The Great Financial Meltdown was preventable.  The post-mortem of the 2008 collapse has reiterated what is true of every man-made crisis, that they can be avoided.  The warning lights were flashing long ago and there was ample time to stop the bubble.  Robert Shiller knew,  Nouriel Roubini knew and plenty of others were sounding the alarm because they had the information to understand what was going on.  Currently soccer is depriving itself of its own early warning system because data on club finances, including player transfer activities and ownership is being kept out of supporter hands.  This needs to change throughout the soccer world and the best place to start is through UEFA.

The Financial Fair Play Rules have forced UEFA to add “Watchdog” to its resume and one can only imagine how woefully unprepared they are to be a financial regulator.  The financial crisis showed us that even real financial regulators are unprepared for their jobs, so is it realistic to expect a soccer administrative body to do a better job?  Part of the problem is that UEFA is using the same centralized analysis model which failed most notably during the financial crisis.  The weaknesses of this model are evident in the performance of the Securities Exchange Commission, where understaffed and underskilled departments were unable to properly analyze information because of technical, political and simple logistical obstacles.  It didn’t work at the SEC, how likely is it that UEFA Regulation will be better funded and staffed?

Rather than limp along until the next crisis exposes the illusion of regulation I propose that UEFA be proactive and do something revolutionary by crowdsourcing financial regulation.  Or at least the monitoring portion of it.  Rather than  trying to analyze a mountain of data which is beyond its capabilities, it should instead develop an information portal focused on disseminating data and filtering through feedback.

One of the main benefits of crowdsourcing is efficiency.  Releasing data to an exponentially larger group of potential auditors would result in more accurate and detailed audits in a shorter time frame as there will be plenty of supporters waiting to scour the finances of their club but even more who can’t wait to tear into the balance sheet of their rivals.  If Barcelona were engaging in financial hijinks who would you bet on to discover it first? A UEFA auditor or a Madridista?  Financial transparency would also demonstrate UEFA’s committment to fairness and economic stability, something which would benefit not just supporters but also the companies that are part of the sports business.  Soccer is often wrongly perceived as just a playground for megarich owners where financial mishaps affect none but their own fortunes,  but a multi-billion dollar international economy now orbits around the sport and mismanagement on a club level quickly metastasizes into problems for the rest of the ecosystem.  Scores of companies and millions of workers draw their livelihoods from the soccer economy and transparency is a necessity for them to function.  Systemic risk does not exist solely in the financial world and lifting the blinds on club finances would provide the information needed to mitigate this risk.

But perhaps the most important aspect about a crowdsourced solution to regulation is that it engages supporters in the governance process.  UEFA’s match fixing problem, FIFA’s bid rigging scandal and bankrupt leagues like La Liga and Serie A are all only the most recent examples of the failure of soccer’s institutions to provide leadership.  At this point they would benefit greatly from sharing the task of governance with supporters.  Incorporating democratic processes like crowdsourced financial monitoring would be an excellent first step to help UEFA regain lost credibility.  The main requirement of such a change is that UEFA be willing to view supporters as part of the game and not just sources of revenue, a change in perspective which seems large but one would make UEFA and soccer as a whole stronger.