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Sunday, June 16, 2024

Don’t rule Ceferin out, multi-clubs, how to split £3.8bn – The Business of Football

We can now add a third classic blunder to the two outlined by Vizzini in William Goldman’s classic tome on leadership, The Princess Bride.

Never get involved in a land war in Asia. Never go against a Sicilian when death is on the line. And never doubt a Slovenian over a statute amendment.

It is easy to see that now, but it did not seem so obvious in the weeks building up to the annual gathering of UEFA’s 55 member associations in Paris last week. They were dominated by speculation that UEFA president Aleksander Ceferin was moving the goalposts on the term limits he introduced in 2017 so he could stay on in the role he’d taken up the previous year, which comes with a salary of almost £2.5million ($3.2m) a year, until 2031.

Nice work if you can get it, obviously, but the concern in regards to Ceferin holding office for that long was that everybody had assumed he is currently serving his third and final four-year term. But you know what they say “assume” makes out of you and me.

It turns out the term-limit wording in the statutes was shoddy. UEFA executives spotted the mistake and fixed it in 2018. But they failed to get approval from the body’s congress, which meant UEFA has been labouring under a misapprehension for years: its three-term limit was illegal, Ceferin could rule for ever.

So, the Slovenian lawyer told his executive committee (ExCo) at a meeting in Germany in December that they must make the limit legit… starting in 2017.

Hold on a minute, or words to that effect, said UEFA treasurer David Gill. That means your first term, which started in 2016, does not count and you can run again in 2027. That is against the spirit of the reforms you introduced, the former Manchester United chief executive apparently added.

Gill could also have reminded the president of the numerous interviews he gave during his early years in the job, when he talked about not wanting to go on for ever, but he didn’t. He left that to former Croatia and AC Milan star Zvonimir Boban, who quit as UEFA’s chief of football last month in a blaze of righteous fury at Ceferin’s hypocrisy.

Throw in some chatter about a leadership challenge from Romanian FA president Razvan Burleanu and the possibility of more than half a dozen member associations voting against the amendments, and it seemed like we were going to Paris for a revolution.

Well, it did not turn out that way.

Gill maintained a dignified silence, Burleanu kept his head down and the rebellion was reduced to English FA chief executive Mark Bullingham holding up the vote’s only red card.

Ceferin could have spared the English this test of loyalty by revealing his career plans in any of the three newspaper interviews he gave last month but he chose not to, and the futility of Bullingham’s protest became crushingly apparent when the president told reporters in the post-congress media conference that he would not stand for a fourth term after all.

He then proceeded to disembowel Boban. As Michael Corleone once put it in another famous story about leadership, The Godfather: “It’s not personal, Sonny. It’s strictly business.”

So, if it’s not “Four more years” for the president, who’s next for the gig?

A patched-up Boban would have a chance, as would Burleanu, the stealth candidate, and Portugal’s FA president Fernando Gomes, a popular chap. In an ideal world, his Norwegian counterpart Lise Klaveness should be in the running. But this is not an ideal world. And nobody thinks a British or German candidate can win (it’s like Eurovision, but worse).

It is too early to talk about a favourite but we can definitely talk about a canny each-way bet. You might have heard of him: Aleksander Ceferin. Steered European football through the pandemic. Defeated the European Super League. The reluctant candidate.

After all, someone has to stand up to FIFA’s Gianni Infantino as he enters his fourth term.

Ceferin and Infantino greet each other in Paris (Julien De Rosa/AFP via Getty Images)

It is also worth noting that Ceferin mentioned even his daughter asked him if he had become like a character from The Lord Of The Rings, prompting him to assure her that he was not looking for the one ring to rule them all.

But as anyone who has read those books/seen the films knows, that is what they all say.

While the amendment to Article 69 detailed above got 99 per cent of the attention, it was only one of 36 amendments in the bundle of changes that 53 of UEFA’s 55 member associations approved.

As well as the English FA’s red card, there was an orange card (not blue) for an abstention from the Ukrainian federation, which is now led by Andriy Shevchenko, another name you may recognise. The Ukrainians were making a point about Ceferin’s attempt to lift UEFA’s ban on Russian youth sides last year.

So, what else was the English FA forced to vote against to make its principled stance on term limits?

Well, “Turkey” is now spelled “Turkiye” in the English version of the statutes and “Czech Republic” has become “Czechia”. Thursday nights have become simpler, as the UEFA Europa Conference League is now just the UEFA Conference League. And all references to “chairman” and “chairmen” have been replaced by “chair” and “chairs”.

More substantial changes are the scrapping of the age limit for office-holders who are 70 years old, as the now legally-tight three-term limit is sufficient, and several tweaks that can be summarised as anti-European Super League (ESL) measures. These “clarifications” are a response to the European Court of Justice’s ruling in December that said UEFA may have overstepped the mark in its preemptive strikes against the ESL in 2021.

That row has been sent back to the Madrid court which requested the opinion of the European Union’s highest court in the first place, and UEFA’s battle with the breakaway league’s backers resumes on March 14. In the meantime, UEFA’s lawyers think they have removed the most anti-competitive language from the rulebook.

Far less contentious, though, are several amendments designed to boost female representation on all of UEFA’s committees, including the ExCo.

Championed by UEFA vice-president Professor Laura McAllister, a former Wales international, the changes mean the minimum number of women on the 20-strong ExCo has doubled, from one to two. Ceferin told reporters this was a more significant move than the term-limit clarification and icily observed that he was speaking to a group entirely of men, bar one female journalist from his home country. Slovenia 1, Rest of Europe 0.

For what it is worth, women outnumbered men in the English FA’s delegation at congress and its chair, Debbie Hewitt, is one of eight European members on FIFA’s council. It was not going to vote against greater female representation at UEFA.

The need for more female voices in football was underlined at the start of the congress when French sports minister Amelie Oudea-Castera raised one of the game’s most pressing issues during her welcome speech.

Having reminded everyone that UEFA was originally based in Paris after being founded in 1954 and that the French capital also staged the first European Cup final two years later, she made some crowd-pleasing points about the need for unity against the likes of the ESL’s three architects A22, Real Madrid and Barcelona — this crowd’s biggest baddies — and said all the right things about sporting merit and solidarity.

But then she said “we also need to look at multi-club ownership“, a phenomenon UEFA surely wishes it had properly addressed 30 years ago when only one or two disruptors were trying it, as opposed to every U.S. private equity fund that has worked out there might be some money in soccer.

Oudea-Castera said it was one thing to worry about “sporting and economic synergies” but another to get to “a situation where a small number of investors would have control over European football”.

The issue came up again in Ceferin’s post-congress media conference, but not until after he had vanished to tell his member associations he would not be seeking reelection.

That meant it was left to general secretary Theodore Theodoridis to deal with questions about what UEFA will do if both Girona and Manchester City qualify for the Champions League. They are second in their respective leagues and City’s parent company, the City Football Group, owns 44 per cent of the Spanish side.

Their relationship is under the microscope at the moment as City attempt to sign Girona’s Brazilian teenager Savio, who is actually on loan at the Catalan club from Troyes in France, who are also members of the CFG stable.

“When the moment comes, we will reply to you,” was Theodoridis’ reassuring response. Just like his boss, then.

Savio has helped Girona compete with Real Madrid in La Liga’s title race this season (Alex Caparros/Getty Images)

Absolutely none of the above would matter at all (OK, matter even less) if there was no money at stake. But UEFA generates pots of cash and everyone wants a piece.

The only talking Gill did do in Paris was to explain that this summer’s European Championship in Germany is set to make more than £2billion, which will help top up UEFA’s pandemic-depleted reserves (down to £400m) and keep the annual grants flowing to the member associations.

But the real money at UEFA is generated by the three club competitions, particularly the Champions League, which is about to get bigger and… different. Out from next season goes the 32-team group stage we’ve had for so long; in comes 36 competing teams, eight games each not six, one league table and two-legged play-offs to decide half the qualifiers for the round of 16.

This means the total annual revenue for UEFA’s three club competitions is set to increase from just under £3billion to about £3.8bn, an increase of 25 per cent. More for participating clubs, more for clubs who get knocked out in the qualifying rounds, more for clubs who can only dream of those big European nights under the lights.

And that last group are significant, as the solidarity money they receive is the reason UEFA is given a free pass when it comes to the European Union’s anti-monopoly rules.

To use the lingo, there is no “specificity of sport” without solidarity payments. So, when the ESL said it would generate £340million in solidarity payments (it did not say how this would be achieved), UEFA had to at least match it. And it has. As of next season, more than £260m will be shared between non-participating clubs across Europe every year, with another £110m-plus being shared between those teams that take part in the qualifying rounds.

This means the share of the total pot going to non-participants is increasing from four per cent to seven — a bigger share of a larger pot.

And there is more.

UEFA’s own share of the net revenues is increasing by at least 20 per cent, too, which means more money will flow back to the member associations in development grants. There is also an 80 per cent boost in the prize fund for its women’s competitions. Prize money for clubs that earn the right to play in the Champions League is also up by a fifth, with a greater emphasis on rewarding in-season success as opposed to historic performance or the size of your country’s media rights market.

This does not mean everybody is happy with the new deal. Obviously.

For example, ‘have-not clubs’ in leagues that have been turned into processions by those sides who do have UEFA prize money point out that the seven per cent set aside for solidarity payments to non-participating clubs will come from a total revenue pot capped at €4.4billion. Anything over that figure will be split on a 93.5/6.5 per cent basis between participating clubs and UEFA.

That said, the men’s Champions League is expected to generate about 90 per cent of the total revenue but the participants will share just 56 per cent. And that is down from the 58 per cent that fewer participants have been sharing in recent years.

I cannot think why that shining example of wealth redistribution made me think of the Premier League’s latest failure to come up with an improved funding package for the rest of English football, but it was interesting to see that one of the decisions the league did make at its two-day meeting with clubs this week was ditching the Summer Series for 2024.

Last year’s inaugural event in the United States was a six-team tournament held across five venues, featuring Aston Villa, Brentford, Brighton, Chelsea, Fulham and Newcastle.

The spin was that it was a smash hit with the Premier League’s burgeoning American fanbase and a wonderful way to introduce some of the league’s less famous clubs to this hugely important market. The reality, however, is that it lost almost $9million (euphemistically titled as “net investment” in a league report to clubs) and missed targets for both merchandise and ticket sales.

The Premier League has come a long way in terms of getting anyone in the U.S. apart from expats to notice it exists but disappointing crowds for fixtures such as Villa-Fulham in Orlando, Florida and Brighton-Newcastle near New York suggest there is further to go.

But the real problem for the league is that Chelsea’s games sold well, as do tickets for any games involving Arsenal, Liverpool, Manchester City and Manchester United, which is why they are all making their own plans to tour in the States this summer.

Tottenham would do nicely, too, but they are going to the Far East, and not as part of a league-branded Summer Series.

Maybe they could play CFG’s rebranded and relocated Chinese franchise.

Sichuan Jiuniu, last season’s second-tier champions from Chengdu, said to be China’s fourth-biggest city by population, are dead. Long live Shenzhen Peng City, who have just popped up 1,000 miles away in the country’s third-most populous city, ahead of the new Super League season kicking off next month.

Which brings us neatly to the final item this week — an update on the slow and painful retreat of Chinese investors from English club football.

Having just sold several of their best players, Reading owner Dai Yongge thinks he has bought himself more time to persuade someone to pay his asking price for the League One club: £30million now, with more to come if they are promoted in the coming seasons.

Unfortunately, he is finding out that the various parties looking at Reading believe the former Premier League outfit are worth even less now because of those player sales. Basic stuff, you would have thought, but Yongge appears shocked by this.

The situation at West Bromwich Albion is even more confusing.

As first reported by The Athletic last month, there is a three-way race to buy the Championship club from Guochuan Lai, the Chinese businessman who paid £175million for a majority stake for them in 2016, when they were a Premier League side. The contenders are: a group put together by the English sports lawyer Chris Farnell, Armenian entrepreneur Roman Gevorkyan’s Noah Football Group and a bid led by Florida-based businessman Shilen Patel.

The latter is very much the choice of the club’s senior staff and also of West Brom’s main creditor, MSD Partners, the investment firm linked to American IT billionaire Michael Dell. And it would be fair to say Patel is now the frontrunner. However, Farnell’s group still believes it has the inside track with Lai, the man who is actually selling the shares, and Farnell and potential partner Alex Hearn are going to China this week to try to close their staged takeover of the club.

Lai borrowed £2million from Hearn in 2021. The loan was secured on 2.35 per cent of West Brom’s shares, with a deadline for repayment of last Thursday. That deadline, unsurprisingly, came and went without repayment and the accrued interest has raised Lai’s debt to Hearn to more than £4million.

Hearn has recently sold his main business, a domestic heating firm called Warmfront, so he does not need his money back urgently. In fact, he has recently signalled to the club that he would be happy to wait for a change of control at The Hawthorns before repayment.

But, equally, he is willing to see if Farnell can get his deal over the line and perhaps convert that loan into a minority stake. Gevorkyan, in the meantime, has been encouraged to remain in the race, as all outcomes are still possible.

The same can be said about West Brom’s on-field prospects, too.

A 2-2 draw at fourth-placed Ipswich Town on Saturday has them fifth, so a return to the Premier League is a realistic goal for the coming months. But they are £40million in debt and heading towards a £35m annual loss. Next season’s projection is no better, either.

If they are not sold or promoted this season, they will need an almighty clear-out to avoid financial fair play trouble next year, assuming Lai can fund them that long. The next week or so feels crucial.

(Top photo: Julien De Rosa/AFP via Getty Images)

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