UEFA frets over rise of ‘global super clubs’

A select group of European soccer teams have morphed into “global super clubs” thanks in part to their ability to cash in on huge worldwide supporter bases that can be accessed through social media, according to a new report from the continent’s governing body UEFA.

While this might be good news for bean counters at clubs like Manchester United, Bayern Munich, Real Madrid, Barcelona and Paris Saint Germain, UEFA’s Club Licensing Benchmarking Report warns that the growing financial gap will present one of the biggest challenges to football on the continent.

The report also says that football remains as popular as ever in Europe, while financial fair play (FFP) rules have helped reduce club debt allowing more of them to report operating profits.

But it’s the growing financial disparity that will increase worries about competitiveness in national and continental competitions.

In recent years these global super clubs – others include Chelsea, Arsenal, Manchester City and Liverpool – have taken advantage of their global profile and the rise of new digital platforms to slice and segment commercial and sponsorship partnerships into an even larger number of deals.

This, the report states, “is enabling those ‘global super clubs’ to monetize their huge supporter bases, which extend around the globe and which can be accessed far better through social media than was ever possible through traditional marketing in the past.”

The report adds: “These supporter bases are growing inexorably, powered by star players, overseas tours and regular participation.”

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Financial muscle

Overall, the top 15 clubs in Europe have added 1.5 billion Euros ($1.6 billion) in sponsorship and commercial revenue since 2009. That compares to less than 500 million Euros ($532 million) for the remaining 700 clubs included in the report.

While financial muscle is no guarantee of success, as proven by Leicester City’s fairytale journey to England’s Premier League title last year, it does enable clubs to spend more on the likes of player transfers and wages.

UEFA president Aleksander Ceferin noted in the report that although the “success story of football as a cultural and commercial force stands out,” the sport’s authorities must remain vigilant and take note of the less positive trends highlighted.

These include “the increasing concentration of sponsorship and commercial revenue among a handful of clubs,” Ceferin said.

The report also finds that:

TV deals

The disparity in broadcasting revenues generated by individual leagues in Europe is also featured in the report.

English clubs earned 108 million Euros ($115 million) on average from broadcast deals alone in 2015. That amounts to more than double the average generated in Germany which registered the second highest broadcast revenues.

Lucrative TV contracts were also a major factor in top-tier English clubs being able to report average revenues that amounted to more than those generated by the 48 other European leagues (outside of those in France, Spain, Italy and Germany) combined.

Clubs from UEFA’s smaller member leagues have long claimed the disparity in the likes of broadcast deals between individual leagues create an unequal playing field which makes it difficult for them to compete against the continent’s richest clubs.

Many small and medium-sized clubs in moneyed leagues like the English Premier League can now afford higher transfer fees and wages to attract players than leading clubs with rich histories in smaller European leagues.

Whereas in the past clubs from the likes of Portugal, the Netherlands, Romania and Scotland would regularly reach the latter stages of European competition, this has become increasingly difficult for them in recent years.

The last time that happened was in 2004 when Porto – then coached by Jose Mourinho – beat Monaco in the Champions League final.

The Champions League in particular now regularly features the same teams in the latter stages which critics say makes it dull and predictable. In the past five years, Arsenal have been drawn against Bayern Munich four times while Barcelona and PSG have met three times in the previous four seasons.

While access to the Champions League has been a big earner for clubs in mid-sized European leagues, even this vital revenue stream looks like it is about to become harder to attain.

UEFA announced in August that the top four clubs from the continent’s top four leagues would be given 50% of the 32 places on offer in the Champions League group stages.

That will leave the champions of UEFA’s 50 other member countries scrambling around for the other 16 places on offer.

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Ceferin has previously said that he will “make sure that UEFA competitions never become closed leagues or tournaments.”

However, some of the continent’s largest clubs have floated the idea of a breakaway Champions League or of guaranteed places for big clubs like Barcelona and Real Madrid whether they qualify via their national leagues or not.

A breakaway continental league featuring clubs from Scandinavian countries, Scotland, the Netherlands and Portugal has been mooted as a way of bridging the financial gap.