Football’s big problem: cash flow, transfers, collapse of sponsors, piracy, everything…

by Tony Attwood

I just got a post on my phone titled Big Topic Discussion: “What an ideal transfer windows for Arsenal will look like?”   It’s not too hard to translate it into grammatical English however, so we can get the rough idea of what they wanted to talk about.

This statement came from AFC Live, who also sent me “Gabon FA president urges Aubo to quit Arsenal and join a club that matches his ambitions.”

That was followed by, “The Gabon FA president claims Arsenal are not as ambitious as some big European clubs.”

At the end of the piece which apparently comes from ESPN (who at their age really ought to know better when it comes to grammar), it says, “As the team is being rebuilt and the coronavirus outbreak set to have a knock-on effect on the club’s financial state, the board might be forced to sell the prolific goalscorer…”

So who might we sell him too?  Who has these greater ambitions? And come to think of it, why is the coronavirus only affecting Arsenal?

We’re not really told, but when it comes to ambitions we can knock down Barcelona obviously, for six members of the board have just resigned, and everyone has taken a pay cut – not to help the state or the medical services – but to help the club survive.  They are in something approaching a financial meltdown.

So what about PSG?   They have already set things up so they can win the French League for the next 30 years.  They are ok, surely.

Actually no, because, unfortunately, their main sponsor has said it won’t be paying the next instalment of its sponsorship money until football starts again.  Which will be… ah, we don’t quite know.  And that is a problem for their sponsor, the giant Augmented Hospitality hotel group Accor with 4900 hotels across 110 countries.  You can understand they might be in a bit of a state.

With Accor’s business heavily impacted by the Covid-19 outbreak, the company is struggling to justify making its next payment on 1st July.  And unfortunately for PSG the deal is reportedly worth up to €80 million a year, which is a fair chunk of the club’s income.  Their statement was simple, “Sponsors cannot give money if there is no visibility. On 1st July, it would have to start again, otherwise it will probably not be paid.”

And it is not just Accor that has just cut three-quarters of its workforce of over 300,000 staff.  Bordeaux’s shirt sponsor Bistro Regent has suspended its contract with the club.  Bistro Regent is a national restaurant chain who pay €1.5 million a year.

So let’s ask again “What would an ideal transfer window for Arsenal look like?”

In fact it is a meaningless, silly, pointless question, because no matter what, this cannot be an ideal transfer window because these are far from ideal times.

Sponsors are pulling out, wholesale.   Clubs which have already spent the next round of TV money by borrowing it from their banks on the promise of full repayment when the TV cash rolls in, now know just how deep a hole they are in.

Clubs can sue sponsors but are probably best advised not to because that would mean they are unlikely to get any more sponsors in the next ten years.

In fact, in the aftermath of the virus situation, there will be a lot of clubs looking for sponsors, because so many of the sponsors will have gone bust.  It will be a buyers’ market and the price will be at ground level.

And there’s another problem.  PSG is owned by the chairman of beIN media group who have massive problems of their own.

It’s not that beIN’s whole business model is based around buying and selling sport on TV at a time when sport has stopped.  Rather it is because, in addition to that, beIN is locked in a major, global battle with beoutQ, the Saudi satellite station that takes all the beIN product and puts it out for free on its own satellite channels.  It is costing beIN billions in lost revenue.

If beIN’s owners withdraw from the market for those rights or offer much lower payments because beoutQ is giving away what they charge for, this would have significant financial repercussions for FIFA, its confederations, the leagues and their teams.

Of course, Uefa, Fifa and various leagues have contacted all the major law firms in Saudi Arabia asking them to act on their behalf in the fight against beoutQ but what a surprise! none will do it.  Saudi Arabia is among a group of Middle Eastern nations leading a political and economic boycott of Qatar.  For the rest of the world this is one oil-rich empire fighting another, so who cares what happens.  The view is, “let them get on with it”.  If Premier League football is losing some of its millions, well tough, they’ve got lots of millions to lose.  Or at least they did have until coronavirus came along.

Vested interests of course swamp everything.  Italy doesn’t like what Saudi Arabia is doing to its TV coverage by letting it be broadcast via beoutQ for free, but then there’s a problem.  Saudi Arabia is Italy’s biggest trading partner in the Middle East.

beIN has launched an international investment arbitration claiming over $1 billion in damages against Saudi Arabia on the basis of beoutQ.  The USA has put Saudi Arabia on its Special 301 Watch List, noting concerns over the deteriorating environment for the protection of intellectual property.

And all the while, trade, commerce, entertainment, sport and the rest has come to a halt.

So to answer the question “What an ideal transfer windows for Arsenal will look like?”  the answer is, “It will look as if no one is trading much, but everyone will be happy that at least football has survived.

That’s the ideal.  Anything less than that is going to be a disaster.

One Reply to “Football’s big problem: cash flow, transfers, collapse of sponsors, piracy, everything…”

  1. Fascinating, and as succinct as you could find. I have seen lots of transfers, transfers articles,read some only to satisfy my curiosity, perhaps there could be interesting information.
    Definitely, the dawn of ”Covid-19 economics” will shape to a large extent how businesses, including football will be run in this new decade. For sure, there will not be big transfers on debt financing. @Tony Attwood, ever consistent and steadfast.

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