Much has been made recently, or over the last 6 months or so, of the financial issues at many of Europe’s top clubs. Notwithstanding the facts that every club in every country in the world has been impacted by Covid 19, the economic issues at many of the top table clubs have been set out and discussed in great detail.
Whether through the failed Super League bid in April, or from the latest big news of Messi’s departure from Barcelona owing to the lack of financial capabilities, the issues at the top level are never far away.
The unholy trident, as they may now be know, of Real Madrid, Barcelona and Juventus are the remaining Members of the Super League. Still trying to convince anyone that’ll listen that they are looking to save football, it is clear to most that the bid for this Super League for purely for financial reasons, to maximise and ring fence profits and players to those select clubs.
These 3 are historic, storied, loved and hated institutions of European Football – whether you like it or not, the dynasty of the 60’s Real Team or glamour of the 00’s Galacticos; the ruthlessness of the various Juve Teams through the years or the legacy and romance of Cryuff and Guardiola influenced Barca sides from recent decades have in no small part and for better or for worse shaped European and world football over the decades.
Such is the glory, power, influence and finance of these clubs that they have seldom had to work or fight to remain at the top table in some way shape or form, aside from various short lived dark periods such as Juve’s match fixing relegation. However in recent years, with new money on the scene through clubs like the State backed enterprises such as PSG and Manchester City, suddenly these pillars of European football are no longer the big boys in terms of finance or muscle, relying instead on prestige and history when attracting players and evidently having to spend more and more on wages or fees, faced with the relatively limitless finances of whole Countries against which they are competing.
There is a interesting dynamic at play and quite an entertaining situation where these clubs in particular, who through history have exerted their financial muscle, pinched players from lesser rivals and even cheated their way to trophies over the years and decades without too much in the way of resistance or retaliation now find themselves in a constant battle to play catch up and remain at the top table with those new upstarts who can afford to pay players more, spend more on transfers and sell “projects” and future dynasties to players, agents and coaches.
Now, there are very valid arguments against state owned clubs, owned by a state, sponsored by companies also owned by the state for exorbitant fees (which have been investigated and stated as being questionable in the past) which effectively creates a situation where other clubs simply cannot compete on this financial level.
Clubs may quite rightly moan, complain and ask why Financial Fair Play regulations aren’t helping to rein in this spending and create a more even playing field. But there is also a nice poetic justice to these big clubs and their owners, used to getting their own way now suddenly not the main show in town – a taste of their own medicine perhaps.
Clubs like Barcelona, Real or Juve have been forced to spend more and more money on fees and wages in attempts to keep up or stay ahead of the upstarts, look at Juve changing their entire financial model to sign Ronaldo or Barca giving huge contracts to many many players and ultimately not having enough revenue to cover even their existing squad. The days of Madrid breaking transfer records to sign the biggest names have since passed, it is PSG and Manchester City breaking transfer records these days on the likes of Neymar, Grealish and Mbappe. Even when Barca or Juve have spent big in recent years, there has been no real value to this – examples like Dembele or Coutinho at Barca, or even Ronaldo at Juve haven’t provided the Champions League or sustained dominance.
Now from a Scottish perspective, our clubs are a long way from this situation. Our clubs have a different financial platform to work within. There do however appear to be significant parallels between the above and 90s Scottish Football.
Travelling back in time, we had a situation where Rangers and Celtic were really exerting their financial muscle on the game, money seemingly flooding in and very public demonstrations of wealth. Spending big on big players from big foreign clubs, multi million pound transfers and then also hoovering up talent from within the league itself. We had David Murray, then in charge of Rangers claiming that for every £5 spent by Celtic, that Rangers would put down £10 – all financial muscle being shown off.
In attempts to keep up with this new money, other clubs like Aberdeen, Motherwell, Dundee United, Hearts or Hibs all stepped out and tried to also spend big (notwithstanding reduced platform to start from). These clubs had enjoyed success only a few years earlier – Aberdeen and United winning leagues, long European adventures, cup successes and more, so at that stage were very competitive with the Old Firm. With this new money and financial power flooding in however, they were forced to spend in order to keep up – transfers such as Paul Bernard to Aberdeen for £1 Million a clear demonstration of the lengths that clubs were going to to try and catch up. Motherwell then spent beyond their means and ended up in financial trouble – similar stories for Dundee and Hearts after lavish spending, ill advised transfers or big wages, all in attempts to keep up with the Old Firm – who all the while were busy spending and vetoing TV deals which would assist other clubs in being able to sustain such economics.
Ultimately, of course, the economic bubble collapsed even for Rangers – the tax issues, the enormous debts and the subsequent liquidation of Rangers testament to that. Celtic survived but with wider financial cut backs, managed more sustainably possibly, have found themselves playing at a lesser platform than they were in past decades – Europa League groups rather than Champions League, buying players from the Polish or Dutch leagues rather than from the English premier League.
Effectively, just as with our friends at Juve, Barca or Real, the model of unsustainable spending simply to try and keep up, save face, look the part, prove themselves always seems to end up with only one result. This cannot be sustained in the long run.
How far will this parallel go though? Will PSG or Man City suffer the same fate as Rangers, will they collapse into financial meltdown? There have been scares already with Financial Fair Play fines, investigations, European bans or similar which have begun to scratch the surface of the economic models. It is hard to see with entire states backing these clubs that such an economic disaster could befall these clubs – ultimately it would appear as though they would have to trip themselves up – dodgy sponsorship or similar as a parallel to Rangers tax dodging or bizarre tax free loans instead of wages. However, there was also a time not so long ago when one wouldn’t imagine Rangers going into financial meltdown, or Barca for that matter- so will lessons be learned, will the big and powerful look at the fate of Motherwell or Dundee, or Rangers from Scottish football? Only time will tell.