Where does the money come from and where does it go?

Football is the most lucrative sport in the world. theFootball sales amounted to $47 billion in 2022, accounting for 28% of the value of all global sporting activities. Despite this result, the teams of the European continent recorded a deficit of seven billion dollars in the 2019-2020 and 2020-2021 seasons. The epidemic has been a severe blow, but in itself it does not explain such a deep red color. And things in Italy are no better. The debts of Italian league clubs’ banks exceed one billion euros, With Inter, Juventus and Roma alone accounting for around 90% of this figure. For all three of these clubs, budgets report commitments of at least 200m, which the forecast does not envisage reducing. He says, “It’s games.” Andrea Goldstein, economist at the Organization for Economic Co-operation and Development And the author of the book Ball Power: The Economics and Politics of Global Football. “It makes no difference whether they are rich, like the Italian clubs, or rich like the English clubs.”

Can you make money from football?

“With a good financial project, it is possible to earn something. Just look at the example of Manchester United. The Glazer family set up a typical leveraged buyout, where they use the company’s earned money to pay down debt, then build a successful business. But as can be seen in the cases of clubs in which large Asian or Middle Eastern capitals invest, but Juventus and all Italian teams, even including Barcelona, ​​​​is an exception. The types of ownership can be very different, from listed companies to private companies and even cooperatives with a broad shareholder base. The conclusion, however, is unanimous: you can’t make money on football».

If the return is not economic, what goals do the entrepreneurs investing in the club set for themselves?

“There is a large list of objectives of a soft financial and economic nature that can be achieved by investing in a football team. to launder money, Even simply by changing their flag. So did the Russian oligarchs or Chinese tycoons who brought their money abroad. It is money earned illegally, given that it is certainly not stolen money or drug trafficking. But they come from gray backgrounds, clean but not so clean, which is a characteristic that unites all great fortunes. The second type of investment goals is to give a new slogan to the nation, as is happening in the Gulf countries. Then there are those who want to buy the generosity of the local authorities. This has also happened in Italy in the past, in large cities but above all in the provinces, especially if the businessman in question works in a sector that is often intertwined with the public, such as the construction sector. in the end, A certain type of nobility is sought after which money alone cannot confer. Entering the world of football may in fact be a way of accessing an otherwise closed environment, a fact that is particularly true of the nouveau riche. In this case, the stands of the stadium, when your team plays, turn into the most elegant living room in the city ».

Another way to invest in football is the world of entertainment that revolves around it. How much does this dimension weigh today?

“Football has turned into an entertainment with a sporting aspect, not a recreational sport in the background. So it is intertwined with the entertainment sector. This once saw a proliferation of TV channels but is now moving to digital channels. It is an increasingly pyramid-like world with a few actors producing the bulk of the revenue. An economy of stars that transcends the dynamics of football as a sport and the dynamics of entertainment. Thanks to broadcast rights financing, the product can be segmented, where both the organizational and financial structure come into play.”

The intervention of the big capitals prompted UEFA to implement Financial Fair Play. Did this work or will it need to be fixed?

Legislation is being revised to be more clear, transparent and realistic. The secret is in the details, so enforcement must be fair and rigorous. It has not always been like this since the existence of this rule. Think of the cases of Manchester City, Milan or Paris Saint-Germain. A kind of procedural quirk saved these teams from the harsher consequences involved in breaking the rules. It is in the interest of Italian clubs to take these rules seriously. In recent years, the gap between the First Division and its main competitors, especially the Spanish League and the English Premier League, as well as the German League, has widened. This disconnect is explained by the limited resources that Italian companies can operate with. In the end, in football whoever has the most money wins, because talent has to pay and that’s what wins matches.”

The two greatest phenomena of the last 20 years, on and off the field, are Cristiano Ronaldo and Lionel Messi: will it be possible to replicate their economic and social success?

“They are built characters. Great players may be great on the field, but then they are human, albeit eccentric and extroverted at times. Cristiano Ronaldo and Messi They are very normal people. If you go there for dinner, they won’t even have much to tell if not the tales of their own lives, albeit certain tales. It is the narrative around these phenomena that has made them even out of court. That is why it will be sufficient to find another person to put him in the center. Definitely the most visible football talent of the next few years Erling Halland. A player who hails from a sporty, but unlikely country for football, like Norway. If she continues down the path she has taken over the years, she will be one of the superstars of her 20s and 30s. The other is Kylian Mbappe, who comes from a bigger country like France, and has human characteristics that make him more interesting. But what makes a footballer a star is also an exercise in building around talent. In this context, attackers are clearly the favorites. They are the faces of difference, those who decide matches and those whose performance is easily linked to single digits, goals scored. It is more complicated for a goalkeeper or a defender to follow the same path.

Great players often have great agents: in your book you mention the rivalry between Jorge Mendes and Mino Raiola, for example. What is their role in the career of the player?

«The prosecutor is a screen that the player can place between himself and the world around him. It applies to relationships with the team, but also to everything that revolves around the players. As mentioned earlier, these are normal people who find themselves not very smart when they are young enough to save a huge amount of money, which can be directly proportional to the amount of mistakes that can be made with them. But precisely for this reason, the public prosecutor can become a scapegoat for all the mistakes that a football player can make, including tax evasion.

Let’s talk about the Superleague: does this or other project have a future?

«The Premier League is inevitable. It is unclear what entity it will organize and how exactly it will be structured, but it is inevitable. Football must find a mechanism to increase the number of stakeholders who feel involved and who have something to gain. One of the problems that a similar structure could solve is the evaluation of the investments being made Fragile assets like soccer players. Athletes also get injured very frequently. The player gets hurt more than the other workers, and becomes unsuccessful easily. They are unforeseen events that can ruin an entire season and jeopardize the economic and on-field revenues of the club that invested in them. For a big team, it doesn’t make sense to see their resources wasted on a game with a small county, a match that yields little economic return. On the contrary, often clashing with large teams leads to rationing of investment, even in the event of unforeseen events. It is undoubtedly a model that can work, but it is mainly aimed at the fan who sees football from afar and has no connection to the local area. These are the great Asian middle classes on the rise. Hundreds of millions of people who do not have a regional affiliation with a team, who do not go to the stadium, but who are a customer base without comparison in Europe. This is the audience the Champions League and Premier League are targeting today. It is a polemic typical of globalization, the defense of the small domestic producer against the advance of mass production, more diffuse but inevitably more flattening ».

In such global football, what happens to the regional teams?

“We have to find a way to create a world in which they can survive. An example is American basketball, where a mass reality as commercial and successful as the NBA and a local world, where belonging is felt as deeply as college basketball. This level, which originated before the NBA and has been around for 150 years, has managed to survive by providing an influx of great players into the National League. Of course, today it is difficult to imagine the second division or even the Italian first division into a stock of talent for a higher league, especially since university basketball is associated with the young age of the players ». ©

Article taken from the April 1 issue. If you want to read the newspaper, subscribe!