The footballing jamboree that is the Premier League kicks off next week. This is its 25th year. For those of you who remember, 1992 was a significant year in football as not only did it mark the beginning of the Premier League, but it was also the year that Leeds United won the last English First Division league.
The subsequent plight of Leeds United is a sorry tale of footballing boom and bust that is eerily reminiscent of the Irish boom and bust. It is a similar story of great hopes, expectations and debts, coupled with lamentably poor management and poor performance behind all the hype, leading ultimately to bankruptcy.
Sport is such a significant part of our lives, and it is interesting to look for parallels between how sport (especially football as it is the most global) is run and the way economies are run. Are there deep cultural forces that determine the way clubs are run in certain countries and the way the general economy operates?
Before we talk football, let’s look at Wimbledon. This is still one of the four top tennis tournaments in the world based in England where no English players ever seem to do well.
Every two or three generations, Britain produces someone like Andy Murray. But if you were to go down the list of winners in either men’s or women’s tennis, very few British names are on either trophy. Wimbledon puts on a great tournament, hosts the best in the world, gets the money and the glory, but it has almost no impact on local tennis.
For years, the City of London was regarded as the “Wimbledon of finance”. The City, like Wimbledon, hosted the world’s best financial players, preserved its prestige and surpassed even New York as a financial centre. The vast majority of the players were and still are non-British; London prospered without the participation of local players. The Wimbledon model of development understands that, in a globalised world, being a good host matters.
Now the Premier League is replicating this Wimbledon model, and unfortunately for English football fans, this fact is evidenced by the awful performance of England at the Euros. A team full of remote, headphone-wearing Premier League superstars epitomised more than anything the disconnect between the Premier League and the local game. England may have the most commercially successful league in the world but, like Wimbledon, it will soon be a hosting service for foreign talent rather than a conveyor belt for local players.
The way things are going, there will be very few English players in the starting XI of Premier League teams. But this probably won’t diminish its allure.
The Premier League is the most watched football league in the world, with a global audience of close to five billion in more than 220 countries. It is a global brand that happens to be located in England.
This global dominance has allowed clubs to increase their commercial revenue dramatically. New TV revenue and commercial income allows the clubs to pay enormous sums in transfer fees and players’ salaries.
One thing is startling and it is that despite Premier League clubs not competing at the top end of the Champions League over the last three seasons, they continue to dominate the list of wealthiest clubs in the world with eight in the top 20. This allows them to continue to compete at the top end of the transfer market.
Another significant factor in the English game is the dominance of the single big shareholder, who finances the club. Think Abramovich and the rest.
Now contrast this British hosting model of football – which reflects its approach to other big industries that flourish there like finance, advertising and publishing – with the German football model.
Germans are very proud of their Bundesliga. Nowhere is that pride more justified than in Munich, where Bayern, the most successful German football club, reigns supreme.
Bayern is a proper club, with a wonderful history. It won the German league at a canter. It has great players and an open, attacking and exciting approach to the game. Bayern recruits local talent, as well as a smattering of foreigners. Its recent greats, such as Philipp Lahm, Bastian Schweinsteiger and Thomas Müller, are all local lads from the famous Bayern youth academy.
Like the German economy, the club is well run and its new stadium, the Allianz Arena, is an architectural gem owned by the local municipality, which rents it to Bayern and its rival, Munich 1860. The 70,000 capacity stadium cost €340 million to build and is used every week. Contrast this with the Aviva that cost €410 million to build, holds fewer people and is hardly ever used.
Financially, Bayern operates well within its means, much like the German economy. Its accounts are perfect and the players are paid well – but not extravagantly. Bayern is all about tradition and continuity; the planning is meticulous, all the way from youth development right up to the professional first XI.
The club is owned by the fans and operates like a tight cooperative. If it were a country, it would be running a massive current account surplus with the rest of the world, have a huge savings ratio and low inflation – not unlike Germany.
In contrast to the English clubs where operating shortfall is usually plugged by the largesse of an oligarch, German teams are not allowed to go into debt. Clubs must be financially accountable. A full set of documents must be submitted each year before a playing licence is given. It is exhaustive, covering assets, receivables, cash and bank balances, liabilities and provisions, current overdraft facilities, loan commitments, projected and current profit/loss statements and cash inflows and outflows.
These documents are judged by the German football league. All clubs must inject money into a fund to make sure that if a club does get into difficulty, even after all this scrutiny, it won’t go bust. No Bundesliga club has experienced an insolvency event since the league’s creation in 1963. By way of comparison, there have been 92 in the top five divisions of English football since 1992.
Ticket prices are kept low: around €10 a game. The fans feel real ownership. The Bundesliga is the best attended of the big football leagues in Europe, with an average attendance of 45,726 in 2010/11 – 10,000 more than the Premier League.
And of course, the German national team is typically a finalist or semi-finalist at major tournaments, unlike the faltering Three Lions.
When you look at the difference between the “hosting” high-finance model of the Premier League and the “local” frugal model of the Bundesliga, it’s not hard to see that football reflects deeper cultural real and economic norms.
Now I realise you can read too much into these little exercises, but as you settle in next weekend to watch the Premier League, just consider what the English football league says about post-Brexit England.
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There is a massive irony, in “don-the-green-jersey” nonsense, with respect to stadium that FF finally built, with 400 Million Euros of the taxpayers money. Just think. They did not decide to built a new hospital. Or try to rectify appreteiceships interrupted by the Bertie Bust. They threw the money at a SECOND spectacle centre to distract the masses, located four miles from another existing one. As a parting gift from the political gang who do not want you thinking too much about what happens to state incompetence, and the mismanagement of public money. And that irony is with respect to… Read more »
The Premiership will adapt. They might even learn a lesson or two from the Bundesliga. Because for the first time in years the British are being forced to rethink lots of lazy assumptions that needed review over the past few decades. The English Premiership is a success because the British are very successful at media management. And that brings in the money. It is a competitive area, and Spain is also highly successful. In fact it is Spain that England’s competitor, not Germany. And with Italy in a distant third place. German media and event management is far more concerned… Read more »
Soccer is now a spectacle. One might say that it is an over-rated spectacle. A safer spectacle than rugby, for certain. And, in the Irish context, we can say that soccer is safer than GAA. I had this mentioned to me a few months ago by a secondary school teacher, who was of the academic inclination. In rugby and GAA, the risk potential is that a young man might become a player. The consequences are serious forms of injury. The sport is cheaper, but the cost is in physical damage. In soccer, the danger comes as a consequence of becomming… Read more »
Perhaps I might add that England’s national squad’s ongoing debacles are a consequences of being controlled an organization more organized for showbusiness than objective effectiveness.
However, that did not stop Spain from winning in recent years – even when Spain had the problem of ongoing unease between regional rivals.
Bitcoin????????????????
http://lofi.phys.org/news/2016-08-bitcoin-money-victory-backers.html
“England may have the most commercially successful league in the world but, like Wimbledon, it will soon be a hosting service for foreign talent rather than a conveyor belt for local players”
Surely Brexit if adopted will stop the flow of in bound soccer player immigrants and give the locals a chance since the fucking scum who run the place won’t run the place properly like the Germans?
Just tongue and cheek David.
Has David missed the obvious parallels with Ireland here? Ireland is one of the most successful countries in attracting/HOSTING foreign companies and their FDI who then employ 1,000s of low paid foreign workers who only exacerbate the housing shortage…..but sure aren’t we a great little country. Perhaps we should adopt a more Germanic model of developing and employing our own resources through apprenticeships, innovation, talent and son on. The longer we rely on MNCs the more difficult it will be to develop our own indigenous industries. Again, successful German firms tend to be more successful because of longer term thinking… Read more »
I’ve just surrendered my Arsenal season ticket after 2 years of trying to re-boot my childhood enthusiasm for The Beautiful Game after putting a hex on the whole thing after Hillsborough. My son was the ultimate Gooner & we’d been on the waiting list for 10 years. There’s currently about 40k on the waiting list. It was 2 years of Dad & son bonding sessions but my son has moved on to DJ’ing in Bristol and ‘girls’. And I’ve moved on from Corporate Football (Soccer) too. I’ve written a book, an upcycling of ‘Fever Pitch’ about my 2 year odyssey… Read more »
It is now six weeks after Brexit. Still no strategy from D2. Call them when holiday season is over. They should be trying to have a grown up conversation about our predicament. Instead it is PR stunts, and gimicks, indicating the antithesis of a grwon up conversation about how we organize ourselves (badly).
The Irish state is run a bit like the English national soccer team.
The hype beforehand always exceeds the performance on the day.
Is this a thinly disguised “The Germans rent their houses – why don’t the rest of us?” piece?
The economics of space in central Dublin. http://www.independent.ie/irish-news/health/nurses-at-st-jamess-hospital-looking-for-jobs-elsewhere-after-losing-parking-spaces-34947531.html The decision to locate the NCH in central Dublin was a big political football. Especially considering the fact that Blanchardstown has adequate space and it’s own entry/exit to the motorway network. But – Varadkar did not want to be labelled a parish pumper, even if he could have produced a better decision. And the fact that Naas is probably more central to both the baby belt, and the national distribution of the population – being on the motorway that joins urban areas number 1, 2, 4, & 5 in the RoI. In… Read more »
Yes, the Premiership is built on foreign foundations. Most of the customers are outside England. Likewise the Spanish competition.
Central banks are not only buying government bonds , now it is corporate bonds and shares in the major stock markets. The next thing , of course, will be to support your favourate soccer team by buying company bonds. If that does not bail out the club then they will buy up most of the season tickets too. The stands will be empty with a hollow sound just like the rest of the economy but the government and the clubs will show their bottom line to show all is well in the economic world. Meanwhile the regular Joe will not… Read more »
What this country needs most is a national conference which addresses the future needs of Ireland.
“Strategic Ireland”
With reference to the article a few weeks back concerning GDP statistical increases and bumper harvests in East Bloc countries in the 1970s…..
http://www.independent.ie/business/the-worlds-largest-meat-company-has-just-moved-its-hq-to-ireland-34950381.html
They did not even bother with the reverse merger thing. They just went straight in, before any laws were changed preventing them.
It is getting comical at this point in time.
Regardless of the state of the real economy, GDP is up again.
The idiots in charge will presumably respond by telling us they are “growing the economy” and “bringing the Debt to GDP ratio to maangeable levels”.
On a tangential subject. It’s just been announced that the US fed funds rate may well rise later this year. A lot of leading economists are suggesting …
So I thought I’d have a look, and since you can’t put in a lot of links, here’s one of the older links (from Nov 2009 – almost 7 years ago) regarding US interest rates:
http://www.wsj.com/articles/SB125797275784744057
The language simply doesn’t have the color to enable fitting descriptions of the nonsense that passes for news and current affairs, and as for ‘professional economists’…….
I visited London in April and watched my club for the first time in nearly 30 years. They are not in the Prem and I don’t think I’d like them there because then they’d attract interest from people who just aren’t part of the club and as far as I’m concerned they can stay away. I found it unpleasant having to sit down because I was always used to standing. Sitting down is all wrong. It’s half way to being a baseball game. But it was good to go there again. London was a strange place, as in a place… Read more »
Last season in the Prem was amazing. We have Sky Sport because my son is football mad and we had been following Leicester from early on. What people forget is that the focus on them early to see if Vardy could break the record for scoring in consecutive games. And then I started watching them properly and noticed Kante and realized they had a chance. The Chelsea-Spurs game at the end was the match of the season. This was the one that won it for Leicester and was bitterly fought in an atmosphere of spitefulness and loathing between the two… Read more »
FOR THE ATTENTION OF DEAR DUBS I almost forgot – walking around the quays in Dublin when they pedestrianised it for the BH weekend was lovely (getting in and out of town was not), but n o w Dublin City Council were so kind as to consult the public about their new 30km/h limit insane proposal: “Dublin City Council is undertaking a review of speed limits within our administrative area and wish to engage through consultation with members of the public, with particular regard to the extension of the 30km/hr speed limit into further residential areas of our city.” If… Read more »
MC and GK
An interesting discussion re Germany.
Perhaps Ireland should consider a reverse takeover.
Germany is short of the one thing Ireland is very good at providing and that shortage is increasing.
Emigrants in our case and Immigrants in Germany’s case.
Ireland should put a really strong emphasis on German language and culture and encourage much stronger student exchange links betweenthe two countries.
The Germans love us, they just don’t know it yet.
The founder of Grant’s Interest Rate Observer was one of several speakers at the New York Society of Security Analysts (NYSSA)’ Annual Benjamin Graham Conference to remark on the ramifications of unprecedented loose monetary policy. Historic Lows Central banks are treading in uncharted waters. Sidney Homer and Richard Sylla, the authors of A History of Interest Rates , found no instance of negative rates in 5,000 years. Now there are $11.7 trillion invested in negative-yield sovereign debt, including $7.9 trillion in Japanese government bonds and over $1 trillion in both French and German sovereign debt. Grant posed a tongue-in-cheek question:… Read more »
The EROI stands for Energy Returned On Invested.
THE COMING BREAKDOWN OF U.S. & GLOBAL MARKETS EXPLAINED… What Most Analysts Miss
Explanation of why the standard of living has been collapsing since the late 1960’s. Why debt has been the only way to afford the costs and why there are 2.5 jobs needed today to pay the bills that one job per family managed before.
The central banks have obliged with cheaper and cheaper money costs. No further debt can be afforded even at zero percent rates.
https://srsroccoreport.com/the-coming-breakdown-of-u-s-global-markets-explained-what-most-analysts-missed/
This is about a root cause of Brexit.
https://www.facebook.com/OfficialBritainFirst/videos/1101408236671103/
http://www.paulcraigroberts.org/2016/08/11/rethinking-the-cold-war-paul-craig-roberts/
http://usawatchdog.com/weekly-news-wrap-up-by-greg-hunter-8-12-16/
MSM Favours lying Clinton over outspoken Trump
http://wealthyretirement.com/slap-in-the-face-award-video/russias-crusade-against-hillary/?src=email
Russia: More Meddlesome Than Your Overbearing Mother-in-Law
Steve McDonald By Steve McDonald, Bond Strategist, The Oxford Club
Friday, August 12, 2016
http://www.gata.org/node/16666
The emperor wears no clothes but who else dares to say so?
Submitted by cpowell on Sat, 2016-08-13 02:59. Section: Daily Dispatches
11:15p ET Friday, August 12, 2016
athletes that declined to attend the Rio Olympics are hardly likely to be pregnant. This is the alleged problem caused by the Zika virus.
Local doctors say the problem is caused by the larvicide used to control mosquitos.
We are being lied to as it is another case where the solution is way worse than the disease.
http://www.gmwatch.org/news/latest-news/16706-argentine-and-brazilian-doctors-name-larvicide-as-potential-cause-of-microcephaly
http://www.thedailybell.com/news-analysis/discovery-of-bulgarian-old-gold-supports-the-evolution-of-private-money/ Money is private property. The fact it is issued and controlled by government is simply using it as a means of control of the population. That is the major cause of our problems. Money needs to be released as private property. The money that is used will be that chosen by the people by their preference of use. Historically that is gold and silver because of the unique properties of the Precious metals. Within such frame work, Aristotle defined the characteristics of a good form of money: 1.) It must be durable. Money must stand the test of time… Read more »
Here is something to read. The stocks performance year to date.
http://www.lemetropolecafe.com/img2016/Lundeen/0814/0815_html_m721b0ae8.gif
bottom of the list airlines.
Top of the list. If you wanted to double your money since December, coal would have been good but PM’s better.
I’m happy to see the Olympic committee got rid of the head-guards, helmets, for all the same reasons I disliked them.
http://www.espn.com/olympics/story/_/id/9087686/olympic-boxing-drops-head-guards-changes-scoring-system
@ Tony Brogan.
It seems it’s not just us who are listening to you re gold;
http://www.dailymail.co.uk/news/article-3215910/ISIS-release-pictures-new-gold-coins-say-break-capitalist-enslavement-paying-deranged-gunmen-dollars.html.
They are still paying the gunmen in dollars though!
Actually, does anyone know what happened to David? No columns last week…
Evening folks, hope you’re all making the most of the sunshine :-) Not sure if any of you guys will be attending Kilkenomics in November? My plans have changed and I’ll be going away for work during Oct/Nov, and sadly will not be able to attend :-( I have a reservation for 3 nights at the Kilkenny Hibernian Hotel for a nonsmoking double room for 1 person – check-in 10/11 check-out 13/11, total + vat @ €385 Let me know if you need this res – I’ll have the res amended and forward it to you via email. G, give… Read more »
In lieu of David’s absence ponder this.
The first casualty of peace/democracy (take your pick) is the truth.
eg The phrase containing the words “did nothing wrong” pretty much covers it.
http://www.goldcore.com/us/gold-blog/deposit-bailin-and-property-crash-warnings-in-ireland/
could Ireland be the first? , next, country to have their bank accounts bailed in to save the banks. Mark O’Byrne is warning you.
Get your stuff out of the banking system!!.
Chinese info graphic.
https://www.bullionstar.com/blogs/bullionstar/infographic-the-chinese-gold-market/
Posted on 15 Aug 2016 by BullionStar
Infographic: The Chinese Gold Market
Are season tickets going up?
http://www.goldcore.com/us/gold-blog/gold-uk-pounds-near-post-brexit-highs-sterling-falls-38-year-date/
I guess one can read too much into anything but this kind of talk scares the hell out of me.
US Martial Law in the next three months is not out of the question.
http://www.zerohedge.com/news/2016-08-16/obama-wants-third-term-and-how-he-could-make-it-happen