The cost of success

As the sun sets on another sporting summer it is hard to escape the relentless machine that is known as ‘the beautiful game’. The celebrations of the 2018 FIFA World Cup were short-lived (unless you are French). Very quickly the focus returns to the transfer market in the domestic leagues. Who will be the most expensive transfer of the summer and which teams will spend the most money? Over each of the last five summers, teams in the English Premier League have collectively spent more than £1 billion pounds. Due to the early closing of the transfer window before the start of the 2018/19 season, the final amount of £1.27 billion was spread over 114 players who transferred into English Premier League clubs. About £600 million less than the summer of 2017/18.

One man responsible for the game changing influx of money into English Premier League, Richard Scudamore is stepping down as CEO at the end of this year after nearly 20 years in charge. Since Scudamore’s arrival in 1999, media rights increased from £670 million to £5.1 billion over a three-year cycle. Clearly the intoxicating mix of foreign players, coaches, investors, fans and owners has produced a sporting business of great value to media networks and content aggregators who re-package and sell football matches via mobile, tablet, laptop and TV to advertisers, subscribers and viewers all over the world.

Not to be outdone by the record breaking transfers of goal keepers Kepa and Alisson to Chelsea FC and Liverpool FC accordingly, Ronaldo completed a €117 million transfer to Juventus at the age of 33. The next generation of emerging talent at the age of 19, Mbappe completed his transfer to Paris Saint Germain for €135 million. Just as the sun sets and rises, the money-go-round keeps turning.

The competition for talent on the pitch is mirrored by the competition off the pitch amongst the tech giants. TV networks still contribute the lion’s share of the media rights fees but Facebook and Amazon have joined the party. Live and unique viewing is essential to maintain the 24/7 content and consumption for billions of viewers and consumers. Amazon already secured 60 English Premier League games for three seasons but Facebook raised the stakes by securing a deal with the Spanish La Liga for 380 games to be broadcast in India, Afghanistan, Bangladesh, Pakistan, Sri Lanka, Bhutan, Nepal and the Maldives. The estimated fee is €10 to €20 million per season, a relative bargain compared to the €150 million that NBC is paying to share the English Premier League in the US.

Not to be outdone by the FIFA World Cup in Russia, the FIFA eWorld Cup Grand Final was held in London’s O2 Arena, generating 23 million online views over three days. Most noticeable was the 20 million players from 60 different countries participated throughout the series and the winner Mosaad ‘Msdossary’ Aldossary, a professional gamer from Saudi Arabia, who pocketed a $250.000,- first prize. A modest prize that will no doubt multiply in years to come as eSports continues to grow.

If this was not too depressing reading then perhaps the latest news from Sheffield Hallam University will cause deeper reflection. New research shows that 11 of the 20 English Premier League clubs would have made a profit in the 2016/17 season, even if there were no fans in the stadium! This did not include the big five of Manchester United, Manchester City, Liverpool, Arsenal and Chelsea. But on average, match day income accounted for less than 20 pence in the pound for all 18 clubs.

Despite the evolution and excitement in football there are worrying signs that the success of ‘the beautiful game’ is reducing the importance of its most valuable asset – the fans in the stadium. Football is a total package with a live atmosphere that is only created with home and away fans. These are the heartbeat of most clubs, creating content, sharing stories and keeping traditions alive. Win or lose on the pitch but the match day fans in the stadium must be protected at any cost.