Premier League: European football prepares for age of austerity in era of Covid-19

European football prepares for the age of austerity in the era of Covid-19. When Wonder Woman broke glass ceilings and worldwide box office sales.

When the unmistakable sound of Despacito became the most played song of all time.

It marked the height of the age of abundance in football and promised to usher in a new era of super-spending.

But it was then. It’s now. A pandemic has changed everything.

Vital cash flows are drying up. The purse strings are tightened. Cost reduction quickly becomes king.

Football has pressed the pause button and in doing so is preparing for an era of austerity.

European football prepares
European football prepares

“It’s an awakening […] A great chance for football to come back to reality a bit, “Lutz Pfannenstiel, sports director of the Bundesliga club Fortuna Düsseldorf, told CNN Sport.

Burst the bubble

Before the pandemic, the rising spending curve for football had shown few signs of slowing.

Last summer, the clubs of the European “Big Five” leagues – England, Germany, Spain, Italy and France – spent a record amount of 5.5 billion euros, according to the analysis of the Deloitte Sports Business Group – an increase of 900 million euros compared to the same period in 2018.

In the English Premier League alone, 11 of 20 clubs shattered their own transfer records while spending in the Spanish Liga broke the billion dollar mark for the first time.

This summer promises to be no different.

Big money movements had been set aside for some of the hottest properties in European football – with frenzied speculation about the future of Borussia Dortmund’s wonderful winger Jadon Sancho, Manchester United’s enigmatic midfielder Paul Pogba and Naples’ defending commander Kalidou Koulibaly to name a few.

Although the new French champion, Paris Saint-Germain, paved the way with the permanent signing of Argentine striker Mauro Icardi for $ 67 million, the Covid-19 crisis has thrown everything in the air.
As leagues around the world scramble to recover what they can from the 2019-2020 season, the latest transfer window, which opens on June 10, has a very different atmosphere.
The Dutch Ajax management team is better placed than most clubs since its business model is mainly based on a youth development program which has produced a series of world class players who have provided a stable income stream.

“I am sure there will be reasoning with new contracts, with salaries, with agent fees and also with costs in general for a club […] I’m sure we’ll get a good amount of money even in the days of Corona, ”Ajax CEO Edwin van der Sar recently told CNN Sport’s Patrick Snell.

This can however be wishful thinking.

According to an analysis by the consultancy firm KPMG, he estimates that if the national seasons can end “behind closed doors”, the value of the players will drop by 6.6 billion euros (7.23 billion dollars). If the seasons across the continent are canceled, that figure will reach 10 billion euros ($ 10.95 billion).

The game’s seemingly impenetrable spending bubble is headed for a bursting point.

Exploiting the market

However, even in times of crisis, the loss of one man can be again for another.

In April, Manchester United manager Ole Gunnar Solskjaer expressed his belief that United could “exploit” these clubs severely affected financially by the pandemic. Although his comments have drawn criticism from certain circles, the expert in football finance, Kieran Maguire, thinks that the Norwegian was only stating an economic reality.

“The gap between rich and poor will widen because the big clubs tend to have stronger balance sheets and more cash in the bank,” says Maguire.

“Suppose you have a very high quality player – we normally look to buy it between 40 and 50 million pounds (48.8 to 61 million dollars). Tell us what we will offer you 20 million pounds sterling ($ 24.4 million) today in cash and the selling club will reluctantly accept this offer as it will fight for its existence. ”

This is a point of view shared by sports lawyer Daniel Geey, who believes that the nature of the negotiations will become more varied and nuanced.

“The types of transactions that can give clubs the most flexibility are going to be the most attractive at the moment […] loan for purchase or longer loans over one or two seasons perhaps and with breaking clauses. ”

With flexibility, patience and caution becoming the dominant buzzwords in the football lexicon, examining player recruitment will be more important than ever.

“(The clubs) will think twice or even three times before signing someone […] If you are not 100%, you will not sign a player – you would rather wait, “says Pfannenstiel.

Caution and conservation

Van der Sar expects “the club’s lifeline” – as he refers to Ajax academy – to continue in the same vein and expects six or seven young players to be rewarded by contracts in a year or two.

And despite the changing landscape, he insists that the Amsterdam outfit will not be forced to sell its precious assets cheaply.

“If the big clubs think they can possibly trade three players or one player with us, this is not how the business was done and will be done, in our opinion.

“It could also be an opportunity for us if the players are not able to move or if they are not the right amounts, that you can keep a team a little longer together.”

Socially unacceptable expenses

Despite all the insatiable gossip on the news channels and the whispers in newspaper columns and websites, the current economic and humanitarian situation no doubt poses a moral challenge to clubs.

The realities are austere – millions of people around the world lose their jobs or are on leave and struggling to make ends meet. The number of deaths per day continues to increase by hundreds and thousands.

Tottenham Hotspur manager José Mourinho recently said he doesn’t believe the world is ready for the “ crazy ” transfers of yesteryear – and that’s a view echoed by Maguire.

“There will be mistrust that the consumption of football clubs is socially unacceptable […] If you’re signing an incredibly tacky 100 million pound footballer, right? ”

While the pandemic has led to unprecedented levels of uncertainty, it has caused the game to watch itself carefully for a long time.

There are more and more calls to reconsider the largely disproportionate finances of football. New ideas are emerging on how viewers can consume a product that, at times, has appeared inaccessible.

And perhaps most important of all, Pfannenstiel believes that there is now additional momentum to reassess the fundamentals of the game.

“I think we can be back to modesty [and] durability […] I think we have seen some very important values ​​that will now begin to play a more important role in the minds of club owners and managers. ”

Football has a golden opportunity to right its wrongs.

He may never be able to have such a chance again and it is a chance he can no longer afford to waste.

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