England’s Declining European Fortunes

We all know that Europe means money. Lots of money. As a top-ranked UEFA association England holds the maximum number of European spots possible (four in the Champions League and three in the Europa), guaranteeing that seven clubs will collect the riches of continental competition each season. In 2010-11 the European adventures of just 6 clubs alone (Aston Villa did not make it through the Europa qualification round) contributed almost 7% of the Premier League’s total revenue!

The four Champions Leaguers earned €158.8m, while the two Europa clubs brought in €12.3m, in total the six clubs grossed €171.1m from the continental season. These figures only represent the TV money distributed by UEFA and do not include the extra matchday receipts, commercial partnerships, etc. The clubs are undoubtedly delighted to have done so well but there is a problem which takes some of the shine off their European bonanza; they are earning less because Europe is a mess. Distributions from the UEFA competitions are denominated in euros which English clubs must translate this back into British pound either for accounting or actual liquidity purposes. The need to exchange euros for pounds exposes the clubs to foreign exchange risk. Continue reading “England’s Declining European Fortunes”

England’s Declining European Fortunes

How Spain Won the World Cup

he 2010 World Cup is over and a new name is on the trophy for the first time in twelve years.  Spain was the first team to win the cup having lost their opening match,  but the loss to the plucky Swiss will be remembered as a blemish in an otherwise outstanding tournament for the Spanish.  How did Spain, until twenty-five years ago a relative backwater of international football, rise to dominate the beautiful game?  What loosed La Furia Roja?

Continue reading “How Spain Won the World Cup”

How Spain Won the World Cup

Soccernomics and the Mismanagement of English Football

I recently finished the excellent Soccernomics written by Simon Kuper and Stefan Szymanski.  It uses statistics and economic principles to test commonly held notions about football, some of the more serious ones  include “Does English Football Discriminate Against Black People?”, “Why England Loses and Others Win”, “Why poor countries are poor at sports”, and the extremely entertaining “The Economists Fear of the Penalty Kick” in which the power of statistics proves to be a deciding factor in a certain Champions League final.  I won’t spoil the book by revealing conclusions here.  If you find this blog interesting then you will definitely find the book a great read.

The chapter I was most interested in was provokingly titled, “The Worst Business in the World: Why Soccer Clubs Don’t and Shouldn’t Make Money”.  In it Kuper and Szymanski highlight several factors which they feel explain the current state of mismanagement in football: Continue reading “Soccernomics and the Mismanagement of English Football”

Soccernomics and the Mismanagement of English Football

The Transfer Market – Top 5 Spenders

A Real Madrid Purchase

Transfers are always the hottest topic over the summer for the footballing world as everyone has an opinion how much any player is worth…and then gets their expectations blown out of the water when a club spends millions more than expected. This summer alone we saw the record breaking transfer of Cristiano Ronaldo from Premier League giants to La Liga giants Real Madrid for a wallet emptying £80m pounds!

Let’s look at who is doing the spending and who is doing the buying. I was surprised by the numbers in a few cases…

Transfer Spending by Country 2009-2010

Top 5 Net Spenders

2009-2010 Season

1. Spain – £206m
2. Germany – £89m
3. Turkey – £36m
4. France – £30m
5. Greece – £15m

Spain

I expected Spain to be at the top due to Real Madrid’s ridiculous spending over the summer. If somehow they didn’t manage to be tops in this category someone would forgive you for thinking that the Enron accounting staff took up jobs in La Liga. Real Madrid accounted for 73% of Spain’s net spending! And CRonaldo’s purchase was 54% of that spending!!!!

League by league: The Primera Division (let’s be honest here, basically Real and Barca) absolutely crushes Segunda in spending terms. Not surprising given the revenue structure.

Germany

Somewhat surprised to find Germany in second. Given the lack of coverage of high profile transfers to the Bundesliga. Quite a heavy net spend of £89m comparatively with other countries.

League by league: The large amount of activity in BLiga1 compared to BLiga2 suggests a large amount of foreign talent coming in. That £97m spent by the top tier certainly didn’t trickle down much with BLiga2 only bringing in £15m in transfer revenue.

Turkey

Turkey??? This one was a complete surprise. I don’t even know what large transfers would account for this. £35m is a lot relative to the size of the market for Turkish football.

League by league: Only one league

France

France had relatively light spending in comparison to the rest and relative to the market. Only £30m leaving the country.

League by league: Of the top 5 France has the smallest deficit in net spending between Top and lower leagues.

Greece

Greece??? This one was also a complete surprise. Same question and comment as for Turkey. I don’t even know what large transfers would account for this. £15m is a lot relative to the size of the market for Greek football.

League by league: Only one league

and most interestingly,

England

Who amazingly have only net spendings of £945,180 on footballers this year. I think this is as much a reflection of the financial crisis as it is on the shift of footballing talent around the world.

League by league: Even more interesting is the amount of money the Championship makes off of player transfers

Conclusions

Spain just spent the GDP of a small nation on footballers. There are some ambitious owners in Turkey and Greece and English clubs are either very conservative or just potless.

…And there’s a hell of a lot of talent in Argentina and Brazil.

Reader Questions: Who did Turkey and Greece buy to rack up such large deficits??? Respond in the comments!

All data from Transfermarkt.

The Transfer Market – Top 5 Spenders