BusinessOfSports: Lockdown gives players a haircut they do not want

This article first appeared in Forum, The Edge Malaysia Weekly, on June 8, 2020 - June 14, 2020.
BusinessOfSports: Lockdown gives players a haircut they do not want
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Cardboard cut-out fans who pay for the privilege, piped-in booing and cheering, celebrations at a social distance — those are just some of the new norms being foisted upon football-starved viewers as live matches return to our screens.

Whether they are highlighting the falseness of playing in empty stadiums or reacquainting us with the real thing, opinions differ. But there is unanimity that faking it is still only damage limitation. And the damage is being calculated in the billions.

A report by KPMG’s Football Benchmark, entitled “Football players’ value not immune to pandemic”, estimates that the cost of cancelling all five major leagues in Europe would exceed €4 billion. Even with a resumption at  four of them — France’s Ligue Un season is the only one to have been annulled — losses could still exceed the €1 billion mark. Enough to give the players — and clubs — the kind of haircut they do not want.

Using what they call a Player Value Tool (PVT) to determine a player’s worth, KPMG looked at 4,183 footballers in the top 10 European leagues. And despite the return of Germany’s Bundesliga encouraging those in Italy, Spain and England to follow, the disruption is reckoned to have hit player values by at least €6.6 billion.

Not even the superstars are immune, as shown by France’s Kylian Mbappe, rated the world’s most expensive player in January at €225 million, who had his value cut by 16.6% to €188 million.

Clubs were also sent into negative territory. The top-rated club in January, Manchester City, which fears an exodus of stars if a two-year ban from Europe is upheld, was similarly trimmed, with its overall value down 15.3% to €1.053 billion, from €1.243 billion.

In a sport where the bulls have traditionally held sway, Covid-19 has brought along a few troublesome bears: uncertainty about the future, loss of match-day revenues and, currently, an inferior broadcast product. No matter how healthy PVT’s indicators (age, length of contract and club’s finances, among others) looked at the turn of the year, all have wilted in the ursine grip of the pandemic.

Welcome though these corrections have been in many quarters, they don’t go nearly far enough for some. As with every other aspect of life, there has been much lockdown talk about a reset in football — a pause for thought about its many flaws, and maybe to sluice its Augean Stables. Most of all, a once-in-a generation opportunity to distribute the game’s vast wealth — famously dubbed “prune juice” — more fairly.

At present, it would shame the feudal system. In England, the 20 Premier League (EPL) clubs keep 93.2% of the £8.65 billion they get for broadcasting rights, leaving the 72 English Football League (EFL) clubs below them to share 6.8%. As a result of the lockdown, the lowest tier has already cancelled the season, with many clubs, unable to survive without gate money, now facing oblivion.

Most are institutions more than a century old and the focal points of their towns. With thousands of livelihoods at stake, some have been reduced to begging for survival as the top EPL players flaunt their millions.

Last season, as Manchester United paid the perpetually lame Alexis Sanchez £500,000 a week to walk his dog, just 10km up the road, Bury FC, founded in 1885 and twice winners of the FA Cup, were allowed to go bust. Half of Sanchez’s weekly wage would have saved them.

For all its glossy image, the EPL has not covered itself in glory the way it has ignored its poorer cousins. But in today’s climate, you’d like to think the time-dishonoured excuse of “market forces” no longer cuts the mustard.

And thanks to Covid-19, attitudes are changing. In April, EPL clubs voted unanimously to donate £125 million to the EFL and the National League (the tier below) to help clubs through the current crisis.

What the so-called lesser lights really want is a fairer shot at reaching the top flight. EFL chairman Rick Parry has described the parachute payments that cushion relegated teams as “an evil that must be eradicated”. They last for four years, the first two of which are 10 times what the rest of the Championship clubs earn.

Another of the lockdown’s silver linings could be that a closed-shop European super league may finally be killed off. When “no relegation” was muted as a way of sorting out the domestic seasons, broadcasters were quick to complain that uncompetitive matches would not be worth watching.

Just as glaringly obvious is that the game is a pale shadow without fans. Rebelling with fury when called “customers”, they deserve more respect, both in the stands and on their sofas. England’s ticket prices are in fleecing territory — Germany’s are a fraction of the EPL’s — while kick-off times need to consider travel schedules as well as peak viewing. Often, the final whistle does not sound until the last train has gone.

Another bone of contention is the way matches are divvied up between rights holders. This forces viewers to take out multiple subscriptions if they are to see every game. Malaysian fans often watch more football than their counterparts in England despite the time difference.  Here, as there has been no live sport, Astro has announced a two-month rebate for sports package subscribers — the only broadcaster in the world to do so.

The financial broadside that has hit even the Big Boys will surely mean “no more crazy spending”, as Manchester United spender-in chief, executive vice-president Ed Woodward, has predicted. In the expected buyer’s market, they will not need to as smaller clubs could be forced to sell prized assets at knockdown prices.

At a time when the UK is bracing for its biggest recession in 300 years, people will want salaries to return to sanity too. But, judging by a reluctance to defer even a small percentage at some clubs, this will not be straightforward. Unless the power of agents is curbed, the likelihood is that the broadcast riches will continue to pass through the system very quickly.

Still, there are reasons for guarded optimism that football will limit the casualties and emerge poorer but wiser. A haircut is only a start — what it really needs is a complete makeover that tackles the burning iniquities that have plagued the game for years.

Bob Holmes is a long-time sports writer specialising in football

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