Review: Euro-consolidation of the Mega Clubs?

Football is not an industry. Football clubs are not wares.
When buying things in the supermarket you compare prices, quality, and maybe image, and then opt for the best deal (which often benefits the biggest corporations because of economies of scale and monopolies).

In choosing football clubs*, however, price and quality don't play that much of a role, and the influence of marketing to boost the image of a club is limited.
Football clubs are chosen mainly according to the place where people grow up. People support their local club.
Also, people support the club whose culture reflects their lifestyle, and clubs with players and managers that they like as persons (even if they are not good enough to play for the megaclubs).

Also, most dominant corporations in "normal" industries have achieved their status by merging with or buying their competitors, which is impossible in football.

And, other than with wares in the supermarket, dominance of a few brands automatically means that the overall product (football) becomes less attractive. (This is true for many sports, most markedly boxing: would you rather see a boxing match between a very good boxer and a weak sparring partner or between two good boxers?)
Dominance in football means predictable outcomes, one-sided games and lack of tension. Nobody wants to see regular thrashings of minnows by mega-clubs. So, if the "consolidation" goes too far, regulation against it will be introduced, because it is in the interest of all clubs, even those mega-clubs. Otherwise, fans will turn away from football, or they will hate those mega-clubs and turn to smaller clubs or other leagues instead.

*the following applies to European football - in the US and other places it may be different

 

Most of those clubs have already stadiums that are too big for them. The attendance figures in Seria A are consistently the lowest among Europe's top leagues: under 70% for the league; the 2010/11 figures for the clubs you mentioned are:
Juventus: 86,3%
Roma: 47,3%
Inter: 73,4%
Milan: 67,3%
Fiorentina: 49,9%
Napoli: 75,7%.
Building new stadiums for a lot of money will not help, but hurt them financially.

The proceeds from the sale of stadium naming rights constitute only a small fraction of the income of a football club. The main sources of income are television rights, gate receipts, merchandise and sponsorship deals other than sale of naming rights (shirt sponsors etc).

Also, there is a general financial and economic crisis on the horizon in Europe (Arsene Wenger made that point recently), and Italy is in the center of it. Corporations and the general public will not be able to spend more money on football, but will cut spending on non-essentials like this.

Italian clubs have a disproportionately high dependence on TV money. If this money dries up in the wake of a global financial crisis, Italian football is in trouble.
Germany, for instance, is in a much better position because the clubs there get so little TV money and charge so low prices at the gate (despite almost 100% attendance) that their income can only go up.

 

One remark to Hoffenheim and its billionaire benefactor. This guy is actually from that region, and supports this in a way, that it eventually can support itself someday.

His intention is not to be like a Berlusconi, who uses Milan for political purposes, or to be like decadent, inbred oil Sheiks or criminal Oligarchs for that matter, who don´t care much about wasting money, and see a football club just as another toy/status symbol to make themselves feel even more important, than they already think they are.

 

Sadly, your optimism seems quite misplaced.

Just consider how Barca/Real. La Liga already suffers under their dominance.

Financially La Liga simply is set up in an unfair way, with those two clubs alone gobbling up half of the TV revenue!

Result? Half of Spain's clubs are bankrupt. Nobody can compete with the two giants. Total earnings also suffer, as I once read, because broadcasters see the overall product not being as attractive.

So, if you were right, Spanish football would have already long reformed itself. It hasn't. Only cosmetic changes to the TV revenue picture will follow in, iirc, seven years.

Err, Barca and Real are getting more fans by the day. In Spain and abroad.

You'll be waiting a long time, if you think all those gloryhunters will all of a sudden support Getafe & Co...

 

Thinly veiled "How dare they make MY club look insignificant" post..

 

I do not give a damn about top football brands. I care about the local football brand. And, thus is the problem - if any sort of Superleague (for example) is formed I will not follow any of the megaclubs in it.

 

Can you explain the mechanism by which Real Madrid and Barca are gaining more Spanish fans. They can not be grabbing hardcore Malaga or Rayo fans, can they?

 

They're grabbing 10-13 year olds that love to play Messi or Ronaldo in FIFA 11 on their game console. The children of the Malaga and Rayo fans, in other words.

 

Don´t really get what you mean...
But well Hoffenheim is not my club, just think that Hopp shouldn´t be put into the same category as the likes of Berlusconi or Abramovich.

 

I doubt that. So many kids follow their fathers' (or brothers') favorite teams. Now, if we were talking about neutrals or the people whose club is far down the football ladder, then - yes, you could have those jump on the bandwagon.

 

I've gotten to a point where I no longer care if the "mega clubs" form their own Super League. Good riddance I say.

That said it would nice to keep it under the UEFA umbrella, with relegation to domestic leagues and promotion through the Europa League.

Something like this: http://bleacherreport.com/articles/...w-a-european-super-league-could-save-football

 

That's what a lot of European football fans are saying. The sad thing is that what European fans think has become irrelevant to a lot of the elite clubs. They have become completely alienated from European football really. What the Dubai industry leaders think has become more important to them than what the people who go through their gates every two weeks think. What international television channels think has become important too. So yes, screw em. Let them have their elite league and let them play their league games in Hong Kong, LA, Dubai, Qatar and wherever. Leave them be, keep overseas football audiences happy, and leave us European football fans the joy of our domestic league.

 

I'm vehemently against that. I don't want domestic leagues to be effectively a second division.

The Bundesliga works well. It's exciting and the minnows (like Hannover, Mainz, Kaiserslautern) absolutely can do well. Heck, Hannover almost made the Champions League. And one of the richest clubs, Wolfsburg, almost got relegated...

Just because England, Italy and - above all - Spain have leagues that are seriously out of whack, we shouldn't forsake traditional league structures.

Instead, those countries suffering from a severe case of megaclub syndrome should restructure their financial setup and tighten financial regulations so as to prevent the sugardaddy subsidies.

Fix it. Don't kill it.

 

It can't be fixed though, not unless the EU gets involved and labels professional football a regular industry. Which would see the EU competition committee take action on football immediately.

The powers that be (UEFA) clearly like the system, it's making a lot of money. The elite clubs show no solidarity whatsoever and I can't see that change either. So let them have their cake and eat it. I ain't bothered.

 

But the clubs spend more than they make and inherit debt as a result. Its a viscous cycle with seemingly no ending in sight.

 

...not in the Bundesliga, the most profitable league in the world.

I'd suggest that other leagues should emulate the Bundesliga's regulations and structures.

 

Not all clubs spend more than they make. That's exactly what the problem is. There are leagues in Europe that allow clubs to clock up massive debts year after year after year. While in a neighbouring league that same debt situation would get a club's license revoked. It's an uneven playing field and UEFA isn't helping because the way they've organised European football is targeted at making rich clubs even richer (which is ironic seeing that officially their mission is to serve all UEFA members states and support football in all member nations).

 

Why would they want to do that though. Why would Real Madrid and Barcelona want to change the cushiony situation they're in now. Same goes for premiership clubs.

The situation can only be changed by a higher international power like the EU. OR if Spanish banks (who financially support clubs) for example start collapsing. Then Spanish clubs would be forced to restructure how they're financed.

 

Serie A has only recently moved to a central marketing of TV rights. That is the key to a fairer distribution of TV revenues.

There's no reason why La Liga couldn't accomplish the same and redress the ridiculous disparity in the Primera Division.

 

Again why would La Liga want to do that? Unfortunately the powers that be only care about money. They don't give a shite about a fair distribution of tv money, whichever way they can get more money works for them. See Liverpool wanting to market its own tv rights now.

The irony of it all is that they all completely underestimate European football fans. I'm pretty sure that the vast majority of European football fans would soon grow tired of watching the same old elite eight play against each other. They're killing off their own market AND their own talent pool yet are too dumb to even realise it.

 

I agree with you. My dad would tell me in his day, clubs made their money off a percentage of betting which was their main source of revenue at the time.

And then of course when TV grew in use it was advertising divided among the clubs and government networks. And now its the private networks owning practically all the rights feeding the clubs.

I don't have all the data, but I think you could make the argument that we have a crisis on our hands. We haven't even reached the bottom of the housing bubble in Spain yet and I think once that starts to tumble you're going to see some serious interest rate adjustments in the market with or without a bailout. Consumer spending will ultimately shrink including the value of Euro which is essentially a tax for businesses and people.

In that scenario I find it highly improbable that you'll be seeing the same sort of ridiculous transfer fees and salaries that UEFA and more so the creditors have been tolerating thus far.

 

Johan, I just gave you a positive example. Italy has returned to the central marketing of TV rights.

...yet the other major clubs in England have rejected that proposal. Looks like Liverpool's pretty much isolated on this question.

And in respect to Spain, things are moving. Though the reform La Liga agreed upon falls far short of what you and I ask for.

That agreement has the Barca/Real TV revenue share fall to 34% of the total, while still sticking to individual clubs selling the rights.

As for EU stepping in, check out the following article:

http://www.insideworldfootball.biz/...xpected-to-support-la-liga-collective-tv-deal

And Sevilla-led efforts:

http://www.insideworldfootball.biz/...iga-makeweights-try-to-reform-spanish-tv-deal

They all?

Err, you unfairly overgeneralise.

Plenty of clubs favour a reasonably equitable TV revenue distribution. That's why central marketing is the norm in Europe. Spain's an unhealthy exception.

And remember: The UEFA Financial Fairplay rules were introduced with the support of the clubs.

Seems to me you should examine things more closely before launching yourself into some rant. It ain't all bad, you know.

 

Football has proven itself pretty resilient in terms of economic downturn. Not like transfer fees have rapidly fallen over the course of the last 2-3 years.

Not least because of all the outside "investment". Man City & Co have injected a lot of ready cash.

Now, it remains to be seen how sharp the teeth of UEFA's FFP rules will be. If they curtail Man City like spending-sprees, then transfer fees will go down.