“It is always wise to look ahead, but difficult to look farther than you can see.” Winston Churchill
Last week this column took a look back over what it had predicted for 2014 to see how they had fared in reality. Now, for the first column of 2015, and as one of history’s great men once said, it seems wise to look ahead, at least as far as we can see.
It seems this year could very well be a volatile one in general terms, both politically and financially, and the football world is not immune to such wider influences. There are also a number of key events taking place within the football world itself that could have a big say in what develops over the next few months. Here I will take a look at what some of them might mean for the game as a whole.
1. The Premier League television deal renewal
Last month this column looked at the annual reports of Real Madrid, Bayern Munich and Manchester United to demonstrate how much a position of primacy for the club brand translates into cold, hard cash for the team in question. Their rivals can only look on in envy. The fact is the same applies for the market-leading Premier League, as its negotiating team, led by the chief executive, Richard Scudamore, goes to the market to renew its broadcast contracts for the 2016-2019 cycle.
The Premier League trades on a number of assets. It benefits from its residence within the nation that gave the world its lingua franca, English. From that flows the advantage of a defunct empire, within whose still-extant Commonwealth of nations many eyes are still culturally and commercially drawn to Britain, not least due to the influence of the national broadcaster, the BBC. It also has the football heritage of being the nation that gave the world its favourite game, added to which is the proliferation of clubs who have made their mark on football over a number of decades.
But most important of all is that the Premier League is already the most-watched league in Europe. This position of primacy in the international market will translate into uplift in revenues for the Premier League, diverging still further from its European counterparts – just as it has for Europe’s biggest clubs.
Broadcast Incomes, European leagues
The last time the international rights were signed off, in November 2012, the international contribution to the current three-year rights cycle was in excess of £2 billion – more than €850 million every year from foreign broadcasters alone.
What happens to the value of the domestic rights, however, is rather harder to evaluate as there are a number of complicating factors. I will conduct a more-detailed analysis of the Premier League broadcast-rights auction later this year but in summary a few of the pressures on price for the Premier League are as follows.
First, there is the declining appetite for aggressive sports-rights auctions at the Premier League’s long-time broadcaster partner, BSkyB. The entry to the market of BT, a telecoms operator with annual revenues of £18.3bn (€23.3bn, $27.6bn) has been a game-changer to make Sky recognise it can no longer have things all its own way. Next there is the fact BT is itself involved in a major, £12.5bn (€15.9bn, $18.8bn), acquisition of the mobile-phone network EE, which may or may not indicate a shift in strategic direction away from football (more than probably not).
That said, it appears likely that the Premier League’s take from UK broadcasters will at least remain flat, at £3bn (€3.8bn, $4.5bn) over three seasons, with the portion earned from overseas growing ever faster. Between 2010 and 2013, the Premier League took £1.437bn (€1.83bn, $2.17bn) from its overseas rights deals, a number that rose 40% over the next cycle. But with the US, the world’s most valuable media market, truly now waking up to the excitement of “soccer” through the FIFA World Cup and expressing it through its consumption of Premier League content that number could fly again. If the Premier League receives £2bn (€2.53bn, $3bn) a season from broadcasting its clubs would probably consider themselves hard done by, and yet it is the kind of number that other leagues can only dream of.
2. The FIFA presidential election
There is a general election due in the UK this year. It will involve two sets of politicians exchanging blows over who can spend the most money on populist projects like the National Health Service. Elections are always about the money that can be spent.
It is no different in football. The FIFA secretary-general, Jérôme Valcke, wrote in a circular to FIFA national associations last month that “additional bonuses” of $500,000 (£331,000, €422,500) would be paid to all member nations as a FIFA World Cup 2014 windfall. This takes to $1.3m (£860,000, €1.1m) in one-off payments to federations, as reported by INSIDE World Football last month (see first related article below).
There has been very little scrutiny of how federations spend their FIFA-grant money in the past. Although the global body now has more tools to scrutinise how that is spent (see second related article below) some cynically wonder whether they will ever properly be employed.
Many federations have proven that some football executives are hopelessly corrupt and are seemingly in the game only for what they can personally gain through graft. If Sepp Blatter’s campaign team wants to garner the votes of such people it has only to whisper to them that FIFA will turn a blind eye to whatever they do with the handouts, regardless of the new structures in place.
That would of course be entirely unethical and there is no suggestion that Blatter or his campaigners would be inclined to do such a thing. But this simple fact does demonstrate that the FIFA presidential vote is very much structured in favour of the incumbent. If voters believe they will do better out of the man in charge than in the event of a change, then there will be no change.
This weighs heavily against the campaigns of Jérôme Champagne and Prince Ali bin Al-Hussein of Jordan, who are running against him. Even were the Asian Football Confederation not to have declared in favour of Blatter, the race would be tough for Prince Ali. If Blatter wants to stand for the presidency (and the only reason there is an if is that lately there have been whispers that his heart may not in fact be in it, at least not for a full term) then the challengers’ chances of unseating him are very, very slim.
3. Judicial inquiries into the World Cup awards
In 2014 it became clear that while FIFA will not revisit the decision to award the 2018 and 2022 World Cup tournaments to Russia and Qatar respectively, the bidding process will remain the subject of scrutiny for some time to come. The New York Daily News reported that the former FIFA executive-committee member, Chuck Blazer, had been engaged by the Federal Bureau of Investigation as a “cooperating witness”.
While at the London 2012 Olympic Games Blazer secretly recorded conversations with a number of his football contacts, presumably discussing matters that were of interest to the FBI. The fact he did so on British soil has joined the UK’s Serious Fraud Office into investigating the 2018/2022 bid process. It is also unthinkable that Michael Garcia, having quit his role as FIFA’s chief ethics-committee investigator, would not also feed information to the Feds if as a career lawyer he felt it valuable to a live inquiry.
If one day a successful prosecution is brought against either bid team or those who voted in the decision (and this is by no means guaranteed, as the related article below explains) then the calls for a boycott of one or other World Cup may become ever more clamorous. And if several major nations refuse to attend, then the commercial cost to FIFA as organiser of the pinnacle tournament in the world football pyramid could be fatal.
4. Russia’s financial crisis and the 2018 World Cup budget
A more-pressing concern for FIFA should be how the economic crisis in Russia is already impacting on plans to deliver the 2018 World Cup. Russia’s sports minister, Vitaly Mutko – a FIFA executive-committee member – was quoted by the state-run Rossia Segodnya news agency on Boxing Day saying: “”There is a budget deficit for 2015, so the organizing committee is counting on donations from individuals.”
In other words, it is time to get your hand in your pocket Mr Abramovich. As explained in my analysis last month of how the rouble crisis would affect 2018 plans (see related article below), there is a shrinking pool of available oligarchs to contribute to the budget due to international sanctions that have been applied. This means the burden on unencumbered individuals like Abramovich will increase. This may have wider-ranging implications. Will they comply sufficiently to cover the deficit? If so, what will it mean for their other businesses? And if not, what does it mean for Russia 2018? Indeed, FIFA must surely be bracing itself for an appeal from Mutko for a nine-figure contribution to the event from its reserves, if one has not already been received.
There remain less than three-and-a-half years before the tournament begins and the flexibility for infrastructure investment by the Russian state is being tightly squeezed by the economic crisis. As Vladimir Putin’s rhetoric grows ever more aggressive towards the West, how does this balance with welcoming the international community and football fans to a Russian World Cup? As tax receipts plummet and Russia faces increasing difficulty in meeting its primary budget, organising an expensive party for the football world must increasingly seem an unwelcome distraction for the Kremlin.
5. Messi’s disaffection is the least of Barcelona’s worries
With early presidential elections called by Josep Maria Bartomeu, the long-serving sporting director sacked, the legendary former captain walking out and allegations of a training-ground dispute between the manager and the club’s finest player, things are not at all well at Barcelona.
But a greater threat for the club’s future financial fortunes could be the wider political climate. In November Catalonia held an informal vote on the future of the region – as part of Spain or to secede as an independent state. It was far from an official affair and there was very little campaigning at all in favour of the status quo as the pro-Spain camp chose to diminish its significance with disdain. Nonetheless, the result was resounding: 80% of those who turned out (who were admittedly only 37% of those eligible to do so) voted in favour of independence.
While Barcelona “més que un club” is a totem for the region, it should be troubled by this development. Because if Catalonia chooses to pull away from Spain and the Madrid government, there are strong signs the club’s very existence would be threatened.
That is because Javier Tebas, the president of the Spanish Professional League (LFP) has said of Barcelona and Espanyol: “They won’t play in La Liga if Catalonia becomes independent. The Sports Act includes an additional procision that there is only one non-Spanish state that can play in La Liga or official Spanish competitions and that is Andorra.”
It’s the law. Without regular Liga football to fund it and for the players to play in, Barcelona would shrink to fit the diminished state of its territory. Champions League qualification would not ensue. They say politics and sport do not mix but this threat could be a powerful antidote to secessionism in Spain. But if an official referendum is allowed – and many believe it will, or at least certainly that it should – and the people go ahead and vote in favour of a breakaway then one of our great football institutions could be lost forever.
Journalist and broadcaster Matt Scott wrote the Digger column for The Guardian newspaper for five years and is now a columnist for Insideworldfootball. Contact him at firstname.lastname@example.org.