Background
FIFA’s plan to ban
Third-Party Ownership (TPO) of footballers means that footballers can no longer
be partly owned by third parties such as football investment funds. The money
provided by these third parties was being used by indebted South American clubs
to pay players’ salaries.
Currently the top 20 teams
in Brazil have debts exceeding US$3 billion[i], while premier division
Argentine clubs have a total debt of US$1.5 billion[ii]. This money will have to
come from somewhere and logic would suggest that it will come from an asset
sell-off: fire-sales of players in
the short- to mid-term.
Banning TPO means that Latin
American clubs will be starved of money required to pay their players. This
will likely create a glut of Latin American footballers on the global transfer market,
causing their value to drop and creating an opportunity for Celtic Football
Club and Scottish football in general.
Portugal:
A model for Scotland
The largest markets for South
American footballers in Europe by numbers have traditionally been Spain and
Portugal. Portugal is more comparable than Spain to Scotland given its size and
football revenues, and provides a useful case study for where Scotland is
currently missing out on an opportunity.
Outside the top three clubs
in Portugal – Porto, Benfica and Sporting – the average attendance for games in
2013/14 was 4,447, compared to the Scottish average of 6,808[iii], suggesting that outside
of the traditional “big three,” the game in Portugal is very similar to that of
Scotland.
In fact, the total
attendance figure for the premier league in Portugal in 2013 was 2,457,194,
generated by 18 teams while the figure for Scotland was 1,981,982, generated by
12 teams. And none of the big three teams in Portugal could match Celtic’s
average home attendance (see figures below):
Average Home attendance of Portuguese
"Big three" vs. Celtic (2013/2014)
|
|
Celtic
|
46,808
|
Benfica
|
43,613
|
Sporting
|
33,703
|
Porto
|
28,685
|
Depending on Champions
League progress, Celtic’s annual revenues compare favourably to those of Porto,
although they lag those of Benfica. However, when transfer revenues are taken
into account, Celtic’s revenues are left behind by the Portuguese clubs.
Portuguese clubs have
successfully leveraged their links with Brazil and Latin America at large to create
what is an effect a large export industry of footballers. As of 2014, there are
111 Brazilian footballers alone, on the books of clubs in Portugal’s Premier
League.[iv]
A combination of Third-Party
Ownership (TPO) and a lack of transparency make it difficult to ascertain the
net income generated by sales of Latin American footballers by Portuguese
clubs, but it can safely be estimated at over £50m annually, and on occasion
even exceeding £100m .
Scottish Football’s export
of footballers – despite its comparability to the scale of Portuguese Football
– is meagre by comparison. In 3 years, if we take England to be an export
market, the combined exports of players from Scottish football amounted to £42.6m
(see below):
Year
|
Player
|
From
|
To
|
Fee (£m)
|
2014
|
Tony Watt
|
Celtic
|
Standard Liege
|
1.2
|
Andrew Robertson
|
Dundee United
|
Hull City
|
2.85
|
|
Stevie May
|
St. Johnstone
|
Sheffield Wednesday
|
0.8
|
|
Fraser Forster
|
Celtic
|
Southampton
|
10
|
|
2013
|
Johnny Russell
|
Dundee United
|
Derby County
|
0.75
|
Michael Tidser
|
Greenock Morton
|
Rotherham United
|
0.05
|
|
Victor Wanyama
|
Celtic
|
Southampton
|
12.5
|
|
Gary Hooper
|
Celtic
|
Norwich City
|
5.5
|
|
Kelvin Wilson
|
Celtic
|
Nottingham Forest
|
2.5
|
|
2012
|
Morton Rasmussen
|
Celtic
|
FC Midtjyllan
|
0.25
|
Ki Sung-Yueng
|
Celtic
|
Swansea City
|
6
|
|
Matthew Kennedy
|
Kilmarnock
|
Everton
|
0.2
|
|
Total
|
£42.60
|
Scottish football clubs are
consequently entering European club competitions on an unequal ground with Portuguese
clubs. Through increased options for acquiring players, Portuguese clubs
increase their chances of succeeding in these competitions and benefit from
increased television revenue (on top of
player sales).
This situation had led to
clubs like Braga (average attendance: c. 10,000) reaching the UEFA Cup Final in
2011, while the last time a comparable Scottish club (Aberdeen, average
attendance c. 13,000) reached a European final was 31 years ago, in 1984.
Capitalizing
on the Opportunity
Clearly, there is money to
be made from South American footballers, which Celtic and other Scottish clubs
are not capitalizing on. The experience of Brazilian footballers in the Ukraine
and Russia also shows that cultural and climatic differences are not
impediments to generating profit on South America players.
Until now, Celtic has been
unable to tap into this market of players, however. This is because of UK
immigration laws, which mean that South Americans require either an EU passport
or a work permit (acquired after several caps, when the player is often already
excessively priced).
A strong case can be made
that Scotland can benefit in terms of income and its international profile from
loosening restrictions on footballers’ work permits. Celtic and other Scottish
clubs are currently competing in an already hyper-competitive arena on an
uneven playing ground.
I contend that Celtic should
lobby the Scottish FA and/or the Scottish government to remove the
aforementioned restrictions. A proposal could be made whereby the restriction
is loosened on a limited amount of imports or for a limited period of time or
that a certain number can only be fielded at any one time.
It could be made clear to
the Scottish FA (perhaps by using the example of Portugal), that imports from
Latin America have not hindered the domestic game or the success of the
national team – rather they have raised the standard and allowed domestic clubs
to compete on a European stage and gain access to increased TV revenue.
Summary
I have attempted to outline
the case for Celtic to lobby the Scottish Government to loosen its restrictions
on foreign footballers. Scottish football Association is looking to sell a
product to a global audience at the same time as significantly limiting its ability
to do so by imposing inflexible legal restrictions.
This is patently an
opportunity for Scottish football to capitalize on and can be summarized by the
following:
- Latin America is home to many of the world’s
most under-valued footballers
-
The fall of TPO as well as massive club debts
in these countries mean these footballers are set to become even cheaper
-
Other European clubs have benefitted on
several levels from the ability to recruit these players without legal
restriction
-
The subsequent export of these players
combined with larger television audiences has the potential to generate much
larger revenues for Scottish football.
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