Foot business: when money can no longer do everything

It is the reform that divides the world of football. The transformation for 2024 of the UEFA Champions League, the most prestigious football club competition, is causing controversy all over Europe. After Germany, France, England and Spain, Italian football clubs have just rejected it. This quasi-closed league project, supported by a handful of big clubs, reinforced their supremacy. He also aims to break the bank in terms of TV rights.

This is a sign that, in football, more than ever, money is the sinews of war. The truth on the ground is not only sporting, it is also economical. 1uh Last June, the Liverpool FC-Tottenham Hotspur Champions League final (2-0 for the first) was much more than a one-hundred-percent English poster. It was also a clash of titans between the 7e and 10e financial powers of football. These two clubs generate 514 and 428 million euros in annual turnover respectively, according to the latest “Football Money League” report from Deloitte.

“There is a very strong correlation between income and sports resultsexplains Luc Arrondel, sports economist and co-author of the book “L’Argent du football”.High incomes buy the best players, who come back to ensure more victories. » Verification: 13 of the 16 teams formed in the knockout stages of the Champions League rank in the Top 20 of the richest clubs, whose minimum income level is close to 200 million.

football aristocracy

To go far in the European Cup, being rich is not enough. Better to be ultra-rich. “There is a financial threshold to be exceeded to insert the aristocracy of football. 400 million euros in revenue seems a minimum”, successor Luc Arrondel. Unsurprisingly, we find almost all these aristocrats – except stowaways – in the final table of the European Cup in 2019. Of the 8 clubs qualified for the quarter-finals, 6 posted a turnover close to or greater than 400 million. In the semi-finals (4 teams), 3 won at least this amount. And for the final, Liverpool and Tottenham fulfilled this condition perfectly.

However, this 400 million ticket for the stars is not a guarantee of reaching them. “At this level of income, the uncertainty of sport takes over and erases the financial aspect”, explains Bruno Belgodère, co-author of the book “Creating value in football”. Real Madrid’s 751 million income does not guarantee victory against Bayern Munich (629 million euros). The Manchester City club (568 million in revenue) of the wealthy Emirati Sheikh Mansour, owner since 2008, is still waiting for his European victory. And what about Paris Saint-Germain (542 million), under the Qatari flag since 2011, unable to go beyond the quarter-finals of the European Cup despite its armada of stars (Cavani, Neymar, MBappé, Di Maria) and its billion euros of investment for eight years?

Sports business

When football business can no longer do anything, other parameters then come into play. Luck, maybe. The culture of winning, certainly. The management model, no doubt. “Most English Premier League clubs are run like businesses, with a long-term financial strategy and a logic of profitability”, explains the economist Pascal Perri. Is it a coincidence that the final of the Europa League – the little sister of the Champions League – also opposed this year two English teams, Chelsea and Arsenal?

“Everything is fine when the president presides, when the coach coaches and when the players play”, adds Pascal Perri, for whom the governance of the club is a significant point. When human resources management is failing, it shows on the green rectangle. This is also what Paris Saint-Germain is accused of in its management of the Neymar cases (whose recovery in Brazil after an injury has caused controversy) or Rabiot (deprived of the field for having refused to extend his contract).

The French championship is perhaps not the most appropriate playing field.

The other preponderant parameter is that of experience. And this is acquired by rubbing shoulders with the best. “We will strengthen PSG’s chances of winning the Champions League when the French championship itself will be more competitive”, explains Pascal Perri. Economic theory dictates that a company that comes up against seasoned competitors in its domestic market will have a better chance of gaining market share internationally. In this respect, the French championship is perhaps not the most appropriate playing field. Sixteen clubs had a budget of less than 100 million euros at the start of the 2018-2019 season. Paris SG, with 520 million, has no rival at its height.

Perhaps he will find the opportunity to toughen up the competition in the new formula of the Champions League, if it sees the light of day. By facing clubs of its size, with the guarantee of playing at least 14 games there (compared to 6 in the current formula), PSG will no longer have any excuse if it does not finally raise the “cup to big ears “.

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