Football has a money problem. Rather than being shaded by money trees, the health of the modern game is being antagonised by the very fabric of its ecosystem. Footballers, fans and clubs are all pawns in the money plays of billionaires and nation-states, attracted by the cash flow of the industry. Without them, without their money, this sport which we schedule our lives around looks like a stranger.
Big spenders pump so much money into the game that it’s easy to see it as a positive. Chelsea have spent €1.23b on players in the last five years; is football better off without that money being spread around the world? An extravagant fee can bring a smaller club from the edge of dissolution and can feed a player and their family for a lifetime. However, the romantic view will always fail to consider the financial straw which every €100m transfer places on the back of the current footballing landscape.
A financial bubble can be described as an overinflation in value of assets. A bubble bursts when shareholders panic about the direction of an industry, selling their stock at low prices, drying up the cash flow. We could be heading to a point where the level of spending bloats beyond what clubs are able to recoup. For this to happen in football, there would have to be monumental shifts to prize money, and TV deals, not to mention that many invest in the game for the leveraging of soft power, not just straight profits. But the current financial landscape of the game forces us to consider this possibility, to not only ask “Will the bubble burst?” but “What does this thing look like after it does?”
It is the History of the Capitalism
Blowing up a profitable industry by forcing cash down its throat and being disappointed when it isn’t returned as a tangible product is a relatively regular occurrence for investors. Back in the late 90s the infamous Dot Com bubble, where venture capitalists rushed to invest in internet-based companies, burst. Though they rightly predicted the internet being the future of…everything, their load was blown a little too early. People at these companies lived like kings and rockstars as unruly amounts of money entered their wallets.
The rest of the world, however, wasn’t as forward-thinking and online content simply was not as easily accessible back then. Inflating a bubble with cash requires a release valve in order to not buckle under its own weight. During the Dot Com crisis, creators were unable to even reach consumers, a fatal disconnect. These extravagant lifestyles were left unsupported when investors fled the scene like pigeons fleeing a sugared-up toddler, causing many companies to go under.
Investors simply redirected their money elsewhere, which directly caused the next big bubble burst, 2008’s housing bubble. In the early 2000s, interest rates and rigid requirements for home ownership were all but abandoned, allowing a great many rich people to try taking control over less rich people’s living spaces. It developed into a frenzy where profits of tens of thousands of dollars were made in a matter of weeks, causing investors to aim for even more speculative property flips, resulting in home prices being too high for most investors to see the worth in them, causing another economic downfall.
If owners of football clubs have learned anything, it’s that more money spent equates to more success on the pitch, leading to a more profitable worldwide brand. The incentive for high investment is alluring. Due to football’s ludicrous cash flow being strengthened by more nation-states and billionaires, a bubble burst is not out of the question.
If football indeed fails to be a financially viable industry, shareholders leave and the cash runs dry, it goes without saying that the very basic structure of the game will evaporate. Focusing in on England, according to the Premier League, they pay over £400m per season to the EFL. The trickling down of the money and attention that the PL pulls towards itself is vital for the footballing structure in England to survive. Therefore, teams in lower divisions will likely be the first to suffer in the case of financial collapse.
The biggest clubs with the biggest, loyal fan bases will continue to have the biggest revenue streams and will likely survive for longer. However, the costs of luxuries like expansive stadiums and domestic flights to attend matches will become untenable. We would see local rivals sharing stadiums and perhaps even see top divisions split into local competitions.
The allure of a life in football will be completely diminished. Player pools will dry up, which would be, at the very least, the final straw for the sellable product of football. Advertisers, TV companies, sportswear brands will run from the sinking ship, sending football back to square one, with the capitalist structure of the sport needing rethinking.
Less money in the game requires more strategic use of it. This doomsday scenario will come about from the careless lumping of money around the game, and its scarcity will bring rationing. Equal wages for all players and staff in a league, trades rather than transfers, fans, people who care about clubs, more involved. Socialist principles will need introducing just for football to stabilise, to recover some HP. A new footballing world built on these principles seems like something of a utopia, reintroducing a wider distribution of talent across different clubs and making for a more engaging sport than the mechanical money-wins-all game we have today.
Can football be saved?
Is collapse avoidable? Or is it necessary for this sport to return to something that doesn’t resemble an all-consuming beast? Tearing the whole thing down and building it back up probably won’t be the first thing to be tried. The recent UK government white paper could see a more fair distribution of wealth across English football, then resulting in stronger competition and hampering the sense of doom which tends to loom over every UCL final.
The dream of a socialist sport would seem like a nightmare apocalypse for those currently controlling the chess pieces but, inevitably, capitalists and nation-states will find another industry to inflate and explode in the case that football doesn’t work out. All things are replaceable and disposable to them. Unwavering, untamed cash inflation will likely continue as long as the shareholders have it and short-term success is all the average fan cares about. Once true intervention is achieved, the game might already be at a critical mass, by which point it’ll be too late.