Premier League: European football prepares for the age of austerity in the Covid-19 era

Premier League: European football prepares for the age of austerity in the Covid-19 era

When Wonder Woman broke glass ceilings and box office sales worldwide.

When the unmistakable sound of Despacito became the most broadcast song of all time.

It marked the zenith of the era of football’s abundance and promised to usher in a new era of super spending.

But that was then. This is now. A pandemic has changed the game.

Vital cash flows are running low. The purse strings are being tightened. Cost cutting is fast becoming king.

Soccer has pressed the pause button and in doing so it is preparing for an era of austerity.

“It is a wake up call […] A great opportunity for football to come back to reality, “Lutz Pfannenstiel, sports director of the Bundesliga club Fortuna Düsseldorf told CNN.

Bursting bubble

Before the pandemic broke out, football’s upward spending curve had shown little sign of slowing down.

Last summer, clubs in Europe’s “Big Five” leagues (England, Germany, Spain, Italy and France) spent a record € 5.5 billion, according to the analysis of the Deloitte Sports Business Group: up to 900 million euros compared to the same period in 2018.

In the Premier League of England alone, 11 of the 20 clubs broke their own transfer records while spending in La Liga from Spain broke the $ 1 billion mark for the first time.

This summer he promised not to be different.

Huge moves of money have been earmarked for some of the most popular properties in European football, with frenzied speculation surrounding the future of Borussia Dortmund’s marvelous winger, Jadon Sancho, enigmatic Manchester United midfielder Paul Pogba and Napoli’s commanding defender, Kalidou Koulibaly, to name just a few.

Although the recently crowned French champion, Paris Saint-Germain, has imposed the challenge with the permanent signature of Argentine striker Mauro Icardi for a fee of $ 67 million, the Covid-19 crisis has thrown everything into the air.
With leagues around the world now fighting to save what they can from the 2019-20 season, the last transfer window, which opens on June 10, has a very different feel.
The leading Dutch Ajax team is better placed than most clubs given that its business model is mainly based on a youth development program that has produced a number of world class players that have generated a steady stream of income.

“I’m sure there will be reasoning with new contracts, with salaries, with agent fees and also with the overall costs for a club […] I am sure we will get a good amount of money, even in the Crown times, “Ajax CEO Edwin van der Sar recently told CNN Sport’s Patrick Snell.

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However, that may be an illusion.

According to the analysis by the consulting firm KPMG, it estimates that if the domestic seasons can be completed “behind closed doors”, the value of the players will fall by € 6.6 billion ($ 7.23 billion). If stations across the continent are canceled entirely, that figure will reach a staggering € 10 billion ($ 10.95 billion).

The game’s seemingly impenetrable spending bubble is heading toward a breaking point.

Jadon Sancho is one of the most sought after properties in European football at the moment.

Exploiting the market

However, even in a time of crisis, the loss of one man may be the gain of another man.

In April Manchester United manager Ole Gunnar Solskjaer expressed his belief that United could “exploit” Those clubs were severely affected financially by the pandemic. Although his comments generated criticism from some quarters, soccer finance expert Kieran Maguire believes that the Norwegian was simply asserting an economic reality.

“The gap between rich and poor will grow because larger clubs tend to have stronger balance sheets and more cash in the bank,” explains Maguire.

“Let’s say you have a very high quality player; normally we would be looking to buy it for £ 40 to £ 50 million ($ 48.8- $ 61 million). I will tell you what we will offer you £ 20 million ($ 24.4 million) in cash today and the The selling club will reluctantly accept that offer because it will fight for its existence. “

It is an opinion shared by sports lawyer Daniel Geey, who believes that the nature of the negotiations will be more varied and nuanced.

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“The types of transactions that can give clubs the most flexibility will be the most attractive right now […] loan to buy or longer loans for perhaps one or two seasons and with rest clauses. “

With flexibility, patience, and caution about to become the dominant buzzwords in soccer lexicon, scrutiny of player recruitment will be greater than ever.

“(The clubs) will think twice or even three times before signing someone […] If you are not 100%, you will not sign a player, you prefer to wait, “says Pfannenstiel.

Prudence and Preservation

Van der Sar hopes that “the club’s lifeline”, as he refers to the Ajax academy, will continue along the same lines, and he expects six or seven young players to be rewarded with contracts in one or two years.

And despite the changing landscape, he insists that the Amsterdam team will not be forced to sell their precious assets at a low price.

“If the big clubs think that maybe we can trade three players or one player, that is not the way business has been done and is going to be done, in our opinion.

“It could also be an opportunity for us if the players cannot move or if they are not the right numbers, so you can keep a team a little closer together.”

Socially unacceptable expenditure

Despite all the insatiable gossip on news channels and whispers in newspaper columns and on websites, the current economic and humanitarian image is possibly a moral challenge for the clubs.

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The realities are stark: millions around the world are losing their jobs or being suspended and struggling to make ends meet. Daily deaths continue to increase in the hundreds and thousands.

Tottenham Hotspur manager José Mourinho recently stated that he did not believe the world was ready for ‘crazy’ transfers of yesteryear, and it is a vision echoed by Maguire.

“There will be caution about the idea that the consumption of football clubs is socially unacceptable […] If you see that you’re signing a £ 100 million footballer who looks incredibly tacky, right? ”

While the pandemic has led to unprecedented levels of uncertainty, it has caused the game to look at itself for a long time.

There are increasing calls for soccer’s vastly disproportionate finances to be re-examined. New ideas are emerging about how viewers can consume a product that sometimes seems unattainable.

And perhaps most important of all, Pfannenstiel believes there is now additional impetus to reevaluate the game’s basic tenets.

“I think we can go back to modesty [and] sustainability […] I think we saw very important values ​​that will now start to play a bigger role again in the heads of the club’s owners and managers. “

Soccer has a golden opportunity to correct its mistakes.

You may never have that opportunity again, and it’s one you can’t afford to waste now.

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About the Author: Seth Sale

"Passionate creator. Wannabe travel expert. Reader. Entrepreneur. Zombie aficionado. General thinker."

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