What we called the foot business appeared in the 90’s when players begun to have agents but also when European court with Bosman judgement in 1995, decided that it was illegal to have quotas according to the nationality in clubs. Since then, players and coaches became a market value and football is now a sport, a spectacle but mostly an industry which weighs 400 billions of euros worldwide.
Indeed, we can say that football has developed into a money-driven industry: games turned into big events and companies don’t hesitate to invest millions of euros to make advertising or build stadiums. It also reflects in the amounts that are paid by clubs to buy a football star or to keep them by giving them high revenue every month. Another aspect which is more politic and also shows the power of this sport is the efforts that countries are putting into to obtain the opportunity to organize the world cup every 4 years. Indeed, it is a perfect communication tool to promote your strength and culture to the world, see the example of Qatar for its 2022 campaign.
However, let’s be clear this craziness doesn’t touch the same way all the clubs. As a matter of fact, only the big clubs with high economic capacities can afford to spend that much money to only buy a player and the “little” clubs with less budget are struggling to catch up with them. All this foot business is marking the gap increase between them.
More than that, this phenomenon causes many criticizes among the supporters, politics and people in general who are shocked by all these amounts and even more since the crisis that affects all the European countries. Moreover, all these big clubs are not really in a good financial state. Indeed, many have big debts, for example the Real Madrid is suspected to have a debt which raises to 530 millions euros and thus, they are still spending millions on the transfer market.
There are many actors from the football sector that are trying to denounce and take measures to control that. The most famous example is the “financial fair play” preached by the UEFA president Michel Platini. This measure was adopted in 2011 in order to improve the financial state of the European clubs. This means that now clubs will have to prove during the entire season they don’t have any late payments either it is for other clubs, staff or other administrations. Furthermore, since 2014, they will have to respect a financial balance: not spend more to what they earn. The UEFA also set up a commission to control clubs’s finance. If they don’t follow the rules, clubs risk a reprimand, a fine but most important to be dismissed from a competition.
However, even if this project seems promising, they are still a lot of efforts to make. Let’s take the example of Real Madrid, as I have already mentioned, the Spanish club is deeply indebted and despite that, they are still spending millions of euros to hire the best players. Therefore, we can fairly wonder if these measures are useful. The real problem remains that the Real Madrid can afford these crazy amounts as they are still earning more money from TV broadcast, by-product sales and advertising, so their financial balance is respected. Real Madrid doesn’t have to worry about that because debt is not taken into account in the UEFA’s plan.
We cannot say the same thing about the PSG. When the Qataris bought the parisian club, they invested a lot of money and they keep injecting money to compensate the fact that the PSG revenues are not sufficient to fund the Qatar’s ambition, which is to transform the PSG into one of the biggest European clubs by buying players like Ibrahimovic.
To conclude, this financial fair-play shows some potential and we can’t deny that foot business needs some regulation to respect the sport values. However, this seems insufficient in some situations and we have the right to question it as it may discourage investors from funding small clubs and prevent them from decreasing the gap between the biggest clubs.
MB
References:
PSG - Real Madrid 