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.