Barcelona collapses, football collapses




By Tony Attwood

It is a theme of Untold Arsenal that football is in trouble, and that trouble is a) serious and b) spread across a number of countries.

Until now clubs have been able to survive by finding new markets into which their products can be sold – the United States is one such area, Saudi Arabia has promised to be another.   But the underlying problems remain, and simply adding in new markets year on year can’t last for ever.

But for the moment his policy of geographic expansion combined with the collusion of the media in not touching the big problems that growing numbers of fans can see, is holding disaster at bay.   And indeed quite possibly it will continue to do so for a year or two more.   But ultimately, like all buildings made out of cards, the structure will fall down.

At such a moment the clubs that will survive are those with a sound financial footing, clubs that are not being accused of cheating or having cheated, and clubs that are not running a policy of ever enhanced debt and chasing after a perceived rival.

So let’s pull the problems together

  • Unsustainable finances and dubious sources of finance.
  • Mistreatment of young players through not keeping proper records of injuries.
  • Bias of referees toward home or away teams.
  • The secrecy of PGMO and a determination never to question anything they do
  • The unwillingness of media to face up to the fact that football is beset with problems.

Our point here is that any one of these issues could be dealt with – and maybe two could be taken on and resolved… but with football facing all five issues at once, that looks like a step too far.  Worse, when one starts to unravel there is every chance so will the others.

So what’s the latest?   We might care to note that in 2022/23 Italy’s professional clubs rather carelessly lost $1.5 billion – in part due to endless tales of corruption, failures in Europe, lower crowd attendance and declining TV revenue (which actually when one comes to think about it, takes in just about everything).  That’s on top of a similar level of loss the season before.

Indeed a report from PwC says they had a total debt of over €5.6 billion at the end of the 2021-2022 season, which is of itself utterly unsustainable, for it ensures that if the clubs do try and expand further or buy in more players, they are simply going to come unstuck.  Especially since the lower leagues are in desperate levels of debt too.

However, there is an idea on the horizon which offers a way out.   Which is good, except for the fact that it only offers a way out for a few, and for a short time.

One of the key problems for Italy is that most of its sponsorship comes from Italian companies.  The Premier League, however, has managed to cut its dependency on UK firms to 53%, which is helpful since if there is a decline in the economy of England, the PL clubs will to some degree be protected.  (Although of course as their fame spreads Saudi clubs will be out there picking up the big multinationals as sponsors and the day will come when those multinationals think that with the Saudi league being shown on TV around the world, that league is a better deal than the ever most expensive Premier League).

Elsewhere we are told by Bloomberg, Chelsea is actively approaching investors as a way of raising yet more capital.

So everyone wants more money.  Quite where all this will end no one knows, but we can certainly say that it won’t end here.  The whole marketplace is ludicrously unbalanced and uncertain, which means somewhere something is going to crash.

Meanwhile there is the case of Barcelona which has a global reach, and has global sized financial problems.

Now La Liga has cut the amount of money they can spend on transfers this season from €649m to €270m – which compares with €727m for Real Madrid and €296m for Atletico Madrid.  Things got so chaotic this past transfer window that the board of directors put up guarantees of their own money to allow the summer transfers to go through.

And we know that the club’s income will now take a major hit because it has already sold off a lot of its TV revenue for this season to clear some of last season’s debts.

So the issue is, Barcelona is out of the transfer market, which by itself might start depressing costs – which will be annoying to clubs who have just bought in players at the previous higher rates.

2 Replies to “Barcelona collapses, football collapses”

  1. I have nothing to comment, except that this is a very interesting isue. We are just sitting waiting for The Crash of 29 in international football. When Barca goes will the rest follow in some kind of Domino effect? And what will happen then? More articles, please…

  2. Marketing is not that simple. Whatever the Saudis do they remain a despotic regime which many companies will not want to be associated with. So whatever the standard of football they deliver their commercial opportunities will be limited. That’s assuming they are even bothered. they don’t need to balance the books. I’m not sure where the lower crowd attendances come from. Nor the reducing TV income, the premier league’s UK TV contracts are going down but their world wide ones are still going up. The worst case scenario is simply that income stops rising and clubs have to operate with more financial discipline. But if income stops rising then transfer fees stop rising, that is basic supply and demand. So what really changes ?

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