Top-level sport deserves the misery
The Coronavirus could finally destroy financial models based on greed
Long before this strain of the Coronavirus transformed life as we knew it, the ocean liner that was top-level sport outside of North America was heading straight for an iceberg, a huge one at that. Those entrusted with administering various key aspects of sport were playing hopscotch on deck, blithely ignorant or indifferent to the course charted by their greed.
This is a time for empathy. So many millions around the world are suffering for no fault of their own. But in the case of professional sport, you’d need a large dose of naivete to waste your empathy. If there’s a group of people — apart from politicians — least deserving of your compassion, it’s those who have systematically driven sport into a ditch.
Wherever you looked, the warning signs had been there for years. Super Rugby’s expansion plans in the southern hemisphere were an utter shambles, and along with the extinction of teams, there has also been a drop in on-field quality. The less said about the precarious finances, the better.
As for European football, its state can be summed up by the fact that the Championship — the second tier of English football — generates more revenue than all but five of the leagues. Just contemplate that for a second. The Netherlands boast Ajax, PSV Eindhoven and Feyenoord. Portugal has Benfica, FC Porto and Sporting Clube de Portugal. Belgium has Anderlecht and Club Bruges. Scotland has the Glaswegian Old Firm of Celtic and Rangers. Each of those clubs has played in multiple European finals, yet their leagues lag behind one which has teams that haven’t been part of the top division in over a generation.
Within the Championship itself, there are different groups. Derby County and Sheffield Wednesday, historically ‘big’ clubs with large fan bases, stand accused of shady dealings regarding the sale of their stadiums (to owners) in a bid to avoid financial fair play penalties. Most clubs don’t even think on sustainability lines as they stake everything on getting promoted to the Premier League.
Being relegated from the Premier League is the financial equivalent of falling off a cliff. Leeds United, a massive club with the additional advantage of being the only one in its city, haven’t been part of the Premier League since 2004, and they make far less money than top-tier clubs with a fraction of their fan base.
We don’t even know how many clubs in the bottom two divisions will survive the pandemic. Many could go the way of Bury, who exited the league at the start of this current suspended season. Sunderland are one of those clubs. Relegated three years ago, they now languish in the third tier, despite a 49,000-seat stadium and an incredibly loyal fan base.
The common theme linking all these clubs is cluelessness. They’ve been driven to the wall by the sheer incompetence of owners and chief executives. Given that such stories are the norm and not the exception, the ownership assessment should surely now be labelled the Unfit and Improper Persons test.
If you’d ever quizzed Jack Walker or Sir Jack Hayward, once owners of Blackburn Rovers and Wolverhampton Wanderers, about the history of their clubs, you can be sure they’d have aced the questions. For them, it wasn’t just an investment with an eye on future profit. The clubs were a big part of their lives. Too many of the current owners and executives are just chancers with no feeling for either the clubs or the game.
The bottom of the English football pyramid is now so fragile that it’s only a matter of time before it comes tumbling down. The Premiership negotiates its own deals, especially broadcast, and those lower down the ladder are left to feed on scraps. When the cost of relegation is potential bankruptcy, you’re not likely to see too many sustainable business models being built. Everything is about the here and now, instant success or instant doom.
Track and field is still alive mainly because of Usain Bolt. You only have to go back 15 years to the empty stands at major events to recall a sport that had lost its last vestiges of credibility after a generation of doping scandals. Bolt changed that, but three years after his retirement, it doesn’t take a great leap of imagination to foresee more crises.
As for cricket, where do you even start? There is no other global sport so utterly dependent on one country for financial health. That isn’t India’s fault. It’s fashionable to blame the Board of Control for Cricket in India (BCCI) for all the game’s woes, but what about the complicity of the others who allowed such a toxic financial model to be built?
We often speak of the Big Three, but that’s a platitude. The reality is that England, especially, and Australia would also be looking at fast-emptying coffers without lucrative tours from India. Without The Hundred, victim of the pandemic, it remains to be seen how parlous some English counties’ accounts will be.
Cricket in most countries would die without the share of the ICC broadcast money that they receive. In most cases, that’s barely enough to break even. Most attempts to replicate the success of the IPL — and even there, some franchises are struggling — have been a miserable failure. The Sri Lanka Premier League lasted a season, and others in the region have been beset by a string of fixing scandals, many of them involving dodgy owners. It’s almost as if they’ve belatedly realised that there is no legitimate way to make their enterprises profitable.
At the heart of it all is selfishness. If the English Premier League gave even five per cent of its TV revenue to lower-league clubs, disasters like Bury shutting shop could be averted. If the ICC monies were more equitably distributed, several cricket boards wouldn’t be facing bankruptcy at the end of one virus-affected season.
There’s a reason North America was mentioned at the start of this piece. The system there is far more robust at every level. Schools’ sport feeds the college system, which in turn provides athletes for the NFL, NBA and other leagues. Even college sport is flush with cash, with some universities attracting average crowds far in excess of anything found in European football.
A few years ago, Jim Harbaugh left his job as coach of the NFL’s San Francisco 49ers to take charge of the University of Michigan team. The Wolverines regularly sell out a 107,601-seater stadium and Harbaugh himself will bank more than $8 million this year. Coaches in English football’s League 1 and League 2 will be lucky to get milk coupons next year.
There is also more than lip service paid to sustainability. It doesn’t matter if you’re the Dallas Cowboys — “America’s team” — or the unfashionable Jacksonville Jaguars, you still have to comply with a salary cap. For 2020, that stands at $198.2 million for each team. Failure to stay under the cap can bring fines of up to $5 million for each violation, cancelled contracts and draft picks taken away.
Contrast that with the Championship, where the wage bill was 106 per cent of revenue in 2017–18. You don’t need a degree in economics to realise how problematic that is, a bit like a bloke with a part-time job at McDonald’s hoping to make the monthly payments for a Bentley.
If your foundation is solid, you can survive most crises with nothing more than temporary damage to the balance sheet. Unfortunately, that isn’t the case with cricket, rugby union or European football. Greed-driven financial models as stable as a Jenga tower have been teetering on the precipice for years now. Covid-19 could be the devastating push that transforms the landscape. Hopefully, what emerges in the aftermath of the crash will feature more common sense and less avarice.