The Global Expansion
I could be wrong, but I kind of felt like my friend Red Ranter over at Red Rants took a shot at me this morning. I know that other people have made arguments similar to the one I made yesterday, but the language he used was so eerily similar to mine that it made me feel as though he was addressing my post. Perhaps I’m paranoid, but I felt the need to address his post regardless.
Here’s today’s post, “The Most Insanely Arrogant Plan,” from Red Rants:
Most of you might have heard about the Premier League’s plan to increase the number of games to 39 and play the extra game abroad. I am not sure what many of you think, but to me this is one of the most arrogant decisions ever made by the Premier League. Now I am not saying that it is a bad business decision. The potential at overseas markets are huge, especially for clubs like United. In fact, if a mid table side played a ‘big four’ team abroad, they will attract fans because of the presence of the big four club. Due to the neutral nature of the venue, I would assume that the gate receipts will be split equally — which is only fair. The clubs will stand to make more money — which is all there is to it, really.
But all that is besides my point.
The decision to send clubs abroad, to me sounds so wrong on many other levels. Before I say anything let me make it clear that I don’t live in England. So I am, as one would say, an overseas fan. I would love it if United came to play in my city, but when it comes to competitive games I have my reservations.
For one, the hypocrisy that I have seen here is so blatant. More money being pumped into clubs would mean more money for the clubs to spend on transfers. With pressures to perform and find relatively cheaper talent, clubs will still continue to look abroad, in their constant quest to compete and stay in the Premier League, and spend on players. Unlike what Scudamore says — that the money will be plugged back in to boost youth development — there will be a constant need for ‘ready made’ players that the extra money would enable clubs to buy into. So any dreams of seeing more English talent play in the Premier League can be safely dumped. And for this, thank the authorities who pride themselves at doing their level best to improve the quality of English footballers.
Again, don’t get me wrong. I am not particularly keen on seeing England do well, or badly for that matter. My greater concern is for the good of our club, and the authorities that govern the league that our club plays in. This lack of coherent thinking in the Premier League is of grave concern to me. And it’s not just the league, Steve Coppell — someone whose made his concerns on the English talent pool very public — has also backed this. Even surprising was Roy Keane’s support of the plan.
The other thing I get from people supporting this plan is when they start throwing fancy words like ‘free markets’, ‘globalization’, and ‘football clubs as products’. It is also extremely tempting to compare it with the NFL, when they played a game at Wembley. But no. Free market concepts don’t necessarily apply to sport. In fact, even the NFL follow a regulated structure where the draft system attempts to regulate and alter the players that a certain team can select.
Moreover, there is a temptation to suggest that there wasn’t an uproar when the Giants played the Dolphins at Wembley. There is a reason for that too. American clubs are franchises, started under the auspices of a regulatory board — like the NFL for American Football — by private parties launching them as business products first, a team second, and fans came finally. Football clubs in England or Europe, started independently, and with fans as the focal point. Football first, money later. Yes, now you see that they have evolved to viable businesses, but the fans who religiously attend games and pay for the gates, are still at the heart of them all.
Which brings me to this final point: The league’s decision to have an extra game abroad, is one way of saying, ‘Thanks for the support all these years, but we would rather play in Tokyo now so that we sell a few thousand shirts more. So fuck off!’ to the season ticket holders.
How popular do you want the English Premier League to be? Isn’t it already in your face wherever you go? What about the billion pound deal with Sky? Wouldn’t that also swell with time and inflation? If it was awareness, wouldn’t pre-season friendly tournaments help?
Who are we anyway at the end to talk about this? The suits made the decision and, barring some really significant developments, the clubs are sure to jump ship and play in Perth, or Jakarta, or Beijing.
Recommended reading: ‘Now - This is Just Too Good‘ by 200Percent.
I couldn’t help but feel that I should respond, so here goes….
Bad things happen to organizations that stand still in the face of a changing global economy. While you may think it would be wise to maintain the traditions of the EPL, if the Premiership does not move to widen the leagues appeal in foreign market it will undoubtedly be the EPL that suffers.
There are, granted, a platitude of questions that still need to be answered. From who will play who, to where the fixtures will be held, to the competitive disadvantages that some clubs will face, much remains unresolved. But do not mistake these questions for reasons that the EPL should not pursue their current course or one like it. If the Premiership does not move into these markets, another league will. If it not La Liga than Serie A: someone will fill the void. The Premiership’s viability is dependent upon its growth abroad. With £625 million in international television rights, the international markets represent a enormous revenue source for the league and it will only grow.
While it is convenient to site the origins of the English game and its fan-oriented beginnings, those days have long passed. Manchester United’s 06/07 profits exceeded £210m, a 27% increase. It also claims a “core” fanbase of over 139 million, with an estimated total of 333 million fans worldwide. Surely we can’t assume that the growth United continues to see is as a result of increased domestic support. While success has helped keep the seats at Old Trafford filled, the stadium cannot get much larger. Further growth will have to come from foreign markets.
We can choose to thumb our noses at growth in foreign markets. We can choose to side with the season ticket holder who may not be able to travel to every game. Maybe I am insensitive to such concerns since here in America, being much larger geographically, one would have to be insanely rich to follow their favorite club around the country. I’ve long adjusted to the idea of missing away games. Perhaps this is one of those incidences where my American perspective is a disservice to me. I don’t know. But I can’t help but to think that if we fail to expand the league our season ticket holders may not have a club to support.
We are in a very precarious financial situation. As you all know the club has undertaken a massive amount of debt. With annual interest payments totaling £62 million a year, a massive payroll, and the growing costs of business, United must continue to grow. If we fail to expand into these markets, we will be ceding that ground to other European sides willing to do so. While their revenues will grow, ours will stagnate. They will have more money for transfers, more money to improve their grounds, and more money to improve their product. If we stand still in the face of these changes we will be the ones at a competitive disadvantage. If you want to see the destruction of the EPL, wait and see what the “Big Four” will do if they see their European counterparts growing while being held back by local supporters who object to a 39th game. It will, in my opinion, invariably lead to the formation of a super league. The major clubs, which are businesses, will not allow anyone to mess with their bottom line. If the Premiership becomes viewed as an organization that impedes the growth of these businesses, watch how quickly the ownership of these massive clubs will move to leave the EPL.
To be sure, globalization has its ills. One thing that is sure, however, is that once businesses–even those like Soccer clubs which do not neatly conform to the constructs of traditional free market organizations–begin to expanding into foreign markets, there is no turning back. To slow or stop the growth of a business is to kill a business. We may not like the idea of a 39th game, but EPL fans must show a willingness to adapt to this new economy or they will soon find themselves longing for days gone by.
Recommended reading: The World is Flat by Thomas Friedman.
8 Comments, Comment or Ping
Red Ranter
Okay mate, here’s the thing. It wasn’t particularly directed at you. But all those who defended the plan made very similar noises to advance their argument. So yes you were among those at whom it was directed. Here’s are some of the points you raised that I would seek to address:
First of all it is the premise of your argument itself that I find hard to agree with. The Premiership has the widest appeal in terms of club following. From the Spanish League you have Madrid and Barcelona, in the Italian you have Juve, the two Milans and, to a lesser extent, Roma. And that’s about it. You may have a few Bayern Munich fans that will draw crowds, but if you think about it you don’t really have too many competitors. The Premiership as a competition has a far greater appeal than any of its nearest rivals — I can think of at least 6-7 clubs that will draw crowds from the Prem alone.
Don’t clubs have foreign pre-season tours? The stadiums are always jam packed. And it is a bigger money spinner than a one off game abroad. In the Premiership even Bolton and Newcastle go on pre-season tours and get a healthy reception. You wouldn’t see Athletic Bilbao or Catania Calcio draw as many crowds. Moreover, the chances of Madrid or Barcelona going abroad is less likely. If you are aware of the system by which clubs are run in La Liga, they are run directly by fans — a 100,000 member group. The finances of Madrid or Barcelona are sound. In fact they are better than that of the Big Four who are either in some form or debt or have a sugar daddy owner (Chelsea) Barcelona, due to tradition and fans’ opinion, even declined a record bid for a shirt sponsor and are instead paying for getting Unicef on their shirts. They may not actually feel the need to go abroad apart from pre-season, because they actually listen to their fans’ opinion. Money is not their only motivator.
Which is highly unlikely due to the G14 getting disbanded not so long ago.
The only other commercially viable markets from a global perspective are the Italian and Spanish leagues. In case of the Spanish league, there is a reason no one is being linked with a takeover of Barcelona or Real Madrid — it’s because the 100,000 core group of people that run the club wouldn’t allow it. They are run more like governments, where the members elect presidents to run their clubs — and they are happy with their business model. (Honestly the football in the Spanish league in general is of a higher technical quality, but then I digress.)
Italian leagues have been hit by far too many scandals that at the moment it is PR suicide to look to buy a club there.
I don’t have a problem with growth. Going abroad is perfectly acceptable in pre-season. Given a chance, you would certainly be ready to watch Ronaldo or Rooney live even if they decide to play for your pub team. And that is the appeal these players have. Having extra competitive games abroad are only first steps towards actually shifting the league as a whole abroad in the very long term.
It’s an excellent plan as a business model, but just one without any heart. And to see that come right from the Premier League itself, which is supposed to ‘help English football’ when it started out, it is a shame.
Feb 9th, 2008
Red Ranter
And one more thing, regarding my economic leanings, I am more of a libertarian so I am for unmitigated open competition of businesses. But in football I think competition should apply to the pitch more than the money. Which is why concepts of open markets don’t necessarily apply to football clubs.
Feb 9th, 2008
Patrick
You are correct when you state that the EPL is the most marketable of all the leagues. The level of competition from top to bottom in the EPL is undoubtedly stronger than that of Serie A, La Liga or the Bundesliga. Perhaps if we do not dominate these markets then no one will. The talent pool in Italy and Spain is indeed shallow, and I wouldn’t walk down the street to see Athletic Bilbao or Catania Calcio. I will also concede that Barcelona and Madrid are unlikely to go abroad outside of the pre-season for the reasons you mentioned.
While perhaps none of the current clubs or leagues provide the proper framework for a greater appeal abroad, that does not mean that there isn’t a void to be filled. The current leagues, while steeped in tradition and historic worth, are, as you have articulated, unfit to adjust to the new global economy. There is, however, a massive market for internationally marketable teams and an internationally marketable league. The current league constructions, while great for localities, are relics of a time gone by. They were formed in a time that did not have today’s travel options. While it was previously impossible to expect a club to travel from London to Rome for a match, it would only take four hours today.
Consumers demand their products to be of the highest quality and having several competing leagues with hundreds of clubs necessarily diminishes the quality of the play within those leagues. While it may seem unimaginable, the formation of a league that would concentrate the world’s best players into the same league would provide an inevitable quality to viewers.
While I don’t believe that today’s local clubs will ever become extinct, I do believe that the prospect of them becoming “farm teams” to larger, national or metropolitan based super clubs is a distinct possibility within our lifetimes. There is a reason why people are so resistant to moves abroad. They are possessive of their clubs and have every right to be. There is a void to be filled, however, and where there is void there are financial interests that will look to fill it. While Manchester United, Barcelona or Milan may not be suited to fill that void, as they are necessarily restrained by tradition and their 100,000 core supporters, to assume that the EPL is as good as soccer could be and therefore is not vulnerable to competition is foolish.
Domestic leagues, as they are currently constructed, are bad for competition. The big clubs that are able to market themselves internationally will continue to grow while the smaller clubs will be unable to do so. Derby City will never be as good as Manchester United. The gap between the haves and have-not’s will continue to grow until competition is non-existent. The correlation between what clubs are able to pay for players and their success on the pitch is no accident. Eventually, as the large clubs continue to expand their revenue, the disparity in quality between the top 3 or 4 teams in each league and even the 9th and 10th placed teams will be massive. This is a recipe for a horrible product. Supporters for mid-table teams will have little to be excited about and will demand that something be done to insure viable competition.
You stated that you are a libertarian so you “think competition should apply to the pitch more than the money.” Well football has very few, if any, mechanisms to insure that competition exists. There are few restrictions on how much teams can spend and there is no draft system to insure that bad teams will improve. The rich get richer and the poor get relegated.
You may think that this all sounds silly, but something will give eventually. There will be a movement for a better product. There is an opening for a league of greater quality with mechanisms to insure that the playing field is at least remotely level. While I may have been incorrect to believe that any of the current clubs are in the position to make that jump, someone will or something will be created to fill that void. Traditions are only useful as long as they still make sense, and in the increasingly global economy of today, changes are inevitable.
Feb 10th, 2008
Chris H
“if we fail to expand the league our season ticket holders may not have a club to support.”
Overstating it just a bit, aren’t you?
The league, and the clubs (especially United) ,are already doing their bit to appeal to overseas fans, with their overseas cash. The pre-season tours and tournaments, as well as the sale of overseas TV rights, are bringing in growing amounts of money.
Personally, I think this 39th game is just a bit much. I too am an American fan of United, so I can’t identify with the outrage fans are pouring out in other blogs about how disgraceful it is that they won’t be able to see every game, since as you mention, that just doesn’t exist here. And it is similarly over the top to say (as people do on every forum I visit) that this is the beginning of the end of football.
Spare me. The importance of money has been plain to all for years now - this is just turning things up a notch, and in a way that makes English fans feel less unappreciated. Or at least, for one weekend, not the center of the universe. Their frustration is understandable, but this proposal is far from the end of the world.
However, I just don’t see how even more games can be crammed into the season, along with two flights across multiple time zones, and several days of personal appearances and a local media frenzy. Scudamore has described week 39 as a sort of mini-winter break, but it will be just the opposite - a drain on players already being pushed far harder than they are in any other European league. In addition, I don’t like the competitive imbalance that results from an extra game against a randomly drawn side. I realize that the clubs and the league want to make more money overseas, but I just don’t think this is the way to do it. I doubt this proposal is going to come off, but in the next couple of years, I think we will see more and more clubs going abroad for tours and mini-tournaments during the summer, and there may be an NFL-style regular season game or two played outside the UK. All of which I have no problem with. And all of which will help to ensure that the EPL (and most importantly for me, United) remains prominent in the hearts and minds of global fans of club football.
I strongly doubt that the EPL is going to fold, or fade away, or shrink in importance because some other league is going to “beat us to the punch” by playing regular season games overseas. The only other two leagues with a global reach in terms of popularity and player recruitment are Italy and Spain, and neither seems likely to press for a similar move, either now or in the immediate future. The Premiership seems to be in front of the pack when it comes to pursuing foreign fans, and it can continue to do so without doing something as drastic as this. It’s good the league is considering such things, but surely they can come up with something better.
We’ll continue to earn more and more $/¥/€ from overseas fans, but I doubt it will be with this plan.
Feb 10th, 2008
Red Ranter
Not relevant to the argument as such but here are couple of interesting links you might find interesting. Even as an outsider I find such articles a good read, especially these coming from a neutral.
“For The Final Time”
“United We Stand?”
I know I tend to link a lot to 200 Percent, but some of the romanticism that he associates with the beautiful game in his writings is infectious.
It’s just for the sake of perspective that I am linking them. Not that I would necessarily agree with everything. A lot of what he says makes a lot of sense.
Feb 11th, 2008
Chris H
As for teams breaking away to form a Superleague, that league is already here. Our next Supermatch is in Lyon on February 20th.
The intense demand that you describe, the desire for fans to see matches against the other giants of European football, is the reason the Champions League has become such a massive moneymaker for everyone involved - the clubs, the sponsors, and UEFA.
I understand the need for exploiting foreign markets, and increasing the clubs’ income from foreign fans. In United’s case I’m all for it, as long as the price we (fans and players) pay for it isn’t too dear. The Saudi trip, for example, is looking worse and worse. A red-eye flight, several days worth of PR junkets, then a full mid-week match at nearly the busiest time of the season? Quieroz on Sunday mentioned tired legs after the international games mid-week, but I couldn’t help but think of the footage of that enthusiastic young Saudi, with his microphone and poor English, trying to interview exhausted players and staff in the arrival lounge at the airport. Still groggy from the flight, immediately after the game they had just played, they must have been thinking, “What the hell are we doing here?”
And while the level of fan outrage has been over the top in response to this 39th business, there really is only so much you can force your core support to swallow. On a recent EPLTalk podcast (http://epltalk.libsyn.com/index.php?post_id=259158) , I heard a well-known football financial expert state that in the economics of the game, clubs expect to get 50% of their income from ticket sales. So they do their best to fill the ground to capacity every other weekend with 30-70,000 fans, a high percentage of whom are interested enough to attend every game. 19 league games, plus a few cup games, if you’re good enough, maybe some European games in Big Cup or Euro Vase. The rest of the money you make elsewhere - sponsorship, TV, merchandise, pre-season tours, American knuckleheads like me buying shirts and subscribing to MUTV online, etc.
Now 50% leaves a full half of the income coming from other sources, but it does mean that the largest single source of revenue comes directly from the pockets of the local supporters. And there’s only so much that a club owner can do that goes against the fans’ wishes, because if that source of revenue takes a hit, it’s going to cut into your ability to do business in other areas. AIG, for example, doesn’t want their logo to appear on jerseys of a team that plays its home games in a stadium with empty seats, regardless of how how many knuckleheads overseas buy shirts to do more advertising for them, and even though studies have shown that East Asia, in particular, is full of knuckleheads.
I’m overstating things here a bit - there’s little danger of Old Trafford being half-empty, and although fans’ reaction has been a bit much, they do have some more than valid reasons to object to the proposal. I share their unease at the way the 39th round unbalances the fair competition of the league. There’s a greater element of luck in any cup competition, but every league in the world runs on the principle that you make the fixtures balanced so that everyone has an identical strength of schedule, a fair shake.
I’m tired and incoherent, so I’m going to stop writing now. Just one more point about the Superleague: if our home games all season are against teams Fenerbace and Olympiakos, when exactly will 70,000 people have the opportunity to rise as one, and sing about the wickedness and inferiority of Scousers? Never. And no one will plunk down 100 pounds for the chance to sing,
“Who put the ball in the Turks’ net?”
“Some Turk, we think.”
Feb 12th, 2008
Chris H
“Who put the ball in the Greeks’ net?”
“Probably a Greek.”
“Who put the ball in the Ukrainians’ net?”
“We don’t know.”.
Feb 12th, 2008
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