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“Dutch disease” #football #footballfinance

Today’s post is kindly written and authorised for our publication by Gustavo Silikovich, Gerente General de Club Atlético River Plate:

“I have been lucky to have been able to visit some clubs in Europe from different leagues and different levels. We were able to be in contact with directors from England and Spain in different meetings. They are either fighting for the championship, trying to enter the UEFA Europe League, or even remain in the Premier League.

In every case, our conversations turned to the diverse income sources that every club has, and how they will project themselves, resource wise, in the future.

I was surprised to hear more than once, generally from marketing people, that their job was going to stop being valuable. Due to the importance of the constantly increasing television income, almost any product or service that the club might provide for their fans was immaterial compared to the large sums of money from the match broadcasting arrangements.

This situation made me recall something that I studied more than once from the time I worked in the energy industry “Dutch disease”.

In this case , we are not talking about the curse that the Netherlands soccer team seems when it comes to becoming world champions, (they have the odd honour to have played the final three times, and some semifinals as well, without winning the cup once.)

On the contrary, the “Dutch disease” is the name given to the economic phenomenon that presents itself when, in a particular country or economy, the resources such as petroleum or gas start to damage other product or service sources (that is to say, all the rest of the activity)

The first time the “Dutch disease” appeared was in 1977 in an article in “The Economist”. It spoke about gas resources in the Netherlands and their effect on the economy.

In the case of football, thanks to input from companies such as Forbes and Deloitte, we can learn about the fact that there are three big sources of income: 1) match day (everything that is generated around the match day); 2) marketing + commercial (sponsorship deals, advertising, merchandising, etc.); 3) diffusion rights ( to a large degree, what TV pays to teams or to leagues to broadcast matches).

In some cases, they add the social part as well, that is to say the input that the members of an institution make monthly, to use the services and keep their solitary condition ??. I have no doubt that some years from now, the digital source will be added as a big source generator, but let’s leave this for now, as it is not the main reason for this post.

How much money enters for TV rights? Contracts are becoming bigger and more interesting all the time, and as a percentage, they are on their way to representing a larger portion of the clubs total incomes. To give an example, Barcelona Football Club and Real Madrid were the clubs that raised the most amount of money for TV rights during the 2013/2014 season ( 160 and 156,8 million euros respectively), although with the new contract, their incomes will decrease ( by accepting to become part of a collective negotiation, to ensure that the rest of the clubs receive more money and in this way improve the product they are selling : The League). The 20 Premier League teams are situated just behind the two giants of The League in the TV income ranking, headed by Chelsea ( €138,6 million), Manchester City (€137,9 million) and Manchester United (€135,5 million).

We shall mention other cases as well, smaller clubs that receive nearly 30 million euros annually from TV. To mention examples from 3 different leagues we can cite Bilbao Athletic (32m), Hamburg (28m) and Atlanta (28m). Obviously, for these clubs, their main sources of incomes comes and will definitely grow to be more dependent on TV.

What point do we want to reach ? That earning money from TV isn’t a good method and that we need to avoid that temptation? Not at all! What I am aiming to do is to discuss the importance of being able to develop ,at the same time and with the same intensity, the other sources of income in the club, to avoid this high level of dependence that might end up with the “Dutch disease” (or as the Spanish saying says “putting all your eggs in the same basket”) As a conclusion, I celebrate all the initiatives many clubs have through their own conviction or need (to be present in leagues that don’t provide large sums of money, like the Argentinian League) to promote all types of new products and services for their fans, increasing the amount of options they have for the use of the stadium, putting into practice new alternatives to associate (for example, “Socio Torcedor” in Brazil or Portugal), adding a streaming platform, creating new alliances with sponsors, or increasing their fans digital base. These are the clubs, as far as I know, that will be the most prepared in the next ten years, they must keep improving their TV incomes, but without entering into the temptation to depend entirely on them.”

Thank you, Gustavo – agree with your sentiments.

Refreshing change

With the constant bombarding of negative life events around the World – Brexit, Nice, Brussels, Istanbul, Turkey etc – what a refreshing change in seeing a politician who merely wanted to celebrate his own Country’s Euro success.  Watch Mário Centeno  turning up to the Eurozone meeting in Brussels. See: http://www.newstalk.com/WATCH:-Portugals-finance-minister-shows-up-to-Eurozone-meeting-in-football-scarf

 

Chances of football coming home….FA

Some might be surprised, but I like the writing style of Stoke City supporter, Anthony Bunn, who has kindly authorised the below article as a Guest Blog Post. If you want to read more of his musings, just pop along to Duck Magazine.  Here goes, an article titled: “Mindset over matter: FA chance of succeeding?”

“In the post mortem that followed our national team’s shameful-but-not-unexpected capitulation in France this week, many fingers were pointed. Quite rightly, many fans have their say on football, and even more so when it comes to the national team.

“Look at them, in their armchairs giving it large and in bucket loads to professional players and managers who have been in the game all their lives”, some sneer. Yeah, as if watching football all your life doesn’t give you the right to voice an opinion, or in a lot of cases, state the bleeding obvious. And you don’t need a UEFA A badge to see England have been poor for decades and underachieving for decades now.

First things first: I’m no massive England fan. It’s always been and always will be Stoke City>England. I’m not bothered if that upsets some people, but I can take or leave our national team. I want them to win, but it’s never over-bothered me when they don’t. The recent cult of celebrity doesn’t help, with players pretending to be on mobiles when they get off the coach or having earphones on the size of Jodrell Bank. Fair play to Stoke players here, almost always ready to engage with those who go through the turnstiles.

In days of yore, when The Potters lost, my mood changed to one of darkness until we next played. Age and responsibility brings a maturity (in some cases) and an acknowledgement that a defeat in a game of football can be shattering, but you also have work to go to and kids training shoes to afford in the great scheme of things! But that has never been the case with England. As soon as the final whistle has gone, that’s me done and dusted. It has no emotional effect on me at all, apart from a  few games where we’ve given it a go or been hard done to.

But that changed a few days ago. And it wasn’t the fact that we lost to what many have disrespectfully called a ‘pub team’. If that’s the case, perhaps our ‘stars’ should take off their lovely big headphones and head for the boozer a bit more often, eh? No, it wasn’t the opposition or the defeat, it was the manner of the defeat, and the total lack of leadership and management by several parties in the immediate aftermath that boiled my urine.

Forget Hodgson. Indeed, I’ve tried to for years. The man should never have been appointed in the first place. He might seem the type who helps old ladies across the road and I bet he’ll do your car for you or trim your hedge while he’s doing his. But he shafted the international career of our captain – which yes, does make it personal – and I also don’t want simply a ‘nice bloke’ to manage my team. I want a bloke the players will die for, respect, and win for when the going gets a bit tougher than the group stages.

Just look across Offa’s Dyke or over the Irish Sea for managerial examples.

Whilst Hodsgon left Ryan Shawcross’ international future seemingly in tatters, it’s fair to say that the current England players have not needed too much of Hodgson’s help to wreck their own. And crocodile tears on French soil don’t cut it with me.

So if we know where the problems are and have an opinion on them – and everyone has blamed obvious targets such as those that run the game, resources, funding, technique, technique under pressure, desire and passion, the academy system etc etc – the solutions don’t seem as obvious. Why? Well there are so many contradictions for a start…..

Like Leicester City winning the league, many arguments will be skewed by the fact that Wales have possibly overachieved, or at the very least played so much better when the pressure was on, than England. Let’s remember, Wales’ match with Russia was virtually a knockout game, and since that they’ve won the next two knockout games. England have simply done an ‘England’ as soon as they get through a group. And where do most Wales players ply their trade? You can’t blame the system all of the time when others are succeeding from it.

And then there’s the “Academy generation” – as labelled by Jamie Carragher.  It also seems churlish to decry a system when it produces either world class players and ones that have gone been successful at Euro 16, whilst others are now back home after having shockers. Want examples – well Southampton’s system produced Gareth Bale and Adam Lallana, whilst Manchester City’s saw Neil Taylor and Daniel Sturridge experience it.  And as for the clubs they play for, Spurs’ regular left back (Danny Rose) has been totally upstaged by his understudy (Ben Davies) in France.

So back to the manager – should we really be smashing into Roy Hodgson, or should we in fact dig deeper and look at the people who appointed him and who he works for?

Long term, we have to look at football from the bottom-up, not the other way around. There are so many easy-wins to put right, and that’s where I want the FA to focus first. Make it easier and cheaper to get coaching awards and badges; tap into the best of what the world of football has to offer; stop making stupid boasts about winning the World Cup sometime soon and be realistic; distribute wealth evenly, fairly and where it is needed; and ensure that our children have the best possible chance to fall in love with the working man’s ballet.

We’ve all seen the stats this week about the number of qualified coaches other countries have, the cost of those qualifications, and the number of astroturf pitches in Iceland….etc. And those figures are a  hugely damning indictment of English football and the richest league in the world.

My own/son’s team didn’t have a match between the end of November and the start of March last season. Three months without football ensured many fell out love with the game, and there is plenty of other options open to kids nowadays, yeah? Don’t make it easy for kids to lose the football bug. Pitches and facilities just aren’t good enough in this country, especially in a climate that is temperamental. The slightest bit of rain turns many pitches into bogs, and that means either a postponement or a pitch that simply ensures who can boot if the furthest or has the biggest players, wins. Still. Just like it did when we were kids. But there wasn’t billions of £$£$£ sloshing about back then!

Invest in the future, not in the next one to five years. Take the hit of not doing well or even not qualifying: after all, the whole country expects little nowadays anyway. At least have a plan in place.

Next time you drive home from work or are out and about, have a look at how many kids are out there, playing football. I’ll save you the time: there is virtually no one. I drive an hour to work; past parks, pitches, wasteland etc….and kids are not out playing football. Perhaps we also need to look at the absolute saturation of football and sport on TV nowadays, too?

Kids need to be out playing the sport, not watching Sunderland v Norwich on a Sunday afternoon or Monday night. No one is more football-mad than my seven year old and yet he’s hardly watched any of Euro 16 – he’s bored by it. Rightly so, but the good news is that he’s out in the garden playing football or cricket.

Let’s not limit who we do pick as the next manager, too. No job should not be based on nationality or place of birth. It’s about having the right person for the right job; whether they’re from the Potteries or Auckland. Who cares? Eddie Jones with the egg-chasers now and Duncan Fletcher’s cricket revolution a decade or so ago showed that it’s about fresh ideas and fresh viewpoints – not just doing the same things over and over again.

England players have had at least 15 years of coaching – surely at that level they don’t really need coaching as much as concentration on attitude, mindset, freshness of approach, organisation, and ensuring that technique holds up under pressure and that winning is a habit. It’s in the head, not the feet.

Want evidence? Look at Eddie Jones’ comments after they went 2-0 up in the recent series down under. He was desperate to win 3-0 and said the third game was their final, after a quarter and semi. Imagine that team coming into the changing room after losing that last game or playing a dead rubber – he’d have banjoed them! Contrast that to resting 6 players against Slovakia – an absolutely dreadful decision that sent out more wrong messages than an inebriated answer machine.

Eddie Jones has, apparently, just gone back to mastering the basics. And that includes defence and set pieces. Like a headteacher going into a failing school, the first thing they look at are uniform and behaviour, not how flowery the curriculum is. You get the basics right, with the right staff hammering over the manager/coaches’ mindset, and you’re halfway there.

For me, elite sport is about that one word – MINDSET. That’s what the successful managers concentrate on, and that why they are successful. Mindset then filters into various avenues: performance, organisation, pride, sense of team, sense of worth, a knowledge of your role and what is expected of you, and it allows everyone to buy into what the manager is doing. Mindset is omnipresent – but that can be positive as well as negative, too!

Gareth  Bale is not a superstar in the Welsh shirt. He’s another player that has bought into a mindset whilst wearing the Welsh shirt. He’s their most gifted player but is one that is prepared to work harder than lesser mortals. And when you get that mindset, anything is possible – and the impossible can happen. Where England talk of the quarter finals being a solid tournament, Chris Coleman asks people to keep on dreaming. There is no ceiling on belief and hope, yet England managed to squeeze every single last drop of hope out of everyone. And as a supporter of a club that has struggled for most of the 42 years I’ve been watching them, hope is all that we sometimes have.

International football is not about passion – that’s another contradiction as evidenced by Joe Hart belting out the national anthem louder than anyone and then performing way below the expected level. But a positive mindset, allied to organisation and belief, means that passion doesn’t take over from performance when the whistle blows. I couldn’t care  less if our players sang Public Enemy songs during the national anthem if it made them play better. And whilst we’re on about anthems – please someone create a new one for our country. Compare it to the Welsh or Italian anthems and it’s akin to JLS covering Massive Attack songs.

Chris Coleman doesn’t seem a ranter. I’ve met him a few times and he seems a calm, decent bloke. He hasn’t had a particularly glittering career either, but he has got the Welsh lads buying into a mindset, a philosophy and a united plan. He has the world’s most expensive player doing exactly what he wants him to. Coleman also seems to use nationalistic pride in a way that doesn’t burden his players, too. Perhaps the FA should have a go at getting him – but I doubt he’d lower his standards now!

England’s Euro 16 campaign wasn’t damned by the Iceland game. Nor was the fat lady singing when Hodgson acted like he did at that press conference. No, our national team was shamed to high heaven in the 85th minute of the Wales v Belgium game….

That’s when Wales were leading 2-1 in the biggest game they’ve had in 58 years, against the World’s second ranked team. That’s when Reading’s right back was Wales’ furthest player forward when they should have been hanging on for dear life. That’s when an out-of-contract Championship player got himself into the box when he could have been on the half way line for when they lost the ball. And that’s when a cross of high quality – instead of simply running the ball into the corner – was matched by the header that sent Wales into the semi final.

That isn’t about passion, it’s not about academies, and it’s not about how loud the anthem was sung. It’s all about mindset; and whilst we started the last ten minutes against Iceland with the dynamic Rashford on the bench and four still in defence, Wales had their right back twenty five yards away from the opposition goal.

That mindset takes bravery. And bravery isn’t just about tackling and sticking your foot in. Bravery is about sticking to what you believe in when the pressure is on. Bravery is the ability to get on the ball when its easier to simply smash the ball away and kill time. It’s about having the guts to think on your feet and take a chance. That’s why Wales two wing backs have had so much attacking joy, shots and chances.

Until England have a new mindset we’ll forever be asking the same questions about the FA and our national team. Until we do things differently we’ll always be talking about multi-millionaires not earning their money when the pressure is on. The results of England and Wales last matches are all the incentive that the powers should need for doing an Edwyn Collins – rip it up and start again. It’s a blank canvas to experiment, look long term. The country will understand as we have had six decades of hurt.

The shame is never the result. There is no shame in simply losing. The shame is always in how the result was attained. We keep losing in the same manner, with the same excuses offered, followed by the same questions. The country deserves far, far better. Our children certainly deserve a national team to be proud of.”

Will the grass be greener? #Brexit

It will take a while to realize the full implications of #Brexit.  Not everyone will agree with my musings, but I seek to at least get it off my chest.

I was undecided at first, but decided to understand the facts.  I decided to vote Remain from a somewhat selfish perspective seeing that my motives were protectionism and crystal ball gazing (at least on the probability of predictions!), as to that I felt best for my Family and Businesses.

As an educated marketer, I read and read and saw reasoning in the economic reports, one after another that suggested, “you gotta be in it, to win it” – at least in respect of financial stability for our once great Nation.

I could recite a Library but just read.  Ask me if I was so wrong to believe:

BREXIT: the impact on the UK and the EU” (Global Counsel, 2015); “Should We Stay or Should We Go? The economic consequences of leaving the EU” (London School of Economics, 2015); Annual Health Check of the U.K. economy and periodic report on the financial sector “ (IMF, 2016); and “Quarterly Inflation Report” (Bank of England, 2016) etc.

So on economic grounds and potential avoidance of a recession, I was in the IN club.

The blue and yellow map representing votes cast in the EU Referendum, whilst reminding me of Fenerbache, showed that for the populous, we now are officially a ‘Broken Britain’. The people have voted but have they voted on facts?  Is it just hearts rather than heads?  I do wonder were the relative pros and cons really explained.  I feel not, just a circus of lies and misinformation especially from LEAVE. The campaign showed untruth after untruth yet this didn’t derail the wagons of Farage et al. With my personal interests in Turkey – some communication from that divide came close to racism – and was at the very least scaremongering around immigration and/or islamophobia.

Whilst, I must stand up for the principles my Grandad, Bill Stores, taught me: “never fall out about politics or religion” there is the odd contact for their views and so called ideology that I have no desire to face in the immediate future.  I do have a ‘gut feel’ – no more than that – that a ‘Gentleman’s agreement with Turkey’ may have been tabled to try and assist with accession.  This related to NATO and use of bases in Southern Turkey and the recent trafficking of refugees from Turkey to Greek Isles.  Maybe this relationship has faltered also – and it will be interesting, if right, to see the fallout from any such beliefs especially in relations between UK and Turkey.

Britain is broken.  Either that or like lemmings our citizens have simply followed the ‘redtops’ whether they read the dailies coming out in favour or not of the European Union.  The UK population voted OUT – although in fact as I always said #tooclosetocall – only just over half did in percentage terms!  The disengagement with the way things are, be that poverty lines, discrimination or UK politics undoubtedly contributed. So were people always voting in the EU debate or in fact something else? Voters voted against the advice of the Leaders of their traditional political parties except for in corners like Scotland, who in turn will no doubt pursue a claim for independence as its’ people wanted to stay in the EU.

The people spoke, as is the point of a referendum – and Europe must fear others will follow suit. Maybe, Denmark again or Netherlands?  The demographics apart from geographical territory make an interesting read.  The younger appear in the same camp as me, but the elder age-bands voted for a swift exit.

What do I believe are immediate implications regarding Turkey? The first input I felt was a good rationale response from Turkey’s Prime Minister,  Binali Yildirim: “The EU should reconsider its vision” in the wake of Britain’s impending exit, be that 24 months away. President, Recep Tayyip Erdoğan may have been less calm depending on risks of promises not coming to fruition?

What, if any are potential repercussions in the world of sport where, I and ACROBAT | FCSM trade?  If you take the EPL, in 2015-2016, 432 European players were registered to play with our clubs.  Don’t expect them to be shipped out but future transfers can expect to be impacted.  By 2017-2018, any new incoming players will not have an automatic right to live and work in the UK.  Europeans could then be subject to the same immigration rules and regulations as non-EU players.

In the sport of the oval ball, rugby, repercussions are likely to be less severe. Unlike in football, there are not as many players of European origin represented in the Premiership as its NGB, the RFU, has had protocol for a while encouraging the  clubs to ‘Buy British’ with English qualified players actively encouraged through financial incentives.

I fear for households like mine – and indeed many others.  I fear for SMEs and larger corporates alike.  I fear for public sector (including higher education) and funding regimes. I just fear for the ‘unknown’ we now enter – as I strongly believe the debating and voting was a misleading marketing agenda from both sides – and people got confused and caught up in the web of lies.

Of course, the threat if in-migration and terrorism is a serious threat. So, we’ll now have more control of our borders.  Will we? Let’s wait and see.  Immigration has benefits and my children would not have been cared for by midwifery and consultants without skilled labour from overseas taking jobs that our indigenous population weren’t able to fill.

My people don’t disappoint me. Everyone has free speech in our Nation.  What upsets me is the ineptitude in the marketing and communication in facts.  Yes, hindsight is a wonderful thing, yet, with just a little more co-ordination, people would have been better equipped to give their most objective opinions.  Just a few percentages’ swing would have meant that the grass we know to have been continued to be played upon.  Whereas, I have severe reservations that by Brexit the ‘grass will be greener’.  I’ve not heard much yet on this subject, but won’t be the slightest bit surprised if this is the final straw to some citizens – and another motivation to ‘brain drain’.

Of course, as our branding at ACROBAT | FCSM constantly shouts: “you have to learn the rules of the game, and then you have to play better than anyone else!”  So rant over, and we’ll just try and get on with it in the best interest of my Family, Businesses and Clients – both in the UK, Turkey……and Europe.

My only consolation is that I know my immediate people, in near proximity, are still on the same wavelength. Proud of you Manchester and Stockport folk that saw fit to vote Remain and oppose the trend seen across the Country .

“Over and out” and back to watching the Euro 2016. My next holiday is in Gibraltar🙂

Adrian Stores is CEO at ACROBAT | FCSM: Award winning MARKETING, FUNDRAISING & SPONSORSHIP consultancy | specialism sports and leisure | UK & TURKEY www.acrobatfcsm.com

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