Tuesday, May 3, 2011

Real 'Fair Play' in Europe requires consolidation

Today, we welcome our friend and ex-colleague Peter Kratzel as a guest writer for NSC. Peter hails from New Jersey but has lived for the past few years in Glasgow, keeping tabs on Americans playing in Scotland.

Here he addresses the imminent arrival of UEFA's 'Fair Play Rules' and argues that the merging of certain nations' leagues is the wise
st response:

Following the European Soccer scene in recent months (especially after the latest transfer window), a lot of media attention and scrutiny has been given to how the biggest clubs in the world have been managing their finances. UEFA is also asserting greater authority to make the playing field “level” for all its member associations.

The impetus for this new-found “fairness doctrine” is the adoption in late 2009 of the UEFA Financial Fair Play Rules. Basically, this mandates that every licensed club within Europe must operate their books at “break-even” for all seasons starting with the 2012-13 campaign.

This is not good news for English Premier League Clubs, as 14 of the 20 teams playing during the 2008-09 season (the last for which detailed financial records are available) showed a significant loss on their books. This was despite having one of the richest TV deals in the world -approximately £40m ($64m) is paid annually to every team in the league.

The lure of television money has encouraged some of the world’s wealthiest people to buy into the Premier League in the hopes of creating their own fantasy football team, stocking their rosters with world-class stars bought for staggering sums of money. Chelsea (with Roman Abramovich) and Manchester City (with Sheikh Mansour) are two clubs who serve as the poster children for this excess of money and vanity. And if you think the threat of the new rules would have dampened the appetites of these two, think again, as in the recent transfer window Chelsea paid a British record £50m for former Liverpool striker Fernando Torres.

However, with all the saber-rattling from UEFA for potentially banning clubs who continue to operate in deficit, the full force of the rules will not be felt until at least the 2018-2019 season. This is because UEFA has inserted clauses into the final revision of the regulations that allow clubs to be as much as €45m ($54m) in debt heading into the 2015-2016 season. This clause was inserted to allay the concerns of the European Clubs Association, a newly formed organization that replaced the secretive and self-serving G-14 as the voice of the biggest clubs in Europe. This includes nearly all the big spenders (Chelsea and Manchester City naturally).

English Premier League side Manchester United, a charter member of the ECA, and a club who have debts reported to be over £700m ($1.17 billion), do not seem at all concerned about the upcoming regulations, stating to news organization BBC that they would meet the proposed criteria, as is, today, although how they would do this is not exactly clear.

Even with the new rules, it is clear that the top European competitions in future years will be dominated by the same big clubs from the same major countries who dominated the last decade, with no relief in sight for teams from the smaller nations in Europe - Portugal, The Netherlands and Scotland for example, who have one or two top-tier sides, but simply do not have the population or TV audience that could sway the balance of power. A few clubs from these countries dominate their own professional leagues, but are limited in their attempts at success in Europe as clubs from four nations absolutely dominate the competition (see statistics below).

If you think rationally about it, how can any football club making ends meet with roughly $3m in television revenue compete with a team earning twenty times that much? Compare this to American sports, and you have the equivalent of how the Pittsburgh Pirates feel every year, without the benefit of draft picks or a farm system to help develop the team further.

For these clubs (Benfica, PSV Eindhoven, Celtic, Rangers and countless others), there is only one hope at “fairness” when challenging for silverware in Europe; they must find a way to become part of the larger markets they compete against. Or to put it more succinctly, they must find a way to merge or consolidate into the larger European leagues.

The concept of clubs playing in leagues outside their home countries is not a new one. In 2000, Peter Fossen and Harry van Raaij, then CEO and President respectively of PSV Eindhoven, made the initial proposal for the “Atlantic League.” The league’s aim was to allow clubs who were perennially successful in the own country's competitions the chance to play at a higher level to a wider audience. The result of which would be the clubs would gain greater revenues from television, afford a better quality of player, and address the growing disparity with the “big four” countries (England, Spain, Italy, and Germany).

Clubs from Portugal, Netherlands, and Scotland were enthusiastic about the Atlantic League idea, but it received a cool response from UEFA, and the big four, led by England, were definitely against it. If it had been allowed to form, it would have been the third largest league in Europe.
That is not to say the Atlantic League was not without its problems: The costs of clubs trekking all over Europe to play league encounters was never fully thought through, not to mention how hard it would have been for visiting fans to travel to matches in Sweden or Portugal for instance.

Yet in the end, the reasons behind forming the Atlantic League were valid and reasonable; it was the execution that would have been an issue. Consolidation is truly the only way that “second tier” clubs in Europe will have any chance at success in the Champions League. It is the type of consolidation that matters, as the focus should be regional, merging specific league structures and creating playoff systems that respect current league entities. This is the formula that will create some form of parity. If you think that it is sacrosanct that clubs can only play within their own borders, note that:

* Two teams from Wales (Cardiff and Swansea) play in the English pro leagues and three more in the English non-league pyramid.
* The English FA attempted to bar Cardiff from winning a European spot if they had won the FA Cup in 2008. UEFA reacted quickly to state that the Bluebirds would be guaranteed a place, and the FA subsequently backed down.
* One English team (Berwick Rangers) plays in the Scottish league.
* Monaco plays in the French first division despite not being part of France.

“Fairness” within UEFA

Why is fairness still an issue? Well, while UEFA believe they are addressing inequity with the new financial fair play rules, they have apparently given no thought as to how clubs participating in the organization’s biggest competitions can have an equal shot of success within them. A quick look at the Champions League (UEFA’s premier competition within Europe) emphasizes this inequality; consider that since its inception in 1955:

• Only 21 clubs have actually won the European Cup/Champions League (Real Madrid lead this field with nine trophies)
• Teams from the “Big Four” countries (England, Spain, Italy, and Germany) have won 41 of the 55 contested championships (a success rate of 75%), and are guaranteed to add to that total in 2011
• Only England has produced a wider variety of winners (four) than the other big four countries

Remember, UEFA is an association where literally hundreds of clubs from all over Europe play in the Champions League (or qualifiers) every year. But, as history shows, clubs from smaller countries have virtually no chance at success in the current format. When Porto won in 2004 (with future legend Jose Mourinho as manager), it was considered an upset of some magnitude against the likes of Chelsea and Real Madrid.

This inequality of opportunity is not addressed by the fair play doctrine. In fact, many smaller clubs would argue they are even more limited than their larger counterparts. For example, the original UEFA guidelines for fair play would have exempted clubs with turnover of less than €50m ($74m) annually, but this was rejected by the ECA as “unfair.”

Can UEFA Competitions ever be Fair?

The short answer is yes, they can be fair, or at the very least a lot fairer to the majority of clubs in Europe. What’s more, being fair does not mean introducing a blander form of football. UEFA, working with all its member associations, can introduce changes that will provide a greater opportunity to the lesser nations of Europe, without significantly degrading the power held by the big four.

That is not to say that some consolidation ideas outside of the Atlantic League proposal stated earlier have not been mooted. The ECA are still talking about having a “European Super League”, where all the best clubs in Europe would play in a two-tier format with promotion and relegation. While UEFA have been dismissive of the idea, Real Madrid’s President Florentino Perez stated in 2009 that “the best need to play the best.”

Ultimately, the Super League is another idea meant to pad the pockets of the big clubs with ever-increasing TV revenue, while second-tier clubs playing in smaller countries try to make do with mid-price talent in the top competitions.

Instead, the alternative proposal presented herein provides a platform for regional consolidation where it makes sense, which will improve the level of European competition, bring the excitement of the Champions League to a wider audience, and maybe, just maybe, provide some degree of parity to football within Europe. The question is, how would such a system function?

How European Consolidation could work

There are several avenues that can be proposed with regards to how certain European leagues could be consolidated to pool TV revenues and improve league play. The combinations are numerous, so here are just a few examples:

• Netherlands (Eredivise) & Belguim (Jupiler League)
• Portugal (Primeira Liga) & Spain (La Liga)
• France & Monaco (Ligue 1) & Switzerland (Axpo Super League)
• Romania (Liga I), Hungary (National Championship) & Croatia (Prva HNL)

The example that will be the focus of this article will detail how such a consolidation can succeed in the United Kingdom (England, Scotland, Wales, and possibly Northern Ireland). This proposal is different from what Bolton Wanderers chairman Phil Gartside advocated in 2009, as there would be a playoff system in place for promotion to the top flight, and relegation would still exist for those that finish at the bottom.

The UK Example: British Premier League

This proposal does recognise the idea of Bolton chairman Gartside that a two-tier “British” league is most likely the best way to facilitate a league consolidation. It would be the pinnacle of British football. The key difference in this plan is that ALL clubs would have an equal opportunity to become part of the “BPL” (as it would be called) through an exciting playoff format between the top clubs in England (lower divisions), Scotland and Wales (Northern Ireland can also be added to this example if desired).

BPL 1 & 2 Format

In the new league, this is relatively unchanged from the manner in which the English Premier League operates today; 20 teams in BPL 1, with relegation to BPL 2 for the bottom three (European qualification will be addressed later). BPL 2 can have anywhere from 20 to 24 teams within the division, with the top two league places receiving automatic promotion to BPL 1, and the 3rd through 6th placed teams having a playoff for the third promotion place (as the Championship works today).

Slightly different will be how relegation from BPL 2 will operate. Only the bottom 2 teams will be relegated. They will also be relegated to the association they came from (a Scottish team would go back to the respective Scottish league, etc.)

The real excitement in this plan, in terms of fan interest and television executives, will come from the way that teams get promoted into the BPL. The diagram below provides the simplest explanation for how the system will work.

BPL Promotion Playoff System

As the diagram shows, a simple playoff system can be constructed where the top two teams in each of the English, Scottish, and Welsh top leagues automatically go into a draw for one of the two playoff groups for BPL promotion. In today’s current league settings, “English Premier” refers to League One, while the Scottish and Welsh leagues are currently called “Premier,” though their structure should change dramatically after the consolidation (Again, Northern Ireland can easily join this structure if desired).

The draw will separate each country’s representatives for the playoffs, so that one team from each is represented within the group. As these are end of season playoffs, it is anticipated that each team will play each other once, though a home and home series is not out of the question. For added effect, each playoff game should be played in the country’s’ national stadium. Seeding could be used to determine home field advantage if necessary.

After only a few years of the new BPL system would see a new level of competition added to British football, in a format that could be duplicated anywhere in Europe. Fans of Celtic would relish an annual trip to the Emirates, but you can also have other rivalries develop, such as Hearts (Edinburgh) – Newcastle, or Bangor City – Wolves.

Consolidation Benefits

At first glance, supporters living in England may not see a clear benefit for possibly sacrificing some premier league places for teams in Scotland or Wales. However, there is no doubt that this scenario will increase the level of competitiveness not only in the top two divisions, but can also allow the freedom in the lower leagues to develop home-grown talent.

In Scotland, freed of the shackles imposed on the SPL as teams struggle to compete with Glasgow’s Old Firm, we could see a resurgence in smaller teams bringing in home-grown players. The excitement of a potential Scottish champion not being either Celtic or Rangers could increase local interest and attendance. The Scottish top division could then expand to 16 or 18 teams, as fans have been clamouring for for years, instead of reducing the top tier to increase TV revenue. Sure, the Scottish top tier will not have the same type of television deal with either of the Old Firm teams, but the costs of running the league will not be the same. Wales will have the benefit of developing their fledgling league even further and providing a link back to their two big teams who now ply their trade in England.

Broadcasters like Sky and ESPN will jump at the chance to broadcast both the normal BPL league fixtures as well as the playoffs, which could very well be followed by large numbers of fans based purely on country affiliation. This could drive the next increase in TV revenue (the broadcasters would subsequently save money from a reduced Scottish TV deal without Celtic and Rangers).

Perfection?

Well, not quite. There would still be details to work out, such as how European qualification would work within a consolidated league environment, whether the cup competitions should stay within their national borders (they should), and how teams would share money with national associations. But once the idea of consolidation is agreed to, these would be relatively easy matters to solve.

There are other items that will need to be addressed and there will no doubt be opposition to this plan from those entrenched in the current system. But eventually, whether in Britain or elsewhere, regional consolidation is the only plan that will finally bring parity to Europe.

- Peter Kratzel

1 comment:

over there said...

Genius...common sense...not a chance of happening. Sadly, more of the same silliness awaits us.