Monday, March 02, 2009

Crunch and the Money League

With almost-global recession crunching loudly in our ears, the possible exception to the global financial crises are the world’s richest soccer teams. Deloitte’s Money League of this year showed this very clearly.

Fine, every business wants to make a profit but should it be at the expense of all - or most - of the others in the football industry? And come to think of it, what is all this money used for? “Because of the lack of transparency from a financial point of view, in this market we don’t really know,” A.C. Milan midfielder Clarence Seedorf said. ”We don’t know how the money is dealt with.”

That appears to be a solid backing of the fact that the world’s richest teams are getting away with too much too quickly. And in all this the main worry is whether the gap between the rich clubs and the poor would not increase if this trend continues. If it should, then we would be presented with a carbon copy of the global digital divide. Something must be done to curb this trend and for the solution let’s see what has caused such a huge financial rift.

Players’ salaries are forever reaching skywards especially those of players in the elite teams. “The top 20 clubs’ aggregate revenue grew by 6% (€220m or $278 million) to €3.9 billion (£3.1 billion or $3.9 billion) in 2007/08,” according to Deloitte’s report.

“The top 20 clubs now generate more than three times the combined revenue of the clubs in the first Money League publication in 1996/97” – Deloitte

But with all that money concentrated at the top, teams at the bottom are struggling as another factor show: better management. But despite all these, some in the game, like Seedorf and Michel Platini, president of Europe’s soccer federation, wonder how long the market can endure without monitors and safeguards.

A few weeks ago, Platini warned a gathering of the European Parliament that the world’s most popular sport was “in danger” and could “financially implode.” He said that rising labour costs -– players’ salaries and transfer fees -– were of primary concern.

“It’s a business; it’s not a sport,” Seedorf said the day before the news of the Abu Dhabi group’s interest in his team was reported. “It’s entertainment.”

For the record, Real Madrid remain the richest club in world football as ranked by annual revenues, closely followed by Manchester United. Having won the Premier League and Champions League in 2008, United would have overhauled the Spaniards at the top of the Deloitte Football Money League had it not been for the depreciation of the pound. Later I would look at what Africa can learn from football’s Money League….lest we be crunchier than our Western folks!