In this episode, we have the pleasure of discussing the future of European football with Ilja Kaenzig, an experienced football executive, current Managing Director of the FBIN Football Network member VfL Bochum and member of the FBIN Advisory Board. We dived into some of the most hotly-debated topics in the world of football, including:
- The ever-widening gap between the richest and the rest
- The Netflixation of Football
- UEFA’s permanent conflict of interests
- Is the Super League a super problem or a super solution?
- Why the American-sports model cannot be implemented in European football
- What will remain the same in football?
PART 1 – THE CURRENT STATE AND FUTURE OF EUROPEAN FOOTBALL
The ever-widening gap between the richest and the rest
We need to face the reality that the gap in European football is widening and is likely to continue doing so. This trend is driven by the steady increase in European money rather than the domestic share of TV money. Teams participating in European competitions are awarded more and more prize money, and while there will be an increase of almost 40-50% in the next cycle starting in 2024, experts predict another increase starting in the cycle beginning in 2027, which will double the prize money compared to today. And you kill the smaller leagues completely because they will become an old serial champion and the rest of the league will become like a fetus for this one or two teams playing at the European level. But eventually, this will lead to a reduction of interest in football in domestic football.
To me, it is illogical and impossible for teams with a budget of more than 1 billion to play in the same competition as teams that have 30, 40, or 50 times less. These matches are without any value, and nobody will eventually pay for them. Football has become a business, and this will eventually lead to a big change.
The Neflixation of Football
Football has increasingly become a part of the entertainment industry, with a trend towards the “Netflixation” of the sport. This approach may work well in other sports, such as American football, where minor teams are feeder teams to major league clubs. However, this approach poses a significant threat to the strong local roots of football in Europe. Historically, football has been a people’s sport, where fans gather in stadiums to watch their favorite teams play and support them by being physically close to them.
Still, there is a huge market of fans who are willing to pay to watch top teams like Manchester United and Real Madrid compete against each other every week. While this may pose a challenge to the nature of the sport, it also presents opportunities for some clubs and organizations to reach new audiences and generate revenue.
Financial & cost control have led to nowhere
We have been discussing cost control in football for a long time now, but it seems that all attempts to limit spending have led to nowhere. The reason for this is that investors who are entering the football business want to spend money to initiate growth and increase the value of their assets. In my opinion, this approach has not been effective. The only way to tackle this problem is through strong regulation. We all want open competitions like those in American sports, where every team can win the league and the matches are unpredictable and exciting. However, American sports are strongly regulated, and it’s not clear if this is legally and politically possible in Europe.
UEFA is in a permanent conflict of interests
The question arises as to who shall be responsible for regulation. UEFA cannot do it as they are in a permanent conflict of interest. They set the rules, organize their championships, and must also regulate them. It is difficult for them to lose the biggest teams as it would damage their own product and weaken their position. Therefore, they cannot have a strong hand. A new structure for European football may be necessary to regulate things like in the US. However, it would be challenging to implement, especially when the trend is heading in the opposite direction.
In short, we have two viable options: strong regulation, which seems unlikely, or a separate competition for the big teams, where they can regulate themselves. The Super League may be the only way out for big clubs, as they need to stay on top sportingly and commercially. However, we need to make sure that any new competition does not kill domestic football and maintains the strong local roots that make football a people’s sport.
PART 2 – IS THE SUPER LEAGUE A SUPER PROBLEM OR A SUPER SOLUTION?
The Logic of Separation
Top-flight teams are becoming bigger and establishing themselves in European football, making it impossible to catch up on a domestic level no matter how hard you work. As a result, we are heading towards a split, with major and minor leagues. This split is fueled by institutional investors putting money into bigger football clubs and contributing to this inequality. Personally, I would prefer a different outcome, but I believe that the biggest clubs will eventually play in their own major league tournaments because the gap between them and the rest will be too large. Matches between the big clubs and the rest will lose any meaning and will not be worth anything for TV. This will be a major shift, but it is a logical one, and while it may not be ideal, it is the reality that we are heading towards.
A22 – the company fronting the European Super League recently proposed a new-look, open competition containing up to 80 teams in a multidivisional format. Is it more like a PR stunt or would it be something really possible?
I believe that one day, whether it’s through A22, UEFA or ECA, or any other organizations, a major league of European football will be organized. The exact timing isn’t important, but I believe it will happen because the biggest clubs are becoming too large to compete in the same competition as the smaller clubs. We started this podcast by discussing the imbalance and widening gap in football, but eventually, the gap may become so large that even the most efficient and perfectly run clubs won’t stand a chance. While smaller clubs may be able to make up a difference of 10 or 20 million, once the gap reaches several hundred million, there is no longer any competition.
Perhaps a Super Solution
The formation of major leagues such as the Super League may not necessarily be a problem, but rather a solution. Having the biggest clubs play among themselves could create a super product with a global audience that is commercially successful. The leagues would become more competitive, and it may even revitalize some of the less popular leagues. For example, if Bayern Munich were to leave the Bundesliga, suddenly eight to ten teams would aspire to win the title, which would electrify the whole nation and make it seem like a positive development.
The next generation of fans might see things differently
Some people may argue that this will be the end of football, but I believe the younger generations will see it differently. To them, a major league will be normal, and they won’t miss anything. It’s important to consider the developments from their perspectives, not just ours. Ultimately, the world is always moving forward. While older generations may view this as a disaster, younger generations may see it as an exciting new era for football.
Why the American-sport business model is difficult to implement for European football
In recent years, we have heard terms like the salary cap, playoffs, and draft, which are typical features of American sports, but implementing them in football seems difficult. The reason why sports in America are commercially successful is due to strong regulations, which are lacking in Europe. In Europe, big agencies can purchase football clubs and use them as platforms for superstar players, which is not possible in American sports. We have the spirit but not the legal environment to implement such rules.
We need stronger regulations to balance capitalism and prevent wild growth without regulation. Currently, we have multi-club ownership at the top level, massive spending by institutional investors, imbalance, and sort of a closed Champions League. This is contrary to what we see in the United States and is unsustainable in the long run. Eventually, US investors in football will probably demand a change.
How soon will this “Big Bang” moment happen?
I believe that in five years, the landscape will look completely different. The pace of change is remarkable, with multi-club ownership and institutional investors entering the scene. In my opinion, the Americanization of football is the next evolution, and who knows what comes next? Football doesn’t resemble the past, and in the future, it will be even more different, and it will happen fast.
PART 3 – FUTURE OUTLOOK
What will remain the same for football in the future?
I believe football will remain the most popular sport in the world, and for good reasons. Unlike other sports, where the team with the better players usually wins, football is unpredictable. The uniqueness of football lies in its unpredictability and randomness. The set of rules, the referee, and the fans – all contribute to its unpredictable nature, making it a truly exciting and attractive sport.
How should football clubs prepare to embrace the rapid changes in the coming years?
Well, it all starts with having a clear strategy in place and hiring the best people to execute it. This is what many midsize and small clubs have done to achieve success. And speaking of success, let’s take a look at Bayern Munich. The secret to their success is not just about the money they have, but the fact that they have the best people and a clear strategy that they keep optimizing year after year. So, for other football clubs looking to adapt to the changes in the sport, having a clear strategy, investing, and retaining the right personnel is key.
