Football’s new world order – not spending everything you don’t have

By Tony Attwood

The argument is being made in some quarters that with its debts out of control football is at last trying to start controlling its finances.  This means there is a move toward reducing its insane spending and costs instead of believing that it is always possible to screw more money out of the media, the spin offs, the fans and the sponsors at every turn.

And this could have a major impact.   In the Middle East and Asia where government support is still available full-time, as part of a constant government PR initiative and drive for dominance over Europe, growth is still expected.

What’s more, despite the takeover of the African branch of Fifa by head office, African football seems also to have a general belief in itself, with its ability to pull in more and more investment, not least through partnerships which allow access to control and activity that cannot be legally found in Europe and North America.

So yes, lots and lots of Middle East, Asia and African money, all coming football’s way.

But in Europe, North America and Australasia there is seemingly a drop in confidence about the eternal ability to grow sport.   And that is dangerous, because it is that belief in the ability to make each sport and each major club grow in terms of its finances, year by year, which is at the heart of the financial model that dominates football.  (There’s a full analysis of the PL figures here).

This is why owners of European and American clubs seem so far removed from the fans; they are there for different reasons.   For the owner of a major team – such as the traditional big six of the Premier League, the issue has nothing to do with winning trophies and position in the league.

Instead it has everything to do with financial growth.  And if the ground is full and the TV rights sold, that growth can only come through engaging with the fan base and getting us fans to spend more money in different ways, while constantly attracting new financial partners and getting them to spend more and more money, and then overall generating new revenue streams.

Football is now: “We’ve got all these committed people: what do you want to sell them?”

So we might well find that completely new games emerge, such as the one in which one can, within a game, “own” a player and have a unique digital representation of that player.  If that player does well, the person using the game might decide to sell their unique image of the player in that game to someone else – who will buy that image to enhance their own standing in the game, and hopefully resell him at a profit later.

That player becomes a crypto currency in fact – just like the original of a painting.  It’s value is artificial – it is just what someone will pay for it.

Or try this one for size.  The under 23 set up in the Premier League is rarely played in front of crowds of any size.   But make the under 23s something new, special and highly marketable and one can bring in new sponsors for the ground on which the matches are played.   Under 23 players can be marketed as the next big thing, sponsors can be associated with the players through the club.  

We as fans might see the under 23s as part of our hope of a continuing Arsenal revival.  But for the owners, and the marketing teams that exploit the players, they are a thus-far largely untapped source of finance.   And then there’s the women’s league too….

And this is vital because until now the amount of growth in the financial returns of major sports such as football has been 3% per annum.   Brilliant compared with interest rates.  But if interest rates shoot up, as they are about to do, and football growth goes down, then that doesn’t just mean fewer big deals for each club.  It means that an investment for the owners which has made money constantly, suddenly stops dead in its tracks.

And at that point, it is difficult to see how the football world, controlled and operated by whole countries, and insanely rich individuals, will continue as it is now.  The rich have no long term affection to players or clubs, so they’ll just move on, and the clubs will be downgraded as investment vehicles.

What all this comes down to is the basic fact: growth cannot continue for ever.  We might well be watching the start of the end game.  This could be the start of difficult times both for game players, and for those of us who actually enjoy supporting our team.

But the problem is that because of the abject refusal of football’s governing bodies to control financial investment, the desire for growth will remain.  Which means in the near future football might not look very much like it does now.

One Reply to “Football’s new world order – not spending everything you don’t have”

  1. you think Barceloanus have found out, to their detriment, that nothing goes on forever? when oil becomes less fashionable in the near future a few more clubs will join them as they weep and gnash their teeth.

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