By Christophe Jost
An interesting comment from Mike T. recently on Macquarie, the Australian bank who have financed PL clubs growth got me thinking about the economics of the PL.
The lenders’ chances of recovering their money seem slim. And now even the government says the games should be broadcast openly, which will dent the whole revenue model more.
And now the broadcasters seem to be arguing that because games don’t take place at set times days and times, they need not pay. That suggests that the broadcasters view is that they may move any game around whenever they wish, yet force majeure does not apply to them.
Just think about the underlying logic. All fans are starved of games. They won’t be able to go see the games. Do you expect that they will tune in or not? Of course they will. The restart of the Bundesliga was an event watched as avidly as the kickoff of a World Cup.
So I guess the broadcasters are just looking for a way out of paying. One wonders how come all the MBA’s and high priced lawyers of the Premier League, the richest in the world, did not include some force majeure clause in the contracts ….but this is another story.
My opinion is that the Premier League is riddled with incompetence, within and around it: indeed all of football in England is a playground of incompetent people, which is what happens when the only criteria for being involved is money.
To me, some of these clubs or their owners have wanted to play poker or roulette. Quite possibly that applies to most of them. Some came to the table with a cartload of money and with wealth that guarantees they would not have to leave the PL casino anytime soon.
Others wanted to join the club at all costs and so set up a venture to do just that. Suffice to look at the owners of PL and Championship clubs to see that. And these people bet way above their means. So, now they’ll have to leave the table. And the clubs will tumble into lower leagues or go bankrupt.
I have no problem with a viable (and correctly run) company getting government help in its time of need. But these casino players, well, the taxpaying citizen does not have to be asked to finance their seat at the table.
Some billionaire does not have the means or does not want to keep on spending on his club? Tough luck them. He sells it, or goes bankrupt and faces all consequences.
And if the finances were not well managed, and too many risks were taken, well the guys who signed need to pay for their errors as any small business owner has to do.
Sure, the players and employees will have a problem. But this happens when any company goes bankrupt and we don’t see much of a report in the press about them, do we?
Personnaly, I’d be more worried about the staff whose wages are ‘normal’, they have the most to lose. But players? Well, they took on the career, they chose the clubs they play for, they earned generally way more money than any of us, so in no way are they worse off. In the end, it ought to be a survival of the fittest situation
And if the PL ends up with 10 teams? Well they’ll play each other 4 times in a season and over the ensuing years, some Championship teams may come up based on finances and results. Would broadcasters be against showing Liverpool- Man United four times a year? I don’t believe so.
As for broadcasters losses, well, tough luck guys. You are the ones who offered to pay more, in order to keep the competition out, you are the guys who took risks, your team members have the university degrees, you are the guys who hire the expensive lawyers and consultants. Go and sue each other and leave those of us who like football alone. Why should we care at all, after all the examples of you not respecting the fan in the stadium and the paying subscribers?
In a time when a recession is starting that looks like it will hurt many, when the health system of the country is in dire straits, any idea of the government coming out to save casino players sounds obscene to me. Privatizing profit while mutualising losses across the country is not acceptable. Banks did get away with it, arguing they were an essential part of the system and could not be allowed to fail. I can’t think how the Premier League or the FA would be classified in the systemic relevant category.
One solution out of this mess may be to transfer all clubs who go bust into some ‘Bad club fund’. Such a fund would pay the ‘little people’ owed by the club and look for buyers. Anyone wanting to ‘buy’ the club would have, in return for use of the ground, the brand, the name, etc. to repay the fund for a number of years, covering what was owed and interest.
Who knows, maybe the clubs’ own fans may be interested in crowdsourcing a restart. This way, there is no need to come up with hundreds of millions in one shot, but with a plan that makes sense, a competent management team and a vision.
What’s more, the funds invested could be vetted so as to avoid mafia or autocratic like takeovers.
But then again, such a scenario would need competent people preparing for it and actually running it. Which I don’t think the PL nor the FA has shown as having available.
It is just an idea, but why would it not be possible to apply to football, recipes that worked for another casino-like industry: the banking system?
However, at some point, survival of the fittest still must apply, and frankly, I do hope it will.
good ideas Christophe. parts of the U.S. bailout of GM in the great recession could stand as a model. Any club that needs bailing out, mostly to save the jobs of the non-playing staff, go into a pool. Anyone who buys the club would be obliged to pay an upfront fee and pay the rest of the bailout money over five or ten years.
The PL should be required to help with the bailout too. What else have they been doing with the massive amounts of money they have made over the years?