Beautiful Game, Ugly Money

Jogo bonito, the beautiful game, transcends borders, resonating in over a billion communities worldwide. Universality, community, and self-expression converge on the football pitch. Call it football, calcio, futbol, or soccer. Fans globally unite in love or hate as their favorite teams compete. Soccer becomes a third place for billions, an escape from home and work, a realm of communal bonding and collective triumph.

Yet, amidst this universal love for football, a paradox unfolds—the universal disdain for most football team owners. Television money's surge distorts incentive structures, veiling the financial realities from common fans. The average fan is expected to accept the astronomical spending of top-flight teams without understanding the intricacies. The market size of football in billions lures owners into perverse incentives, burdening clubs with debt, neglecting facilities, and prioritizing players for sellability over skill, tarnishing the sanctity of our third place.

Between 2013/14 and 2019/20, transfer fees soared by 116%, driven by fan expectations, bias, and strategic moves to boost revenue(Poli et al.,2023). Football's rapid growth outpaces clubs' profit-turning abilities, forcing owners to inject capital continually. Despite English Football League clubs reporting $1 billion in revenue in 2021/2022, high wages to revenue ratios led to a net loss of ￡322 million for championship clubs(Deloitte, 2022). Unlike conventional businesses aiming for self-sustainability, football clubs rely entirely on capital injections, posing a challenge for smaller teams trapped in a perpetual catch-22 of pushing for top flight qualification, only to die by a thousand cuts once in the premier league.

Sports teams prove terrible investments due to owners' penchant for self-sabotage. Most clubs are bought with debt, creating a facade of financial strength while jeopardizing actual health. Take Manchester United, drowning in $1 billion of gross debt, yet languishing in mediocrity. Owners like the Glazers prioritize profit at divestment, leading to unsustainable debt, neglect of facilities, and skewed player acquisitions for marketability rather than merit(Sheldon 2023).

The downstream impact? Teams prioritize ad revenue, likes, and sponsors over trophies, community, and euphoria, leaving fans disillusioned. The football owner's goal has shifted from building a winning culture to a reckless pump-and-dump scheme.?

Football, traditionally humble, is under threat. Perverse incentives push teams away from being communal spaces to shiny piggy banks. The game's beauty endures, but so does the ugliness surrounding it.