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| Football and the World Economy | |
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| Tweet Topic Started: Dec 31 2008, 02:15 PM (1,215 Views) | |
| Manzanares | Dec 31 2008, 02:15 PM Post #1 |
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You have to think the sport of football like everything else will be effected by the declining world economy. You would think that not everyone will be effected the same way especially with the amount of money Real Madrid are spending this winter transfer period. But some clubs, i.e. West Ham, have lost their shirt sponsors, others (Manchester United) may lose theirs, while TV contracts still in effect which were signed before the downturn may not be renewed in the future for the same amount of money. In the United States MLS cut out it's reserve league in order to save money while Chelsea have cut it's staff amid rumors that Roman Abramovich may have to offload some of his assets (either Chelsea or his equally beloved yacht). The sport is resilient and will get through this economic situation but I think this thread might be a place for us to discuss ways in which the world economy is effecting the sport around the globe. |
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| xeneize | Dec 31 2008, 04:29 PM Post #2 |
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Future TV contracts is where I think we will see the effect of the world economy on the sport. That may then cause European clubs to reduce their salaries they pay which of course won't be too popular with the players. But I find it hard to believe salaries will continue to increase in the current economic situation. |
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| shelsoccer | Dec 31 2008, 06:20 PM Post #3 |
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I've heard for years that TV rights fees have peaked and would have to come down. Hasn't happened. Now, that was in an economic climate much healthier than the present one. But, I'll still believe it when I see it. |
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| Merengue | Jan 1 2009, 09:52 AM Post #4 |
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That is the big difference though in my view. TV companies afraid of losing the rights would drive the price upward but now in the current economic situation those TV networks may be more reluctant to do so. Of course it also may depend on when TV contracts will be up for renewal, anything up this year should be effected but if the contract won't be up for renewal for several years then that should give the economy time to turn around. |
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| Mr. Pither | Jan 1 2009, 11:11 PM Post #5 |
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shelsoccer is I think right that so often in the past it was discussed that the ceiling on rights fees had been reached, only for it to be surpassed in the next contract negotiations! Maybe that will change in the current environment but that won't be known until the enxt contract is negotiated. When AIG was bailed out by the US federal government I had read that even if they did back out on their shirt sponsorship of Manchester United, which they have not as of yet done, that the club would have numerous other suitors waiting to buy that sponsorship. I imagine there is in these financial times going to be one set of rules for the big, multi national clubs (those which have appeal around the globe like Manchester United, Real Madrid, Milan, Bayern Munich, etc.) and another one for the smaller clubs like West Ham, Siena, Bochum, Heerenveen, etc. It is these smaller clubs who are more likely to be effected by the current situation than the mega clubs as they won't have advertisers looking at them because of their trans national appeal. |
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P-I-T-H-E-R ...as in Brotherhood, but with PI instead of the BRO and no HOOD | |
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| gaviota | Jan 1 2009, 11:58 PM Post #6 |
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Mr. Pither you have emphasised what I feel will happen in the present economic situation. The strong will be able to survive but the smaller clubs will be the ones who will struggle. I think this will just increase the gap between the haves and the have nots in world football, a gap which is already growing large. |
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| valenciano | Jan 3 2009, 07:19 AM Post #7 |
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That is always the case in tough economic times no matter the industry as the small company I work for is finding out now. One of the consequences of the Bosman ruling in the 90's was the rich got richer and we saw the creation of the multi national teams at the biggest clubs. The current economic situation will only exacerbate this occurrence and all the world is becoming like a South Amercan club who survives by selling it's top players to wealthier clubs overseas. Now even in Europe that is becoming the situation as only a select elite of clubs have the money to buy now. My club Valencia are a perfect example, it is one of the larger teams in Spain, is moving into a nice new stadium soon, was one of the founding members of the G-14 clubs but it is facing harsh economic times now and may have to sell some of it's more valuable players like David Villa or David Silva to wealthier clubs. This in turn will make the club less competitive as we are seeing across Europe that only a few teams can realistically challenge for the title. Gone are the days when clubs like Deportivo, Nantes, Verona or Blackburn could win a league championship. There may be more money involved now than ever before but to me overall the sport is poorer by this development. |
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| Mr. Pither | Jan 3 2009, 12:48 PM Post #8 |
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There is no doubt that in Europe power is consolidated in fewer clubs now than ever before. valenciano is right to point out in the primary European leagues outsiders find it increasingly difficult to contend but what has happened in the past few years is that even powerful sides from middle powers, clubs like Porto, PSV, Ajax find it much more difficult to compete with the giant clubs from England, Spain and Italy. Even the best from Germany and France have difficulties keeping up. To me this is a sad development in Europe. The disparity does not seem to be as great in South America and thus a club like LDU Quito is still capable of surprising the continent's powers and winning the top club prize. That is refreshing for someone like me who is more used to the elitism which has developed in the European game. But I don't see that changing in Europe anytime soon, particularly now in rough economic times. |
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P-I-T-H-E-R ...as in Brotherhood, but with PI instead of the BRO and no HOOD | |
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| Manzanares | Jan 3 2009, 06:13 PM Post #9 |
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One of the ways which the clubs who are not mega rich can be viable is through selling their players so you would think clubs would place more emphasis in the current situation on developing their youth clubs. But look at Chelsea, they are cutting some of their youth scouts so they may now be less able to uncover "diamonds in the rough" in youth leagues and thus could eb elss likely to develop their young players. Although Chelsea is a buying club and not one who looks to develop players to sell to others, this is still significant and may be a sign that other clubs without the financial resources of Chelsea may also be looking to cut costs in their youth divisions. If they do that they are being in my opinion very short sighted. But I would look to see if this becomes a trend in the present economy. |
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| Simon | Jan 4 2009, 05:06 AM Post #10 |
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It's true that leagues like Holland and Portugal are falling behind, but also as Mr Pither says, so are Germany and France. For one reason or another French clubs have never really been too competitive in Europe, there's only been one French European Cup winner and of course that was in tainted circumstances. But German clubs regularly used to be in finals and winning cups, and now it seems like Bayern Munich are the only competitive German team. Even then, I've heard people like Rummenigge saying that Bayern can't challenge the biggest clubs from England, Italy and Spain, perhaps that's a bit of kidology. Of course the Dutch have always been good at developing young players and then selling them to richer foreign clubs, but we used to see players like Marco Van Basten, Dennis Bergkamp and Ruud van Nistelrooy have pretty good careers in Holland and then leave for clubs like Milan, Inter or United when they were in their mid-20s. This would allow them to learn their trade in their own league and would also enable clubs like Ajax and PSV to win European Cups. Now, it seems any half decent Dutch player is long gone by this time, and increasingly the trend is for foreign clubs to sign academy players of 16-18 years of age who have barely even played in the Dutch league. I'm sure this harms the competitiveness of Dutch clubs like Ajax, but the sad thing is it often doesn't work out for the player either. Highly-rated young kids such as Maceo Rigters, for example, are rotting in the reserves at Blackburn when they could be playing regular matches in Holland. But it's hard to criticise him for wanting the move, I'm sure he's on good money and if he'd turned down a move to the bright lights of the Premier League, who could be certain his chance would come round again? Although it's true that competitions such as the Copa Libertadores are more unpredictable, I'm not sure it's always for good reasons. It's the reverse side of the same coin, kids from South America are signed at ever earlier ages by European teams, so it's almost impossible for successful South American clubs to make long-term team building plans and hold on to their best players. In that climate, it's hardly surprising that South American competitions are more unpredictable. |
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| cafetero | Jan 14 2009, 01:25 AM Post #11 |
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Here is a disturbing sign of the economic times from Colombia. Troubling news from Tolima. Their sponsor Bavaria, the large brewery, have pulled their sponsorship of the team and now the club are worried they may not have the revenue to play the upcoming season. Tolima, located in the city of Ibague had the best regular season record in the 2nd half of last season but due to their financial problems they have made no acquisitions this offseason and will have to sell players or find alternative sponsorship if they are to survive. Stay tuned for more on this story. This week officials from not only the club but the department (like the state or provincial) government will meet with Bavaria to try and resolve the sponsorship issue. I don't see the club disappearing but they are in serious financial condition now and the loss of their sponsor shows how fine of a line a club like Tolima are running. |
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| Yogi | Jan 14 2009, 10:34 AM Post #12 |
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That is a scary situation that you describe cafetero and a reminder to us that outside of Europe and it's big money TV deals, the life for some clubs is simply about surviving and the cutting off of a sponsor's money could spell doom. |
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| Martin | Jan 14 2009, 12:30 PM Post #13 |
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I was reading a couple of Colombian papers online about this situation with Tolima and apparently despite the club's success in 2008 on the field, the team did not draw many fans with a paltry 3,000 average attendance and this is why Bavaria, their chief sponsor withdrew. They just were not getting enough bang for their advertising buck. You see games involving the big clubs from Bogota, Medellin and Cali or even smaller provincial clubs like Junior and Cucuta and you see large crowds but in Ibague the fans apparently were not coming out to see Tolima play. I also don't know the entire situation but read in 2000 the club had similar financial problems and missed the first 5 games of the league before proper financing was acquired. I assume they forfeited those 5 matches back in 2000. So financial problems are not a new situation for Tolima and without much fan support it is hard to see the club remaining viable and being able to attract much sponsorship. In Mexico the clubs are franchises like in US sports and moving a club without much fan support is not uncommon, both Necaxa and Atlante were Mexico City clubs who always played second fiddle to the more popular America, Cruz Azul and UNAM. So the governments of provincial cities Aguascalientes (Necaxa) and Cancun (Atlante) pursuaded the clubs' owners to move them to their cities with promises of financial support. Playing in smaller markets where they are the only game in town has tremendously helped both clubs. In Colombia I do not believe clubs are franchises as they are in the US or Mexico but Chico FC was a small club in the capital of Bogota which never attracted much interest as it was overshadowed by larger clubs from the city (Millonarios and Santa Fe), so it moved to a small city called Tunja in Boyaca department and took off under it's new name of Boyaca Chico. In Ecuador, Espoli, the club owned by the national police academy (Escuela Superior de Policia ) never attracted much attention in the capital of Quito for much of the same reasons as Chico did in Bogota, so it has moved to Latacunga about an hour outside of the capital where it has found more support. I know clubs have ties to a community but when there is not much fan support, changing locales can be a viable option for some clubs and maybe this is something Tolima should consider in order to save itself? |
| Club Sportivo Desamparados | |
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| Pepe | Jan 14 2009, 12:48 PM Post #14 |
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You make a good point Martin and while you feel for the loyal supporters of Tolima with their club in dire straits, there just are not enough loyal supporters out there. Maybe this situation will be the kick up the ass the fans need to actually come out and support their club and save it. But if even a successful season like last year was not enough to get them to turn out in more numbers, a move to another city which could support them better might be the best alternative. |
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| Manzanares | Mar 6 2009, 09:42 AM Post #15 |
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This article discusses that Valencia is not the only club in Spain with financial troubles and also mentions how English clubs also are in deep debt problems too: http://sports.yahoo.com/sow/news;_ylt=Ahti...uters&type=lgns But the article only gives a cursory view from two academics of what should be done to solve the problem, Gay said it was essential that the professional league (LFP), the soccer federation (RFEF) and the government acted to impose financial controls on clubs to ensure their viability. But he noted that none of the three appeared to be up to the task. “I have the impression that they are looking the other way to avoid seeing the sad economic and financial spectacle that the league of stars has become.” Angel Barajas, an expert on soccer finance at the University of Vigo, backed Gay’s call for financial controls and said they would have to be combined with fines to punish transgressors and agreed on a Europe-wide basis. “Many clubs play in Europe and there will be a distortion of competition if clubs from some countries set salary caps or similar measures and others don’t,” he told Reuters. |
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