Business side of European Football? vol. no draft

[ziostilon]

I watch the game when its available on TV, mainly La Liga

But I've never understood the business side of Euro Football.  With no salary cap in the three big leagues over in Europe (as far as i know), how can the rich teams continue taking up the talent, and the bottom-feeders continue being the dwellers of the league.

However, this is not as much of an issue when theres a draft.  From what i know, eg. some team in Brazi will develop this up and coming young superstar.  Then rich teams start a bidding war to get his services.

Lets bring it back to this side of the continent, you can't have Jerry Jones every year just snap up the top 10 prospects and just pay each of them boat loads of money.

Then, theres this transfer thing.  Lets say the Steelers are in need of money after that Super Bowl win in 06'.  and the ******** pay a big sum of dollars to the Steelers to get Big Ben.  Steelers nation would be up in roar, and riot in Pittsburgh

How is it those leagues can still operate?  I grew up with Manchester United being at the top, and many years afterwards they're still a top team in the league.  Just ridiculous

 

[dland24]

Great questions. I have no answers personally.

 

[rook]

That got me thinking now lol

 

[persiafly]

Originally Posted by Ziostilon


Lets bring it back to this side of the continent, you can't have Jerry Jones every year just snap up the top 10 prospects and just pay each of them boat loads of money.

Then, theres this transfer thing.  Lets say the Steelers are in need of money after that Super Bowl win in 06'.  and the ******** pay a big sum of dollars to the Steelers to get Big Ben.  Steelers nation would be up in roar, and riot in Pittsburgh

How is it those leagues can still operate?  I grew up with Manchester United being at the top, and many years afterwards they're still a top team in the league.  Just ridiculous

All this applies to MLB. Sure they have a draft, but poorer teams basically end up being farm systems for the richer teams. When's the last time the Pirates or Royals were good for a significant period? When is the last time the Yankees were bad for a significant period? 

 

[ronaldo nazario]

Money is almost everything in futbol, but some of the lower tier teams get lucky and produce a great player out of their youth teams, which they eventually end up selling to one of the big clubs. For example, Rooney came out of Everton, who I personally wouldn't rate them as a great club, but eventually he ends up at Man U. Another case opposite to this one was that of Giovanni dos Santos, who comes up under Barcelona and although he wasn't hyped up as some other younger players he ends up getting sold to Tottenham where he didn't really accomplish anything and has since transfered. Some lower tier teams end up getting a player with star caliber, something it turns out well for them and sometimes it doesn't.

 

[marionthebarberian]

Jerry Jones and Mark Cuban would be one of the top 3 owners running their sport.

 

[frankie valentino]

Was that a question or a statement?

 

[keepie uppie]

Carlos Tevez needs to come in here with a reply...i'm sure him and a few other fanatics can shed some light on this topic...

 

[wttm]

basically the rich get richer and the poor stays poor until some billionaire decides they want a piece of the pie and come in investing in a club and spoil the party which is the case for Manchester City. some might think thats rigged but i'm pretty happy cause the shift of power is making the EPL very interesting for the top 4 battle. 

most clubs will have a youth ranks to prepare them fort he big league, so i guess draft is unnecessary. scouting is more important like you said for the dwellers to find the diamond in the rough for that NEXT guy either to get their team respectable or sell them to bigger clubs for financial reasons. sporting lisbon is not a bottom dweller but their youth ranks have produced C Ronaldo and Querezma.

teams like Real are owned by the people.

football is also a religion there, even for the bad teams, you would have legion of fans every week following their local team. the smaller clubs just have a smaller stadium to fill compared to the big boys....most locals stay true to their team since day 1 that runs thru the family, chances are, your kid will follow the same team.

 

[nomadicsole21]

^i can understand the cycle...but why not have it be fair for the smaller teams to insinuate a cap space in the league?
Its making it out to sound like the bottom teams want to be at the bottom as long as the club/team is doing well financially.

Maybe im not making sense, but i really don't understand it...i need a more simplified answer, and its laate at night LOL.

 

[nimfh]

Basically, us European soccer fans do not complain about how fair or unfair a team's wealth is because the teams are owned by their season ticket holders and not by a bunch of billionaires. Outside of the EPL, most European clubs are simply corporations owned by the fans. When you buy season tickets, you become a partner and the seat is yours to do whatever you want with it. People resell their seat, lend it to family members, whatever. Unlike American sports you don't buy the tickets, you buy the actual space inside the stadium.

European clubs have presidents which are elected periodically by the team's adult partners, just like a normal democratic election. In Barcelona's case Joan Laporta will be leaving his place as Club President this summer despite being the most succesful Club President in Europe during his time (3 Spanish League titles, 3 Spanish SuperCups, 2 Champions League titles, 1 Spanish Cup, a UEFA SuperCup and a Club World Championship) because he has exhausted the three-mandate period. Nobody complains about this because the club's statutes prohibit someone from becoming a dictator of sorts and we all knew this going in.

Why should anyone complain about the larger wealth of certain teams when it's their management's shrewd decision making that enables the clubs to amass money season after season.? *****ing about this or that squad being wealthier is akin to complaining when Nike or Coke make more profit than Reebok or Pepsi. Except for Real Madrid (I really can't understand how this team has international fans, but that's another story), every Spanish squad has earned their money legitimately running as a law-abiding business corporation, and just like in regular business some teams have more success than others. It's pure Economics.

Also, more money does not necessarily mean you'll spend more. Last season's Barça squad, the most succesful team in club team history, was largely homegrown. Out of the 11 regular starters 7 of them (Valdés, Puyol, Piqué, Busquets, Xavi, Iniesta, Messi) have been in Barça's farm system since their early teens at the latest. On the other hand, Real Madrid spent nearly €300M this summer only to be humiliated 4-0 by a 3rd Division team in the Spanish Cup. Some squads such as Barça and Sevilla rely on homegrown talent and make a market splash once in a while (Ibrahimovic for Barça, Negredo for Sevilla this season) while others attempt to buy titles and generally fail.

 

[carlos tevez]

Good post NIMFH, very insightful. Although I dont think I've seen you around before, I can tell that you are anti-Real Madrid which increases your credibility ten-fold

In the case of the Premiership, TV contracts generate a ton of revenue for all 20 clubs in the league. Unlike other leagues in the world, the Premiership sells its broadcast rights collectively so the bottom feeders of the Premiership will get paid as much money as the top teams like Chelsea, Man Utd, etc. TV rights is a huge business in the Premiership. BBC paid 2 billion pounds alone just so that they could show highlights on their channels for a 3-year span. Sky Sports in England pay over 4 million pounds for every match they air. Then you have overseas broadcasters such as Fox Soccer Channel, ESPN, Asian broadcasters, South American broadcasters, etc. etc. who pay for the rights to broadcast matches. Every single penny generated is distributed equally among 20-teams.

Clubs have many other ways of generating income. For example, a club like Wigan are a small market team that have been able to survive in the Premiership for about 5-years now by making modest player purchases and then selling them for a ton of profit. They made 5 million pounds off of Leighton Baines, 16 million pounds off of Antonio Valencia, 5 million pounds off of Pascal Chimbonda, 12 million pounds off of Wilson Palacios. Basically, they make money by making smart buys on players that allow them to be competitive and then sell the players for a nice sum of money. The cycle continues as they re-invest the money in young and talented players who are sold once they begin to blossom.

Then you have clubs who generate revenue through other streams. Teams like Chelsea and Arsenal own condos and other properties around their stadiums which make them a ton of money. For example, Arsenal recently announced that they made 100 million pounds over a 6-month span through condo sales. Teams like Man Utd. have their own tv channel which generates subscription and advertising revenue. Clubs make money by travelling overseas and playing in friendlies.

Dont feel sorry for the 'little guys', they are profitable as well.

 

[trelvis tha thrilla]

Its not like it is that much different with the way things are setup over here. For the most part, the same teams are good every year. Yankees, Red Sox, Cowboys, Patriots, Lakers, Cavs, Celtics for the most part are always good and spend the most money. I mean look at the NBA and how few teams have the title over the past 15 years or so. It is the same teams that win. Bulls, Lakers, and Spurs with Detroit, Miami, etc.. thrown in there every couple of years.

I like how Europe does it. If the owner has money to spend and wants to spend it on players for his team, he should be allowed to. I hate the Yankees but I cant fault them for signing up everyone. If they have the money to do it, then they should be able to do it. If you dont have the money, then you better start developing your own players.

As far as transfers go, I kind of see that just like trades that would happen in the NFL, NBA, etc...

 

[nimfh]

Hey Tevez. I rarely post although I've been here 7 years, it has to be something that really catches my eye for me to comment.

Back to the topic at hand, there are many reasons why we cannot institute a draft in Europe, I'll name the three that I deem most important.

1- It's not just one league, like MLS or the NBA or whatever. You have national leagues in every country with different governing bodies everywhere. Therefore, there is no way to make a standard draft policy.

2- We don't have athletic scholarships in Europe, so there are no basic guidelines as to the age of someone getting to the highest level of competition. Some players, like Messi or Bojan, start for top teams at the age of 17 while others, like Jesús Mendoza of Xerez, make their 1st Division debut at the age of 32. Soccer not being a sport that makes full physical maturity an absolute requisite allows some very young players to get to the top very early, an advantage that would be negated by having a draft which would obviously require an age minimum.

3- Most clubs have reserve squads, sort of like a minor league team. The bigger teams stash their young talents there and call them up whenever necessity strikes. Jonathan dos Santos and Thiago Alcantara play for Barça's reserve team most of the time but they've also started games with Pep's team. If we had a draft, many young players would end up forgotten in a top team's reserve squad instead of playing valuable minutes in smaller teams like Canales is doing for Santander.

As for the salary cap, it would turn European soccer into NCAA lite. The top teams rake in around €400M every year, why shouldn't the players that generate said income be compensated as handsomely as fiscally possible? And before mentioning that this measure is supposed to benefit small teams, do realize that many of the smaller clubs' top players are actually on loan from the top teams, who pay their salaries. In Xerez's case, Valencia is paying for Renan's salary and Barça is paying for Victor Sánchez's salary, and that's only their two most important players.

As Tevez said, small teams make money too. Sevilla is the best example of a small market team making it to the top through shrewd deals. They were in the 2nd Division not a decade ago and now they're a Top 16 club in Europe They bought Dani Alves for €500K and sold him to Barça for €36M, they had Ramos on their youth teams at a very low cost and sold him to Madrid for nearly €27M and bought Baptista for €3M and flipped him to Madrid for €20M. As you can see, just like as with any business, you can make it far by buying low and selling high. A team's money isn't a gift (unless we're talking about Madrid), it's the result of management's work. Barça employs Xavier Sala i Martín, widely regarded as the top economist in Europe and the favorite to win the presidential election this summer is Sandro Rosell, perhaps the most renowned marketing expert in Europe. The money doesn't roll in by coincidence.

 

[nimfh]

I just realized the OP also wonders about how these leagues can operate. I think the best example comes from Germany. The Bundesliga basically created its own TV network and the revenue is shared equally amongst the teams. If a TV station wants to air highlights of one game, every team in the league is getting paid.

 

[ziostilon]

you guys make some great points, learned lots.

In terms of the draft. hockey has a similar situation. the IIHF is the governing body (equivalent of UEFA). the player can enter in the drafts of both the NHL and the KHL. then only the two teams from the two leagues with his rights will be able to sign him. And there a minimum rookie contract, so the player pretty much can choose which teams he wants to sign with.
With NIMFH's 2nd point, don't clubs use their minor league clubs to grow their young talent. Then the league can just draft players from those minor league clubs

But the salary cap is not as much of an issue, since management still needs to properly manage their assets.

But the whole transfer, loan system seems to work great overseas. Why don't North America leagues implement that system

 

[Sinner]

Originally Posted by Carlos Tevez

Good post NIMFH, very insightful. Although I dont think I've seen you around before, I can tell that you are anti-Real Madrid which increases your credibility ten-fold

  We can agree on that.  Good info NIMFH 

I mostly watch the Premiership, where they talk about the TV rights all the time... 

Question regarding something like an FA Cup tie between a low-division team against a top premiership club.  Say the tie was played at the EPL team's home ground... The low-division team earns a draw, in which a replay will be required at the low-division team's stadium.  Will they get a chunk of the tv-rights money (which, presumably will be a relatively huge sum)?  

EDIT ~ 

 Great goal by Messi.

 

[xblaze23]

Except for Real Madrid (I really can't understand how this team hasinternational fans, but that's another story), every Spanish squad hasearned their money legitimately running as a law-abiding businesscorporation, and just like in regular business some teams have moresuccess than others. It's pure Economics.


humor us with story time

 

[ziostilon]

the part where its very hard to comprehend for me is how the fans feel about all this

its like the Knicks going to the Cavs and saying i'll give you guys this much money for Lebron. the Cavs agree because that money can help them in other ways including using that money to get other great players from other teams.

If Im a Cavs fans, im pissed. Why did management just trade away Lebron for money. I don't want anybody else, i want Lebron.

Thats why i don't really understand the concept they have overseas

 

[trelvis tha thrilla]

Originally Posted by Ziostilon

the part where its very hard to comprehend for me is how the fans feel about all this

its like the Knicks going to the Cavs and saying i'll give you guys this much money for Lebron. the Cavs agree because that money can help them in other ways including using that money to get other great players from other teams.

If Im a Cavs fans, im pissed. Why did management just trade away Lebron for money. I don't want anybody else, i want Lebron.

I mean, the Cavs wouldnt have to sell him if they didnt want to. Just like Manchester United could have kept Ronaldo, but decided to let him go, but they got PAID for it. You can also look at a team like Barca who will pretty much hold onto Messi for a while. Its not just a team makes an offer and you have to sell the player.

You also can look at it the other way. Using your LeBron and Cavs example, wouldnt it be cool if the Cavs could just pay money and bring Wade to the team?

 

[ziostilon]

Originally Posted by Trelvis Tha Thrilla

Originally Posted by Ziostilon

the part where its very hard to comprehend for me is how the fans feel about all this

its like the Knicks going to the Cavs and saying i'll give you guys this much money for Lebron. the Cavs agree because that money can help them in other ways including using that money to get other great players from other teams.

If Im a Cavs fans, im pissed. Why did management just trade away Lebron for money. I don't want anybody else, i want Lebron.

I mean, the Cavs wouldnt have to sell him if they didnt want to. Just like Manchester United could have kept Ronaldo, but decided to let him go, but they got PAID for it. You can also look at a team like Barca who will pretty much hold onto Messi for a while. Its not just a team makes an offer and you have to sell the player.

You also can look at it the other way. Using your LeBron and Cavs example, wouldnt it be cool if the Cavs could just pay money and bring Wade to the team?

with the D. Wade example.  if you give me 150million for D. Wade.  Theres no reason why i won't give you D. Wade.  But what does that do for all the Miami Heat fans, its not like im spreading that 150million with all my season ticket holders.

My whole point with this whole thread comes back to the fans themselves.  the owners can still keep the team running, but that doesn't mean anything when they can't get butts in the seat because they are as bad as the Rams.

 

[nimfh]

I'll be glad to humor you with History.

When Franco's dictatorship realized they were quickly being isolated from Europe the regime decided to make an international statement in sports, the only category in which a depaupered Spain could be noticed in Europe. The little problem was that the best teams were Athletic Bilbao and Barcelona, which just so happened to be from separatists region. How did the regime fix this? It was a three-step process. First FC Barcelona's president, Josep Sunyol, was summarily executed by Franquismo's troops. Then, when things still didn't go according to plan, authorities seized Alfredo di Stefano's (only the best player ever, signed by Barça) transfer documentation and forced him to play for Real Madrid. Finally, the perks given to referees who came to Madrid to ref European competition games were legendary, going from being chauffered around in official vehicles to dining and sleeping in Spain's finest establishments all courtesy of the government. Still today, Ultra Sur, the club's largest support group, is aligned with Spain's Fascist party...

As for more recent history, Real Madrid was in insurmountable debt in the late nineties. The club had no real possibility of survival playing by the rules. Fortunately for them, José María Aznar, a neofascist and known Real Madrid supporter, was the President of Spain. The government issued a once-in-a-lifetime decree that overruled Spanish urbanism legislation to allow for Real Madrid to sell most of its property to large construction companies, who weren't interested before because it was illegal to build anything on that land. To further destroy the legitimacy of said action, the land was sold several times over market value.

And not to break the trend, this summer Caja Madrid and Banco Santander issued over €300M in loans to Real Madrid to allow the club to sign Ronaldo, Kaka and others. Well, banks are allowed to run their businesses however they deem necessary, right? Wrong. It is illegal to loan an amount that surpasses 40% of gross income in Spain. Given that Madrid grosses around €400M, the math seems a little iffy. To make matters worse, Caja Madrid belongs to the provincial government of Madrid...

So, can anyone tell me what drives someone from outside of Madrid to cheer for a Fascist club who cheats every step of the way?

 

[nimfh]

As to the question of why not use the minor league players to be drafted, there's two very obvious reasons. The first is that no team is interested in spending resources to develop a player that will be drafted away from them. The second is that there are 7 different divisions where reserve squads play and there are "normal", non-reserve clubs playing those leagues as well. There is no minor league system per se.

 

[airblaster503]

Originally Posted by Ziostilon

Originally Posted by Trelvis Tha Thrilla

Originally Posted by Ziostilon

the part where its very hard to comprehend for me is how the fans feel about all this

its like the Knicks going to the Cavs and saying i'll give you guys this much money for Lebron. the Cavs agree because that money can help them in other ways including using that money to get other great players from other teams.

If Im a Cavs fans, im pissed. Why did management just trade away Lebron for money. I don't want anybody else, i want Lebron.

I mean, the Cavs wouldnt have to sell him if they didnt want to. Just like Manchester United could have kept Ronaldo, but decided to let him go, but they got PAID for it. You can also look at a team like Barca who will pretty much hold onto Messi for a while. Its not just a team makes an offer and you have to sell the player.

You also can look at it the other way. Using your LeBron and Cavs example, wouldnt it be cool if the Cavs could just pay money and bring Wade to the team?

with the D. Wade example.  if you give me 150million for D. Wade.  Theres no reason why i won't give you D. Wade.  But what does that do for all the Miami Heat fans, its not like im spreading that 150million with all my season ticket holders.

My whole point with this whole thread comes back to the fans themselves.  the owners can still keep the team running, but that doesn't mean anything when they can't get butts in the seat because they are as bad as the Rams.

But at the same time, the Heat could then go and sign another player or even multiples, whether it be a superstar that is going to require alot of money, or a young player that is on the rise and they could get a good deal out of it.
  

 

[o fenomeno]

One of the ways these bottom feeder clubs can survive is that they are supported on a level that most franchises in the US are not. 90 percent of teams in the major European leagues know that they have no chance at winning a championship, yet they generally still pack the stands and support the team. These teams have often been established in their cities over a century ago, so they are ingrained into the culture and identity of the city. If the NBA were to be monopolized by the richest teams, teams like the Grizzlies would do absolutely terrible at the attendance gate, because they would have absolutely no chance at winning jack +$+#, and their fans would not have any interest.

Soccer is a crazy business. I'm still not sure how I feel about the fact that only 3 or 4 teams compete for the title in the top leagues. On one hand, it sucks for every other team. On the other hand, the champions league aspect of it (the fact that there are about 10 - 15 elite clubs in Europe) make for some amazing games. It has pros and cons.