Money makes ball go round
We recently saw the end of Silvio Berlusconi’s reign at AC Milan following the €740 million acquisition by Rossoneri Sport Investment Lux, a Chinese-owned investment company. Milan’s fierce sporting rivals, Internazionale, were similarly acquired by Chinese electronics retailer Suning Commerce Group for €270 million in 2016.
Due to both clubs being owned by Chinese investors, the derby di Milano last weekend was played at an unusual lunchtime kick-off, whereby a reported 862 million people watched the action unfold via television across the globe, with an estimated 90 million in China alone.
Chinese influence in football is not just being noted by the ownership of football clubs but also through the emerging growth of the Chinese Super League, where world-renowned managers and players are being lured by astronomical wages to ply their trade.
There is no denying that commercialisation in football is playing a key role: bidding wars for exclusive TV rights for the world’s elite football leagues and competitions are on the increase, players are being paid astronomical amounts and being purchased for mind boggling figures, and the revenue generated by clubs is on a general increase.
However, not all football clubs are basking in such financial sunshine.
To give a few examples, Leyton Orient are on the brink of being wound up; Notts County and Nottingham Forest, two rival clubs with the former being the world’s oldest remaining professional football club and the latter known for its European Cup (today known as the Champions League) triumphs under Brian Clough, are both facing financial difficulty and a bleak future ahead of them.
In order to try and control such excessive spending, Uefa introduced the Financial Fair Play Rules (FFP) in 2011, whereby clubs must prove that they have paid all their bills and that there is no significant outstanding debt, thus ensuring sustainable growth.
This has not deterred clubs and their owners from pumping excessive amounts of money into clubs.
In Germany, RB Leipzig were playing in league’s fourth tier in 2007. Bankrolled by Red Bull, this season the club has caused a stir in the Bundes-liga and is currently battling it out against Bavarian giants Bayern Munich for the league honours.
Last weekend, RB Leipzig guaranteed themselves a place in next season’s Champions League. However, there is serious doubt over whether Uefa will be granting them a licence to participate in such competitions, due to Red Bull also owning an Austrian football team, Red Bull Salzburg, that is also on the brink of qualifying for the Champions League.
This is because Article 5 of Uefa’s regulations governing the Champions League prevents two or more clubs who are effectively run by the same body, or financed significantly by the same investor, from competing in the same European competition at the same time.
This brings back memories from 2002, when AEK Athens and Slavia Prague qualified for the Uefa Cup and were both owned by entertainment group ENIC. The Court of Arbitration for Sport (CAS) confirmed that the Uefa rule is an essential feature for the organisation and is not more extensive than necessary to serve the fundamental goal of preventing conflicts of interest which would be publicly perceived as affecting the authenticity, and then the uncertainty, of results in Uefa competitions.
While Uefa to date has not yet commented on such a potential clash, it will certainly be a busy summer for club lawyers to defend their respective position.
Finally, there has been much talk in Malta about bringing into force the Commercialisation of Sports Facilities Bill, which is now well past its promised date of entry into force.
It must be ensured that the Bill is properly drafted and suited to all sporting clubs in Malta.
While many feel the Bill is necessary for sporting entities to thrive further in their operations, at the same time, it must guarantee that proper checks and balances are in place to ensure that clubs do not go over their limits and then find themselves having to deal with the consequences years later.
Money will continue to dominate not just football but other sports for many years to come.
Clubs will continue to seek to enrich their coffers, players will continue to demand higher salaries, and sponsors will continue to splash the cash to outbid their competitors in sponsoring famous sporting events.
Robert Dingli is vice president of Swieqi United FC and is studyingfor a master’s in sports law at Nottingham Trent University.