UEFA's Platini Believes Real Madrid Deals Are Bad For Soccer
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Platini Feels Real Madrid's Moves
Could Destabilize European Soccer |
UEFA President Michel Platini Thursday said that Real Madrid's record $131M (all figures U.S.) transfer fee for Manchester United MF Cristiano Ronaldo will "destabilise European football," according to Blitz & Mulligan of the FINANCIAL TIMES. Real Madrid earlier this week paid a then-record $92M to AC Milan for F Kaka, and the two deals provide "further evidence of the financial muscle that separates Europe's elite teams from the rest." Platini said, "It is very puzzling at a time when football faces some of its worst ever financial challenges. These transfers are a serious challenge to the idea of fairplay and the concept of financial balance in our competitions." U.K. Minister of Sport Gerry Sutcliffe also questioned the deals, and said the government is "concerned about the sustainability of the game" (FINANCIAL TIMES, 6/12). In L.A., Chuck Culpepper writes Real Madrid's spending this week "epitomized the runaway stakes of the globe's biggest sport." A $131M transfer fee "has known no peer" even in the U.S. (L.A. TIMES, 6/12). FanHouse.com's Jay Mariotti said, "These deals over there are insane. There don't seem to be any budget restrictions, no recession in sports in Europe and that ought to remind us there's a bigger deal out there in sports. It's called soccer" ("Around The Horn," ESPN, 6/11). ESPN's Tony Kornheiser: "This is a staggering sum of money" ("PTI," ESPN, 6/11).
THE REAL DEAL: SI.com's Gabriele Marcotti wrote under the header, "Rules Don't Apply With Real Madrid." Real has some "built-in advantages that no other club has," including its status as a "for-profit business; it's essentially a public trust with tremendous social and political clout." Real also earns $223M annually from its domestic TV deal, which is "more than double what Manchester United gets." Marcotti: "Real Madrid is the biggest brand in the game, maybe in all of sports. And it knows how to exploit that fact" (SI.com, 6/11). The FINANCIAL TIMES' Blitz & Mulligan note Real has been "hit by the loss of sponsors and corporate hospitality during the recession but the club is still among the richest in the world in terms of assets and cashflow" (FINANCIAL TIMES, 6/12). In London, Nick Harris notes Real also earns about $132.9M per season in "fees and spin-offs" through its partnership with adidas, as well as about $30M from its jersey sponsorship deal with online betting firm BWIN (London INDEPENDENT, 6/12).
DEALS WITH THE DEVILS: In London, Paul Kelso notes ManU has "become a money-making machine unparalleled in British sport, able to strike deals that their rivals can only dream of matching." However, the "flip side is that they have to" sign such deals because if Owners the Glazer family "stand a chance of servicing the [$1.1B] of debts incurred buying and maintaining ownership, they have to keep breaking records." The Glazers' "highly-leveraged model means United have to run to stand still, a feat they have managed in recent seasons thanks to on-field success and a commercial department able to exploit highly marketable talent" (London TELEGRAPH, 6/12).
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Exec Feels Ronaldo Deal Will
Inflate Fees For Other Players |
FALLEN ON HARD TIMES: The WALL STREET JOURNAL's Futterman & Patrick write the Ronaldo deal "contrasts with the gloom enveloping Europe's big soccer leagues." All across the continent, the credit crunch has "hamstrung teams, which relied heavily on debt in recent years to build new stadiums and support wages." Banks historically were "willing to extend big lines of credit to soccer clubs, figuring that the recurring revenues from ticket sales, TV rights and potential growth from planned stadiums made them good bets." However, revenues have "declined as the economic downturn has deepened, and player wages and transfer fees have kept rising." FC Barcelona President Joan Laporta said that the Ronaldo signing is "so out of line with previous payments that it will devastate the sport." Laporta: "Everyone has a right to do whatever they want with their money, but this is very bad for the rest of the clubs because they are going to provoke an inflation" (WALL STREET JOURNAL, 6/12). Meanwhile, in London, Jeremy Wilson notes it appears that only Spain's La Liga "will consistently compete with the leading English clubs for the best players." Deloitte Sports Business Group Dir Paul Rawnsley: "Real Madrid and Barcelona may individually match some Premier League clubs but, in Italy, there has been a downward trend for several years in revenue" (London TELEGRAPH, 6/12). In N.Y., Jere Longman writes professional soccer in Italy, "longtime host to the world's most glamorous showcase of international talent," has "taken a hit lately." The Ronaldo and Kaka deals are the "latest blows to Italy's reputation as a gravitational center of international soccer" (N.Y. TIMES, 6/12).
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