Tag Archives: TV rights

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.

The World Cup: Evolution from Celebration of Football to Money-Making Exercise

“No decision will be taken before the upcoming 2014 FIFA World Cup Brazil, as agreed by the FIFA executive committee.”

Source? An official FIFA statement, via the Guardian. Topic? Whether the 2022 World Cup in Qatar will be held in the summer or winter, of course; it’s only been the topic that’s consumed most international football fans and FIFA observers in the past few months.

The timing though? Immediately after Jerome Valcke, the FIFA secretary general, suggested to a French radio station that the World Cup might be moved to November 2022 after all.

Confused? You’re not the only one. But what’s been made apparent from the Qatar World Cup 2022 debacle, is that besides all the confusion and suspicions, the focus has firmly been taken away from what the World Cup is supposed to celebrate: football, the game itself.

Sure, the talk has revolved around Qatar’s temperatures in the summer, which would make for harsh conditions for players and fans alike, but surely that would’ve been a factor in the decision-making process leading up to awarding Qatar the host rights, instead of a topic to be discussed afterwards.

That Sepp Blatter and FIFA want to bring the World Cup to the Middle East is not a secret: Back in November, he even entertained the idea of hosting the tournament across several countries in the Gulf region, according to the Telegraph. So the globalization of football and the expansion of FIFA are two key items on the agenda, and both politics and money are equally prominent at the heart of all this, as we studied in an earlier article on the World Cup controversies.

But how exactly did the World Cup get to this current state? To answer that question, let’s go back and trace the evolution of the world’s most prestigious tournament from celebration of football to money-making exercise.

Laurence Griffiths/Getty Images

The Olympics: Eternal Rival and…Founding Father?

To understand the World Cup’s evolution and growth, we must first consider the history of the Olympic Games, eternally seen as the World Cup’s rival tournament in terms of global reach and prestige.

The distinction is always made that the Olympics celebrate not just one sport, but sport as man’s pastime, while the World Cup is only the gathering of footballing nations in the world—and before the United States’ entry and strong showing, not even encompassing the entire world. The World Cup’s proponents point to the final as the premier spectacle in world sport, with no single sporting match able to match its global appeal.

In reality, while they might be rivals now and trying to outdo each other every two years, it didn’t start out that way. In fact, the World Cup has the Olympics to thank for its current iteration and success, because it was the Olympics that gave birth to the World Cup as we know it.

When FIFA was founded in 1904, international football—indeed, professional football—was a phenomenon only affordable for a few countries, and when football was inducted into the Olympic Games in the summer of 1908, only amateurs were represented. Any attempt at organizing a truly international football tournament was undermined by the lack of professional setups in most countries around the world.

But when Uruguay won both the Olympic football tournaments in 1924 and 1928, FIFA, with then president Jules Rimet as a visionary driving force, stood up, took notice, and most importantly, set about realizing his dream. The first FIFA World Cup was to be staged in 1930 in Uruguay, with politics—what else?—at the heart of the host location decision: It was to be the 100th anniversary of Uruguay’s independence, and it was to be made not a great celebration of the game itself, but a spectacular political statement.

How else to explain it, given that the Uruguay national football association was willing to cover all travel and accommodation costs incurred by participating teams? As even FIFA.com concedes, that possible profits would be shared with participants and deficits taken on by the host country won Uruguay the first ever World Cup hosting rights.

The 1934 competition was held in fascist Italy under the dictatorship of Benito Mussolini, and Rimet, according to this excellent Independent feature on his life, was already criticized for politicizing football.

Before the advent of television and the phenomenon of globalization, the World Cup had surrounded itself with politics and money.

(A footnote to add, though, is that Jules Rimet’s vision and dream of uniting the world through sport and creation of the World Cup earned him a Nobel Peace Prize nomination in 1956. Perhaps, hopefully, the World Cup at its heart was actually more than a celebration of the beautiful game, but a triumph of humanity.)

Carlos Alvarez/Getty Images

The Context: Globalization and Technology

But just as we can’t give the Olympics all the credit for introducing the concept of a FIFA World Cup, so Rimet and FIFA can’t claim all the glory for growing the tournament from a small competition featuring just a few countries in Montevideo, Uruguay, to the global spectacle that was the 2010 World Cup in South Africa.

As ever, context is key, and the explosion of global business and trade, just as it’s played a huge role in the history of the 1900s, is an integral part of the World Cup’s continued evolution. Before the business side of things took over, though, first came the phenomenon of television.

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

The first live World Cup games were broadcast in Europe in the 1954 tournament, which reached only a handful of audiences due to the low volume of matches shown, but the potential of television and TV advertising was already apparent. (Not that the Olympics were to be beaten, of course: The 1936 Summer Olympics were the first to be broadcast on TV to local audiences. International broadcasts came in 1956.)

Fast forward a decade and a half. Spying an opportunity to conquer the world of football and reap the ensuing economic benefits in 1974, was new FIFA president Joao Havelange, who upon taking office turned his organization into a modern international NGO, putting in place the infrastructure, people and income-centered mindset of a corporation.

The only thing left to do for the World Cup, which previously featured 16 national teams, was to expand. And expand Havelange did, opening the doors to developing countries with eight additional slots (which have since been further increased to a total of 32 participants since France 1998), as discussed by Tim Vickery for The World Game. The Havelange era also saw the introduction of the FIFA U-17 World Cup, FIFA U-20 World Cup, FIFA Confederations Cup and FIFA Women’s World Cup.

The costs of hosting such an immense global tournament in one country were too much to bear for one host country and FIFA, and thus came the idea of corporate sponsorship of the World Cup. Havelange struck deals with Horst Dassler, heir to the Adidas fortune, for the German sportswear company and other big-name corporations like Coca-Cola to fund the tournament, paving the way for the commercialization of international football.

So while the advent of television advertising led to increased premiums for marketers to get their spots onto World Cup TV screens, behind the scenes within FIFA itself was a concerted movement to pump money into the World Cup—with political and economic influence once again the main motivation behind all these changes.

(The name Joao Havelange may be familiar. He was the same FIFA ex-president that resigned in April 2013 after a FIFA ethics report ruled that he had taken bribes, as reported by BBC Sport. The culprit in question? International Sport and Leisure [ISL], founded by Horst Dassler. Politics and money, indeed.)

Getty Images/Getty Images

The 1990s and Onwards: Spiraling Out of Control

If ever there was a curious decision in the history of world sport, the idea to host the 1994 World Cup in the US was clearly one, at the time. In hindsight, however, it was just another calculated plan from Havelange to bring the game to North American shores, which had yet to be consumed by football fever.

The legacy was stunning: To this date, USA 1994 still holds the total attendance record (over 3.5 million) and the average attendance record (68,991), according to USSoccer.com. The US’s advancement to the round of 16 for the first time since 1930 contributed to soaring TV ratings.

(Leading up to its hosting of the World Cup, the US also put in place their first ever professional soccer league. It’s no surprise that Major League Soccer was founded in 1993, a year before the 1994 World Cup. We explore the growth of soccer in the US in another article.)

The introduction of the World Cup in practically uncharted territory in 1994 was met with enormous financial successes, and since its foray into the world leader of commercialized sport and corporate sponsorship, FIFA have never looked back. The World Cup has since traveled to Asia (2002) and Africa (2010), goes to Russia in 2018, and brings us to the Middle East in 2022.

According to this Economist article, the World Cup broadcasting rights for France ’98 were sold by FIFA in 1987, before the stunning 1994 American success, for $344 million. An indication of how far the World Cup and FIFA have gone: In 1998, at the time of the article, ISL—which would later collapse, of course—had agreed to pay $2.2 billion to show the games outside America.

The groundwork for corporate sponsorship was laid by Havelange, but was taken to new levels under the leadership of current president Sepp Blatter. Let’s consider the 2010 World Cup, for example: According to a UPenn study, FIFA’s revenues related to the South Africa tournament amounted to a staggering $1.022 billion, of which $650 million belonged to broadcasting rights.

Participating national teams are in on the act too: FIFA was to provide $420 million to all participants and the football league teams providing players to the national teams, $30 million of which would go to the World Cup-winning team (Spain). First-round teams qualified automatically for $8 million each, while $1 million in preparation costs were provided to each participating football association.

This was brought about by the stellar line-up of corporate FIFA sponsors, known as “partners,” which 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? A minimum of between 100 and million euros through to 2014. By which time, of course, the next World Cup cash cow will be held this summer, this time in Brazil.

Clive Mason/Getty Images

Conclusion: It’ll Only Get More Expensive From Here

Is it damning or merely inevitable that corporate sponsorship and incessant marketing efforts are now part and parcel of any World Cup?

In the build-up to this summer’s tournament, the allegations of corruption have been brushed aside after Havelange’s resignation in 2013, while all the talk of political and commercial interests have been directed towards the distant 2022 World Cup in Qatar, still eight years away.

It’s no longer news—rather, it’s an accepted fact—that the World Cup is now considered an extremely lucrative opportunity for brands and nations alike; this Fox article on Nike and Adidas’ brand battle pre-World Cup is now just part of the fabric. In fact, any sports company—or indeed any business entity at all—would be condemned for not taking advantage of a World Cup year to promote its business.

And so it’s only going to get more expensive from here. The spending and rights associated with the premier world football tournament have skyrocketed in the past decade or so, with the help and under the influence of a few key players, but the brand-new stadiums that are to be constructed in host countries are just the tip of the iceberg when it comes to World Cup spending.

But it’s the World Cup. Just as FIFA continue to rake in the cash, we football fans will continue to ignore the commercial influences and political battles and focus on the spectacle that will unfold before our eyes when the first whistle is blown on June 12 at the Arena de Sao Paulo.

An event of this magnitude only comes once every four years, after all. When the winning team hoists the Jules Rimet trophy on July 13, for once the celebrations will be directed entirely towards the football that they have played, not the money they will make.

This article first appeared on Bleacher Report, where I contribute regularly on Liverpool and the Premier League, and at times on the business of football.

English Football Weekly: Arsenal Slip, Liverpool Close-In; A New Managerial Generation; BT Sport’s Champions League Megadeal

EPL Week 11 recap: Reds dominate; Spurs slip; United roar

There were no lingering memories of Liverpool’s forgettable loss at the Emirates last week, as the Reds took Fulham to task and practically ripped them apart. Four goals were scored at Anfield on Saturday, but it really should’ve been more like seven or eight, such was the Reds’ domination. Fulham’s form will have been the bigger talking point, however. This was a side that indulged the laxness of Dimitar Berbatov and kept a pedestrian midfield unmoved for 90 minutes. Surely Martin Jol is on the brink of the sack; he has to be, or Fulham will spiral into a relegation battle.

After a promising start to the campaign, suddenly it doesn’t look so rosy anymore for Andre Villas-Boas and Tottenham, which on the surface should just be ludicrous—20 points and joint fifth in the table doesn’t spell crisis in any way. But after the three Premier League clubs at the bottom, Spurs are the fourth lowest-scoring team in the top division, and it’s starting to hurt them big time. Sunday’s loss against Newcastle, albeit against an inspired Tim Krul, represented their second loss in three home games. For all of the money AVB spent on the midfield in the summer, he has yet to find someone to link the middle with the front.

On the flipside, Manchester United are rising again—and fast. David Moyes crowned an encouraging run of performances with a statement of a display against Arsenal on Sunday. Given the tightness of the league this season, it won’t have caused the seismic wave that’s been mentioned in too many quarters in the immediate aftermath, but it does give United’s rivals plenty to think about—and Arsene Wenger will have plenty to think about as well. It’s not the end of the world for the Gunners, not still leading the table going into the international break and almost a third into the season. The January window will be key for both clubs.

That Southampton won yet again shouldn’t be a surprise anymore: They’ve won more often than not this season and find themselves just three points behind the league leaders. Title challengers? We can’t be sure yet, but they’re definitely European contenders right now. West Brom also delivered a very credible draw at Chelsea, who will be very relieved that their controversial penalty gave them even a point. Norwich’s 3-1 win over West Ham will also offer some much-needed breathing space for Chris Hughton and co.—about time his summer acquisitions started hitting the net. Let the international break be over sharpish. This league is too much fun.

 

A new generation of managers is emerging

In the Premier League top four currently are two managerial stalwarts who have practically won it all in European football—Arsene Wenger and Jose Mourinho. But it’s the two other occupants that intrigue, for they are relative novices at the top level.

But Brendan Rodgers and Mauricio Pochettino, and the style of football they preach, are a breath of fresh air in the fast-changing Premier League landscape—and a very welcome change of scenery at the top as well. Look just a bit further down and we see the likes of Roberto Martinez and Andre Villas-Boas, who also champion the merits of possession, energy and pressing. And this can only be a good thing for English football.

It’s always seemed that English football has been slower to catch onto emerging footballing trends. After all, it’s taken until now for possession-based technical football based on an energetic, high-pressure playing style to take root in the Premier League. But it’s taking it by storm, and we as fans are reaping the benefits.

As managers bring with them a philosophy—not just a winning mentality—this inspires clubs to revamp their structures, academies and internal setups to catch up to the rest of the continent (clubs that trust their managers enough, mind). As the coaching setup is increasingly tailored to cater to youngsters from around Europe (due to the globalizing nature of football), coaches and methodologies need to be updated to reflect the relentless growth and development.

Could the Premier League and the English national team end up not as adversaries, but as mutually beneficial endeavors? Food for thought as we consider another side to football below.

 

BT Sport, the latest game-changer in football

The buildup to Week 11’s Premier League action was dominated by the earth-shattering revelation that BT Sport secured the exclusive broadcasting rights of the Champions League and Europa League starting from 2015—for a massive £897 million.

How will this affect English fans? Well, this allows them to tune into one broadcaster only for their European fix, which is much easier to manage for cable subscribers. It also frees up the Champions League final and at least one match featuring each participating British team to be shown free-of-charge every season, which is a boost to everyday viewers as well.

Those already sounding the death knell of affordable football for the everyday fan need not panic just yet; the goal behind this money-spinning deal is to get even more interest to ramp up the bids the next time around, so there will be mechanisms to make European football coverage at least as affordable as it is now (inflation permitting).

What it also means is that starting from 2015, European football will be even more of a cash cow for top clubs than ever before. (Yes, “European football,” given that the Europa League will be given much more of a boost as well.) While this news has gotten the Daily Mail to proclaim an imminent rise in significance and importance of the FA Cup and League Cup, it also means that the much-mocked Arsene Wenger Fourth-Place Trophy will edge ever closer to reality.

Those clubs that are fighting to get back into Europe—and especially the Champions League—by the start of the 2015/16 season might be tempted to shell out even more on prospective signings in the coming few transfer windows to stock up enough ammunition to launch a real fight for the top four, which will have UEFA scrambling to impose its controversial Financial Fair Play rules—but also raise the quality of the Premier League even further, perhaps at the cost of creating a “Big Eight” in the English top flight.

We’re only beginning to scratch the surface here, but BT’s deal has already changed the landscape. Now they should consider shelling out just a little bit more to bring Gary Neville and Jamie Carragher over from Sky. Then it’ll make a tad more sense.
This piece was part of my weekly column on SWOL.co, where I take a look back at the weekend’s English Premier League and domestic cup action, related talking points and news surrounding English football at large.