Commentary

Soccer's biggest flaw is its TV rights-based economic model

On Friday evening I was channel-hopping, having briefly clicked away from the CNN feed that had been my family's staple for the previous four days. I came across a soccer game on one of Germany's dedicated sports broadcasters, Sport1, being played in a small, empty stadium under a shroud of heavy fog. It was a Scottish second-tier encounter between Alloa Athletic and Dundee.

For a few seconds, I marveled at the wonders of the modern world. A place where you can not only follow the U.S. elections almost vote-by-vote, with a running commentary from a man who knows the intimate ins and outs of voter behavior in Coconino County, Arizona, but you can also keep pace with all the action from the Indodrill Stadium in Clackmannanshire. Will eight-place Alloa top sixth-place Dundee? I can only stand so much excitement and tension over the course of one weekend, so I returned to CNN to watch again the two mesmerizing hands of John King.

Alloa-Dundee ended in a 3-3 draw, so you could rightly point out that I missed a six-goal thriller. More interesting, though, is the question of who else in Germany was watching this game. Exiled fans from Alloa and Dundee, perhaps, but I would think their numbers would be limited on the European mainland. In non-COVID times, Alloa's home attendance varies from a low of around 600 to a high of just below 2,000, depending on the opponent, so the best thing you can likely say about its international fan-base is that there's plenty of room for growth.

Then on Monday morning the Bundesliga informed me by email that it has sold the rights for all first and second division games to be broadcast in Poland, through the end of the 2024-25 season. As usual, the interesting information was missing from the lengthy press release. What are they being paid for these rights? How many people in Poland generally watch the Bundesliga? And when these deals are made, does anyone give a single thought to the effect it has on that country's domestic league?

Ever since the pandemic forced the exclusion of spectators from sporting arenas, the major European leagues have relied on revenue from their TV deals to survive. It was the reason they were so keen to restart as soon as possible, even in empty stadiums and with the handicap of strict COVID regulations. Never mind the flam about wanting to provide the fans in lockdown with entertainment during difficult times -- this was solely about the cash and keeping the brand out there. In the short-term survival stakes, this was understandable, even if some fans at home find that watching games without living spectators in the stands just sends us to sleep.

The vacant stadium restart has, however, yet again helped soccer to swerve around the issue of its economic model. This model has been running now for two decades on the brittle belief that the more TV revenue that leagues can generate, the healthier soccer will be. All other considerations -- funding the grassroots game, or the importance of a club in its community, for example -- have been secondary, if they've even been considered at all.

The pandemic very quickly exposed the flaws of such flimsy planning, but conversations about possible economic reform only lasted as long as it took to force the teams back out on to the field. The business plan continues to be: wealth generated by TV deals goes straight to the top of the game while clubs race to attract the best players on the highest wages. Even a non-economist like myself, though, can understand that more money pumped in at the top end doesn't mean greater wealth and health for soccer as a whole. It just means a cycle of inflated wages for the sport's elite. Otherwise known as the 'everything that's wrong with capitalism' prototype, where the greed of the few treads on the needs of the majority.

The sport has now missed its major opportunity to reject this perpetually mediocre and unjust setup. The game's leadership -- UEFA and its national soccer federations -- needed to agree to sit its players, their unions and their agents down and tell them, "Look, there's an international health catastrophe, and we need to take a long break. The game needs your help to survive, all the way down to its smallest clubs at the bottom end of the pyramid. We need to slash your salaries and reform the way that the game is governed, structured and run for the long term benefit of all." The alternative? We're all out of a job.

The self-interest of the biggest clubs and leagues meant that this possibility was a pipe-dream -- revenue continues to fuel little else besides the massive salaries that the clubs themselves have created through craven ambition and irresponsible budgeting. In the meantime, the amateur game's been suspended again, while numerous clubs in the lower professional divisions and less glamorous leagues of Europe are hanging by a financial thread, or threatened with going under altogether. Whatever tiny amount Alloa Athletic and Dundee managed to garner from being broadcast to an unsuspecting German nation on Friday night, we shouldn't begrudge them a single penny.

We all hope Monday's announced vaccine will end up working for the world. For soccer, however, a return to 'normal' would not be a healthy state of affairs. Continuing to burn money in the quest for short-term success is a disastrous strategy for the game as a whole, and for all but a handful of the largest and most avaricious clubs.

1 comment about "Soccer's biggest flaw is its TV rights-based economic model".
  1. R2 Dad, November 10, 2020 at 6:14 p.m.

    Very clever, showing Dortmund players addressing an empty & not-so-Yellow Wall. So, who to blame? I believe the national FAs and their governments are letting this disaster/opportunity slip through their fingers. Leagues need parity in order to grow their media presence; no one watches Ligue 1 because it's just about PSG. But football leagues are about having the most number of competitive match-ups. The Bundesliga is fighting their BM dominance but it's a losing battle at this moment. But Italy (Juve is 5th), Spain (Real Soc and Villareal are 1/2) and the UK (Leister & Tottenham are 1/2) all are more interesting because of the higher level of play AND the lack of a clearly dominant side (especially this year). How best to foster parity? I believe the giant clubs need to understand they should get LESS of a bigger pie instead of more of a smaller pie. Giant clubs still threatening to break away? Fine, let them, but the FAs or UEFA should impose a usurious tax that would go straight to the 2nd level of clubs in each country to compensate the nations for skipping out. BTW, how many teams would compete in such a league, 15? It's not really do-able in the long run and all those clubs have done is threaten to leave unless they get whatever perq they insist on. I do believe if BM & Dortmund left the Bundesliga the Germans would turn their backs on those clubs and the whole thing would collapse like a house of cards.

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