Sport: pandemic increases urgency of calls for reform in football

Jonathan WatsonTuesday 5 January 2021

‘Change is coming.’ Those were the words of Richard Masters, Chief Executive of English football’s Premier League, addressing UK Members of Parliament at a Department for Culture, Media and Sport Select Committee hearing in early November.

The discussion surrounded possible structural changes such as reducing the size of England’s Premier League from 20 teams to 18; scrapping the League Cup and Community Shield; allowing ‘B’ teams to compete in the lower leagues; and getting rid of FA Cup replays.

All these possibilities were mentioned in the ‘Project Big Picture’ plan, devised by some of the Premier League’s most powerful clubs. The plan became public ahead of schedule at the beginning of October, when it was leaked to the UK media.

The simple fact is that football is – like it or not – the world’s most popular sport. Accordingly, financial interest keeps growing globally

Eric Mayer
Secretary, IBA Anti-Corruption Committee

A very different vision for the future of the sport was presented in Saving Our Beautiful Game – A Manifesto for Change. This document, compiled by a group led by former Manchester United player Gary Neville, focuses on how football can guarantee a fairer distribution of its considerable wealth to ensure clubs throughout the pyramid are sustainable. The manifesto argues that the sport needs an independent regulator.

‘Project Big Picture’ was ultimately rejected by the Premier League, but the conversation around reform continues.

‘Discussions on this subject are being held all over the world,’ says Simone Lahorgue Nunes, Chair of the IBA Sports Law Subcommittee and a partner at Brazilian law firm Levy & Salomão Advogados. She believes that many big clubs – which she defines as those with a larger fan base – are conscious of their importance and want to play among themselves, exploiting the broadcasting rights of those matches in a separate package.

Lahorgue Nunes warns that this rationale, which may at a first glance seem beneficial to the big clubs, will destroy the product as it fails to consider the importance of small and medium-sized clubs.

‘These grassroots clubs are responsible for the recruitment and training of new talents that will eventually be poached by the big clubs,’ she says. ‘If they are not included in the package, they will not be able to raise enough funds to perform their role in the system.’

‘The simple fact […] is that football (or “soccer” for our US friends) is – like it or not – the world’s most popular sport,’ says Eric Mayer, Secretary of the IBA Anti-Corruption Committee and a local partner at German law firm GSK Stockmann. ‘Accordingly, financial interest keeps growing globally.’

Mayer points to Manchester United and Liverpool’s United States private equity investors, and that Paris Saint-Germain and Manchester City are owned by Qatar and Abu Dhabi sovereign wealth funds. Chelsea, meanwhile, is owned by the Russian high-net-worth individual Roman Abramovich.

The ever-increasing role of money in football can be good news for fans of the elite clubs who can continue to monopolise all the best players and win all the major competitions. It also helps to improve the sport’s overall infrastructure, including coaching. But it also brings risks. If supporters perceive that the game is dominated by a self-selecting, self-perpetuating, exclusive oligarchy, they become disillusioned.

Before the pandemic, ‘we want our [insert club name here] back’ became an increasingly common chant in stadiums where fans feel the sport operates in its own detached and unreal universe. The introduction of the ‘financial fair play’ rules by UEFA, designed to prevent clubs spending more than they earn in the pursuit of success, has arguably not made a significant difference so far.

Money can also damage the game’s reputation. ‘Clubs and players need to respect and to conduct business in accordance with anti-money laundering rules, tax regulations and legislation in general,’ says Tomislav Šunjka, Senior Vice-Chair of the IBA Asset Recovery Subcommittee and a founder and principal of Serbian law firm ŠunjkaLaw.

It’s a major concern that so many players, agents and clubs have been accused of, investigated for and convicted of tax evasion. For example, Uli Hoeneß, the former President and Chairman of the Board at Germany’s biggest club Bayern Munich, was found guilty of seven serious counts of tax evasion in 2014 and sentenced to three and a half years in prison.

‘The improvement of anti-money laundering and tax regulations is always desirable, but most necessary in this regard is the full application of the regulations and zero tolerance in respect to money laundering and tax evasion in order to maintain the rule of law and equal business conditions for all clubs,’ Šunjka says.

Covid-19 may lead to a major shake-up in the way the game is run. ‘The main impact so far has been loss of income, especially at the small and medium-sized clubs that do not have the same opportunities to generate revenues as the big clubs,’ says Lahorgue Nunes.

In England, the Premier League reached a £50m agreement in early December on a bailout for clubs in the third and fourth tiers and a £200m loan facility for teams in the second tier.

‘This pandemic could severely damage a business model which was already under pressure prior to Covid-19,’ adds Mayer. ‘Speculations abound that the last third of the Bundesliga table, many sides of the second division and many if not all amateur sides need to fight insolvency.’

Covid-19 will have a huge long-term impact on football, and it may force the clubs to make business plans – including revenues and expenditure estimates – more certain and precise, Šunjka says. They will also have to become less dependent on particular sources of income for expenditure, such as prize money, ticket sales, broadcasting rights and similar.

Šunjka hopes that the football authorities will be able to use the crisis to implement positive change, to build back better and ensure a more equitable and sustainable way forward for the sport.

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