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How the European Union destroyed European football

May 18th, 2008 · 13 Comments

Two English teams in the Champion League final, three in the last four and it could have been four, but two had to play one another in the quarter finals. We might have to get used to it. A decade or so ago, the European Union changed the face of European football. Not for the better.

Consider the following little fact. In the first leg of the semi-final of Manchester United against Chelsea, the first had Tevez and Ronaldo on the bench, the latter Sevchenko and Anelka. On the bench! In almost any other team, these players would have been on the pitch, and most other clubs (even big clubs) in Europe wouldn’t even be able to afford these players in the first place.

How did things get so out of hand?

Not according to The Economist though. In an article last year on the state of European football, it posed the following question:

The tension between its [football; admin] commercial role and cultural status creates a difficulty for economic policymakers. Is sport just like any other competitive enterprise or should it be handled differently?

It answered that question with a resounding ‘no’. But, in fact, it’s not even the right question. Football could be treated differently from other businesses for cultural reasons, but there are actually more important economic reasons for doing so.

Level playing field?

In short, European football is far from the ‘level playing field’ that is one of the most loftiest goals of the whole European economic integration and dominates much policy making, from the internal market to competition policy.

The aim is to create European Union wide equal competitive conditions for business. Does applying the rules of the internal market and competition policy to football create a level playing field in football? The answer to that question has to be a resounding ‘no’.

It’s quite surprising that The Economist can’t see that, it’s hardly rocket science, as will be demonstrated below. Perhaps being English has suspended their usually impeccable judgement on economic issues here?

There are two interventions of the EU into European football which are applying the rules but had exactly the opposite effect, taking us further in stead of closer to a ‘level playing field’.

First, the (in)famous Bosman arrest. The finer details need not bother us, but this was supposed to treat footballers as any other employee of any other garden variety business located within the EU. More especially, clubs could not get any transfer fee after the end of a contract. This had two effects:

  • The power balance between clubs and players shifted in favour of players
  • The market for players became much more liquid.

Second, the EU ruled that limitations to the number of players from other European countries were discriminatory and hence illegal. Previously, many national football federations had set limits on the number of foreign players teams could field (for a long time, Italian and Spanish teams could only field three foreign players, for instance).

This further increased the players market liquidity and made it possible for teams to field sides that entirely consisted of foreigners. The surprising net effect of these rulings was the opposite of creating a European level playing field in football.

Why is that? Because, basically, players now could move freely across borders, but clubs can’t, they’re tied to their national competition. And freeing-up of the players market set in motion winner-take-all (or at least most) forces at the club and competition levels.

To understand this, one has to go back to basics, and to answer the question what it takes to build a great football side? Three things, basically:

  • Excellent players, preferably a mixture of the young and enthusiast, and more experienced players in their prime
  • The ability to ingrain routines, the ability of playes to know what other players are going to do in certain situations and how to proceed. It’s collective tacit knowledge that can only be acquired when there is continuity, when the core of the team stays together for a considerable amount of time.
  • A top trainer to ingrain those routines and the required team spirit necessary

Now, on all scores there is a virtuous cycle for big clubs from big countries at work.

  • The freed-up player market enables them to buy the best players, these will, more than ever, move to the richer clubs.
  • In bigger countries, there are more clubs with money, so there are more rich clubs, which can now afford more of the best players.
  • This bolsters both the fortunes of these clubs, and the competitions they play in, setting in motion increasing returns.
  • These competition, housing a greater proportion of the worlds best players, will attract much more money from sources like tv rights, marketing, (questionable foreign) billionares looking for new ways to boost their egos, and the like.
  • More money further separates the big clubs in big competitions from the rest.

Consider how football has changed with the following example, a relatively big club from a relatively small country. There was a time that it ruled Europe, winning three European cups in a row with a team of locals (and playing some innovative football) in the early 1970s.

The demise of Ajax Amsterdam

They still had a brief spell of success in the mid 1990s (winning one Champions League and appearing in another final), but they had to do that with a team consisting of numerous teenagers and foreigners, as already by then, these forces we have just described were operative and Ajax having to resort to a youth training program to keep up with foreign competition.

It was still possible then, but not anymore. The Bosman arrest in that same year ensured that their best players from that winning 1995 team walked out of the door next season earning Ajax not a single dime in transfer fees.

Since, it had to see foreign competitions getting multiples in terms of money, and it now even sees it’s acclaimed youngsters walking out of the door to foreign clubs when they’re still in their teens.

A demonstration might be that this year, it’s trainer Henk ten Cate, walked out in mid season to become assistant to another trainer at Chelsea, one of those clubs whose European pedigree cannot even stand in Ajax shadow, but is on the receiving end of the money flows set in motion by the mechanisms we just described.

There used to be a time when being trainer at Ajax would have been the highlight of almost any trainer’s career, now, even being assistant elsewhere is better (and certainly better paid). But consider also this:

  • The youth Ajax has to sell just to make money is making the competition abroad stronger. This is like a zero-sum game, Ajax loss is the foreign competition’s gain
  • In terms of being able to keep a team together, necessary for inculcating the routines that makes a great football team, well, it doesn’t help either if every year you have to sell your best players to make ends meet and start allover again building a team. The big clubs in the big countries, meanwhile, can keep their team together for the long periods required to perfect the routines.

These forces have set in motion a vicious cycle of diminishing results leading to even further diminished financial clout. Fifteen years ago they could still rely on their youngsters, but even that competitive advantage has been eroded by finance.

One has to realize that even in the now very unlikely case Ajax would win the Champions League again, it would earn half of what a club from a big competition would, as the price money reflects tv rights, and the Dutch competition sells for less than 1/10 of that of the Premier League.

And Ajax, now no. 169 on the world club ranking list, is hardly alone. The big clubs in the big competition are getting bigger, but even smaller clubs in big countries benefit.

Teams from smaller countries do not attract only a fraction from tv rights, no foreign billionaires, and even reaching the same stage in European competitons gets them much less than clubs from big countries.

On top of that, they see their best players move to clubs in big competitions even at a very young age (risking their development as they have to compete for playing time with the best established players, and often ending up on the bench). So they have to start all-over almost each season.

The fundamental problem is that teams for most of their income are tied to their national competition, and losenign the player market at a European level has set in motion strong forces to increase the economic viability between the big and the smaller European national competitions.

These forces reverberate also on the national team level. Since English clubs can buy the best foreign players and the top teams often field but a few nationals. This thwarts the development of English talent.

While the English Premier League is full of foreign stars, how many English players play in foreign competitions? Only a handful (it’s a good quiz question to name, say, three)

It’s perhaps no accident that at the same time English club teams seem to conquer all in front of them, the national team has not even qualified for the upcoming European Championships.

The star of that once mighty Ajax team of the seventies, Johan Cruyff, came up with a solution. Teams should be forced to play with 6 nationals, and can field 5 foreigners.

This requires an exemption from the free movement of labour provisions in the European treaties, but why not? Applying these in football is clearly counterproductive with respect to the overall goal of European economic integration, the creation of a level playing field.

As an example, Russian football has applied that 6+5 rule (and next year they’re even going to move to a 7+4 rule), is it a coincidence that their team came ahead of England in the qualifications for the European Championships?

And it can even work at club level, as a Russian team won the UEFA cup last week. Shortly, the European Parliament will discuss these matters, but the omens do not look good. We better get used to English dominated finals (like the one this Wednesday) at the club level, perhaps.

Tags: Fun and Games · Opinion

13 responses so far ↓

  • 1 Xaveiro // May 19, 2008 at 3:24 am

    I love your articles…this is just fantastic…hang in there and keep up the good work!!

  • 2 TB // May 24, 2008 at 1:41 am

    I strongly disagree with several of the issues and ‘solutions’ that you bring up in your article.
    I do agree that the Bosman ruling does need to be changed, however Lyon and Porto are both good examples of clubs able to develop talent and sell at high prices, and this is one reason why Lyon is one of the strongest club in France and a strong club in Europe.
    However what I disagree with you with is you analysis or why a minimum number of domestic players should be brought in for clubs. Firstly, looking at your comparison of the Russian and English national teams. The English national team is far stronger than the Russian team on paper. If what you say is true, the majority of the Russian team would be playing for some of the biggest teams in Europe. Instead, 8 of the preferred starting 11 in the English National team play for one of the big four English teams, and is likely to increase during the summer. The problem the present English team seem to have is their inability to be able to play with one another, this has happened to both Brazil and Italy in recent years, arguably two of the strongest sides in the world. A few years ago during the ‘Sven era’ this was not an issue and was a reasonably strong side. Only a few players have left since then and new talent has immerged.
    Secondly, many people agree that some of the English players have improved significantly by playing amongst the best players in the world, people credit the quality of John Terry after he played alongside the French defender Marcel Desailly for many years.
    In fact, English players have often been criticized as being over-priced, but clubs are still willing to spend large amounts of money on them because they know that the amount these players will bring in through sponsorship and shirt sales will make up for this. For this reason, English clubs make every effort to buy and develop English talent, but they need the best talent available and within cost, and this is regularly not English.
    The problem with why the English league does not have a better national team is the approach taken at the youngest years of a football player’s life. There is travel restrictions placed on young players (10 – 17 I believe) to ensure that they are not snatched up by premier league/championship clubs, but this leaves them susceptible to sub-standard development and training in some areas of the country. France on the contrary before the last decade put in place an academy after a string of bad results by the national team and now they enjoy many world class players, Henry is one graduate of this academy. This is the sort of practical steps the FA should take if it wishes to achieve what France has done; placing minimum amounts of English players on the team sheets of the biggest clubs is not the answer.

  • 3 admin // May 24, 2008 at 2:53 am

    Thank you for your comment.
    Well, apparently you do not disagree with my fundamental thesis, which is an economic one. It’s stating that applying the rules of the single market has been counterproductive in football. Instead of bringing a ‘level playing field’ closer, it has set in motion increasing return forces (the big get bigger because it’s an advantage to be big, basically, both at the club and the national competition levels), at least I couldn’t discover a single argument against it.

    I really cannot fathom that the Economist did not get that now for the third time. It’s really basic economics.

    Ajax, which one all European cups (and the most important one four times) has a budget that is smaller than that of Portsmouth or Fulham.

    And you notice it well: “Lyon and Porto are good examples able to develop talent and sell them at high prices”. Yes, they have to sell, exactly my point. If you have to sell your best players every year, how can you form those routines that are the bread and butter of football?

    And Lyon is hardly a small club from a small competition.

    I do think it was unfortunate that England didn’t qualify (I’m a fan, actually), and in future they probably will. However, it’s hardly beneficial for English talent not getting much opportunity to play in their own competition (or anywhere else), but this was hardly a central point to my argument.

    I think it’s an outcry to have those players on the bench Sevchenco, Anelka, Rooney, Tevez. Really. An indictment to modern European football.

  • 4 TB // May 24, 2008 at 10:28 am

    I did enjoy the article, my disagreement was not
    so much with the article as a whole, as I do not have the background or experience to do so. More with your summary of why the national team is poor when we have some of the best clubs. My knowledge of teh Bosman ruling and its full implication are slightly lacking and I admit it was a slightly off-the-cuff comment.

    It’s true that market principles cannot be wholly applied to football like other businesses, even the European Commission acknowledged this when they allowed the new form of selling TV rights. Before, all games in each competition were sold to the highest bidder, now they are split into 6 ‘packages’ of which one broadcaster can buy a maximum of 4. They saw the benefits of this above the need to keep a completely free market.

    However, much like Cruyff, Blatter and Platini, I believe your analysis of the poor results of the current English national side is slightly short-sighted and have looked at what has increased (foreign players) and decreased (the quality of the national team) and have put them together.

    Spain, as you mentioned, used to have a quota for the maximum amount of foreign players in each club, yet they have never won the world cup and rarely come close to doing so. In the 1990’s England had a string of semi and quarter final games in the continental and world competitions, they still have a squad with strong players, some of which (Gerrard and Lampard) are credited with playing one of the most pivotal roles in their team. Others are rated amongst some of the best defenders in the world (Terry and Ferdinand). I could go on.

    Finally, the one reason why the Premier League is pulling away from the rest of Europe is the way in which it has conducted business. I cannot speak of Ajax and their league directly, but the way in which Spanish and Italian leagues sold their TV rights. They do this as individual clubs which is why you have several very big clubs and the rest can barely measure (unless the big clubs are playing badly). The Premiership sells rights collectively and distributes money based on league position and the games shown. This has resulted in the winner of the EPL receiving £50million while the bottom club receives £30million. This has kept the premiership more interesting and now that the sport has gone global, the EPL has gained significantly from this. It was the greed of the biggest clubs in Spain and Italy which is now the reason why their competitions are less competitive. Manchester United know they could get far and away the most money from TV rights and dwarf the £50million awarded for winning the premier league if they sold their rights individually, but they do not look so short-sighted. This point is less aimed at countries such as Holland, which admittedly would not have much of an affect on and their situation would change less. But people were happy when the three big leagues were equal (particularly Uefa and Fifa), now that the gap is growing; several influential people unfairly have the EPL in their scopes.

    As for Shevchenko, Anelka, Rooney and Tevez…the latter two generally play unless they need resting. Shevcenko has had an awful time at Chelsea and is not suited to the style of the EPL and Anelka was brought in because of the effect of the African cup on the Chelsea strike force, now that the African cup has ended, Chelsea are left with more than enough quality strikers. But yes, there is players that rarely play yet in any other team they would. I concede this point.

  • 5 admin // May 24, 2008 at 7:56 pm

    Well, Grant has just got the boot. I guess, terrible season, to lose CL final on penalties, it’s really bad…

    Can it get any more bizarre than this?

    Yes, I do agree that there are probably more reasons why England didn’t qualify (like bad luck or a rather clueless coach), but the point I was making is that all the foreigners in the PL make it more difficult for English talent to develop. You don’t see many English players abroad either, which is another indication of that.

    Sevchenko, Anelka, Rooney, Tevez, they were not rested in just any game, it was the semis of the CL..

    The Dutch league also practices a form of socialism with tv rights, like the PL, but with the budget being less then 1/10th, does it help..

    My main thesis stands though, applying EU rules has had the opposite effect of it’s intentions, brought football further away from a ‘level playing field’ as players can move easily, but clubs are bound by their national competition. Perhaps Ajax should join the PL?

  • 6 Simmo // Jun 26, 2008 at 12:10 am

    Well the great Johan Cryuff and Michel Platini can talk all they want about quotas and the like, but they themselves left their poorer domestic clubs to become highly paid foreigners for richer clubs, Barca and Juventus respectively.

  • 7 admin // Jun 26, 2008 at 4:05 am

    Which is actually proving our point. European football is not a level playing field at the club level, and less and less so.

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  • 13 admin // Aug 21, 2010 at 6:54 am

    It’s getting worse by the day, what good is a famed youth academy if its brightest prospects are leaving at the tender age of… 16
    http://www.talksport.co.uk/sports-news/football/premier-league/transfer-rumours/2010-08-20/united-set-snap-dutch-starlet%3Fgid%3D6791