What does the future look like in football?

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What does the future look like in football?

What does the future look like in football?

What’s next? A lot of people are basically asking this question at the moment. The world of sport and its players are not spared from this. Although it is a simple question, it is not possible to answer it at this point in time and under the current circumstances, because there are still many unknown variables. The sports world has never had to deal with such an exceptional situation and its challenges before.

Massive cuts in the economy and government intervention show the seriousness of the situation. However, all areas are affected and this ranges from “ghost shows” on television to deserted stadiums in the recent past. Yes, even the most important minor matter in the world (football) has not been excluded.

In recently, terms such as “social distancing” and “social spacing” have shaped the media landscape. And that also applies to team sport football. It started in soccer Germany on March 11th. with a ghost game between Borussia Mönchengladbach and 1. FC Köln.

We want to give an outlook on how individual clubs in Germany, Austria and Switzerland deal with it and which paths are disputed by the clubs listed.

DACH area – waiver of wages, short-time work and termination without notice

Germany – Solidarity is the order of the day!

Borussia Monchengladbach

Borussia Monchengladbach

We also want to start here with Borussia Mönchengladbach, who as pioneers in terms of cohesion have taken the first step in this direction.

Gladbach was the first club in the German Bundesliga where the players waived salaries in favor of the club employees concerned. The players wanted to show a sign of solidarity and signal even more strength through this community spirit.

Due to this campaign, a million euros are supposed to be collected every month, which in this exceptional situation primarily and above all the employees around the club (scouts, press officers, club doctors, masseurs, administrative staff, stuff attendants, grounds attendants, ticket vendors, cashiers, external stadium staff etc.) should benefit, in order to further increase the internal connection.

All Bundesliga clubs have to cope with financial losses. The clubs from the 2nd Bundesliga are even more affected. With a total of 36 clubs from the 1st and 2nd Bundesliga, there are between 50,000 – 60,000 jobs either directly or indirectly.

The personnel costs are enormous and represent the greatest burden on the budgets of the clubs. The player salaries (management costs), by far the highest cost factor, alone make up around 40-50%.

At Gladbach, personnel costs amount to ~ 83 million euros per season, or SV Werder Bremen, for example, pays out around 58 million euros to employees (including players) per season.

FC Bayern Munich, Borussia Dortmund, FC Schalke 04, FSV Mainz 05

FC Bayern Munich, Borussia Dortmund, FC Schalke 04, FSV Mainz 05

Both the Bayern players and the club’s management have agreed to waive their wages by 20%. This project is supported by everyone involved. This is exactly the path that Dortmund is taking. Many other Bundesliga clubs, such as Schalke 04, have also agreed internally to cut back on salaries.

But not only the “big ones” have given their consent, but also smaller clubs (e.g. Mainz 05) use this means, where both officials (board / director), the coaching staff and the players benevolently forego part of the salaries.

Austria – Most of the clubs rely on the concept of “short-time work”

SK Rapid Vienna, FK Austria Vienna, SK Sturm Graz

SK Rapid Vienna, FK Austria Vienna, SK Sturm Graz

Solidarity is more in demand than ever in such a challenging and difficult environment. Sturm Graz shows itself to be a closed unit and short-time working in this precarious situation was unanimously agreed to ensure the existence of the club.

The professionals of the two popular and at the same time rivaling Viennese capital clubs SK Rapid and FAK Austria also followed this path. In this difficult time, everyone stands together and presents themselves as a unit to help the clubs in a difficult financial situation.

In these cases, short-time work means personal waiver, where the salaries are reduced and the players can no longer, or at least, no longer, as usual, go about their everyday life in the form of regularly held training sessions.

LASK Linz

LASK Linz

LASK Linz takes a completely different path and does not use the short-time model. In contrast, employees of the club are made available to the Austrian Red Cross as temporary help to relieve the human resources of the aid organization.

All of this is made possible by a generous and extremely understanding community, which also includes sponsors, in this time of crisis.

RB Salzburg

RB Salzburg

RB Salzburg players voluntarily accept a drop in salary, but this money flows into a support fund that the club has founded. With the help of this fund, the most urgently needed help is to be offered directly to those most affected from the immediate vicinity of the association. This affects individuals as well as organizations or distressed companies that have run into financial difficulties.

Switzerland – Confederates go an unusual path in some cases

FC Sion

The controversial and not uncontroversial president of FC Sion, Christian Constantin, escalates the situation and terminates players’ contracts without notice. Some will say rigorously, others will say the man is consistent.

According to media reports, the players refused to sign a letter due to the speed / short-term nature. The receipt was presented immediately upon termination.

FC Basel, Young Boys Bern

As a traditional club, FC Basel is one of the most renowned clubs in Switzerland and the successes of the second most successful club in Swiss football speak for it.

At FC Basel, the team council could not currently reach an agreement with the club management about a salary waiver. Now there is to be another meeting to be able to record a satisfactory result for everyone involved.

Both top Swiss clubs have applied for short-time work to mitigate the economic consequences and to ensure their continued existence.

FC Vaduz

Through successful Europa League appearances, FC Vaduz has created a financial cushion and is therefore not yet taking short-time working measures. But the small association from the Principality of Liechtenstein will not be able to draw on these reserves for long. If the condition lasts for a long time, it results in short-time work.

What does a complete cancellation of the rest of the season mean for German football?

A nice and commendable gesture (waiver of salary) from the aforementioned teams in Germany, but the problem is a lot bigger and this can be clearly seen from the graphic below.

There are various predictions and these range from 680 – 750 million euros, should there be a complete cancellation of the rest of the season.

According to projections by the DFL in the economic report, damage of € 680 million is mentioned in the event of a season break.

According to estimates by other experts, clubs would even have to calculate up to 750 million possible losses.

The above graphic with the pie chart makes it clear that outstanding income from TV rights / media rights make up almost half of this and this quickly becomes striking, especially for smaller clubs.

Financially weak clubs find themselves in a quandary. Furthermore, the continuation of the league in stadiums without fan audience tears a financial hole of about € 120 million in the club’s coffers. Finally, the absence of spectators also results in a minus in proceeds.

After the continuation of the game operations at the beginning of April turned out to be unrealistic, all clubs go through a wide variety of scenarios in order to be able to prepare themselves as best as possible so that one is not faced with accomplished facts at some point.

What scenarios were / are possible in the German Bundesliga?

League continuation in early April
Longer break until May / June
Play-off games (title & relegation)
Cancellation (no champions, cup winners & relegations)
Increase – next season with 22 clubs

National competitions should have priority

Basically, not only the general appeal, but also the tendency of those responsible for the club is clearly to give the national competitions priority over the international ones, because these are seen as a livelihood and financial resource for the continued existence.

“We have to finish the season – no matter when” – CEO of FC Bayern Munich Karl-Heinz Rummenige

Indirectly, the CEO of FC Bayern Munich Karl-Heinz Rummenige hits exactly this notch. However, Karl-Heinz Rummenige is not the sole advocate of this measure but also the managing director of the DFL, Christian Seifert.

Revenues have seen a steady, steady increase over the past decade. The slump could be enormous in the event of an early termination of the season and could very likely have fatal consequences in German licensed football in the future and leave a lot of burnt ashes.

The two most famous examples of FC Bayern Munich with almost 1000 club employees and Borussia Dortmund with 850 employees show that football is a huge industry and that the clubs behind it, like companies, have to be managed with commercial care.

Transfers & transfer window

The biggest anomalies are likely to occur here. In other words, it will be particularly questionable how the transfers will be numbered in the foreseeable future. As things stand at the moment, it can be assumed that the trend with regard to the tense financial situation across Europe will show a downward trend for all teams.

The transfer amounts will decrease noticeably and the past record transfer volumes will move far away, as these will no longer be possible.

Supply and demand regulate the market!

Due to the termination of contracts and canceled players, more footballers will be freely available on the market. From an economic point of view, an abundance of offers and a simultaneous falling demand favors the drop in prices.

In addition, there are the expected financial difficulties due to lack of money (impending bankruptcy) for many teams, which will further unsettle the managing directors of the clubs and thus further reduce demand.

Therefore, well and sustainably managed clubs with high liquid funds will be able to strike on the other side of the market or make a supposed bargain. In contrast, clubs with poor monetary positions will fundamentally rethink the transfer policy and will now refrain from possible transfers or put them on hold over a longer period of time, which will fuel the already widening price differential even more.

Transfer windows urgently need to be adjusted both in terms of time and length of time, so as not to risk a total collapse of the transfer market as we know it today.

The further course of action is just as uncertain as the resulting consequences, because news is being published almost daily, and future developments are therefore absolutely unforeseeable.

Are ghost games a way out?

In a survey by the polling institute Forsa, 60% of the respondents said that the majority of those interested in football said that the current interruption in the Bundesliga and 2nd division would continue with so-called ghost games (without spectators) from May.

In contrast, only 24% spoke out against it.

Leading virologists are unanimous on this and recommend to play games without spectators within the stadiums (“ghost games”) when the game is restarted. They also expect this new way of playing games by the end of the year.

Ghost games are not to be dismissed out of hand and threaten as a very likely scenario. This is probably the tendency of numerous football experts.

For this reason, FC Schalke 04 publicly calls season ticket and day ticket holders in advance not to insist on reimbursement of the costs – in the case of ghost games. This could put the miners in an existential position.

DFL plans to end the season at the end of June

According to the DFL, the season should be until June 30th. be finished and for this purpose the German Football League has introduced a task force.

This deals in particular with the available options for how the remaining season (9 game days + 1 supplementary game) can be brought to a reasonable conclusion and, after regular evaluations, carries out the assessment of any measures that may be considered.

Training, if any, can only be held if certain requirements are met. The kickers of isolated clubs (e.g. FC Bayern Munich, RB Leipzig, SV Werder Bremen) have started training sessions in small groups.

The answer to the question asked initially depends very much on when and how the respective leagues are continued!

In our view, ghost games as a kind of interim solution will definitely be inevitable. How and how quickly this regulation is relaxed depends on a number of factors that are currently difficult to assess.

Excursion to other European leagues

Spain – Barcelona professionals with 70% salary reductions

The Catalonian capital Barcelona pulled the emergency brake very hard and made a radical all-round attack with the clubs of the same name from the sports of football, basketball and handball. In all clubs, the agreement has been made to forego 70% of the salaries, which has caused a lot of resentment, especially among the basketball players.

However, the Barca kickers will certainly not have been enthusiastic about this massive measure either. According to estimates, the A squad of FC Barcelona has a net saving potential of 14 million euros per month. In percentage terms, the Barca players are probably the most affected by cuts.

Italy – Juve players voluntarily waive 90 million euros by the end of the season

The Old Lady can be really lucky to have players with so much heart and compassion. Many other clubs in Europe can sing a completely different song about it.

For the Juve stars Giorgio Chiellini and Cristiano Ronaldo, the question of support did not even arise, which is why the decision was made fairly quickly and is long-lasting compared to other teams.

England – Warning words and “cry for help” from Burnley FC premier league club

Burnley FC officials fear that they will not be able to get a substantial amount of money from the lucrative TV money, and this would result in the club being in serious financial distress.

Overall, the club faces a potential shortfall of around £ 50m.

Netherlands – Ajax Amsterdam, AZ Alkmaar and PSV Eindhoven support season-out

After the neighbors in Belgium have already decided to do so, voices in the Netherlands are also getting louder to complete the championship with immediate effect. The management team in the Eredivisie is unanimously ready to end the season. Only Feyenoord Rotterdam has not commented on this.

Another famous proponent of this approach is Marc Overmars, who is the technical director at Ajax. The Dutch football association, on the other hand, takes the opposite view and does not want to accept the situation now with a season break according to the Belgian model.

Belgium – The league has ended and FC Bruges has been named champion!

On April 2, the Belgian association decided to declare the championship over and to include the table that was valid at the time as an indicator. The decision made FC Bruges became Belgian champions without further action.

The fact that the TV funds from the sale of the broadcasting rights in Belgium had already been paid out in full and were distributed among the clubs was certainly an advantage. There is also no need for a refund.

What does the future look like in football?

“We could start in mid-May, early June or late June. If we don’t do any of this, we won’t finish the season. ” – UEFA President Aleksander Ceferin makes a fresh start in Europe’s leagues

Belgium is at the forefront of such a decision and is generally upset by UEFA but particularly by UEFA President Aleksander Ceferin, which could possibly result in (draconian) penalties. UEFA is currently evaluating the chances of excluding Belgian clubs from international competitions.

And that would be particularly bitter since this project does not involve any insignificant financial damage for the Belgians.

Croatia – Dinamo Zagreb dismisses coach Nenad Bjelica’s full coaching staff

When it comes to salary issues, the management of the Croatian capital’s club and series champion Dinamo Zagreb uses Formula 30-30-30.

Specifically, this means: 30% of the salary will continue to be paid as normal, 30% within 6 months after the next championship game has taken place and 30% should be completely and permanently waived by the players and the coach. On the other hand, those involved have resisted and have not yet agreed.

It can be assumed that the football professionals also asked themselves where the remaining 10% went. So far, there has apparently been no satisfactory answer for the main players. Furthermore, the entire club management must accept a drop in salary of 60%.

Serbia – RS Belgrade fires one of the most expensive players in club history

The striker Raji van La Parra came from the English club Huddersfield for a transfer fee of 1.2 million euros in the summer and played until recently in the ranks of the European Cup winner of the national champions (today’s Champions League) from 1990/91 Reported annual salary of 600,000 euros.

The rest of the squad accepted their ultimatum with grinding wages, so as to avoid termination like in the case of former club colleague van La Parra.

Slovakia – MSK Zilina files for bankruptcy

Insolvency in professional sports has become a reality. What was illusory until recently has been proven by the sad example of the 7-time Slovakian champion and traditional club MSK Zilina (currently second in the table). This club officially ceases operations on April 30th. With this date, the players can look for a new club (employer) despite valid contracts.

The reason for the bankruptcy lies in the hardened fronts between the club and its players. The officials demanded that the professionals waive their wages in order to guarantee the continued existence of the club. Unfortunately, no consensus has been reached on this matter.

It should be added that the club had to struggle with financial difficulties and liquidity shortages even before this challenging crisis. For this reason, the filing for bankruptcy was only the logical consequence of it.

The dreary outcome clearly shows that such unexpected crises are always a question of character.

Conclusion

Herculean tasks come up to football! The planned schedule cannot be kept, game plans are currently under scrutiny and the annual planning is completely turned upside down. In order to be able to end the season regularly, major obstacles have to be overcome. This ranges from the type of staging of the open match days (“ghost games”) to the coordination of national and cross-border competitions and extends beyond contract extensions or directly related transfers.

In addition, the transfer windows that are still valid and their compliance are particularly questionable from the current point of view, because they will have an immense impact on the transfer fees. Despite the adaptation of the transfer periods, faults are inevitable and this will mainly be due to clammy club funds. Highly paid football professionals, highly endowed contracts, utopian player fees, record transfer sums, increasingly flowing / higher TV advertising money are a thing of the past. The prediction: A new, unimaginable era is imminent in football.