[aca]

I know that this was discussed before, but I would really like to
hear more in on thread and this might be a place for it....

Money. The implications it had/ has on the game and on the future of the team.

We've seen some exorbitant sums of money being pumped-up into the teams. We've seen extreme sums of money being paid for one single transfer, and it seems that with the likes of Nesta & Crespo possibly available for transfer, these amounts will possibly go up even further. And there are teams that are ready to pay those amounts and even more, banking on the "future" success of the team riddled with stars & broadcasting and advertising money. Add to that sales of merchandise...seem worth taking the risk.

The back-clash to it we can see in the last season.

Paying big means that you need your top players to perform "big"
instantly. There are too many examples this year that this just doesn't happen.

Broadcasting money is drying up slowly but certainly. The ITV case explains it all. According to some calculation, failure of ITV to pay the agreed amount to FA will almost certainly mean bankruptcy to many first , second & third division teams in England alone.

Kirsch group, which holds broadcasting rights in Bundesliga, is losing something to the tune of 2 US million a week for a simple reason that the pay-TV subscribers base for one third of the required number to make the current deal profitable.

So the new terminology entered soccer world. Salary cap, balancing the budget, profitability, shareholders, shares, market price...

What good or bad does it bring to us, the fans?

Worth debating?

 

[mutu1875]

Definatly worth debating in my opinion.

Personally, i dont think that a salary cap or any similar measure would work, clubs will always find ways around them, its just up to the clubs to be sensible. If you look at the clubs who have been most sucessful in Europe in the last few years - Man Utd, Bayern, Depor, Valencia and the exception to the rule Madrid, they've all kept their out goings in check and are now reaping the rewards.

 

[Biancoceleste]

Also the players seems more interested in money than ever. Not many players 'feel' the same thing for their club anymore and there are less and less icons of clubs these days. Even last year Sol Campbell changed from Tottenham to Arsenal. That was unthinkable just a few years back and Figo's Barcalona - Rea switch is another examble. There are really few players left that represent the heart and soul of their club like Baresi for Milan. If there is anyone left it is Maldini for Milan, Keane for Utd., Raul for Real and Nesta for Lazio. And even Nesta's staying at Lazio is questioned every year.

When the big stars renew their contract their wages increase seriously every time. Beckham has been negotiating contract with Utd. for months and to be able to keep him he is offered a breathtaking salery, not to mention incredible personal sponsor deals.

 

[cam]

To be horribly honest I am glad that this football boom, which really started courtesy of BSkyB offering a huge sum of money when the English Premiership first started, is seeming to be over. In a matter of 2 years things were getting ridiculous, AC Milan buying Lentini for £13million, Cole going to Manchester United for £15million, an unknown (to me & the majority of the British public) teenage Brazilian called Denilson going to an equally unknown Spanish team in Betis, then we had Crespo leaving Parma for Lazio, Figo & then in the summer gone, Zidane going from Juve to Real. With clubs paying vast sums to other clubs for the star players, these players then started demanding outrageous wages, huge signing on fees & numerous bonuses & clauses too. Then we had the whole Bosman incident (1 & 2) which saw clubs saving money on paying clubs, instead it all went to the increasingly greedy players.

I do not know about in other countries, but in the UK football was a game for the working class man, where he spent Saturday afternoon's going to the pub, going to the game, & then 2 hours later returning to the pub to critisce the referees & generally debate like we all do at Xtratime. Sadly, a large majority of these people who were the clubs loyal support from their birth right up until the mid-1980s have been priced out of attending top division games. This is partially due to clubs increasing enterance fees, especially for big games such as derby matches, & partially due to the abandonment of the terracing, which is just so much cheaper to go to.

At Ross County, my own team beside Parma, it costs £10 for an adult to get into the terraces, £5 for a child (we are Scottish 1st Division team, so we don't have to drive ourselves further into debt converting our terracing into seats & raising the capacity of the ground to 10,000, even though Dingwall only has a population of 15-17,000) where as the seats are about £15 for adults & £7 for kids. This is not much more, but at Victoria Park the atmosphere in the terrace is far superior, & even looking at the people, it is clear it is the more working class type of person who frequents it. Now bare in mind that an adults season ticket (36 games) is not more than £150 for the stand. Now I've been told that season ticket for CHELSEA (yes, a pretty average team on all accounts) can cost nearly £1,000 & this really leads to isolation of the less well off.

So if the finacial boom in football dies off, players will be paid less, clubs small & big will be able to get rid of debt & can keep ahold of their players, it will be easier to access football (the TV companies will surely soon realise that PPV football just does NOT work) on TV & hopefully things will return more to the days gone by when the mercenaries (Benito Carbone type players) are booted out of the game, replaced by players who love their club, such as Fabio Cannavaro (Napoli), Alessandro Nesta, Del Piero.

So while a few clubs may just end up dead in the water like Accrington Stanley & Third Lanark before them, they will either be replaced by teams with larger supports & larger ambitions. This will be much better for football in the long run, & so I just thank Granada & Carlton for pulling the plug.

If clubs don't impose their own little wage caps & don't manage their finaces properly then it's their own faults for ending up in a situation. You shouldn't spend money until it is actually yours, & not a minute before the cheque is cashed.

 

[Punkette B]

You've raised a point of interest, Jakob.

Now switch the table around. How many players can truly believe in their clubs when they are hung like pork bellies at the end of each season? If one's investment value (so sorry, aca ) is measured constantly with the number of goals, assists and torn ligaments, we will end up with the following, in Serie A.

Totti - Yo!
Vieri - still Yo!
Nesta - still Yo!
Recoba - a little Yo!
Ronaldo - Dunno
Crespo - Dunno
Lopez - Nah
Batistuta - Nah
etc. ...

To management, the players are indeed items of investment. We fans tend to believe that the owners of our favorite clubs give a hoot and a holler about everything from the striker's hairbands to the meals served before each match. Yes, they do, if it's good investment value only. Otherwise, why should they bother? These bosses have better fish to fry and nicer canned fruit to trade.

And, sometimes, even a tragic loss on the pitch will mean tremendous gains in the stock market the next day.

Remember, the lifespan of a soccer player's career is extremely short. From the moment they are discovered, say, like at 8 years old? To the time they hang their cleats (at maximum, at 40 but really somewhere between 30-34), what do they have but the desire to amass wealth and fame (which, to most players, is also wealth)?

 

[gOD]

Players as investements, interesting issue. Personally I think it is repulsing to see how big teams spend deranged sums of money for players. Fun part is to see and forsee how those "investements" are doomed to fail.

To me it is totally incredible to see those teams spend those amounts on players they absolutely don't need. One one side they should have spend it on other players (e.g. Real did nbot need Zidane, had they paid for a decent central midfielder and a back up for Morientes La Liga would have been decdided by now).

On the other hand the players can't be used (there are only 11 places in a squad) and therefor they lose value. One of the dumbest moves this season was Milan paying an big amount for Rui Costa where just a couple of days before that deal they signed Pirlo.


One the other hand one can and should question the ethical aspect of this. If you cut the romance this is just modern day slavery. People or clubs making money by selling people. Sure you will answer that those players make big bucks themselves, but for every Zidane, there are 10 unknown players that weren't that lucky and talented.

 

[mutu1875]

I hardly think it can be called slavery - the clubs don't own the payers they just own the right to their services. To an extent the players can even chose which team they play for.

On the note of players wages, i dont think the clubs can point to this as an excuse as to why they are losing so much money, after all the players only earn what is offered to them by the clubs. Having said that, once one club starts to offer players huge sums of money, players every where else will start to demand such money from their employers.

Indeed, it is probably worth mentioning that it is olny the cream of the crop who earn ridiculous amounts of money. A high percentage of players in the football league have second jobs to support their families.

 

[Fred Elliot]

.

I do not know about in other countries, but in the UK football was a game for the working class man, where he spent Saturday afternoon's going to the pub, going to the game, & then 2 hours later returning to the pub to critisce the referees & generally debate like we all do at Xtratime.

hmmm...small boys in the park, jumpers for goal posts...marvellous

If the current level of financial provision for clubs, big and small, suddenly dried up, far from helping the smaller clubs, I think that it would actually worsen their plight. Wages up and down the country have increased in football, steadily, for the last 10 years. Players expect to earn good money, and aren't going to suddenly agree to take a 15 or 20% cut, just because the television money has dried up. Fans will have to bear the cost even more, through tickets and merchandise. Instead of there being a flat rate that covers all the clubs, the larger clubs will be able to negotiate a larger fee for their televised matches, whilst even the smaller clubs in the premiership will get left out in the cold. These games might well be entirely payperview. This will price the common supporters of these clubs even more out of the game.

 

[Paulinho]

Money, it's a gas
Grab that cash with both hands and make a stash
A new car, caviar, four star daydream
Think I'll buy me a football team

Roger Waters plays with words for a living, so he put it better than I ever could. There's simply too much money in the game today, and something's gotta give. This collapse of ITV could be the ominous sign of things to come.

 

[aca]

Doc, You are Signorina dottore after all. Human dimension plays such an important part in the world of finances in general, and football in particular. In football, "humans" are the commodity.

Anything that you can apply to running a private company, you can apply to football today. Starting from finances, over a fight for a market share, to profitability of the team.

How do you gain finances? You offer shares on the open market, you look for sponsors, you make a TV deal (money from the ticket sales is miserable when compared to these). So from one now you have at least three interested parties, from the business perspective.

How do you gain market? Success is the main issue here. YOU have to win. If you cant...you go around it. Sign the famous players. That brings audience, which brings sponsors, that brings better TV deal. Diversify. Bring in a player from Asia, Africa, and South America. That rises interest in those countries for your team, brings more supporters. IF you are lucky, the talent of these players will be brought out on the field. If not, the number of "supporters" they will bring to the team will make up for their failure...financially

How do you achieve profitability? Buy low, sell high is centuries the rule of the market. It works in football too, in most cases. There is a buy high, sell high logic too. But that is based on potentiality basis. Although Real maybe did not need Zidan as a player, they need him for "sales" department. Zidan means more sponsors, better TV deal, etc....

And this introduces now kind of competition in football. Talent hunt. It was always there. You try to buy the best commodity because it will help your team beat the opponent ON THE PITCH. New version, if you are successful in gaining finances, it will help you beat your opponent by SITTING on the bench. It is a waste of talent, but lowers down the risk to your investment and in the case of one of your commodities getting injured or not living up to expectations, it is not harmful having someone potentially better to take it's place (note "IT" for player. Isn't there something wrong with it?)

Where is football in all of this? And more importantly, as Doc
would say, where are the players? Where are love, thrill, and joy? Where is loyalty, determination, where is the pure pleasure of fulfilling your dreams and playing for the team of your childhood? Where are all those "Maldinis"?

The problem is that all these "abstract" terminology clash heavily with the "real" money issues. There are clubs presidents (unfortunately) involved. IF you want to see the likes of Zidan, Crespo, and Figo in your team.... you as a fan have to take a risk of seeing the same going to your most disliked rival.

Where all this leads the world of football?

It leads us to alienation. Players like Mandietta are "puled-out" of
their natural environment and placed into "new" world. Forget the talent, previous success, the quality of skills. Even if it comes back, it will never be the same. They are alienated from their "product" which is built on love for the game. Because "abstract" lifeline that everyone has is ripped out and replaced by "real" lifeline is taking its toll.
Player becomes IT, wanted it or not. And does what everyone in his right senses would do. Try to get the best out of it. I.e. more money, better deal for himself, while his value is high. You said it Doc, it doesn't last long. Some do it willingly, some not....but they do not have much of a choice, don't they?

I know this might sound too "drastic". It is not so black & white, but the bottom line is....it is happening.

The solution? Maybe some sort of revolution (to continue with Marxist terminology)? I don't know.......Yet:tongue:

 

[Lav]

This will be nothing short of the great depression for football

tremendous gains = tremendeous lows

Basic ecnomics state that no amount of prosperity can last for ever, and soon it will all come crashing down.

There is no way to avoid this, there are no "maldinis" out there, they are all money hungry twats who need a 7 house mansion with an olympic pool.

The players, the managers, the presidents will have no one to balme but their greedy selves.

Lav

 

[Barlinek]

There is nothing wrong with the players asking for more $$$$. They are making a living like any of us. All of us would like to earn a higher income regardless of our current level. If I was a player and see that the club can afford any transfer fee (i.e. Real Madrid), why wouldn't I want to ask for a nice salary? Its ridiculous to think of the players as culprits. Its up to the management of all teams to stop increasing salaries. The player can be dropped in a moments notice. They are being used by the club for a gain. What is wrong with an employee doing the same?

NO CLUB HAS TO PAY ANY DEMAND. THEY CHOOSE TO. RIDICULOUS TO BLAME THE PLAYERS.

They are mere workers. If the management can't balance the books, its not the players' fault. They are not there to increase the profits of shareholders or any owner. They are there to work, and make the most they can. Like every single person.

 

[Steph!]

Great stuff everyone and higly interesting topic, Aca. :strong:

Avarice is certainly not the players' apanage but there are black sheeps everywhere. The case of Anelka's clique is striking. Where's the love? This kid, advised by his two grasbing brothers/agents (Claude & Didier), personnifies all I despise in the stardom that rules football nowadays. Only 20 years old (back at the time of the infamous affair that saw him moving to Madrid), and already driven by money -attitude I could understand from an old proved player near retirement willing to assure his future (cf. Bonita's post)- and money only. To comment his big-money transfer to Real Madrid he stated, which illiustrates pretty well what I'm saying: "Je suis un mec commercial/I'm a commercial guy". Or he once very elegantly said: "With the bosses of football, you have to be implacable: you pay a lot, I play; you haggle over the expenses, I'm off." Someone would asked him whether he would play in Saudi Arabia for loads of bucks/month, it wouldn't have made much of a difference. Football is Nicolas's last thing on mind. He himself confessed he prefers to play basket-ball with his "old" pals and mixing vinyls. No commitment to the team whatsoever, no will to do things right if it hasn't an impact on his incomes, no discipline, the forgotten fact of being part of a whole, with that implies. In other words, it's all about the green and about that! I took Anelka's example as it is the most mediatic one but there must be others just like him out there...

The actual wave of indecent transfers only confirms an already perceptible trend: there are two footballs nowadays. The football of the giants of Europe and the football where all the rest is competing. For the most powerful clubs of Italy, Spain or England, winning the chiampionship or a European cup does count, off course. But in the end, the finality of those enterprises that clubs have become, only the commercial balance does matter. Football clubs are not simple football clubs anymore, they are entertainment societies, just like Disney or Universal. Their aim is to make as much profit as possible: ticketing, but above all TV deals, sponsoring and commercial partnerships, merchandising etcetera. Some clubs (like Real Madrid and OM) even have their own TV channel, others are on the stockmarket (Juventus, Lazio, AS Roma, Manchester Utd,...) In the likeness of Real Madrid president, Florentino Perez (it says it all when you have business men at the head of a football club), football's bosses are not crazy at all. When they buy a star for gold, their club's quoting on the stockmarket takes off and it generates millions in a way more secure way than European football games whose gains are mainly used to pay the players. To them, players are nothing but commercial products they have to use to the best of their interest.

I bet Roberto Baggio, Hristo Stoitchkov or Marco Van Basten would piss his pants off laughting at how much some young unproved capricious money-grabbing young talents' price is estimated at by their clubs, how a couple of good performances get to their head as their ego is unbelievable, becoming arrogant and unthankful to the chance they have. They are overpaid and they don't even seem to realize they are, while their fans, everyday people who go to work every morning to earn a modest but fully diserved, this one, salary. It has become more than playing for a living, it's avarice and sport, which is all about passion and love and its values are, should be, the opposite thing.

 

[aca]

Thans to everyone who found interest in this topic.

I think that money issues are of extreme importance nowdays. The clubs are driven by money and so many of the issues that affect life of the team are related to it.

Just to give an update on the TV contract deal in England. Here are some numbers, published in the TIME magazine

Number of teams involved in the deal : 72

Number of teams threatened with closure if ITV does not pay the full amount agreed : 30

Total contract value with ITV digital (2001-2004) 448$ million

Previos Contract with Sky (1996-2001) 178 $ million

Players wages as a percentage of the turnover in the First divison 1996-1997 : 67%

In the 1999-2000 season : 95%

There is more to it, which i will post later

 

[San Siro]

This is a great topic!
Very informative and thorough posts in this thread, which is very nice to see. Speaking of money, i'd like to share with you, in this thread, an interview of Fiorentino Perez, i posted a while back. I find this interview quite relevant to the topic of this disscusion to give us more insight about how Real is being run and that is also the way the top clubs in the world may have to follow it, if they are to compete economically. The interview is from the prestigious France Football, a French weekly magazine, the same magazine which awards the Ballon d'Or each year.


"France Football: How has Real Madrid gone from a gigantesque debt to having a balanced budget?
Florentino Perez: Very simply. When I arrived at the presidency of the club, a year and half ago, its principal problem was an incredible debt of 300.5 Million Euros. Our old installations were not worthy of the best club of the world, based on FIFA's rankings. We have then sold la Ciudad Sportiva, for 480.8 Million Euros and then we have bought a new land of 120 hectares, which is 10 times bigger, for only 2.4 Million Euros.

FF: Your budget will then explode this year!
FP: Our gross volume for this year will obviously not be representative. On the 480.8 M Euros of this real estate deal, we will utilize 360.6 for the 2001-2002 season and 120.2 M Euros for the 2002-2003. Real Madrid should then have a budget of about 600 M Euros. Half of that has been used towards the amortization of the cost of players and we have also been able to reduce the costs of the club by 78.1 M Euros. Thus, that's where this balanced budget comes from.

FF: What is then the actual day-to-day budget of the club?
FP: The objective that we would like to obtain right from the 2003-2004 season is 240.4 M Euros in the revenue column and 192.3 M Euros, in the expenses columns. The difference of 48 M Euros is the profit that we would like to utilize each year towards buying the best players of the world. We want to amortize annually, all these expenses, it is the best way to stabilize the economy of the club over the long term.

FF: What would the new sporting city (Ciudad Sportiva) look like?
FP: It would be built on a very well located place, near the airport and close to the subway, and divided into 4 parts. The first is destined for our 72000 socios (members) , who will have their club in this new sporting city. We will also build a practice centre for the professional players with football fields and the best equipment and a residence for the preparations of pre-matches. The city will also have a youth school, a centre of formation for our 500 youth players to continue to live, practice and continue their studies in the same place. (90 M Euros will be devoted towards the construction of this city).

FF: How about the 4th part?
FP: We want to install a thematic park entirely devoted to football in general and to Real Madrid in particular. It will relate the story of the club thanks to the different techniques that would particularly use the new technologies available; it will also offer attractions, stores, and restaurants…Just like the Disney and Warner parks, but here it would only be about football and Real Madrid. This new sporting city should be built within five years.

FF: Can we compare Real Madrid with Disney?
FP: Real is a brand, just like Disney, known around the world. But we still have some efforts to do in order to have all these people that know Real to become customers. We think that all the fans are in theory, clients of the Real Madrid product. Thanks to them, we would be able to obtain extra profits and then increase the number of fans in all the continents. Our policy of recruiting the best players in the world goes towards that direction.

FF: Can you afford to pay each year stars such as Figo or Zidane, whose transfers have been world records?
FP: If we have the best players in the world, the various television stations and networks, will pay more, the marketing side works great, more and more people come to the stadium and the teams that wish to play against us will have to pay more than 2 M Euros for one friendly game. It’s all a set of elements that allow to make profitable the purchase of these players. It is crucial that the players at Real, matches with the image of the club.

FF: Are the salaries of the stars not weighing too heavily on the budget of the club?
FP: Real Madrid has a special envelope for the salaries, which they must not go beyond. It is for this reason that the salary inflation has to be contained. The salaries represent today 60 % of the club’s budget and we want that percentage to go below 50 %. In order to achieve that, no need to pay the players less, it only requires increasing the profits. Also, there are too many players in the team: we have to reduce that number.

FF: What is your sporting policy?
FP: It is to mix the best players of the world such as Figo, Zidane, Raul or Roberto Carlos with the young players that are coming from our own centre of formation, such as Pavon or Guti. Raul also is from our youth system. As to the economic point of view, we have to make more profitable the potential of the Real Madrid brand. Finally, we have to set up a modern, professional and transparent organisation and dispose of the best installations, in regard with the prestige and image of the club.

FF: Do you also want to sell the Santiago Bernabeu stadium?
FP: No, we would like to improve it. 30 M Euros have been destined for its renovation and modernization. We will also be changing the dressing rooms, redesign the interior of the stadium, from the stairs to the roof. Several restaurants and stores will also be opened inside the Santiago Bernabeu stadium. We will also finally increase its capacity by an extra 6,000 to reach more than 80,000 by 2004. There is not a better-located stadium in the world and it belongs to us.

FF: Since 2002, the Spanish clubs can have access to public fundings. Do you wish to have Real Madrid listed in the Stock Exchange?
FP: It is not possible because the socios that own the club are so happy of its sporting patrimony and of its other values that are being attached to the club, that they do not want to sell anything. I think that if the club were to become a PLC one day, it would mean that it would lose its identity. We don’t want to cede the ownership to no one but the socios.

FF: In this Centenary year, the objective of Real is to win it all. However, the more a club wins, the more it becomes expensive to the club because of all those bonuses to be paid to the players. How do you plan to handle this situation if Real were to succeed in their quest for the treble (Liga, CL, Copa del Rey)?
FP: We are so strong that no insurance company has accepted to cover us only for the double Liga, CL. The only solution for us would be to cover us, but also for the Liga, CL and the Copa del Rey. (Real Madrid is believed to have disbursed 2.7 M Euros for their current contract with the insurance cies Willis and Musini to cover them for the bonuses to the players) In case of treble, the club would have to disburse only 15% of the promised bonuses to the players.