Should European Football Adopt a Revenue-Sharing Scheme?
Posted by Brian Phillips on 1/31/08 • Categorized as Politics and Economics
Today more than at any other time in the history of sport, fans are aware of the way the rules governing money influence the fate of their teams. We follow the money game—who taps into what markets, who accrues what debt—with a savvy that would have seemed bewildering, and perhaps a little depressing, to fans half a century ago. Knowing what’s going on behind the scenes at a club, as we’ve seen with Liverpool and Manchester United this month, is simultaneously a defensive tactic for fans concerned about the rapid expansion and commercialization of sport, and an outgrowth of the apparently illimitable interest that is driving the expansion.
But I wonder if we’re not paying too little attention to the money game as it affects the larger problems in sport, rather than problems at specific clubs. Every Man Utd fan can name the exact amount of the annual interest payment, but when we think about issues like “competitive imbalance” or “disregard for fans,” we’re still much more likely to direct our blame at individual people or general social change than at the financial structures that underlie the problems.
For instance: despite the enormous, and growing, resentment felt by many fans of European football toward the concentration of power among a few elite teams, there seems to be very little serious discussion about instituting an American-style revenue-sharing system within European leagues. The obstacles in the way of doing so would be intimidatingly large, but surely not more so than the difficulties of changing human nature or reversing the flow of time, which is what we demand of ourselves when we blame David Gill or “the Sky revolution” for everything wrong with football.
The general problem in football—or at any rate the outline that seems to emerge from the most common fan complaints—is
That the consolidation of wealth, especially from television revenue, among top clubs has created a competitive environment in which it is unfairly difficult for smaller clubs to advance, or for any but a few superclubs to compete for top honors.
That survival for smaller clubs, and success for larger clubs, has begun to require a prohibitive investment from fans, in the form of higher ticket prices, increased tolerance of risk, and submission, in many cases, to the primacy of the larger television market.
We might add a third category, the mismanagement of clubs by unscrupulous owners. But it would really be an extension of the first two, as it’s the influx of television money that’s made clubs vulnerable to profit-seeking owners in the first place.
Is there any other practical solution to these problems but a revenue-sharing scheme? A system designed to redistribute wealth from large clubs to small clubs and from upper to lower divisions, and perhaps to place a limit on the amount of money clubs could spend on player salaries, would have (at least) the following benefits:
Smaller clubs would be able to compete in the transfer market and, as a result, to challenge for trophies. This would almost certainly spell the end of the big four in England (and its variations in other countries), and lead to significantly more parity within domestic leagues and international club tournaments. Increased competition would make the game more exciting for everyone.
The survival of many smaller clubs, and the preservation of their role in local communities, could be secured regardless of their performance or ability to exploit new markets: meaning that local clubs could stay local without passing missed-opportunity costs along to their fans.
Isn’t that more or less what everyone wants? And yet how many “profit-sharing is the way forward for European football” columns have you read compared to the number of “greed is destroying football” columns? Greed is not going to abandon football until the last dollar is had; so isn’t the sensible thing to advocate a system that would keep greed in check, keep clubs from being run like playthings, and ensure some competitive balance?
The difficulties…well, the difficulties you can foresee. Chelsea will not like being told to share their television income with Kettering Town. The Premier League itself largely exists as the top clubs’ collective refusal to do so, which means that some degree of legal coercion would most likely be required to force their compliance and end the threat of future breakaway leagues. And the EU will have to be involved, since preserving the integrity of international competition will mean establishing UEFA-wide requirements for revenue sharing within national leagues. Then there’s the problem of maintaining open leagues—preserving the promotion and relegation ladders—while ensuring an equitable distribution of income; something no American league has had to contend with, and that will be fiercely complex to work out.
Revenue sharing in European football is, in other words, an unfeasible, unlikely idea. But football administrators at top levels, Blatter and Platini included, are in favor of it, and surely if the popular clamor became loud enough the smaller clubs and larger politicians would begin to take it up. It would have costs—in American sports, it’s arguably lowered the standard of play of the best teams—and complications that I am not able to estimate. But shouldn’t we at least be talking about it? Online, I see academic papers on the subject, studies, research reports…but very little discussion from bloggers or fans, even the ones most likely to object to the current system. Isn’t this a conversation that we ought at least to start?
A good passage
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