Boom to Bust?

ivoralljack

ivoralljack

Grizzled Veteran
Staff member
There is no silver lining or good news to be had from this foul virus but, long term, perhaps there is a shred of good news to be had. Carlo Ancelotti speaking in the Sun today has warned that football's gravy train will fly off the rails in the fallout from the coronavirus. He believes the sport is on the brink of a huge global downturn. And that looks set to spell the end of the era of huge transfer fees and ridiculously large wages. :):)

It has left clubs at all levels staring at financial meltdown in the face of spiralling costs with no real income. Leagues and clubs are desperately scrambling to find a way to finish seasons to ensure they claim the BILLIONS in TV and matchday revenue needed to stay afloat. And he predicted football is set to go from boom to bust before our eyes. He also predicted that soon the economy will change and, at all levels, TV rights will be worth less. Footballers and coaches will earn less and tickets will cost less because people will have less money. Let's get ready for a general contraction, he said.

He also rubbishes the claims of some clubs that they will need three weeks preparation before they can play again describing it as bullshit, a joke and a false myth. As for the claim that to finish the season would be asking too much of the players, Ivor's personal opinion is that teams have squads, so use them to rotate and spread the load. It's the same for everyone and some promising kids might get a chance that they otherwise might never have had.

Long ago I predicted that football was going to implode because of the obscene money swilling about in the game, going to everyone except the long suffering fans who rarely get rewarded for their loyalty and support. Well maybe that day has dawned and I, for one, will be pleased if it happens. It is just so tragic that it might take a deadly pandemic to bring it about. :( Good health to you all and your friends and families. Keep well.
 
Yankee_Jack

Yankee_Jack

Key Player
Football is going to shrink as an industry. There are clubs that will not survive this. They will enter administration and, depending on the forbearance of governing bodies and the ability of local support, or the availability of cash rich vultures, they may not be able to reorganize.

At the primary level, the industry runs primarily on media money, with supplemental income from sponsorship and merchandise. A few of the fatter cats make very good money in all of these channels. At the secondary and lower levels, the industry runs on match day money.

Media contracts are likely to be less lucrative for many reason not just the virus, but no doubt it will amplify existing factors. The media bubble is destined to soon reach maximum expansion and ultimately burst - perhaps not catastrophically but deflate. There are only so many eyeballs in the world to watch football; only so many minutes that those eyeballs can be focused on sport; and only so many minutes that those eyeballs can tolerate .... let's be honest 90 minutes twice a week of our dross is more than I can tolerate; and, even when we're live, I am easily distracted.

For example, my affinity with the Swans means I don't watch EPL football except highlight reels due to time clashes, or clubs in other leagues ... I have plenty of more important and more interesting things to do.

To date, the EPL has dominated the media contract space. Over the last few years, La Liga has been coming on strong with the league itself forging a global presence on behalf of clubs (Madrid and Barca being the only two that can really stand alone). Compare with the EPL, where the clubs' brands (top 7 or so) have been leading the way with the EPL itself a lesser presence.

The Bundesliga is now entering the fray. And, although playing catch up with the EPL clubs and LaLiga, it is ready to stake its claim for eyeballs and money. There is only so much money and so many eyeballs to go around and once those two elements get fragmented / allocated across multiple properties and viewing time slots, then dilution in value has to take place.

What I am seeing in the USA, with soccer and even F1 events, is that not all advertising slots are being purchased. I am routinely seeing dead time during commercial breaks, significant chunks of time, over 30 seconds, where the equivalent of a test card is displayed and music is played. Advertising slots are going unsold. I see this on ESPN and NBC Sports routinely. I also see it on cable news / talk channels, e.g. MSNBC. It is happening with non-sports content also. I am not sure whether these dead slots are allocated to the local carrier and the local sales team is absent or inferior or whether they are the property of the main network, which would indicate a bigger problem. The lack of demand from advertisers implies that the unclaimed slots are over priced or that the advertiser does not believe that they can reach the right market.

So there are four problems: fixed / limited number of consumers (eyeballs), over supply, increasing competition, and lack of demand from advertisers. This is a deadly cocktail for the value of any commodity and football is a commodity to the media industry. The net is that the EPL has probably reached its maximum media revenue - going forward it is going to stagnate or shrink. And hence, the EFL will experience revenue shrink.

The impact of the virus on people's disposable income is going to further diminish the demand for subscription viewing of football. And then the snowball starts rolling
 
Jackflash

Jackflash

Midfield General
Staff member
Yankee_Jack said:
Football is going to shrink as an industry. There are clubs that will not survive this. They will enter administration and, depending on the forbearance of governing bodies and the ability of local support, or the availability of cash rich vultures, they may not be able to reorganize.

At the primary level, the industry runs primarily on media money, with supplemental income from sponsorship and merchandise. A few of the fatter cats make very good money in all of these channels. At the secondary and lower levels, the industry runs on match day money.

Media contracts are likely to be less lucrative for many reason not just the virus, but no doubt it will amplify existing factors. The media bubble is destined to soon reach maximum expansion and ultimately burst - perhaps not catastrophically but deflate. There are only so many eyeballs in the world to watch football; only so many minutes that those eyeballs can be focused on sport; and only so many minutes that those eyeballs can tolerate .... let's be honest 90 minutes twice a week of our dross is more than I can tolerate; and, even when we're live, I am easily distracted.

For example, my affinity with the Swans means I don't watch EPL football except highlight reels due to time clashes, or clubs in other leagues ... I have plenty of more important and more interesting things to do.

To date, the EPL has dominated the media contract space. Over the last few years, La Liga has been coming on strong with the league itself forging a global presence on behalf of clubs (Madrid and Barca being the only two that can really stand alone). Compare with the EPL, where the clubs' brands (top 7 or so) have been leading the way with the EPL itself a lesser presence.

The Bundesliga is now entering the fray. And, although playing catch up with the EPL clubs and LaLiga, it is ready to stake its claim for eyeballs and money. There is only so much money and so many eyeballs to go around and once those two elements get fragmented / allocated across multiple properties and viewing time slots, then dilution in value has to take place.

What I am seeing in the USA, with soccer and even F1 events, is that not all advertising slots are being purchased. I am routinely seeing dead time during commercial breaks, significant chunks of time, over 30 seconds, where the equivalent of a test card is displayed and music is played. Advertising slots are going unsold. I see this on ESPN and NBC Sports routinely. I also see it on cable news / talk channels, e.g. MSNBC. It is happening with non-sports content also. I am not sure whether these dead slots are allocated to the local carrier and the local sales team is absent or inferior or whether they are the property of the main network, which would indicate a bigger problem. The lack of demand from advertisers implies that the unclaimed slots are over priced or that the advertiser does not believe that they can reach the right market.

So there are four problems: fixed / limited number of consumers (eyeballs), over supply, increasing competition, and lack of demand from advertisers. This is a deadly cocktail for the value of any commodity and football is a commodity to the media industry. The net is that the EPL has probably reached its maximum media revenue - going forward it is going to stagnate or shrink. And hence, the EFL will experience revenue shrink.

The impact of the virus on people's disposable income is going to further diminish the demand for subscription viewing of football. And then the snowball starts rolling
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Good analysis Yankee.
 
CroJack

CroJack

Key Player
If this crisis lasts for no more than three months, then it won't be a huge problem. At least not in Britain. The rest of the games from this season can be played in June and July, and the new season can start in late August or September. It can be done if there aren't any international games in 2020.

And you know what? We've been through some really bad crisis before. Among others: the international debt crisis, the 1973 oil crisis, the dotcom bubble and early 2000s downturn, the financial crisis in 2008 and the great recession, the EU monetary crisis in 2010. Three months of economic inactivity is bad, but it's not so bad that we can't quickly recover.

But, if this lasts for more than three months, then we'll be in a deep s***.
 
Jackflash

Jackflash

Midfield General
Staff member
CroJack said:
If this crisis lasts for no more than three months, then it won't be a huge problem. At least not in Britain. The rest of the games from this season can be played in June and July, and the new season can start in late August or September. It can be done if there aren't any international games in 2020.

And you know what? We've been through some really bad crisis before. Among others: the international debt crisis, the 1973 oil crisis, the dotcom bubble and early 2000s downturn, the financial crisis in 2008 and the great recession, the EU monetary crisis in 2010. Three months of economic inactivity is bad, but it's not so bad that we can't quickly recover.

But, if this lasts for more than three months, then we'll be in a deep s***.
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Looks like deep shit it is then,Think the government is forecasting July at the earliest,this thing is going to be active until a vaccine is discovered, and that seems a long way away yet.
 
Yankee_Jack

Yankee_Jack

Key Player
I think you can stick a fork in this season, it’s done, it was done for us the moment we hired Andy Pandy. Players’ contracts will terminate on June 30 ... season’s natural year end ... I don’t see players signing a one month extension. I don’t see agents putting in the effort to get players to sign a one month extension only to scramble to sign free agents to new clubs. Where’s the incentive for them.

The game is better off calling this season and putting its effort into making sure that next season is not compromised.

Media will have to decide whether they want to short payment for this season or claw back or recognize that this is a cash cow that they want to continue to milk and therefore need to avoid compounding financial stress. I have heard very, very little in the way of wage give backs by players, so cost burdens persist. I think I heard that the Juve players made a concession the other day; but this was the first that I’d heard of.

‘Pool won the EPL. Anybody who argues against that is a total prick. They won it going away. Klopp and his squad should not be denied their accomplishment in being by far the best team in the league.

As for everywhere else .... treat it like a war broke out. How are leagues elsewhere decided under these circumstances. To have European competition next season, UEFA will have to make a ruling otherwise they have no roster of teams to play; and don’t forget the little club rounds that few care about ... they typically start in July. UEFA rules, national associations and competitions comply, everybody else sucks it up and moves on.
 
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ivoralljack

ivoralljack

Grizzled Veteran
Staff member
I see that Aaron Ramsey has donated £10,000 to the Welsh Health Authority a gesture that he should be commended for - and it's highly possible that he has made further donations to charity as well. But looking at the figures only serves to underline the absolutely obscene sums of money that professional football players are paid just to kick a ball. Compare what they earn to what those dedicated health professionals, who are saving our lives, earn and the comparison moves from obscene to grotesque.

Ramsey earns £400,000 per WEEK (also he no doubt enjoys image rights and endorsements etc on top) and his donation equates to just 2.5% of that. An average worker in this country earns, shall we say, circa £500 per week, 2.5% of which amounts to £12.50. Is it any wonder that people are getting totally brassed off with this ridiculous imbalance? This HAS to stop otherwise football really will go down the pan.

Look, I'm Conservative in outlook and believe in a free market: that hard work, enterprise and ability should be rewarded. BUT there must be limits and surely this type of situation far exceeds sensible limits. Football is awash with money and there are plenty of people such as agents getting their grubby snouts in the trough. But what of we fans and supporters? How much of these BILLIONS ever come to us in the form of reduced ticket prices, properly subsidised travel to away games and so on? As little as the game's money-grabbers can get away with is the answer.

However, having witnessed the dedication, sacrifice and hard work of our healthcare professionals, who work for a pittance in comparison, I would have no objection if surplus funds were diverted from the football supporter into the NHS, to properly reward them and give them the tools they need to carry on saving OUR lives.
 
CroJack

CroJack

Key Player
ivoralljack said:
Look, I'm Conservative in outlook and believe in a free market: that hard work, enterprise and ability should be rewarded.
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Mate, if that's a conservative thinking then I'm Conservative too. ;) I would just add that ALL hard work and ability should be rewarded, not only the hard work and ability of the few. Too many people today earn their riches by manipulating the "free market" and exploiting political connections. I don't have a problem with people getting rich, but I do have a problem when I see their workers suffer. It's simply not necessary to have such extreme inequalities in our modern societies. We already have enough wealth to give the ordinary people a decent life, and enough wealth to give the extraordinary people an extraordinary life.
 
Jackflash

Jackflash

Midfield General
Staff member
ivoralljack said:
Good to see Rambo donating another £3k to a homeless charity in Newport. Well done to him.
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Yes, those running charities are very concerned, especially charities who rely on shops for there support, a few organisations are in big doubt that they'll survive this epidemic.
 
CroJack

CroJack

Key Player
Yankee_Jack said:
Has anybody heard what Sky are going to do with the EPL and EFL.
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No, but I think they have a contract where it says that the leagues have to be brought to conclusion by July 1, 2020. I'm not sure about this date, it's possible it's June 1. It has to be seen whether Sky is flexible or not.
 
Yankee_Jack

Yankee_Jack

Key Player
In the football industry, we are about to witness a bevy of sharks circling each other in a shrinking pool of water with no other food except for each other. The carnage is going to be biblical.
 
Behindthegoal

Behindthegoal

Key Player
We can't trust football club boards to do the right thing with the savings by cutting players' wages.
Either ring fence the cash for distribution to lower league clubs, or leave it to the superstars to follow their consciences.
 
ivoralljack

ivoralljack

Grizzled Veteran
Staff member
Behindthegoal said:
or leave it to the superstars to follow their consciences.
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Some might but I'm afraid the attitude of self-entitlement of most of them will prevail. Top footballers of today exist in an unrealistic bubble where they get the best of everything and most actually believe they deserve it. :rolleyes: Think on - palatial houses, luxury cars, first class travel, fitness coaches, dieticians, private health plans, advisors and God knows what else that the rest of us can only dream about. It's a far cry from the days when footballers were better paid than most but still possessed a sense of reality and empathy with everyday life and the community they lived in.
 
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