In our first article on league reconstruction, The Battered Bunnet looks at youth development, football finances and European regionalisation – and argues that radical reform is necessary.
The SFA’s Professional Game Board met two weeks ago to formalise the process of reorganising Scottish football. This meeting coincided with a number of articles in the press on what they ought to be focussed upon, and what any new structures might look like.
My attention was drawn to an article in The Herald by Richard Wilson entitled: “Scottish football needs refreshing, revitalising and radical reform“
Wilson states as critical the issues of “how income is distributed among clubs, how supporters can gain a more influential voice, how to draw fans back to their clubs, and how to improve the general level of technical ability of Scotland’s young footballers.”
Absolutely! I thought. The game in Scotland needs all of these things, and I was keen to read some new ideas. What I read though was somewhat underwhelming, with a rehash of an earlier idea that resurfaced over the summer involving 2 leagues of 12, splitting into 3 leagues of 8 after two cycles of matches. A regionalised structure accommodating a ‘pyramid’ sat below.
Wilson’s piece followed shortly after a similar column by James Traynor in the Daily Record, where Traynor argued that a structure comprising 3 senior leagues of 14 teams was what we needed, again with a regional structure below. Traynor explains that this structure, or something like it, will: “.. allow the game to develop and strengthen. A model which is robust and takes into account the needs of the fans.”
Neither Wilson nor Traynor explains how or why their suggestions might enhance the game, address fan engagement, or improve youth development. In the rush to promote revised league structures that serve to reduce the number of divisions in the senior game, they fail to explain the advantages or the benefits that will follow.
On balance, these two proposals (and others like them) represent little more than rearranging the deckchairs when we need to change the direction of the ship. Principally: if we are going to refloat the game in Scotland we don’t need to redistribute revenue, we need more of it. Greatly more.
The problems that Scottish Football face in this regard are bound up in two key strands: firstly, the limitations caused by the relatively small size of the Scottish population and consequently its media market; and secondly, the diffident, parochial approach to managing the business of football in Scotland.
The Youth Development Challenge
Youth development is a topic sufficiently complex to deserve an extended discussion in its own right but, contrary to recent reports, Scotland is actually doing some very good things. The standard of player developing in and emerging from the SFA Performance level – so called Pro-youth League – is very encouraging, with such as McCarthy, Forrest and Goodwillie produced in recent years. If you want a look at an encouraging future, get along to Lesser Hampden or St Mirren’s Ralston complex or the University Playing Fields in Stirling or Aberdeen any given Sunday lunchtime. The level of skill and game awareness is streets ahead of the same age group 10 years ago, a generation that produced Champions League level players Darren Fletcher, Scott Brown and Aiden McGeady among others.
Moreover, the SFA’s appointment of Mark Wotte evidences the desire to further improve the process, while the introduction of the 7 Regional Performance Schools will make a welcome contribution to the highly effective Football/School partnerships established a few years ago by Celtic, Dundee Utd and other clubs. Added to Regional Football Centres, Performance Schools, and peer competition for elite players must be added Coach Education, a topic Wotte is expert on. Further improving the Youth Development process for elite youth players will in turn further improve the elite youth players developed, and we can look forward in the coming years to even better results than we’re currently achieving.
Despite the challenges, our problem is not so much in developing elite players – I believe that process is good and improving. Our problem is holding on to the players produced beyond age 21. While it is engaging to watch the progress of young players, it is frustrating to lose them before they have matured, and despite being a widely-heralded business model for our clubs, does little to change their financial fortunes.
When Aberdeen lost Fraser Fyvie to Wigan, their decade-long investment in developing him from age 10 was returned with only 58 first team appearances and a modest transfer fee (thought to be £500,000). Aberdeen simply couldn’t afford to offer him a wage comparable with that on offer from Wigan Athletic. For Aberdeen to have generated meaningful revenue from Fyvie, they had to hold on to him to age 24, trusting that by which time his talents would have matured, and the value they might have demanded may have been 10 times the £500,000 they received. To do so, they had to offer him a 5 year contract at perhaps as much as £6,000 per week.
In losing Fyvie so young, Aberdeen didn’t simply fail to fully valorise their youth development investment, they reduced the talent and potential in their squad. Developing players to age 21 might provide our clubs with a useful income stream, but it does not change the game for them.
In essence, youth development only translates into a substantial business model if the impact of the process is significant on both the performance of the first team and the prospects of the business. Aberdeen’s Fyvie experience, like so many others, served neither purpose.
Who’s next to head south for a song? McKay Steven? Russell? Young Ryan Fraser at Aberdeen? For as long as Scottish clubs develop EPL standard young players, the EPL will take them away as soon as the market rate for their wages exceeds the ability of the developing club to pay. For most SPL clubs, that is £2000 per week, with only Celtic now having the financial strength to stay in the game through to mid-20s. Indeed, Celtic’s business model is now predicated on developing talented players through the crucial period to 24 or 25 years old.
While Scottish Football of course can and will further improve the player development process, what the clubs need far more than that is the wherewithal to keep their hand in the game long enough to hit the meaningful pot.
If fan engagement is correlated with an exciting product on the park, brimming with quality and imagination, then we need to find the money to keep the kids we produce beyond their second season in the first team. We need more cash in the game.
The Cash Conundrum
With only 10% of the population of near neighbour England, Scotland does not represent a critical mass of consumers and thus the country is considered to be something of a marginal market – a sub-segment of the UK market as a whole – to the media companies that have driven the financial growth in English football. The same fate has befallen the countries bordering Germany and elsewhere. Where Sky has predicated its entire business model on capturing the English football audience, paying a breathtaking £2.3 Billion for rights over the coming 3 years, the best deal Sky has ever offered for the broadcasting rights of Scotland’s top tier was their slice of the £18M per season joint offer with ESPN last year. BT has followed in the footsteps of ESPN and Setanta before them, in paying huge sums – £750M! – for a small piece of the EPL action, while even the BBC presents EPL as de facto the National football league of the UK, paying 100 times more for rights to highlights than the equivalent deal for the SPL. 10% of the market is marginal territory, and spend is always concentrated on the core.
The same issue of sub-critical consumer mass is faced by clubs in Holland, Austria, Belgium, Portugal, Switzerland, Slovakia and pretty much every other footballing nation in Europe outside of the so called ‘Big Five’ nations. The relatively vast financial gravity of the top leagues in England, Germany and Italy draws the talent inexorably and is throttling even the best efforts of the smaller nations that surround them. There is no combination of Scottish senior league divisions and club numbers that changes the fundamental problem we face: In the modern TV market, we’re just too damned small to bother much about.
The smaller nations individually cannot compete with overwhelming market force, and therefore a new approach is needed. Either the smaller nations join their larger neighbours, or they collectively create a market of significance that cannot be marginalised by those media companies who want to use football content to drive business growth.
Historically, UEFA has been antipathetic to competitions that might compete with its own, and Article 49 of UEFA’s statutes gives it “sole jurisdiction to organise or abolish international competitions in Europe in which Members Associations or their clubs participate”.
However the marginalisation of Europe’s smaller nations is becoming ever more evident, and UEFA now recognise the problem as a ‘crisis’. Following the recent merger of the Dutch and Belgian Women’s leagues, Michel Platini is clearly warming to the concept of supra-national ‘domestic’ league football:
“We have to decide whether to allow two leagues to play together. At the moment we don’t allow it but in the future it’s possible that we will. There are many things to be considered. It has an effect on European competitions and it’s really complicated but there are crises in many countries and so there are leagues that fear for their existence. It is something that we need to consider.”
Interestingly though, this is not an issue strictly within UEFA’s remit. It is the National Associations themselves that are authorised, via their FIFA mandate, to “foster the game” in their country. UEFA doesn’t actually have a formal role beyond managing (and moreover, protecting) its own competitions in partnership with its member FAs. If the FAs of the Balkan nations decide the best way to deliver their purpose is to create a supra-national top league with Greece, Bulgaria and Romania, all UEFA could do is bar them from UEFA competitions, which really doesn’t do UEFA (or the game) any good in the long term. Consider though the quality of that league! It would be breathtaking if it meant the top players from each country were less likely to move abroad.
Interestingly, there is already a supra-national competition in Europe: the 16 team Baltic League comprises the top teams from each of Lithuania, Latvia and Estonia, with teams qualifying based on their national league position. Tellingly, UEFA hasn’t objected despite it being staged outside of UEFA’s jurisdiction. Platini himself suggested the merger of the Balkan leagues 3 years ago, while talks continue with a view to the merger of the Czech and Slovak domestic leagues. News this week from Croatia suggests a pan-Balkan League comprising the top teams from the former Yugoslav nations together with Hungary and Bulgaria may be ready to kick off by 2015 with UEFA’s blessing. Matters are accelerating.
The question now is not whether the regionalisation of European football will occur, but how it will be organised – and how quickly. To this end, there are two main flavours: smaller nations incorporating their top divisions into their near neighbours’; and the agglomeration of the top leagues of smaller nations into a single, multi-national top division.
Over the past 10 years we have seen various flavours of supra-national leagues emerge, from the original ‘Atlantic League’ comprising the top clubs from Scotland, Holland, Belgium and Portugal, to the hoary old chestnut of the ‘Old Firm’ somehow moving to the EPL. Both of these ideas though overlook the essential element of meritocracy that is at the heart of football. Whatever new structures emerge in the coming years, the pathway has to be open for ambitious and well managed clubs to reach the top.
To this end, there are some fairly radical ideas out there. For example, the idea of merging Scotland’s top league with the English Football League structure, let’s call it the BFL. The ‘Championship’ would remain as the top division, with two regional divisions of 24 feeding in: Division 1 North and South. The top 12 Scottish clubs would be elected into the North division in the inaugural year, together with 12 clubs from Northern England split out from the existing League 1 and 2 teams. Thereafter, promotion upwards and relegation back to the SFL and League 2 would be determined by league standing and play-offs.
In due course, successful Scottish clubs might find themselves promoted out of the Championship and into the Premiership. To my mind, Aberdeen would be a terrific EPL club, drawing upon the 450,000 people living in recession proof Aberdeen/shire, and the demand from the vast international Oil & Gas sector in the city for top class sport. The Edinburgh teams, the Glasgow teams, perhaps a reborn Dundee United, all playing against the top sides in the UK, with the promise of the same for those clubs below should they find the means on the park.
Off the park, with access to a true UK wide media market, the clubs can expect a levelling of the financial playing field as media and commercial revenues for the Scottish clubs start to catch up with those in England. It won’t happen overnight, but let’s look 5 years, 10 years ahead.
Looking at the alternative model, the agglomeration of the top divisions from multiple nations, a ‘Super League’ of 20 clubs, involving the top 3 or 4 clubs from Scotland, Holland and Belgium, with 2 or 3 from each of Denmark, Sweden and Norway makes sense at both a sporting level, and a macro-economic one. A weekend fixture list comprising such as Ajax versus Hibernian and Anderlecht versus Aberdeen is mouth watering, while competing clubs can retain their UEFA qualification status as now. At the end of the season the bottom placed teams from each country in the Super League will play off for places for the following season with the Champion club from the domestic league, or similar meritocratic approach. Thus with promotion from and relegation back to the top national divisions, the pathway is open for all clubs to aspire towards and reach the very top level, while interest in domestic football can be sustained by retaining the national Cup competitions. Provided enhanced broadcasting revenues are distributed downwards with the purpose to support and grow domestic competition, this model offers both compelling sport and compelling numbers.
The Numbers Game
Such a competition would present media companies with a consumer market of 52.6 million people and a GDP of €2.2 trillion. (GDP is used here as an indicator of consumer spending power).
This compares to England with 53 million population and €1.55 trillion GDP; Spain with 47 million population and €1.1 tn GDP; Italy 60 million population and €1.7 tn GDP; and France with 65 million and €2.15 tn.
In terms of consumers, only Germany with 81 million and €2.77 tn GDP would represent a larger, more lucrative media market than this suggested North Western European Super League.
Taking a media market critical mass of 40 million population and €1 trillion GDP, we can see that a Central European League along similar lines involving Switzerland, Austria, Hungary, Czech Republic and Slovakia gives a market of 42 million consumers with a GDP of €1.16 tn, bigger than Spain.
The issue of geography is often used to diminish such proposals, but we should be careful to note that the furthest distance travelled in our North Western League idea is the 680 air miles between Glasgow and Stockholm, comparable with Udine to Palermo, and less than half the distance from Barcelona to Gran Canaria, a regular fixture in Spanish football. Indeed, were Portugal to be brought into the Super League, the distance travelled from Glasgow to Lisbon would still be less than the Spanish teams trip to the Canaries.
One of the fascinating aspects of this topic is the discomfort Sky and other established subscription broadcasters are feeling as new media and new channels emerge. In the UK, for example, the advent of the Freeview platform has provided national coverage for niche programming at highly accessible costs, and the opportunity to utilise it for Pay per View football has been closely considered by SPL as recently as this year. Moreover, as high speed broadband becomes ubiquitous, so the opportunity to utilise high definition broadcasting over the internet gets ever closer. Just as Satellite TV transformed broadcasting in the 1990s, so high speed fixed-line and mobile broadband is likely to do in the coming 5 years. Major League Baseball in the US already offers high definition MLBTV via internet subscription, described recently as “..one of the best mobile platforms of any entertainment network.”
Sky might be the big boy in European sports broadcasting today, but with a little less than £2 billion of total shareholders funds, it is somewhat dwarfed by Google with £38 billion and Apple with £68 billion. Sky can compete effectively with contemporaries BT, ESPN, Canal+ and Al Jazeera, but Apple and Google can buy and sell Sky before breakfast time. Apple have already dabbled with internet TV, while Google’s purchase of YouTube was not a mere whim. Delivering high definition, high demand content via the internet is absolutely on the Whiteboard of both companies, and the launch of Sky Go, providing Sky channels on demand via the internet for their satellite customers, indicates where Rupert Murdoch sees the market heading.
The regionalisation of European Football will happen, indeed is happening. In that sense, it is largely down to national FAs in each European region to develop their own solutions, and perhaps this is where the real problems lie. We are by no means well endowed with Football Administrators that are able to take the long view. Indeed, the impression is that for many at Hampden Park, the most important issue is their own fiefdom, their own sphere of influence, and their own career.
The Administration that, charged with implementing Club Licensing, overlooked the financial disintegration of Rangers under David Murray and Craig Whyte is clearly ill-equipped to shape a radical future for the Game. From 3-points-for-a-win to goal line technology, the administration of the game in Scotland has preferred to sit on the fence, moving only after the rest of the world has jumped. If radical change is to happen, I suspect it will be driven by the clubs, not the SFA, irrespective of what Stewart Regan might say publicly. How will the SFA react to their top clubs coming under the jurisdiction of a British Football League or a European Regional structure? Poorly, I fear. Managing the self interests of half a dozen national FAs may be the greatest challenge of all.
We are at a seminal moment in Scottish and European football, where decisions taken now will shape the game for the next decade and beyond. The confluence of the recognised crisis in League football across Europe’s peripheral nations, UEFA’s openness to radical reorganisation, and the developing ubiquity of high speed broadband presents a truly unique chance to create a new structure for football in Europe, one that can seed the re-emergence of the great clubs of Europe’s football history, and provide a bulwark to the dominance of the ‘Big 5’. This last aspect is likely to interest UEFA as much as the others.
Richard Wilson in The Herald states that Regional European football “is unlikely in the short term”, and suggests a reorganisation of the domestic league structures instead. James Traynor in the Daily Record presented a variation on the same theme. While each of these suggested formats might have some merit in their own right, they don’t change the game, they don’t address our fundamental issues. Our singular challenge is to see what’s coming and to make damned sure we’re ready for it. Indeed, as one of the founding nations of football, the country that invented the modern Game, and which changed the European Football landscape in the 1960s and early 70s, it is surely incumbent upon us to lead the way.
Which brings us back to the SFA’s Professional Game Board. Will they choose the Box Seat and drive change in the game, or the Back Seat and watch on as the game in Europe changes without us? Gentlemen?