Beyond the Ball

Considering the rapid approach of this year's World Cup in South Africa, Blawgconomics thought the timing was right for a posting on some of the notable economic and legal issues in global football today. Loyal readers will recall a few postings in the past on footie-related topics from fan ownership stakes in their clubs to how tax regimes could impact the competitive balance of the sport in Europe. We have even managed to get a posting translated into German. However, with today's post, we are taking a more Snippets-esque approach, allowing for coverage of a few topics of interest...

UEFA, the governing body of the sport in Europe, announced a new set of austerity measures aimed at reducing debt and evening the playing field between small and large clubs. The restrictions on using debt to cover losses and the severe penalties for breaking the rules may indeed mean that the heady days of $130 million transfers will be short-lived.

However there is real concern among some that, rather than increasing fairness, the measures could actually increase the gulf between haves and have-nots as the big clubs with big revenues may continue to dominate, albeit in a slightly reconfigured system. It is probably going to be a case of not knowing the outcome until it actually happens. However, it is becoming increasingly clear that the debt situation in football is untenable. Fair or not, some steps toward financial health are necessary.

One such team in debt, Manchester United, is likely to remain in the hands of American Malcolm Glazer for the forseeable future. Apparently, the self-named and strongly-backed fan group The Red Knights found Glazer's asking price of $1.5 billion a little too rich for their blood. This is probably sensible as it was becoming increasingly clear that the consortium was going to have to take on significant debts to meet the asking price, which would have ironically put them in the same situation they disparage Glazer for.

Less than a week after leading Italian club Inter Milan to a Champions League Final victory, coach Jose Mourinho proved that employment contracts are not really agreements, but more starting points for negotiations. In engineering his move to Real Madrid, themselves hungry for Champions League glory and vindication of their historically expensive team, the 'Special One' managed to get the Spanish club to foot a 14 million euro buyout clause payment. Though not disclosed, the payment was presumably made to keep all of the parties out of court on a breach claim, and should ironically leave Inter with more free time and funds to pursue Mourinho's Madrid predecessor, Manuel Pelligrini.

In an interesting, though likely anticipated, development, The International Authentication Association has claimed that counterfeiters in South Africa are costing official suppliers millions in knock-off sales. Though Blawgconomics supports copyrights and legal regimes that reward the innovation of developers and fruits of production, it seems unlikely that suppliers are suffering as greatly as the IAA claims. It is probably more likely that people purchasing the counterfeit goods would not have bought the official gear due to pricing, and therefore the sales of the fakes are not predatory, but simply supplementary, to official sales.

We at Blawgconomics would like to believe that we are not so feeble-minded as to be impacted by the Jedi-esque mind tricks of contemporary marketing campaigns. However, it would be foolish to deny the home run Nike has hit with its 'Write the Future' campaign. It is a must-see for football fans, marketing students (and most marketing executives for that matter), aspiring filmakers and anyone else with a pulse.

Finally, it is not too often that indecent exposure finds its way onto this page. However, if that is the only way to get this story into this post, so be it...