The football business shows its two faces these days. Two opposing business models for the same show – say, if you will, sport – that compete for the same cake. With the paradox that while some gorge themselves, others share the crumbs. This is the only way to explain why the International Federation of Association Football (FIFA) anticipates unprecedented income after the World Cup in Qatar at a time when the five major leagues (the English Premier League, the German Bundesliga, the Spanish LaLiga, the Italian Serie A and the French Ligue 1) are struggling to get ahead by selling assets and trying to get the clubs that comprise them to tighten their belts.
All of them closed their last financial year with losses, and only two clubs from the Premier (out of 20) and three from LaLiga (also out of 20) presented a positive operating result in the 2020-2021 financial year, according to the Annual review of football finance. 2022 prepared by Deloitte and the latest report The finances of the five major European football leagues of the Col·legi d'Economistes de Catalunya.
The explanation is as simple as it is surprising: FIFA, like the six affiliated supranational confederations –in Europe, UEFA– or the national soccer federations, compete with the leagues in the sale of television rights, sponsorship agreements, brand licences, etc. sale of merchandising and tickets and all kinds of commercial agreements. However, its main and practically only activity is the organization of competitions, such as the current World Cup or the continental competitions for clubs or national teams, although without having to assume the main operating cost of the clubs that make up the national leagues: personnel ( read players). A cost that represented in the 2021-2022 campaign, when the pandemic had already forced to reduce costs, more than 71% of the average operating expenses of the Premier clubs and almost 73% of those of LaLiga, according to the statistics. same studies.
“We are facing an absolute aberration, a totally unequal business in which its players compete in the same market with different rules. The clubs pay the players by pushing their resources to the limit in order to compete on the pitch with a logic that has little to do with business, while FIFA, UEFA or the national federations, following a false model of amateur football, use the players that they do not have to pay to carry out their business without assuming any risk”, reflects the professor at the University of Barcelona and sports finance analyst Gonzalo Bernardos.
That the pandemic has fractured an already highly stressed business model has been made clear with the famous levers that the FC Barcelona board of directors has been forced to activate. Various operations, computed in different years so as not to further unbalance the accounts, which are nothing more than a euphemism for the sale of assets, future rights that the club will not enter from now on. With this, and following the logic of this business, they have not tried to improve their budgets, with a gross debt of about a billion euros, but to invest in players.
In a very unequal international market, with very powerful clubs and others extremely modest, the buying and selling of players had already become the main resource for those who were in the greatest hurry to balance their accounts, making what was computed as an extraordinary income appear as the most ordinary in most budgets.
An abnormality assumed without further ado by the leagues, responsible for regulating the business and enforcing salary limits and financial fair play rules, which is unthinkable in any other sector, where accounting orthodoxy dictates that any company must be able to cover its operating expenses with your regular income.
However, the pandemic and the lack of resources of the rich have also affected that model, putting many clubs in trouble. "Until now it was clear that you always had the option of selling players, but the pandemic has changed everything, and competitions and clubs have begun to sell assets, further stressing the model," says Marc Menchén, director of the business platform for the sports industry 2Playbook. This is what Barça has done and what LaLiga did when it sold a year ago 9% of the audiovisual rights for 50 years, although this body is now trying to prevent – it will discuss it at its next meeting – that the clubs increase by more than 5% of his salary limit for the sale of assets in a season.
In this same scenario of crisis and the urgent need to obtain more resources, the Super League project was born, initially led by the main clubs of these five major leagues, but in which now only Real Madrid, Barcelona and Juventus have remained. of Turin after the revolt that led to his announcement among the fans of the English and German clubs. Even the British Government positioned itself against a project that questioned the viability of national competitions.
This same week, LaLiga presented a report prepared by the KPGM consultancy that estimates that with the European Super League the Spanish competition would lose 55% of its income. On December 15, the European Court of Justice must declare itself on the right of the clubs to create this new competition, although the defense of only three promoters makes its implementation unfeasible today. Meanwhile, the different national competitions are preparing new mechanisms to dismantle it.
That this desperate search for mechanisms coincides with the benefits that FIFA obtains from a competition that has become a manna has reactivated a latent debate for years. Should FIFA and the federations face the salary of the players? Should they spread their profits between the leagues? Should they have their access to sponsors prohibited or limited, following the model of some public agencies or media? "Of course, a change in the model is required to make federations and leagues compete on equal terms, because the current one has neither head nor tail," says Josep Sanfeliu, author of the report from the Col legi d'Economistes de Catalunya. In addition to a harmonization between competitions, since the market is international”.
Menchén is also committed to a radical change in the current selection model that allows clubs to obtain a fair return for their players and to regulate by means of a European directive, since four of the main leagues are in the heart of the EU, the current criteria for UEFA's financial fair play, since currently it is the regulator of each country that approves the accounts of the clubs, in some cases with advertising or sponsorship contracts that far exceed market prices. Bernardos agrees with this regulation, setting on the one hand a harmonized salary limit between the major competitions, following the F-1 or NBA model, and on the other through an intervention by the different administrations to equate the federative model to that of the major leagues.
