Football is the most popular sport on the planet. Over the last few years, it has further cemented this position by gaining popularity in nations such as China, Indonesia and India, among others. This continuous surge in its popularity, coupled with the rise of online streaming platforms, has meant that football’s viewership all over the world has skyrocketed. This has turned it into a valuable product for media companies which, in order to gain broadcasting rights, have been doling out an increasing amount of money to football clubs. Further, the growth in the fanbase of football clubs has meant that sponsors, too, are willing to pay these clubs vast sums of money for commercial deals that are only growing with time. As a result, revenue streams of football clubs have ballooned over the years. And this, in turn, has caused their market valuations to increase manyfold.
In a bid to capitalize on this opportunity, investors all over the world have been pouring in millions of dollars into football clubs. Several clubs in Europe are witnessing growing interest from ultra-rich investors who are looking for a good investment opportunity. In the recent past, there have been several deals which have seen affluent individuals or entities purchasing a stake in football clubs. Qatar Sports Investments’ takeover of Paris Saint-Germain in 2011, and Sheikh Mansour’s much publicised takeover of Manchester City in 2008, are two of the most prominent deals that come to one’s mind.
These mega-money takeovers have had some undesirable consequences on modern football. Since the increase in money supply in the football economy has grown at a significantly faster rate than the number of world-class players, transfer prices of players have increased at an unprecedented rate. For instance, today, it is commonplace for clubs to shell out upwards of GBP 40 million on footballers that, most will argue, are not even established, world-class players. To understand how exorbitant football prices have become these days, it helps to note that Diego Maradona, the greatest player of his generation, was purchased during his heyday by Barcelona for GBP 6 million, in 1982. Convert that into today’s prices after accounting for inflation and the figure you arrive at is a paltry GBP 18 million. By contrast, Neymar Jr., presently the most expensive player of all time, moved to Paris Saint-Germain from Barcelona for a jaw-dropping GBP 198 million—exactly 11 times the present-day value of Maradona! Unfortunately, this hyper-inflation in football is not just limited to transfer prices. In an attempt to sign the best players, clubs with deep-pocketed owners are offering sky-high wages to footballers. In fact, wages of top footballers have risen by more than 1500% in the last 20 years.
While prima facie, it might seem that this huge influx of wealth into the footballing world has been a boon for all parties concerned, a closer analysis reveals that that is not really the case. Indeed, revenues of clubs have risen exponentially and footballers are now earning more than they have ever before. However, the benefits of this new wave of investments have not benefited all clubs equally. Only a handful of clubs with a global appeal have been able to draw investments from owners with deep-pockets. Others—though benefiting from increases in revenues due to new commercial and broadcasting deals—do not have the privilege of banking on uber-rich owners for forking out millions of pounds on transfer fees and player contracts. Investments in certain clubs by ultra-rich owners have allowed the former to pull ahead of others. Ordinary clubs can no longer hope to compete with these so called ‘super clubs’ when it comes to signing top-notch players. Poaching the best players of clubs by luring them with extortionate wages has become the new norm for these ‘super clubs’, while all others are reduced to the status of a ‘selling club’.
Today, clubs such as Arsenal, Ajax, Benfica and F.C. Porto are the quintessential selling clubs. Over the last couple of decades, these clubs invested vast amounts of resources into developing their scouting networks and nurturing young talent. However, they have had to watch in dismay as richer clubs such as the likes of Manchester City and Paris Saint-Germain, among others, swooped in and lured their star players away by offering them lucrative contracts. Modern-day football is witnessing a growing trend of polarisation of wealth. In fact, what is happening in the football economy is not dissimilar to what is happening in modern-day capitalist economies. The benefits of growth are being enjoyed by a handful of individuals (clubs) which are leaving the rest behind. In the backdrop of society’s growing dissatisfaction with the status quo, a change in the rules of the capitalist system is needed to level the playing-field for all participants. Similarly, in the football economy too, the rules need to be amended so that competition can be unleashed and big-spending ‘super clubs’ are supplanted from the helm. Failure to act now will kill the competitive spirit of the game and end up being its ultimate undoing.