Football: Too big to fail?

Peter Fieldman[1]

Has football become too powerful for its own good? The wealth generated from TV coverage and sponsorship by major multinational corporations has made “the game” so corrupt it is virtually a state within a state. What started as a sport and grew into the world’s number one public entertainment has now turned into a major international financial business operating above the law and ruled solely by money and power.

bernabeu-maqueta-600x360 Football: Too big to fail?
Maqueta del nuevo estadio de fútbol del Real Madrid, Santiago Bernabéu

It is a global game played between corporate club owners, agents and lawyers where the players are merely pawns to be distributed around to the highest bidder. On the field, matches, once played at the same hour on the same day -in UK, usually Saturday afternoon – are now spread out almost daily throughout the week and at all hours to cater for the TV advertisers, sponsors and the growing number of spectators on the other side of the world, maximising earnings for the few leading clubs, which dominate the game.

Soccer players who express their talent inside stadiums, have become virtually untouchable regardless of their personal behaviour off the pitch, whether it is tax evasion, driving offences, excessive drinking or their sexual lives, which are the life blood of the media. From being mere mortals the top stars are celebrities whose faces, cars, palatial homes and female conquests are splashed over the tabloid sports pages as well as people magazines.

The world’s leading players are mercenaries switching clubs and allegiance at the whim of their agents, a secretive network of intermediaries, who have become the cogs in an infernal money machine collecting millions every time one of their clients shifts clubs often for no other reason than to satisfy the ego of club owners or to collect their exaggerated fees. And contracts are not worth the paper they are written on.

Illegal practices, corruption and violence

The revelations over the endemic corruption within FIFA exposed the immoral and illegal practices which have plagued football for decades; bribery, match fixing, political interference, tax evasion and even sexual abuse of young players by their coaches. Governments have failed to prevent the excesses and moral decline in the sport for fear of antagonising the advertisers and especially the armies of supporters, especially the “ultras” who are all voters in order to avoid potential social problems in many towns and cities. Soccer has become such a social phenomenon that local politicians are afraid of the consequences should a town’s club be declared bankrupt and disappear. They appease supporters for votes and have allowed the clubs to run up debts and turn a blind eye to the loss of tax revenue.

Violence has not yet been eradicated. This was brought to light during the 2014 Italian Cup Final in Rome between Juventus and Napoli. A supporter from Naples was shot near the stadium by one of the Roma Ultras and then to avoid trouble inside the stadium once news spread, officials were seen negotiating with a member of Naples Ultras. It transpired that the gunman was a known criminal having spent several years in prison for killing a policeman and the leader of the Napolitan supporters was son of a notorious boss of a Naples mafia family. Many families are drifting away from watching games due to the risk and this incident forced the Government to promise reforms and a crack down on violent behaviour.

The rise of Internet betting has been one of the factors in the increase in match fixing with players and referees being bribed to throw matches in European soccer competitions
and, according to recent reports, even the World Cup. The growing popularity of soccer throughout gambling mad Asia has led to the increase in match fixing by local Mafia gangs for whom gambling is a vital source of revenue and who are accused of attempting to influence results of matches across the world.

Despite massive incomes, which it has to be admitted, bear no relationship to the players’ own or their clubs’ success, the more they earn the less they want to hand over to the taxman. This may be unpalatable and immoral given the average salaries of ordinary people, but it is not illegal. Think of the so called “Beckham Law”, introduced in Spain purely to by-pass the existing tax laws, which require residents to declare their world wide earnings. Mr Beckham and other wealthy business people were given exemptions by the Government for up to five years so they only had to declare their earnings in Spain. However when players, agents and club owners engage in creating complex corporate structures whose sole criteria is to cheat the tax man, it is no longer tax avoidance but tax evasion and becomes a criminal activity requiring thorough investigation by the tax authorities.

Whenever there are vast sums of money involved and too much inequality it can only lead to corruption, disillusion and unrest. The influence of money has led to an increase in the number of court cases regarding opaque commissions to middle men, money laundering and tax evasion in the transfer market with so-called agents setting up deals with African and South American clubs to bring young players to Europe.

In the early nineties Olympique de Marseille, then owned by the charismatic French businessman and politician, Bernard Tapie, was indicted when a major scandal erupted involving allegations of manipulating transfers and match fixing. The club recently came under suspicion again with regard to opaque commissions following the transfer of players and alleged links to the city’s underworld.

A Spanish accountant investigating the financial situation of clubs in La Liga said that it was far more difficult to trace movements of money in soccer clubs than in most businesses. The allegations of opaque offshore companies hiding up to 150 million euros paid to Cristian Ronaldo during the past decade for his “image rights”, the court hearings over Lionel Messi’s tax affairs or the transfer of Neymar to Barcelona are perfect examples of what he meant.

Ten years ago, saddled with debts, Real Madrid, today one of the world’s richest clubs, escaped insolvency thanks to some fancy financial engineering. Club President Florentino Perez, who happens to be head of one of Spain’s largest construction groups, is credited with some excellent footwork negotiating a deal with the planning authorities to change the zoning on the club’s old training ground on the northern perimeter of the city centre in order to build and sell four high-rise towers for use as offices and a hotel. As well as saving the club, the buildings have altered the city’s skyline.

Even the soccer showpiece of the World Cup has lost its aura. Up and until the 1970s the World Cup was where supporters all over the world had a rare opportunity to watch unknown teams and players from other continents. It was original and exciting. Spectators and television viewers were in awe at the talent of the Brazilian team with its stars including Pele, Garrincha and Carlos Alberto, to name but a few. Today most of the top players are household names, playing for European clubs and seen every week on television around the world. Brazil versus Spain or Argentina versus Italy might as well be between Real Madrid and Barcelona, Milan and Juventus or Manchester United and Chelsea. The World Cup has been transformed into a money-spinning circus for FIFA and sponsors, stripping out the profits while leaving the host country burdened with huge debts.

Nevertheless all the publicity and hype associated with soccer should not hide the fact that while the leading clubs are quoted on the world’s stock markets, many harbouring massive debts which would cripple mere mortals, the vast majority of soccer clubs live on the breadline often lacking enough cash to pay their players and staff. Observing the overpriced tickets and half empty terraces of lower league clubs should be a wake-up call to European football’s governing bodies that all is not well.

Soccer has been a major factor in reducing conflicts and forging relationships around the world but it has also instilled in many young people the impossible dream of coming to Western Europe and becoming rich. Soccer will have to face reality and deal with the growing disparity in earnings between the leading West European clubs, whether they are public corporations or private enterprises, and those from the lower divisions or from East Europe and Africa.

The European Championship and Europa league are no longer the correct descriptions. The competitors extend far beyond Europe’s borders. Israeli and Turkish clubs can participate and I notice that Kazakh club, Astana, also takes part. According to my knowledge of geography Kazakhstan is on the Chinese border in central Asia, which hardly makes it eligible to play in a European competition. However although it is logical and fair to give lesser known clubs from central and eastern Europe the opportunity to play against the big boys, I am under the impression that some of the leading clubs in Western Europe do not relish the idea of mid-winter games in harsh conditions against clubs such as Rubin Kazan, Shakhty Salihorsk, Ruch Chorzhow, Rudar Pljevlja, Xazar Lankaran or Ludogorets Razgrad,whose names sound like villains in a James Bond movie.

An interesting anecdote is that while Monaco and Liechtenstein are independent states and tax havens, their soccer clubs are allowed to play in the French and Swiss leagues respectively. It obviously suits the French and Swiss governments as well as business interests. But why should teams from these notable tax havens be able to play in another country’s championships? Has anybody considered what would happen to Barcelona if Catalonia ever seceded from Spain? Who would turn out to watch them play Terrassa or Manresa? Or would the usual financial interests take precedent so the club could remain in the Spanish league?

  1. Peter Fieldman, NUJ writer. Author of «The World at a Crossroads” published by Austin Macauley in London

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