Money & Euro Football

Created on 18/9/2008

This week the European Champion’s League football season kicked off. There are the rich and the poor in every sport, but rarely, if ever, is the discrepancy so large as it is here. It won’t be a surprise if a poor team wins the European Champions League, it will be a genuine miracle.

Two nights ago the Romanian champions, Cruj, beat Roma in Rome. A single result like this is nearly miraculous given the difference in the relative budgets of these two clubs. But the reality will set in and such anomalies will be corrected. The rich will get richer, and the poor are just their cannon fodder.

Last night Celtic, champions of Scotland for three straight years played Aalborg, of Denmark. The Scottish champions entire budget for the purchase of new players last close season was less than Hull City, a lowly new Premier League team in England, bid for a Manchester United fringe squad player, Frazer Campbell, now out on loan at Spurs. Aalborg are even less endowed with wealth, their manager, Bruce Rioch, was almost apologetic about crashing the rich boys party. Like him we know that his team is going to be eliminated, not because they are necessarily a bad team, but because they simply don’t have anything like an equal chance as they don’t have the resources to be competitive.

Teams wanting to advance to the knock out stage of the competition have to spend fortunes on new players just for the chance to do so. It is no longer sufficient for you to have a great manager, terrific support and a wonderful stadium, because what you really need is accommodating financial backers and a great television deal to spark interest in your sponsors and consumer marketing.

For instance, Lyon, usually a selling club, has spent more than £40 million (about $75 million) during the close season to beef up their squad and they are still likely to go out of the competition before the knock out stages are reached.

After the World War II, if you were a comfortably off local businessman, you could purchase your local football team, and demonstrate your community spirit by subsidizing them. It was only a bit more than two decades ago that it was sufficient to be a lowly millionaire to do much the same thing. Next you needed to be a member of the billionaire boys club if you wanted to be involved with the bigger teams in Europe and now, very shortly thereafter, you have to be the overseas investment arm of a major oil exporting country to compete in the major business this has all become.

Do you, like me, notice something very wrong with all of this?

AIG, the now nationalized giant American insurance company is the main shirt sponsor of perhaps the biggest football team taking part, Manchester United. They are committed to over £50 million in shirt sponsorship ($110 million) for the club. Should the shirt logo be re-designed to say, “Property of the US Government”?

The more people who are totally divorced from our national game gain control of our favorite clubs, the more divorced they will become from the people that built those clubs, the common man who remains the core fan base. In the longer term I suspect this is unsustainable. As a famous radio character once said, “We’re all doomed headmaster, we’re all doomed!”

It’s as if we are all in some giant casino, surrounded by unreal glamour, mindless of the consequences of betting with borrowed money, hoping that we won’t pick up some very bad diseases from the people we’re mingling with. Is this what they mean when they talk about toxic debt?