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Top of English Premier League and European football: a billionaire’s land!

Manchester City and Chelsea as winners of respectively the English Premier League and the UEFA Champions League is a powerful example of the road, which many English Premier League clubs and top European clubs have travelled in recent years. Capital injections from billionaire owners is a current trend in European football. It is a method of trying to turn ‘ownership of a sports team’ into a valuable asset while building on the aspirations of building strong global sports brands. Chelsea and Manchester City are both examples of teams, which succeeded in following that strategy in 2012 while securing valuable titles. Though, one may ask the question: are football clubs following the same strategy ‘selling their souls’ or is this just a sound way for global success in a very competitive sport?

Time will show how consequent the implications of UEFA Financial Fair Play will be and how that may affect big powerful clubs if they come out with consecutive financial deficits? Additionally, it will be exciting to follow the ‘power balance’ in English and European football in the years to come. Clubs with greater traditions and a higher level of intensity in terms of the presence of football icons, e.g. Manchester United, Liverpool or Arsenal have been working on their financial situation and do not match Chelsea or Manchester City regarding ‘average yearly salary’ or ‘transfer spending’ currently. Though, Manchester United is number 1 in the Premier League at the moment and has done well capitalizing on the club’s football legacy in building a global fan base and hence outweighing some of the big spending capabilities of Manchester City and Chelsea. The trade-off between ‘transfer spending’ and trophies is fascinating and it will be interesting to see the final score of the Premier League and UEFA Champions League in the 2012/2013 season.

German clubs Borussia Dortmund and Bayern Munich are two cases of clubs still ‘being alive’ in the UEFA Champions League and ‘being under influence’ of different (50+ rule underlining membership-based ownership) and healthier financial structures than those of  Manchester City and Chelsea. The two German powerhouses seem capable of matching new threats from Eastern Europe and Paris Saint Germain displaying spending habits similar to the two English clubs, which did not progress from the group stage of this year’s UEFA Champions League (proving that money does not guarantee the right to win every year).

Italian club AC Milan is another example of a club competing for the UEFA Champions League trophy, which does not try to match the ‘highest bidders’ in today’s football. The club has had to restructure it spending habits. From being highly supported by capital injections related to Silvio Berlusconi’s strong media empire, the club now finds itself in a new reality where these capital injections do not offer the same transfer opportunities. As a result of that, Zlatan Ibrahimovic was sold to Paris Saint Germain and the club does not seem to be as strong as earlier (measured on their performances in the Italian Serie A this year). But still alive in the UEFA Champions League, we will see where AC Milan ends this year.

Spanish clubs Real Madrid and FC Barcelona still spend money and especially Real Madrid can be categorized as one of the big spenders over the past decade whereas FC Barcelona seems to apply a strategy closer to that of Manchester United (still spending at a high level but ‘more balanced’ than that of ‘the highest bidders’). Compared to Chelsea and Manchester City, both Real Madrid and FC Barcelona have seen stronger revenue streams and global brand strength, which may somehow defend their spending.

LET’S SEE WHERE THIS DEVELOPMENT ENDS IN A COUPLE OF YEARS! One of the latest rumors was that a Russian club wanted to acquire FC Barcelona’s Lionel Messi for ‘an insane number’ – an offer rejected by Messi. I am sure that all this leads to ‘BREAKING NEW BARRIERS’ concerning transfer spending, player salaries, sponsorship deals and global branding efforts from clubs and billionaires eager to set new standards for the game of football in commercialized fashion. If not, UEFA has to stand strong in terms of their financial governance activities.




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