Making Money In A Changing World
The English Premier League is fond of saying that it’s strong demand makes it immune from the current financial meltdown and they might be right – the league as an institution continues to enjoy strong international demand and with two European champions and four consecutive European final appearances by English clubs in the last four years, coupled by an English club winning the Club World Cup for the first time (it counts outside Europe, if not in it) this year, makes English football the hottest ticket in club football today.
Don’t take my word for it – AFC and CONCACAF have already shown a willingness to cooperate with the Premier League, and the African and Australian head footballing associations were already on PL’s side, giving the Premier League unprecedented leverage in the world of football second only to that of FIFA (read ‘The Money Wars‘ for more on this subject).
Barclays, with it’s new Arab shareholders, are now in a stronger position to sponsor the Premier League (who won’t mention conflict of interest when it’s a question of millions and billions) and there is enough competition in the TV arena for the EPL to demand a better deal than the current one. And if all else fails, there’s always the option of ‘Premier League TV’, an idea as outlandish and as impossible as the European Super League and nothing more than a phantom stick to scare the TV companies with.
The Premier League is one thing – as the industry leader they are more immune to financial shocks than other, smaller players – several football clubs are finding it increasingly hard to compete with debt and even basic day-to-day operations and transfers being difficult to finance for owners.
West Ham and Newcastle United are officially on sale, not just because their owners aren’t liked by the fans but also because the owners do not have the financial ability to take the club higher up the league table. Portsmouth has let its best players and manager go in exchange for money to finance their debt. Manchester United are looking for a new shirt sponsor. Chelsea have blocked all transfers for January. Liverpool are finding it hard to refinance their debt and their troubles in getting funding for a new stadium are well documented.
And that’s the top of the pile – imagine what life must be like for clubs in the lower leagues and in leagues outside England, especially those outside Europe where historically revenue from football has been lesser than what one sees in European football.
FIFA may sell the TV rights for the 2010 World Cup for billions and Barcelona may be investing in a new franchise in the MLS, but when clubs cannot pay wages and when fans – not just in England but around the world – stop going to matches because they have no jobs with which to buy tickets with – the masses that support football and are as much a part of the fabric of the beautiful game as the top clubs will suffer.
Americans take a lot of pride in the strength of small businesses in their country and how, over the last 50 years or so, small businesses have been the single largest job creation force in the country. Small businesses are also more vulnerable to financial shocks and when a worldwide financial crunch happens it’s the small entrepreneur, the small business owner working off a loan or running a tight ship in a niche market, who’s going to suffer the most.
The difference between big and small is clear – barring a few exceptions, the big companies / clubs are more equipped to survive a financial crisis than smaller players / clubs.
And this is EXACTLY what’s happening in the world of football news and football blogging.
While the top dogs in football news reporting can survive despite cutting costs thanks to high demand, the smaller players are finding it much harder to stay afloat and as the crisis worsens in 2009 people will find it almost impossible to find good advertising deals, good paying gigs and overall harder to find money-making and revenue-generating opportunities in online football.
In the last six months I’ve seen dozens of bloggers laid off from both their blogging gigs and their day jobs, I’ve seen prominent blog networks pull out of deals because their funding didn’t materialise, I’ve seen ad networks fold and/or renege on contracts because they had no advertisers to support their efforts – it’s not a pretty picture and it’s getting worse. For anyone (like Football Media) whose primary source of income was football and football blogging, the current situation will mean serious changes in how they move forward in 2009 and beyond.
