December 29, 2008
Sadly, 2009 Will be the Year when the Sports Pages and Financial Pages Converge
By Steven StarkIn 2009 the big story on the political, financial, and entertainment pages is likely to be the world recession/depression. And in world sports, it won’t be any different.
In part, that’s because the coming year is an off year. No World Cups (rugby, cricket, and soccer) and no Olympics. And while golf, Formula I, tennis, and all the other sports the world plays will continue merrily along, it will be extremely hard to top 2008 which saw the Beijing games, the heroic travails of Tiger Woods, the emergence of Lewis Hamilton, and perhaps the greatest tennis match of all time (Nadal-Federer at Wimbledon).
But the real reason the economic crisis is likely to dominate even sports headlines throughout the planet is that sports outside our borders are, ironically, far less socialistic than ours. In the U.S., individual teams are shielded from financial ruin by various schemes such as salary caps and revenue sharing that guarantee that the fate of one team is tied to the fate of all.
That’s not the way it works elsewhere. Overseas, soccer team owners are largely on their own and can borrow to the hilt to make their investment. England’s 20 teams in its top league are said to be in hock for over $4 billion collectively. The result is that when times get tough like now, some find themselves in extremely hot water, with nowhere to turn.
That’s why it’s rumored that up to almost half of the 20 teams in England’s Premier League are looking for new buyers – which has the effect of depressing the market for all of them. An ultra-wealthy Arab consortium recently purchased Manchester City but there are only so many rich Arabs looking to lose hundreds of millions on a soccer team.
It’s not like soccer teams and even leagues haven’t almost gone bust before. In 2002, Italy had to delay the start of its league by two weeks because of a dispute over the finances of the league’s TV contract. Between 2002 and 2004, two clubs were declared insolvent (Fiorentina and Napoli) and other teams were forced to sell their best players just to remain above water. In England, powerhouse Leeds United went into administration in 2007, after selling off most of the team’s stars and its training ground and stadium.
Unfortunately, that’s an increasingly likely scenario all over the world over the next few years. London’s West Ham United has an Icelandic owner who finds his fortune in the same shape as his nation’s and will likely have to sell most of his team’s best players over the next year. Even Manchester United – the gold standard in soccer clubs – is said to be so much in debt that despite all its successes on the field (it won Europe’s Champion’s League and the English title in 2008), it lost tens of millions over the last year.
The debt crisis is also crippling countries. We haven’t reached the stage yet where it’s affected national team performances on the field. But London is suddenly finding that hosting the 2012 Olympics – with all the construction costs entailed– may not have been the best idea. “Olympic chiefs are being forced to cut payment times to contractors to avoid small businesses supplying the project going bust,” read one recent story. “The Olympics minister on Tuesday admitted that two of the biggest games venues still had no financial backing from their developers and that ‘this is not a good time to pursue private sector investment,’” read another. The result is that the British government will have to pick up a much heftier portion of the tab, which won't do that nation’s economic situation a whole lot of good in tough times.
Then there’s European soccer’s Euro 2012 tournament – still scheduled to be held in the Ukraine and Poland, despite the fact that they are figuratively miles behind schedule in the construction of the new stadiums needed. Look for Germany and Russia to step in soon with promises to host that event.
And soccer’s World Cup, scheduled for South Africa in the summer of 2010? FIFA, the sport’s world governing body, promises everything will be ready, though many doubt their optimism. And, with the problems in the world economy, FIFA has already said it hopes to award the 2018 and 2022 Cups to what one official called the “rich” countries to avoid similar issues.
Ironically, that bodes well for the U.S., which despite its own economic problems already has a lot of the infrastructure to host an Olympics or world soccer tournament.
The bottom line is that 2009 will be the year when the sports pages and financial pages converge. Sadly.
