Very soon (most likely at the end of April), UEFA will confirm the introduction of various changes in the Champions League, both in its format and in terms of access to the competition. These reforms (which will take effect in 2024) will greatly benefit already rich teams in already rich leagues, as has happened in most of the changes we have witnessed since the tournament was created in 1992.
These changes will be presented with the intention of making us understand that UEFA had no choice but to choose the lesser of the two evils. Concessions will be made to the big clubs, but this is a better alternative than seeing them split to form their own Super League, thus completely ignoring the Champions League. I have already heard similar threats, but this time they seemed credible, as I mentioned last October. With interest rates close to zero percent, private equity companies full of money and big clubs lacking in liquidity due to the pandemic, a perfect storm has formed in which different teams such as Real Madrid, Barcelona and Manchester United would form their own separate competition to share profits between them; or, as seems to be the case, they would pretend to be doing just that, harnessing their power to get a better deal in their favor.
The effects of the pandemic, the need to create (to use a fashionable word among football directors) “innovative formats” and the reminder that football in the club is a business will all be used to justify the additional loading of dice. To favor the rich and powerful. However, this argument cannot be supported. Christian Seifert, the executive director of the Bundesliga, expressed it better than anyone recently, during his speech at the Business of Football Summit event, organized by the British newspaper Financial Times.
The brutal truth is that some of the so-called “super clubs” are, in fact, poorly managed cars, which have failed, during a decade of incredible growth, to even come close to a business model of any kind. a sustainable way, “he said.
Somehow, despite a decade of steady growth, in which European clubs’ revenues have doubled (most of these increases peaking) and despite regulations on fair play that have helped keep costs low (ensuring that the system as a whole has been profitable in three campaigns that led to the pandemic), some of the biggest clubs in world football found themselves overloaded with costs and lack of money.
And its solution is to make almost permanent changes, which will only contribute to increasing the gap between those who have and those who do not. The details remain insufficient and are subject to last minute negotiations; However, after consultation between clubs and leagues, all indications are that the Champions League will include four additional places, featuring something called the “Swiss Model” which will increase the number of games played in the group stage from 6 to 10, offering the French League an additional seat automatically, in addition to a safety net allowing up to two clubs with good European descent (read: UEFA club coefficient ranking) to qualify automatically.
We will have time to analyze the new format (especially the so-called “Swiss model”, which I guarantee will be understood by very few) once it is confirmed. However, broadly speaking, the idea is to organize more European parties and generate more economic resources, with the intention of helping to mitigate the damage caused by the pandemic. I clarify that I am not against clubs that play more games in Europe and that includes the Europa Conference League, which will start next month.
There are hundreds and hundreds of first division clubs across Europe that never make it to international matches, and of those that do, the season ends in September for all but 80 clubs. Why shouldn’t they play? I didn’t even have problems trying to get more money out of the Champions League and Europa League. They are professional clubs. They run a company. Of the € 3.25 billion ($ 4 billion) generated by these competitions, around € 400 million ($ 485 million) is also intended to support grassroots football, national federations and other development initiatives.
There is no doubt that we are in the midst of a difficult time for clubs, especially given that measures to prevent COVID-19 imply that stadiums must remain closed for a longer period than anticipated and the demand for reductions in payments on which make them television stations for broadcasting rights. In September last year, the European Clubs Association projected that the teams would have a financial impact on the order of EUR 4 billion (USD 4.85 billion) over the next two seasons. In January, ECA President Andrea Agnelli raised these estimates, saying the losses would range from EUR 6.5 billion ($ 8 billion) to EUR 8.5 billion ($ 10.3 billion).
And, as is evident, the biggest clubs, owners of larger stadiums (and therefore with higher revenues at match dates) and contracts for television rights were, in absolute terms, the most affected by these losses. . What’s more annoying, though, is the de facto takeover of the big clubs, who not only want a bigger piece of the pie, but also aspire to additional insurance if (wow!) They can’t qualify for the Champions League, in the form of additional quotas. (Let’s face it: if you’re one of half a dozen super clubs playing on circuits other than the Premier League, you should cheat on him until you qualify.)
All of the above are wrong from two points of view. First, it is simply unethical. Friends of big clubs always justify taking a larger share of their income by taking a higher “business risk”; that is, investing more resources to get the biggest figures and sponsors, which motivates fans to pay to see these players. This is why 15% of the revenue generated by the Champions League is distributed according to the “market fund”; that is, depending on the size of a club’s national league television market. If you play in the Premier League, Serie A or Bundesliga, you will get a lot of money, because these are big TV markets in the big economies. If you’re a club in Albania or Denmark … well, you don’t get that much.
This is also the reason why another 20% of profits are distributed according to the “ranking of coefficients”. Bottom line: if a team has performed well in Europe over the last decade, they will receive more resources than they would gain if they performed less well. The statement is that teams with good results in the past have contributed to building the Champions League brand; consequently, it is worth reaping a greater share of the benefits (It is also, in practice, a way to channel more money towards the established elite).
Everything is okay. However, the so-called “business risk” is just that: a risk. You risk your skin more in the game; as a result, you get more benefits when things go well. It also means you lose more when things go wrong. Basic lesson in free market economics. The other aspect is that we are talking about implementing permanent de facto changes that would only make it even more difficult for other clubs to participate in the tournament. Of course, in theory, these changes are not permanent (UEFA operates in three-year cycles); But in the real world, all the formatting changes introduced since the competition was founded in 1992 have served the benefit of the biggest clubs in the largest nations.
This means that the genius will not be able to return to the bottle after he has left. Nobody wants to see a bankrupt club. But you know what? This is practically impossible at the highest level. Salary can be reduced. Debts can be renegotiated. Players can be transferred. The rules can be relaxed to help fulfill the obligations. Does that mean you can do all this and stay competitive? Well, no. Most likely, this will affect your athletic performance. It may take a while to get back to where you were. But this is life. That’s the business. If you spend too much, you pay the price.
In the 10 years leading up to the pandemic, European club revenues have almost doubled, from EUR 11.7 billion ($ 14.2 billion) to EUR 21.1 billion ($ 25.6 billion). We are not talking about earnings similar to Bitcoin, but they are not negligible either. And thanks to the regulations on fair play, the system as a whole has been profitable for the last three years.
So yes, Seifert has a point. If you are currently complaining about your poverty (and trying to change the whole system to try to get out of it and, in addition, create a more permanent domination for an already dominant club elite), you should expect to sing to the smallest violin in the world. . UEFA will probably say that it had no choice but to give up. The alternative (for clubs to comply with their threat and withdraw from the Champions League to set up their own tournament) would have put a direct dagger at the center of their competitions and their ability to redistribute economic resources throughout the system.
However, the truth is that UEFA has lost steadily over the last twenty years. He’s getting tired already. And it’s not positive for football.