 

Handout/Getty ImagesLong Term: The Structure Is in Place for a Resurgence

As a football club, Manchester United have led the way in England and in Europe for many years, both on the football pitch and off it in the commercial realm. United were perhaps the first club to have built any global brand of note and formulated a wining commercial strategy that was based around silverware won on the pitch and the superstars that brought United that distinct success.
News that the club’s share price on the New York Stock Exchange has rebounded to a pre-Moyes, according to the Mirror, is both cruel on the newly deposed manager and reflective of the club’s standing in the global financial game, while Alex Duff’s commentary on Bloomberg.com considers the club’s power in terms of attracting lucrative commercial sponsorships and strategic partnerships.

Any new manager arriving at Old Trafford would be walking in a dressing room, while needing the injection of some much-needed fresh blood, still featuring some world-class stars, and operating within a commercial giant that is peerless in world football with a brand name that still resonates around the globe. Any comparisons with Liverpool’s dramatic downfall are as a result premature and naive, as the Anfield club have only recently caught up on the commercial side of things, whereas United were pioneers at building a commercial enterprise.

But while United fans shouldn’t panic at the current state of their club, even if the Champions League anthem won’t be playing at Old Trafford next year, they will realize that the club will only be able to bounce back—and the club officials will realize its brand power will only be fully realized—if they overcome a potentially significant short-term hit and approach their rebuilding job correctly.

Because if they don’t do it right, the Manchester United brand, which has been built so strongly over the years because they have become synonymous with success, will wither as a result of their on-field disappointments.

It’s imperative that they get it right this time, before it becomes a vicious, self-defeating cycle.

 

This article first appeared on Bleacher Report.

Is a European Super League an Inevitable Next Step in World Football?

The past couple of weeks in European football have thrown up some interesting scenarios, perhaps unthinkable just a few years ago, which have thrown into question the competitiveness and balance even in the leading domestic leagues around Europe.

When Chelsea loaned Thibaut Courtois, then one of the hottest goalkeeping talents in the world, almost three years ago to Atletico Madrid, surely they didn’t expect to have to waive a contract clause at the prospect of facing their loanee in the Champions League semifinal.

When Borussia Dortmund won the Bundesliga and upset the status quo just a few years ago, surely they didn’t expect that a comprehensive 3-0 win over Bayern Munich in the league would mean as little as it just did, given that Pep Guardiola’s side had just become the quickest team ever to win the German championship.

These are but two incidents that have reflected the reality of European football these days (and there are many more—think Bayern’s ruthless snapping up of Mario Gotze and Robert Lewandowski from Dortmund, supposedly their closest rivals).

And the reality is that, while the top-tier leagues, especially in England with the Premier League, have started to break away from their lesser domestic competitions, those cream-of-the-crop clubs at the top of the European game have begun to form a mini exclusive club of their own.

Perhaps it’s time to consider not whether a European Super League would be a fun and interesting side project for club owners to think about, but whether it is actually an inevitable next step in world football.

 

Kerstin Joensson

 

Booming broadcast and television revenues

It’s hard to point a finger at a definitive starting point for this spiraling breakaway of the European elite, but BT Sport’s staggering £897 million three-year exclusive deal to broadcast live Champions League and Europa League games starting from 2015, announced last November via BBC Sport, is a good start.

Given the amount of money involved in the European game, it’s no surprise that the likes of Arsenal and Liverpool have made qualifying for the Champions League essentially a barometer of their season-to-season success in the Premier League.

Of course, it’s a cyclical game—perhaps even a snowball effect—in which money drives commercialization and encourages clubs and league administrators to package the sport as a “consumer product,” which focuses on entertainment value in the form of stadiums, overall team play and individual superstars, which boosts widespread interest and thus potential income, and so on.

But it’s not as if those involved in the beautiful game at the top level are trying their level best to keep the game devoid of any adverse effects from the money involved. Far from it.

Just this January, the Telegraph reported that the Premier League wanted to bring forth the next “auction” of football broadcasting rights by six months, which sources allegedly claimed was a show of “opportunism” from the league in “attempting to exploit the fierce competition between BSkyB and BT, and the resulting increase in the value of sports rights.”

As the game of football evolves at the top level and clubs become ever more like global corporations, even the ordinary football fan has evolved into being a consumer from their clubs’ point of view.

And how do businesses engage with their consumers? By providing high-quality goods (in this case, high-quality performances with a dose of superstardom, delivered at every broadcast opportunity across every possible channel).

A further case illustrating the financial explosion of the modern game once again focuses on the aggressive increase of Premier League prize money: A Telegraph report in May 2013 mentioned that Manchester United’s £60.8 million in TV money, a record sum for a Premier League champion, would be eclipsed the following season by the club that finishes bottom of the league because of new broadcasting deals.

 

Gonzalo Arroyo Moreno/Getty Images

 

Exponential inflation of player valuations

The sheer amount of money involved in top-level football highlights the indispensability of the sport to TV networks and channels, which in turn drives up their bids to carry these matches.

But from both the clubs’ and the fans’ points of view, this is merely a reflection of an ever-increasing and ever-vociferous demand for the sport—especially as clubs and leagues are becoming more business-savvy and expanding into markets never previously thought lucrative or even possible.

Which means that top-level footballers and top-level coaches, who turn top-level footballers into top-level teams on the pitch, gradually become a premium commodity to be traded to those willing to shell out a fortune in anticipation of the potential upsides.

And so we have eye-watering deals like Gareth Bale’s world record transfer from Tottenham Hotspur to Real Madrid, who themselves set the previous record by signing Cristiano Ronaldo from Manchester United. And vastly inflated contracts like Wayne Rooney’s new extension at Old Trafford, which reportedly will land him a mammoth £300,000 a week, per BBC Sport.

Suddenly, the prevalence of money in the modern game has made it an essential part of both player decisions and transfer strategies. Players appoint ruthless agents to extract the best deal for themselves and their clients, while clubs head towards the murky waters of outbidding each other for star names.

The supply line has just shot up in value.

And those organizations who can afford to shell out the big bucks to procure such mercurial and overpriced talent—some through the generosity of a well-off benefactor—become the most important players in the financial game of football.

It’s no surprise, then, that Simon Kuper and Stefan Szymanski put forth in Soccernomics that football clubs in capital cities are best positioned to dominate the European game in the future: Take the financial “capital” in the cities and you instantly have the most powerful hybrids of money, geography and power across football clubs in Europe.

 

Marc Mueller

 

A whole new, exclusive playing field

Where does this bring us?

On the one hand, the growing demand of top-level football means that there will only ever be greater sums of money spent by fans and reflected in megadeals between leagues, clubs and broadcasters.

On the other hand, the explosion of player valuations means that agents will continue to grow in prominence and importance, while player power will entrench itself as an institutional concept in modern football—and only a handful of football clubs are even equipped to handle such major deals.

Which essentially means that the footballing world is their oyster.

As players vie to get into those clubs as a sign of their ability and ambition and as clubs strive to either maintain their place in that elite group or try their utmost to break into the oligarchy, a whole new, exclusive playing field has taken form for the big boys up top.

La Liga has traditionally been the easiest and most glaring example of a “top two” league, with Barcelona and Real Madrid maintaining a hegemony on proceedings in Spain until Atletico burst onto the scene this season, while recently Bayern Munich has become a textbook example of just how far a first-placed team can pull away from its closest challenger.

Sooner or later, as egos, ambitions and competitiveness are wont to trump all in sport, these big players will yearn for a platform where they can pit their wits against each other on a regular basis, to claim a title that will truly prove their dynasties.

The concept of a European Super League suddenly doesn’t sound so far-fetched after all. In fact, it almost sounds as if it’s going to be the next big evolution in world football.

And just as TV networks have continued to scramble for big broadcasting deals just to get a slice of the ever-growing pie, football clubs not yet in the “Super League” category will fight tooth and nail, and spend an arm and a leg to try to get there.

There will be plenty of new entertainment for football fans—and plenty of inadvertent and unfortunate financial casualties as well.

 

This article first appeared on Bleacher Report.

Why the 2014 FIFA World Cup in Brazil Can Still Be the Best Ever

As we enter the final few months of the buildup to the 2014 World Cup, we’ve heard much about the current state of host nation Brazil and how behind it still is in terms of building the necessary infrastructure to successfully host and support a worldwide tournament and festival.

Just last week, FIFA secretary Jerome Valcke told BBC Sport that Brazil may not be “totally ready” for the start of the tournament due to building delays, with two stadiums in Porto Alegre and Sao Paulo still not finished.

And with the current political climate in Europe, amid criticism of Russia’s recent actions following the Winter Olympics in Sochi and Qatar’s human rights record ahead of its own World Cup in 2022, Valcke has even gone as far as to emphasize FIFA’s political neutrality, per Al Jazeera:

FIFA is not the United Nations…We are not there to discuss with political authorities what they should do…We can discuss with them, and again be the platform for them to meet, to exchange and to make sure they are using football as a tool for change…But we cannot tell a country what should be [sic] their foreign policy. That’s not our role.

All of which has thrown a considerable spanner into the Brazilian works, as the country makes frantic last-minute preparations for the global event amid an unsteady domestic political climate.

For Brazil to put on a successful World Cup, 64 years after it was last hosted on home soil, no doubt there are still major hurdles to overcome—not to mention many people to convince.

Yet lost amid all the negative news is the undeniable prospect of a fervent and vibrant tournament, of a famed Brazilian party, of a mouthwatering tournament featuring footballing talent in abundance on the pitch—and the underlying possibility that the 2014 World Cup can still be the best ever.

 

Leo Correa

 

A National Legacy

Let’s begin by looking at the positive impact that FIFA can bring with its local programs in conjunction with the tournament itself.

Its recent announcement of a $1 million television production internship program for Brazilian students, allowing them the chance to gain “invaluable work experience at the world’s biggest single-sport event,” is a glimpse at the “legacy” impacts that FIFA has now made a big part of its tournament-hosting packages.

By involving local students and providing technical and professional training in a sure-to-be exciting opportunity for local youth, FIFA has laid the groundwork for a potential boom in interest in the international sports business and the financial workings of a global tournament—quite in contrast to the uneasy local sentiment on show during the Confederations Cup last summer.

Looking at the legacy factor from a macro, country-level perspective, the Brazilian government forecasts, via Fox News Latino, that the World Cup itself will generate around 62.1 billion reais ($27.7 billion) in revenue, three times its income from the Confederations Cup.

The significant economic impact from the boom in tourism has been projected to include a total number of 3.6 million visitors to the country and an increase of 47,900 jobs in the tourist and recreation sectors, which would be a considerable injection of activity and revenue into Brazil’s GDP.

Alongside the inevitable focus on consumption on Brazilian soil, the Brazilian government has also launched advertising drives to highlight its other attractions, including “the Iguassu Falls, eco-holidays in the Amazon, the historic city of Salvador and Brasilia,” according to the BBC, as well as to draw attention to its capacity and capability to host global events and conferences.

Said Marcelo Pedros, the director of international markets for Embratur, the Brazilian Tourist Board:

Everyone knows that Brazil can play football and throw a party, but we want to show just how well we can organize international events. When Germany held the World Cup in 2006 it was the other way round. Everyone knew they would be well organized, but could they hold a party? They did, and it was very successful. We are going to prove the same success with Brazil’s organization skills.

And, of course, there is the small matter of the tournament kicking off on Brazil’s own Lovers’ Day, which, according to the Metro, is already capturing the imagination of many an innovative and entrepreneur.

 

Dean Mouhtaropoulos/Getty Images

 

An Unpredictable Contest

We’ve managed to come this far without even mentioning the football due to be on show in Brazil, which is a strong testament to the off-pitch factors that could see Brazil become the biggest and most successful global party yet.

But while the World Cup has arguably evolved from a pure celebration of football into a money-making exercise, at its heart football is still the beautiful game, and we could well be looking at one of the most exciting iterations of the tournament of all time, given the unpredictability of the contest this summer.

As football fans look ahead to the 2014 World Cup, many questions will no doubt pop into their minds. Who will rise to the top this year? Will Neymar confirm his status as the next big thing in football by bringing his country the World Cup at home? Or will Lionel Messi finally deliver a World Cup to secure his place in the pantheon of all-time greats?

Will Spain continue their recent dominance with a fourth successive win in a World Cup or a European Championship tournament? Or will Germany’s youth revolution end its own wait for a world title?

What about the dark horses—will Belgium’s new golden generation fulfill their potential as they look to take the World Cup by storm? Or will Uruguay better their last-four performance in 2010? Is it time for an African team to go all the way? Or will England finally get over their quarterfinal hoodoo and fire their way into the final?

The presence of so many international stars on Brazilian soil—the mythical Zlatan Ibrahimovic excepted, due to Sweden’s playoff loss to Cristiano Ronaldo’s Portgual—will bring unprecedented levels of global coverage (and, of course, incessant marketing and advertising efforts), which will in turn drive up interest in the tournament around the world.

Even the statistic, tactic and formation buffs will be treated to an event of gigantic proportions, as the proliferation of data analysis in football will no doubt boost intelligent debate and substantiated discussion around the contest unfolding on the pitch. The different ideologies and philosophies adopted by different national teams may finally see distinct national “identities” form around the ball.

And we haven’t even gotten to the prospect of a nerve-wracking penalty shootout or a new Zinedine Zidane-esque flashpoint.

 

Handout/Getty Images

 

A Glimpse into the Future

All the talk so far has been of the present, but while the World Cup doesn’t involve the next host nation putting on a “teaser trailer” show to close out the current tournament—unlike the Olympics—one eye, as ever, should be kept on the future.

And this World Cup finds itself in a fascinating intersection between the old and the new.

On the pitch, what could be better for Brazil than to have traditional rivals Uruguay resurface as a strong contender? Or a new-look Argentina side to prove its dominance and legacy with Messi at the helm?

The prospect of a new Brazil team headed by Neymar winning on home soil is one that can’t be ignored—and no doubt one that would kick off an unprecedented party—while the recent dominance of Spain may start to make way for teams of the future.

We will get to witness the platform that Belgium may well set for itself in international football, while England is set to usher in a new generation of young talent following what will be a transitional tournament. And as ever, there are plenty of new names we might not have even heard of yet who will catapult themselves into the spotlight over just a few weeks in Brazil.

In the stadiums and on the streets, the local mood may well be poignant, as Brazil recalls hosting its last World Cup 64 years ago and considers the development and turmoil it’s gone through in that time.

From a traditional footballing heyday in 1950 to a global commercial extravaganza, those who have followed the tournament in years gone by may yet witness another chapter in the ongoing evolution of the World Cup as an event.

The fascination of welcoming visitors from around the world and partaking in a joint experience of an international tournament at home may inspire a new generation of Brazilian youngsters to not only embrace the power and potential of the simple game of football but also to serve the greater good of their nation through business and global collaboration.

And finally, Germany 2006 was a return to familiar European territory between two groundbreaking tournaments in Asia (Korea/Japan 2002) and Africa (South Africa 2010), while Brazil 2014 will be the last tournament to be hosted in a region with World Cup experience: The next two World Cups, if all goes according to plan, will be held in new frontiers—Russia (2018) and the Middle East (Qatar 2022).

For FIFA as much as for Brazil—depending on how this year’s event goes—the World Cup will be a key milestone and provide a glimpse into an exciting or murky future.

For if Brazil successfully overcomes its last-minute hurdles and political differences and ends up hosting an excellent tournament, we can all look forward to successfully charting new territory in the years to come.

South Africa did it. Why not Brazil?

 

This article first appeared on Bleacher Report.

The Business of Football Kits: Sponsorships, Technology, Branding and Beyond

As we enter the final few months leading up to this summer’s World Cup in Brazil, the national teams taking part in the tournament have been unveiling their new kits to ride on the wave of growing interest in international football.

Brazil, England, Germany, Spain, Argentina and France have all released new kit designs for the summer, with various big-name sportswear companies and top international stars at the helm of high-profile launch events and flashy marketing campaigns. (The Mirror has a collection of some newly released kits here.)

As with most commercial activity in football, however, not all the recent kit launches have been met with universal acclaim: Ben Curtis’ article on the Mirror is a cynical rant at the hype machines that these events have become, while Lizzie Parry’s on the Daily Mail highlights just how expensive replica kits, launched over increasingly short time periods, have become.

In February, we explored the importance of stadiums in the overall commercial strategies of football clubs. As top-level football increasingly becomes big business and a huge revenue generator, let’s take a look at another money-spinning side to the sport: football kits.

 

Vincent Yu

 

Sponsorships

One of the first things that comes to mind when football kits are mentioned these days is the staggering amount of money they can generate for football clubs, both from the merchandising side and from the corporate sponsorship side.

While club merchandise is generally dependent on the popularity and on-pitch success of the clubs themselves—and the annual Deloitte Money League results generally attest to that—the larger context is the money that sportswear companies actually pay to be the official kit providers of football clubs.

In recent years, just in the Premier League, we’ve seen many instances of eye-watering commercial deals involving kit suppliers. Liverpool’s 2012 deal with Warrior Sports, the latter’s first foray into football, would, according to Andy Hunter of the Guardian, net the club at least £25 million a year.

Just this January, Arsenal announced they would be changing their kit maker from Nike to Puma, in a five-year deal reportedly worth more than £30 million a year, per the BBC. And, as ever when it comes to business deals, Manchester United shocked the world this March with their world-record 10-year deal with Nike, which, according to Simon Mullock of the Mirror, will see the Old Trafford club earn more than £60 million a year.

Besides contracts with sportswear makers, the other big player in the football kit boom is the corporate sponsorship deals that have taken center stage in recent years. This 2013 J.J. Colao article in Forbes listed Manchester United, Barcelona, FC Bayern Munich, Liverpool and Real Madrid as the biggest shirt sponsorship deals in the world.

Another interesting marketing tactic has been employed by Tottenham Hotspur this season, as they featured different sponsors on their shirts in different competitions, with Hewlett Packard their Premier League front and AIA their cup shirt partner. According to Kevin Palmer of ESPNFC, however, even Tottenham will revert to the traditional “principal partner” model at other big clubs, having agreed a lucrative £20 million-a-year deal with AIA for the next five years.

 

Richard Heathcote/Getty Images

 

Technology

But with all the money that goes into the kits, and their burgeoning price tags, do those who get to wear them actually benefit?

Specifically, do the footballers themselves get anything out of the constant kit changes, or are they just excuses to step in front of a camera for yet another photo shoot?

Just ask the Italian national team stars. According to the BBC, the high-tech football shirts they will be wearing at the World Cup this summer will be able to deliver massages during the game. The shirts contain a special tape that provides “micro-massages” for their wearers and “maximise muscle power” by allowing the body to recover from exertion more quickly.

Away from the luxury options provided to footballers these days, far more important is the shirts’ ability to keep their wearers warm in extreme cold temperatures. This article from PRNewswire.com lists a few examples of temperature-regulating technologies that are present in football shirts on the market.

Different sportswear manufacturers—the same who enter into the lucrative long-term contracts with football clubs and will rely on such technology to win such bids—integrate different functions into their shirts, but the underlying principles are the same: adding layers onto shirts that keep players comfortable, dry, warm or cool depending on the surrounding weather conditions.

With the digital space increasingly at the center of the football fan experience, besides featuring on shirts themselves, technology has also crept into the marketing side of football shirts and kit launches, so much so that organizing such events can be considered an industry in itself.

See, for example, this analysis on Liverpool’s new kit launch in 2012 on Dan McLaren’s TheUKSportsNetwork.com. Liverpool’s multichannel marketing and promotion strategy, across different social media platforms, was all about putting out a united front for the kit launch, which also had to match the club’s corporate branding.

But, as they’ve tended to do so in social media in general, Manchester City will take home the technology and marketing hybrid approach for football kits as well.

They’ve since switched to Nike as their main shirt sponsor, but City’s launch of their Umbro kits for the 2012/13 season, as covered here by SoccerBible.com, took fan engagement to a new level when they invited fans to decide how the new kit would be officially launched.

 

Ray Stubblebine

 

Branding

Using a new innovative campaign to bridge the marketing and technology worlds with branding in football was yet another Manchester City-affiliated project, New York City FC.

Since their official announcement in 2013, New York City FC have caught the attention with their cutting-edge digital-marketing campaigns despite the MLS outfit not yet officially competing in the U.S.’s highest-tier domestic football league.

NYCFC put their fans truly at the center of their business and branding strategy by inviting them to submit ideas for an official club crest, which was met with widespread acclaim and culminated in a win-win scenario where the club also got their hands on an excellent winner, shown here on the MLS official website.

An example of how the football kit itself has become more than just one of the components of a football club’s identity; it’s evolved into an integral part of the football club’s business strategy on the whole.

So eager have clubs and affiliated sponsors wanted to tap into their fanbase for merchandising dollars that they have begun creating hype cycles out of kit launches to boost profits and increase circulation among their followers—at the risk of straying into grey areas and stirring controversies.

In tandem with the ongoing, controversial narrative that football is becoming more and more middle- and upper-class and moving away from the traditional working-class fanbase that gave the sport its following and popularity, clubs and corporations have rushed into a branding frenzy and become eager to associate themselves as “premium” titles.

A major recent example was that of Adidas, who, according to Anna White of the Telegraph, may refuse to supply Sports Direct, one of the biggest sports retailers in the UK, with a variety of World Cup football kits due to concerns over its stores and customer service.

Said Adidas, “Like all manufacturers, we regularly review, season by season, where our products are distributed. We determine distribution channels for all products based on criteria such as in-store environment and customer service levels.”

In other words, sportswear manufacturers are eager for their football kits to be treated as premium consumer goods—indeed, the mooted £140 price tag for the new England kits by Nike almost automatically price themselves into that category—and they’re not afraid to incur the wrath of fans and middlemen retailers to achieve their commercial goals.

Charlie Crowhurst/Getty Images

 

Prior to the World Cup row, Adidas also landed themselves in hot water with Sports Direct over their treatment of Chelsea’s official club kit. In light of the public spat, Matt Scott of InsideWorldFootball.com put together an excellent and in-depth analysis of the changing role of the football kit itself.

Linking the state and rationale of Chelsea’s commercial and branding activities with the area’s wealthy and exclusive reputation, Scott consolidates a list of the London club’s highest-profile official sponsors, who all pride themselves on their elite stature within their respective industries.

The ever-changing face of the football kit, then, is not just an evolution of modern shirt design and an extension of clothing technology into sport, but is a reflection of a shift in the status of merchandise and football itself in the eyes of football clubs, manufacturers and sponsors.

And with seemingly unstoppable momentum behind money-spinning sponsorship deals, it seems that football kits will continue to be at the center of football’s paradigm shift. One only hopes that it doesn’t one day become only limited-edition items due to their exclusivity.

 

This article first appeared on Bleacher Report.

The True Financial Cost of Manchester United Missing out on the Champions League

The gulf in class on the Old Trafford pitch was evident on Tuesday night as Manchester United succumbed to another 3-0 home defeat to a major rival, but David Moyes added more insult to injury as he claimed that Manchester City’s standard and level were something to “aspire” to, per Sky Sports.

For Red Devils fans, who had been used to seeing years of Premier League dominance and a true winning dynasty under Sir Alex Ferguson, this statement—that United were now, suddenly, looking up to their “noisy neighbours”—will have irked, much more than their overall lethargic play has already this season.

It hurts, not just because it was United’s sixth home defeat in the league this season—their most ever in the Premier League—but also because a glance away from the scoreboard and at the league table shows just how far they’ve fallen from their supreme title-winning season last year.

As we approach the final weeks of the 2013-14 Premier League season, Manchester United are left staring up rather than down, contemplating what exactly a failure to qualify for next year’s Champions League—and they are on the brink—would mean to the future of the club.

But what exactly would it mean? Here’s a brief study on the true financial cost of Manchester United missing out on the Champions League—and it doesn’t look too rosy.

 

Alex Livesey/Getty ImagesPremier League Payouts

Qualifying for the Champions League requires a minimum of a fourth-placed finish in the Premier League, so let’s go from there.

It’s a well-known fact that the Premier League provides payments to its competing clubs at the end of every season—and it’s because of the league’s astonishing financial successes that those in England’s top tier receive huge amounts of revenue from television rights and so on.

While we won’t know the exact payouts each club receives for the season until late May, after the season will have officially finished, our benchmark will be from last season, where the fourth- and fifth-placed clubs were Arsenal and Tottenham Hotspur respectively.

For their efforts last season, Arsenal received a total end-of-season payment of £57.1 million, £12.8 million of which were “merit payments” from the Premier League based on position, according to the league’s official announcement. Spurs, on the other hand, received £55.9 million and £12.1 million in merit payments.

It’s easy to calculate the difference just in merit payments as a reflection on the gap between the fourth- and fifth-placed Premier League clubs, but the other components of the payout—the “facility fees,” given each time a club’s matches are shown on TV in the UK, and “overseas TV” costs—are also tied intricately into their performances in the league and in European competition.

So the difference in overall payments is likely a more reliable indicator on the gap. In this case, it’s £1.2 million.

Not too significant as a lump sum, but when it comes to Manchester United, the fact that they were so successful in the league last season means that the hurt will be inevitable—and more considerable.

United finished the season as runaway champions, netting a league-high £60.8 million in payouts, which is a full £4.9 million difference from Tottenham’s eventual payout. And it doesn’t stop there: United’s current seventh place was where arch-rivals Liverpoolfinished last year, and the Merseysiders received £54.8 million.

If the Red Devils drop from first place and finish seventh come May, they will have missed out on at least £6 million just in league payouts—and we haven’t even adjusted for the inevitable league-wide increase yet.

 

Laurence Griffiths/Getty ImagesChampions League Payouts

Then there are the official payouts from the Champions League, which, if United do miss out on the competition itself, they will naturally not be entitled to next season.

For all their domestic woes this season, United’s run to the quarter-finals this season has by and large been smooth, barring a first-leg shock against Olympiakos in the round of 16. Their easy win of Group A was secured on the back of four wins, two draws and no losses—but this is also why an exit from Europe’s elite cup competition will hurt all the more.

According to the official UEFA website, the Champions League paid a minimum base fee of €8.6 million to each participant in the group stage last season.

An additional €1 million was awarded for each win and €500,000 for each draw, meaning that on their group stage form this season, United netted at least €13.6 million just from the group stage alone.

All clubs competing in the round of 16 received a €3.5 million payout, whereas each quarter-finalist received €3.9 million each.

Added on to the group stage payments, that’s at least a €21 million total that they will earn from this season’s Champions League run—and, again, that’s not adjusted for the inevitable competition-wide increase yet.

And who knows—if David Moyes manages to mastermind a famous victory over two legs against the fearsome and record-breaking Bayern Munich of Pep Guardiola, there could be further payments yet.

Translated into pound sterling, the Champions League prize money from this season is at least £17.5 million (and counting), which puts the total opportunity cost at £23.5 million.

Just exactly the amount Marouane Fellaini would’ve cost last summer—if Moyes submitted his bid before the Belgian’s release clause expired on July 31, 2013, according to BBC Sport.

 

Paul Gilham/Getty ImagesThe Intangibles

If only the cost of missing out on the Champions League was just £23.5 million.

Just ask Liverpool, perennial arch-rivals to Manchester United, who slipped into several years of mediocrity—including a couple through financial difficulty—after finishing seventh in what turned out to be Rafael Benitez’s last season at Anfield.

Whether it was down to the personal draw of the managers that succeeded Benitez, or due to the lack of top-quality competition that Liverpool were to be involved in, we may never know, but the truth remains that Liverpool’s signings since that exhilarating title challenge in the 2008-09 season had dropped down several notches—and only resurfaced in the past year or so.

In many ways, Manchester United’s current situation and Liverpool’s back then are similar, especially since both clubs are two of the most prestigious in England (and the world), two of the most historically successful and two built on pride and tradition more so than pure financial muscle.

To lose out on what has traditionally been a key part of the United brand—namely their winning tradition and stature in Europe—would be a huge blow to Manchester United’s appeal to prospective players.

David Moyes stressed in January that “the amount of big players wanting to join United is incredible. It’s because of the club and what it stands for in world terms. Players are not looking at the share price. They are looking at the football club,” per ESPN FC.

A Manchester United without the Champions League simply does not provide the same attraction and a scan at Liverpool’s reported missed signings over the years is testament to that.

Far more than the £23.5 million base loss, which less than half a season under the terms of their kit deal extension with Nike can already recuperate, via the Mirror, this might well be the true cost to Manchester United missing out on the Champions League.

Unless, of course, they change tack and throw their financial weight in to compensate for the lack of European competition, in which case the likes of Chelsea, Manchester City, Real Madrid and Paris Saint-Germain become their main competitors.

And they’ve all got Champions League football.

 

This article first appeared on Bleacher Report, where I contribute regularly on Liverpool and the Premier League.