E. Europe Lost Behind Football's Iron Curtain
UEFA missing out on huge future revenues
On a beautiful midweek evening in April, I'm sitting with two friends -- a Spanish girl and a British guy -- in a pizza parlor called The Italian Coffee Company on Charlotte Street, in the heart of London's trendy media quarter. In keeping with the date, one of the parlor's staff, most of whom hail from nations in Eastern Europe such as Kosovo and Poland, turns on a television set, and our conversation becomes shaped by the incredible spectacle before us: the Champions League semi-final first leg match between AC Milan and Barcelona.
Most people in The Italian Coffee Company, including my two friends, are supporting Barcelona, but all are transfixed by what is a technically magnificent game replete with what will surely be many of the stars of this summer's World Cup: Ronaldinho, Pujol, Marquez; Shevchenko, Pirlo, Kaka. A wonderful contest ends with a Ronaldinho-inspired Catalan victory; at this point, it seems difficult to see how the Champions League formula could be improved upon.
However, there is one rather glaring issue which the Union of European Football Associations (UEFA) appear not to be particularly concerned about, but that threatens to undermine the success of their most prestigious club competition: the European Champions League is not fully European anymore, and overwhelmingly it is not a tournament for champions either. Effectively, it has become a contest which realistically only a handful of teams from the elite leagues of Western Europe have a chance of winning.
It is generally agreed that this phenomenon began in earnest when Manchester United played Galatasaray in the first round of the 1993-94 European Champions League, and the Manchester club, which had just ended a 26-year wait to win the English league title, were sensationally -- and deservedly -- eliminated on away goals. In fact, it should not have been such a surprise: the Istanbul club had consistently performed well in Europe in preceding years, reaching the last four of the old European Cup in 1989. But it was a result that rocked the European footballing establishment, because at a stroke they had lost the attentions of the lucrative English television market for virtually the whole season.
In response, UEFA set about altering the entire nature of European club football to make sure that nothing like that ever happened again. A mini-group stage had been introduced in the 1991-92 season to guarantee more revenue for those clubs who had qualified for the latter stages of the competition, but the tournament was still open exclusively to the champion clubs of Europe, regardless of their geographical origins or TV audiences.
However, since the mid-1990s this principle has been diluted to the point of meaninglessness. Beginning in 1994-95, automatic qualification for the group stages was introduced for clubs from the top-seeded nations; two seasons later, teams from the richest and most successful leagues that finished second, third or fourth in their domestic competitions were given entry to the Champions League instead of the UEFA cup. This has meant that a now enormous wad of television cash is being shared amongst ever-fewer clubs from a select band of major consumer markets, principally Spain, Italy, England and Germany.
The consequences of this have been twofold. Firstly, the Champions League has become a tad monotonous. The same names from the same countries keep cropping up year after year: AC Milan, Juventus, Chelsea, Real Madrid. In 2002-03, three of semi-finalists were Italian, and in 2004-05, two of the last four teams in the competition were English. Even "surprise" teams now come from the same big television markets: this year's revelation are Villarreal of Spain; in 2002 it was German club Bayer Leverkusen. The 2004 final in Gelsenkirchen, fought between FC Porto and AS Monaco, can probably be written off as a statistical anomaly.
But the corollary of this -- and a far more disturbing trend -- is that most of Europe has no direct interest in the Champions League. For example, Poland, a country of nearly 40 million people, has not had its league winner qualify for the group stages of the competition since Wisla Krakow in 1996-97. Ditto Romania (22 million), which has not managed to have a club in a Champions League group since the same season. Even clubs from the relatively wealthy leagues of Greece (10 million), Turkey (70 million), Russia (140 million) and Ukraine (60 million) have not enjoyed any sustained success in recent seasons. And as for teams from smaller countries, any involvement in the competition beyond the preliminary rounds is the stuff of fantasy.
Yet such an arrangement increasingly does not make financial sense. A decade or so ago, and ironically when it was still possible for clubs from all across Europe to accomplish great things in the European Cup/Champions League -- Red Star Belgrade even won the competition in 1991 -- it actually made some commercial sense for UEFA to concentrate on extracting revenue from clubs located in the developed economies of Western Europe. Private television markets in other countries were in their infancy and in truth, so were many of the continent's market economies. For example, there was very little money to be made from the likes of Croatia's 1994-95 Champions League quarter-finalists Hajduk Split, hailing from a country that had a third of its land under occupation and many of whose people were struggling to purchase daily essentials.
But the fall of the Berlin Wall was now nearly 17 years ago. Countries in and around the former Eastern Bloc have either joined the European Union (Poland, Hungary) or are candidates to enter (Croatia, Turkey). Most have undergone massive and sustained economic expansion -- and that includes in the realm of television markets. For example, Poland now has a GDP of around $13,000 per capita (compared to $26,000 in Spain), economic growth of approximately 4 percent per year, and about 500 cable television operators with over two million subscribers to channels such as Cyfra+ (the Polish version of Canal +) and RTL 7. It is a similar story in Romania, which has an estimated cable television subscription base of up to 3.3 million, the fifth largest in Europe. Eurosport, which obviously sees the value of both markets, now has services in both Polish and Romanian.
UEFA, however, does not seem to have realised this, so in the 2005-06 season we had no less than four Champions League group stage competitors each from England, Italy and Spain, but not one from Poland, Romania, Bulgaria, the former Yugoslavia or the ex-Soviet Union, and just one a piece from Greece and Turkey. Not only is this disastrous in terms of European cultural unity, as it clearly sends out a signal of a highly divided and unequal continent, but in pure economic terms it is completely counter-productive on two levels.
On the first, UEFA are seriously endangering their potential shares of important future markets through not giving youth in the majority of European countries a reason to get excited about club football. An entire generation has grown up without knowing what it is like to have big international club matches taking place in their vicinity on a regular basis. This will undoubtedly lead to a decline in the popularity of the sport among many people from this demographic -- and a decline in the popularity of football means a long-term slide in UEFA revenues.
On the second, UEFA are losing money in the short-- and medium-term by not inviting entire swathes of Europe to the Champions League party, instead giving golden tickets to teams with questionable economic value. For example, Real Betis and Udinese, two teams active in this season's edition, are both middling teams in Spain and Italy who attract barely any support outside their home regions of Andalucia and Friuli respectively (though Betis do have a following of some Andalucians who are resident in the major Spanish industrial cities). But if a team from Romania, Poland or any comparable country was to gain entry to the group stage of the tournament, they would have the support -- and burgeoning economic backing -- of at least half their country. Yet the implications of this seem lost on UEFA.
That we can watch such a mouthwatering tie as AC Milan versus Barcelona is a wonderful thing. But European football is not truly European when half the continent is excluded from being able to cheer a local team at the highest level. It is imperative that UEFA realize this. Otherwise they and the whole of Europe will end up paying a heavy price, culturally, socially and economically.
Asad Yawar
UEFA missing out on huge future revenues
On a beautiful midweek evening in April, I'm sitting with two friends -- a Spanish girl and a British guy -- in a pizza parlor called The Italian Coffee Company on Charlotte Street, in the heart of London's trendy media quarter. In keeping with the date, one of the parlor's staff, most of whom hail from nations in Eastern Europe such as Kosovo and Poland, turns on a television set, and our conversation becomes shaped by the incredible spectacle before us: the Champions League semi-final first leg match between AC Milan and Barcelona.
Most people in The Italian Coffee Company, including my two friends, are supporting Barcelona, but all are transfixed by what is a technically magnificent game replete with what will surely be many of the stars of this summer's World Cup: Ronaldinho, Pujol, Marquez; Shevchenko, Pirlo, Kaka. A wonderful contest ends with a Ronaldinho-inspired Catalan victory; at this point, it seems difficult to see how the Champions League formula could be improved upon.
However, there is one rather glaring issue which the Union of European Football Associations (UEFA) appear not to be particularly concerned about, but that threatens to undermine the success of their most prestigious club competition: the European Champions League is not fully European anymore, and overwhelmingly it is not a tournament for champions either. Effectively, it has become a contest which realistically only a handful of teams from the elite leagues of Western Europe have a chance of winning.
It is generally agreed that this phenomenon began in earnest when Manchester United played Galatasaray in the first round of the 1993-94 European Champions League, and the Manchester club, which had just ended a 26-year wait to win the English league title, were sensationally -- and deservedly -- eliminated on away goals. In fact, it should not have been such a surprise: the Istanbul club had consistently performed well in Europe in preceding years, reaching the last four of the old European Cup in 1989. But it was a result that rocked the European footballing establishment, because at a stroke they had lost the attentions of the lucrative English television market for virtually the whole season.
In response, UEFA set about altering the entire nature of European club football to make sure that nothing like that ever happened again. A mini-group stage had been introduced in the 1991-92 season to guarantee more revenue for those clubs who had qualified for the latter stages of the competition, but the tournament was still open exclusively to the champion clubs of Europe, regardless of their geographical origins or TV audiences.
However, since the mid-1990s this principle has been diluted to the point of meaninglessness. Beginning in 1994-95, automatic qualification for the group stages was introduced for clubs from the top-seeded nations; two seasons later, teams from the richest and most successful leagues that finished second, third or fourth in their domestic competitions were given entry to the Champions League instead of the UEFA cup. This has meant that a now enormous wad of television cash is being shared amongst ever-fewer clubs from a select band of major consumer markets, principally Spain, Italy, England and Germany.
The consequences of this have been twofold. Firstly, the Champions League has become a tad monotonous. The same names from the same countries keep cropping up year after year: AC Milan, Juventus, Chelsea, Real Madrid. In 2002-03, three of semi-finalists were Italian, and in 2004-05, two of the last four teams in the competition were English. Even "surprise" teams now come from the same big television markets: this year's revelation are Villarreal of Spain; in 2002 it was German club Bayer Leverkusen. The 2004 final in Gelsenkirchen, fought between FC Porto and AS Monaco, can probably be written off as a statistical anomaly.
But the corollary of this -- and a far more disturbing trend -- is that most of Europe has no direct interest in the Champions League. For example, Poland, a country of nearly 40 million people, has not had its league winner qualify for the group stages of the competition since Wisla Krakow in 1996-97. Ditto Romania (22 million), which has not managed to have a club in a Champions League group since the same season. Even clubs from the relatively wealthy leagues of Greece (10 million), Turkey (70 million), Russia (140 million) and Ukraine (60 million) have not enjoyed any sustained success in recent seasons. And as for teams from smaller countries, any involvement in the competition beyond the preliminary rounds is the stuff of fantasy.
Yet such an arrangement increasingly does not make financial sense. A decade or so ago, and ironically when it was still possible for clubs from all across Europe to accomplish great things in the European Cup/Champions League -- Red Star Belgrade even won the competition in 1991 -- it actually made some commercial sense for UEFA to concentrate on extracting revenue from clubs located in the developed economies of Western Europe. Private television markets in other countries were in their infancy and in truth, so were many of the continent's market economies. For example, there was very little money to be made from the likes of Croatia's 1994-95 Champions League quarter-finalists Hajduk Split, hailing from a country that had a third of its land under occupation and many of whose people were struggling to purchase daily essentials.
But the fall of the Berlin Wall was now nearly 17 years ago. Countries in and around the former Eastern Bloc have either joined the European Union (Poland, Hungary) or are candidates to enter (Croatia, Turkey). Most have undergone massive and sustained economic expansion -- and that includes in the realm of television markets. For example, Poland now has a GDP of around $13,000 per capita (compared to $26,000 in Spain), economic growth of approximately 4 percent per year, and about 500 cable television operators with over two million subscribers to channels such as Cyfra+ (the Polish version of Canal +) and RTL 7. It is a similar story in Romania, which has an estimated cable television subscription base of up to 3.3 million, the fifth largest in Europe. Eurosport, which obviously sees the value of both markets, now has services in both Polish and Romanian.
UEFA, however, does not seem to have realised this, so in the 2005-06 season we had no less than four Champions League group stage competitors each from England, Italy and Spain, but not one from Poland, Romania, Bulgaria, the former Yugoslavia or the ex-Soviet Union, and just one a piece from Greece and Turkey. Not only is this disastrous in terms of European cultural unity, as it clearly sends out a signal of a highly divided and unequal continent, but in pure economic terms it is completely counter-productive on two levels.
On the first, UEFA are seriously endangering their potential shares of important future markets through not giving youth in the majority of European countries a reason to get excited about club football. An entire generation has grown up without knowing what it is like to have big international club matches taking place in their vicinity on a regular basis. This will undoubtedly lead to a decline in the popularity of the sport among many people from this demographic -- and a decline in the popularity of football means a long-term slide in UEFA revenues.
On the second, UEFA are losing money in the short-- and medium-term by not inviting entire swathes of Europe to the Champions League party, instead giving golden tickets to teams with questionable economic value. For example, Real Betis and Udinese, two teams active in this season's edition, are both middling teams in Spain and Italy who attract barely any support outside their home regions of Andalucia and Friuli respectively (though Betis do have a following of some Andalucians who are resident in the major Spanish industrial cities). But if a team from Romania, Poland or any comparable country was to gain entry to the group stage of the tournament, they would have the support -- and burgeoning economic backing -- of at least half their country. Yet the implications of this seem lost on UEFA.
That we can watch such a mouthwatering tie as AC Milan versus Barcelona is a wonderful thing. But European football is not truly European when half the continent is excluded from being able to cheer a local team at the highest level. It is imperative that UEFA realize this. Otherwise they and the whole of Europe will end up paying a heavy price, culturally, socially and economically.
Asad Yawar
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