Liberal Vision

Is football really a free market sport?

A major disadvantage in being a convinced free marketeer and an impassioned supporter of Southampton Football Club is that I get precious little sympathy when I whinge on about how my beloved Saints can’t compete fairly against the big teams because of the wealth gap.  Grumbling football fans of chronically underperforming teams are a pretty sorry sight in the best of circumstances. But when you’re also characterised as a supporter of “the weak should go the wall” approach to business,  you elicit even less sympathy than normal.

Nevertheless, the news that stinking rich Chelsea have received a £40m bid for John Terry from even more filthy rich Manchester City has made me consider again whether football really is a competitive market or whether it’s just a badly structured oligopoly that’s heading for disaster. The offer for the services of Terry is about four times the amount needed to buy ailing  Southampton Football Club in its entirity.

In most markets, that’s just the way things are, and so be it. But football requires not just competition, but fairly dramatic swings in the fortunes of different clubs in order to thrive and excite. If in the annual results for supermarkets consistently put Tesco in first place, Asda in second and Sainsburys in third, with a string of other smaller shops making up the numbers, the consumer needn’t suffer and needn’t care.  

Not so with sport. One key reason for football’s worldwide appeal is that – in all but the most extreme circumstances – professional matches are genuinely competitive. The underdog nearly always has a genuine chance of winning.  That key selling proposition is in danger of disappearing in English football – especially over a 38 or 46 game season.

As is so often the case, the Americans have the right approach. Although some pundits claim that their sports regimes are more “socialist” than the European equivalents, in fact the only real difference is that the Americans realise that the key “products” are baseball, football, basketball and ice hockey – not the individual franchises/clubs. They therefore operate a system which ensures something approaching a level playing field amongst competitor teams for the sole purpose of generating an engaging and exciting sporting spectacle.

Since the English Premier League was formed in 1992, only four clubs have won it (and one of these  – Blackburn Rovers – readily accept they will never win it again). In the same time period, eleven teams have won the baseball World Series – and a further eight have been runners-up (meaning that nearly 2/3 of all Major League Baseball teams have competed in the “grand final”).

So, I don’t support nationalising football. But I do support making the League, the FA and UEFA the key financial bodies and the promotion of English and European football the key aim.   If it’s too late to stop the global “brand expansion” of Man Utd and Chelsea, then perhaps the best thing for the sport is for the big four English teams to sod off and join Florentino Perez’s Euro super league and leave the remaining 88 clubs to devise a system that is genuinely competitive – and based on footballing performance rather than a club’s ability to attract a supportive sheikh or Russian oligarch.

Tags: football

Ronnie’s £80m market failure

Being entirely obsessed with men kicking balls around a pitch, there is no way I can resist responding to Darrell Goodliffe’s blog post on the Cristiano Ronaldo move. He cites complaints made by Labour MP Gerry Sutcliffe and the allegedly pernicious effects of “the free market” that they both seem to believe Ronaldo’s transfer demonstrates.

I say “seems” as, bluntly, it’s in no way clear what they’re moaning about.

They issue concerns over “sustainability,” without really citing what is not sustainable. Real Madrid’s spending? Who cares?

Money, it is acknowledged, does not necessarily equate to success in football, yet we are then told “there remains an issue around clubs being priced out of being competitive.” Moreover, who is being priced out of being competitive against who and how is the Ronaldo transfer an example of this? Is the concern that ManUtd might struggle to compete when Real Madrid are spending this amount of money? I wouldn’t be surprised if such motivations come from Gerry Sutcliffe – born in Salford and a life-long Man United fan, it’s notable that Sutcliffe’s having a political moan to let off steam over his beloved team losing their best player.

Harsh? Then consider this part of Sutcliffe’s attempts to politically influence the FA:

“…there’s no one player bigger than the club – the club comes first. One thing you don’t do is underestimate Sir Alex Ferguson.”

Right ho, excellent policy analysis there, Gerry. No doubt another example of serving the public, “public sector ethos” and all that.

Yet back to the issues raised in the blog: it mentions “cultural identity washed away by market forces,” again without any context or explanation of how this is so, or how it relates to Real Madrid buying Ronaldo. “Season ticket prices are an issue,” we are told twice. And how does this relate to Real Madrid buying Ronaldo, or anything else? Again, there’s no explanation, just a series of unsubstantiated groans with a reactionary blame placed at the feet of “the free market.”

Yet these muddled anti-market claims are not the worst part of the blog. The worst part is the presumption, as always, that football is a free market, unaffected by interference.

In fact, football is strictly controlled by authorities, who inflict many interventions that impinge on the issues raised.

Let’s take the claim that Real Madrid’s excessive spending is the consequence of crazy speculation based around globalised merchandise sales. History does not back this up. Real Madrid, more than being “almost famous for making transfer decisions based … on how many replica kits they can sell,” rather have a reputation for being the State team, the King’s team (the Royal Madrid) and have consistently been aided by the state. A recent example of this came in 2001 when authorities purchased land from the club for a price considered to be extraordinarily above the market rate (over £200 million). This led to Perez signing the first wave of Galacticos – such as Zidane for £48m. The signing of Ronaldo (and Kaka) is the consequence of Perez’s re-election, after he promised to return to the Galacticos-era policy. Hence this whole affair stems from political and government intervention.

Secondly, let’s not pretend for a minute that Ronaldo moving from one big club to another affects “cultural identity” of the game in England. Sure, the sterilisation of football in recent times has taken something away; atmosphere at games is often not what it used to be. This, however, is largely the consequence of the enforcement of all-seater stadia – due to an extreme interpretation of the Taylor Report by a Tory government that had previously tried to impose ID cards on all football fans. As a consequence, we now have the crazy situation in which tens of thousands of people can legally stand packed into a third division game or a rock concert, but not a second or first division game. Meanwhile in Germany, a country with a near-equally rife culture of football hooliganism, standing areas are used safely in top flight games packed with 60,000+ supporters (see Schalke 04, for example).

Fortunately, our party is enlightened enough to be the only major party supporting the liberalisation of the rules imposed by the previous Conservative administration and propped up by Labour. This is the kind of good, liberal work we should be engaging in. Petulant complaints about Ronaldo’s move away from Manchester should be left to misguided Labour MPs.

Tags: cristiano ronaldo, darrell goodliffe, football, gerry sutcliffe mp, manchester united, real madrid