How many 19th century industries can say they have more than tripled revenues over the first 16 years of this millennium? My hunch would be only one: European club football which, according to the latest UEFA Club Licensing Benchmarking Report, generated revenues of €18.5 billion in 2016, up from €6 billion in 2000.
It is an impressive feat. And yet, after this astoundingly buoyant period for the industry, one in which cash has flowed into club coffers like water, enabling the sector to remunerate dozens of its biggest stars as if they were Hollywood A-listers or hedge fund managers, still fewer than half of the Continent’s 54 top-division leagues reported aggregate bottom-line profits in 2016.
According to UEFA, the majority of clubs in the 34 leagues outside the top 20 had an operating loss margin of more than 20% in the 2016 financial year. It reports, moreover, that no clubs in the ten-team top division in UEFA President Aleksander Čeferin’s home country of Slovenia reported an operating profit.
I don’t know about you, but I find this very worrying. These are good, good times for European football, and if there is one thing you can be certain of with good times it is that, as sure as eggs are eggs, they will not last.
Some see in fast-changing consumer viewing habits the first clouds on the horizon – although it is fair to say that just as many probably regard this as an exciting new opportunity.
Part of the problem is that any other 19th century industry would have consolidated down to a tiny handful of competitive rivals by now. But in team sport, this is not really possible: football clubs aspire, on the whole, to win more trophies than their adversaries, not to take them over or drive them out of business.
In European club football, instead of consolidation (although multi-club ownership is becoming “a thing”) we have polarisation: the rich get richer and the poor…at best get richer more slowly.
There are any number of examples in this UEFA document. In 2010, the top 12, so-called “global” clubs – which, as far as I can see, are not identified, though we know who most of them are – generated 25% of the commercial and sponsorship revenue produced by all European top-division clubs; by 2016, this had risen to 40%. The average wage bill of the highest-paying league – England’s Premier League – is now more than double that of the next highest-paying league, Germany’s Bundesliga. The nine countries where average club revenue was down more than 5% in 2016 from a year earlier – Sweden, Hungary, Wales, Bosnia and Herzegovina, Serbia, Romania, Moldova, Ukraine and Belarus – are all relative small fry, commercially, though most, if not all, boast proud footballing traditions and some even house former European champions.
Čeferin is aware of the issue, observing in a foreword how “we cannot help but note that the polarisation of commercial and sponsorship revenues between the top tier of clubs and the rest is accelerating”. But the threat of a breakaway by top clubs makes it difficult for him, or anyone else seemingly, to do much about it.
Part of the conundrum is that the geographic distribution of the top clubs – though, once again, I am not clear exactly who he includes in the top 12 – is extremely uneven. Of the top 12 by 2016 broadcasting revenue, one was in Italy, two in Spain and no fewer than nine in England. If the parameter is overall revenue, then England still has the lion’s share with six, including three in the single city of London, ahead of Germany and Spain with two each and Italy and France with one. As UEFA says itself, “Clubs from countries with smaller populations have not benefited from similar levels of TV revenue increases”. Between 2010 and 2016, average club revenue in four of the top 20 leagues – those in Greece, Norway, Ukraine (population 45 million) and Scotland – has actually decreased.
Part of the secret of football’s success over the years has been the way in which the sport, and the clubs that are its most visible representation, become wrapped up in local cultural identities. What we may be about to discover over the next decade or more is whether football can retain its remarkable, and remarkably enduring, popularity when the game’s most glittering prizes are to all intents and purposes permanently out of reach of all bar the tiniest minority of elite clubs who happen to be based in big cities – and, crucially, big, comparatively wealthy, countries.
Will kids in Belgrade, Amsterdam or Glasgow be content either to watch their once-great local clubs scrabble for crumbs from the rich man’s table while perhaps dominating domestically, or to follow, say, Barcelona as electronic, primarily absentee fans (or both), or will football’s appeal in such places start to ebb away?
Set in this context, I found another UEFA fact less than reassuring: “league attendances decreased in 2016-17 in 62% of leagues”. In at least 19 countries, indeed, the reduction was of 5% or more. Most of these were in Eastern Europe, but they included countries as diverse as Sweden, Ireland, Israel, Cyprus – also Iceland, which really surprised me, given the recent unparalleled success of their national team.
The key question, of course, is why? Were the absentees watching football on a TV or device? If so, were they watching the team whose games they used to attend, or someone else? Were they even, perhaps, going to games in one of the many leagues where attendance remains stable or increasing? Or were they doing something completely different? And if so, is their turning away from football permanent, or temporary, attributable for example to economic circumstances that may pass?
For the biggest clubs, which now earn substantial sums from international media rights and sponsorship deals whose heady valuations partly depend on such coverage, their local fan base is of dwindling economic, if not institutional, importance. But few football lovers in Shanghai and Lagos want to watch live action from, say, Estonian league division one.
If those missing fans in 62% of leagues do not come back, we may be forced to conclude that the base of the most monumental pyramid sport has ever constructed – European football – is starting to be eroded. The consequences of that would be uncertain, but are unlikely to be wholly positive.
David Owen worked for 20 years for the Financial Times in the United States, Canada, France and the UK. He ended his FT career as sports editor after the 2006 World Cup and is now freelancing, including covering the 2008 Beijing Olympics, the 2010 World Cup and London 2012. Owen’s Twitter feed can be accessed at www.twitter.com/dodo938.