With Chelsea lifting the Europa League trophy after defeating Arsenal in Baku this week, and Liverpool taking on Spurs in Madrid on Saturday for one of the biggest titles in world football, English clubs are truly back on top. Never before has one country produced all four finalists of Europe’s two main club competitions and we spoke to Gustavo Spanholi, Programme Leader for BA (Hons) International Football Business at UCFB Wembley, to find out the reasons behind this revival and the impact that success in Europe can have for a club…
Hi Gustavo. Good to speak with you. The Champions League on Saturday will be a fitting finale to a memorable campaign which has seen some great matches and upsets. What sort of impact does this have on the tournament and its reach from an international perspective?
Since the inception of this format of the Champions League, what UEFA sought to create was a memorable competition, to increase the level of the competition and transform the Champions League to become the main reference for football around the world. And I think the level of the matches, especially this year, with the semi-finals, fans around the world have been delighted by two great comebacks. It’s crowning everything that UEFA, as the organisation that delivers the tournament, has sought over the years.
We know, based on research and major studies, that the level of competition and the uncertainty of the outcome are two of the main drivers to attract audiences for any competition and consequently it increases the value – so year after year the Champions League is confirming it is the main football competition in the world. UEFA provides all the conditions to create this uncertainty of the result; as we saw in the semi-final, for example, everybody after the first leg was betting for a Barcelona vs Ajax final, but two fantastic comebacks have given us Liverpool vs Tottenham instead.
Having this product, we need to recognise the fantastic work that the marketing and commercial teams at UEFA do together because they promote this tournament and this golden product in regions of the world that don’t even have a team in Europe. They go to Thailand, Malaysia, South America, where they present exhibitions of the trophy, events with fans, and year after year they are increasing the level, off the pitch as well as on the pitch.
The level of interest in the competition is huge. Speaking of South America and Brazil, my home country, the interest in the Champions League compared to local competitions is increasing immensely over the years. If you look back 8-10 years, the impact it has on local audiences is fantastic.
The race for the top four in the Premier League and qualification for the Champions League demonstrates how important the competition is for clubs. What business implications does qualification have?
It’s widely known in the football industry that the European competitions organised by UEFA have a huge financial impact on the clubs because of the prize money on offer for each club depending on their level of participation. For instance, for clubs in eastern Europe, to qualify for the group stage of the Champions League has a tremendous impact on a club. A friend of mine used to work for an eastern European club and he explained that if they only qualified for the group stage, the money they received was sufficient to cover the costs of the club for a whole year, so the impact is huge.
Leicester City won the Premier League in 2016 and went on to have the highest earnings from the Champions League the following campaign despite being knocked out in the quarter-finals
Another interesting fact to exemplify this is the 2016-17 campaign when Leicester City reached the quarter-finals; even though Real Madrid won the cup, Leicester achieved the highest earnings in that competition because the way the prize money is geared it is designed to award the club that succeeds not only on the pitch but also the clubs that succeed off the pitch. England has the highest audiences for the matches, and the clubs, because of the marketing pull, benefit from the high audiences they generate. Leicester was the club that was top, so it causes a huge impact for every club playing in European competition, especially the Champions League.
Speaking specifically about Tottenham and Liverpool, Tottenham have benefitted from a combination of factors. Nobody was expecting the club to be in this position but they’ve benefitted from the gate receipts from playing at Wembley – a 90,000 seat stadium – so this had a big financial impact. And their progress this year in the Champions League means that next year they’re going to be at a top level financially. The Deloitte money league shows that Liverpool, over the last year, achieved the best results in the report, reaching number seven on the list for highest earning clubs in the sport. So the Champions League is in the centre and the main driver of these financial results for both clubs.
The new Tottenham Hotspur Stadium will complement the financial benefits the club has enjoyed from playing at Wembley Stadium and reaching this season’s Champions League final
To have all four places in the major European club competition finals taken up by one country is unprecedented. For you, what are the reasons behind this? Does it show the return of English football to the top of the tree?
In the football industry, this is something that’s been expected in the last few years and this season it’s been achieved. It’s the first time that four clubs from the same country have reached the final of the two main European competition. One strong reason is the financial strength of the English clubs – we have Premier League driving the highest earnings in terms of broadcasting. The clubs are the highest earning clubs in the world, and their performance in the Champions League is another key driver for finances.
We know, based on research and previous reports, money spent not only on transfers but also on player wages is a key element to drive the performance of clubs in leagues and other competitions. English clubs are in a position where they pay the best wages in Europe on average, and one key factor for us to have a clue about the impact of money – a club that just escaped relegation in the Premier League – Brighton – is among the 30 richest clubs in the world. Again citing the Deloitte money league, half of the top 30 wealthiest clubs in the world are in England, and half of the top 20 clubs on revenue generation are English. So English clubs pay the best wages and generate the biggest revenues, and they have the power to sign any player they want in Europe. So like I said before, it was expected that they would be top in the main competitions, and this year that expectation has materialised.
Spurs and Liverpool have reportedly been allocated just over 33,000 of the 68,000 tickets for the final. Why are relatively so few tickets available for supporters of the two clubs who will be facing each other in the match? And what are some of the impactions or challenges of this situation as it stands?
From the point of view of the supporters, it’s not a nice situation for them because every supporter wants to follow their clubs at the peak of their season. However, we cannot forget that the Champions League is only the Champions League because it drives all this interest and because they do very good work alongside their sponsors. So from the business perspective, we need to understand that UEFA, or any event organiser, depends on the money generated by sponsors that follow them through every stage of the competition, and for the final, they have already allocated tickets for these sponsors to promote and generate activations, and for corporate guests. We can also cite research that’s used by analysts in the industry – 20% of the stadium capacity which is dedicated for VIP boxes generates 80% of the revenue, so this is part of the structure of how a big fixture like this is organised.
Spurs and Liverpool have reportedly been allocated just over 33,000 of the 68,000 tickets for the final at Atletico Madrid’s Wanda Metropolitano stadium
On the other hand, as we have English clubs in the final we are speaking about the most demanding type of fan in Europe because English fans are mad about football. They follow their clubs wherever they go. It’s rare to see the away stand in any game in England empty, because no matter if you are fans of Newcastle playing Brighton, the fans will travel. And it’s true for English fans travelling for European fixtures too. So we are speaking about an English fan that has purchase power, they have the financial conditions to follow their clubs and that’s why it’s so disappointing when not all these fans can follow their clubs to a destination not so far away like Madrid for Liverpool vs Tottenham. A lot of people will travel to the city to experience the atmosphere so I expect to see a full stadium, and outside the party will be like it’s an English city for a night!
Performances like Lucas Moura’s in the semi-final second leg against Ajax must have a huge impact on a player’s profile. For students aspiring to work as agents/player representatives, what are the skillsets required? And what is the best advice you would give for building a career in that area?
Based on our experience in the football industry and the contacts we have, the friendships and business relationships we have with agents, owners of agencies and sports lawyers, what we observe is that for a student, they need to know the regulations and how to negotiate. But they also need to be very good at applying their interpersonal skills. Maybe the key thing to work in this area is the ability to build consistent relationships and, over the years, to build a strong network of contacts in football and to build that it’s important to attend every kind of related event. Go to these events with an open attitude and be positive. You never know when you might meet an important contact for your future.
Someone aiming to work with players – they need to know people that are shaping this market. When you work on behalf of a player, they will expect you to connect the two points; the talent of the player with the best place possible for that player to ply their trade. A player doesn’t want to work with someone that only has a couple of options that will waste their time – they need to connect the player with the best clubs in Europe and the world.
The advice I would give based on our contacts with agents and sports lawyers is to have some hard skills like negotiation skills, as well as knowledge and awareness of regulation, but also they will need to have the ability to build consistent relationships and a strong network in the industry.
The Europa League has enjoyed a resurgence since it’s rebranding from the UEFA Cup in 2009, and the winner now secures Champions League qualification for the following season. What are the driving factors behind a rebranding project like this? And how has it impacted European football from a business perspective?
I think the Europa league is successful because the Champions League is successful. Both competitions seek the best football – both on the pitch and in off the pitch areas too. And because the Champions League is so selective and only the best of the best qualify, this creates a good problem, because we have very good teams in European countries, traditional clubs, that don’t manage to secure places in the Champions League but do qualify for the second tier tournament. This season proves the point – we had two clubs this year that easily could have played in the Champions League but they have contested the final of the Europa League. We’ve also seen Valencia, ones of Spain’s biggest clubs, Lazio from Serie A, and other clubs that don’t have a chance to play in the latter stages of the Champions League starring in this competition – clubs from eastern Europe and some of the smaller markets in Europe.
Chelsea beat Arsenal in the Europa League final at the Olympic Stadium in Baku on Wednesday with an estimated 5,000 fans from both sides able to make it to Azerbaijan for the game
Because Europe is so complex, with so many member associations, and several strong leagues, we need to have a very strong second competition like the Europa League. I would say the Europa League is a fruit of a strong Champions League. It brings glory to win it; Manchester United in 2017, Sevilla won it several times, and Atletico Madrid have won it recently, so it’s a very big competition to win and the fans of Chelsea will be very happy winning the trophy this week.
Baku proved to be a controversial venue to host the final. Why do you think that was the case? And what the drawbacks and benefits of hosting a major final in a less traditional football location?
Governing bodies like UEFA and FIFA have a duty to be inclusive to make a competition for all and to make a tournament that includes not only the elite of football but one that every club supporter has the chance for enjoy. If it’s not inclusive, you can lose the uncertainty of the outcome and you can lose attractiveness, so choosing a place like Baku is part of the strategy of taking football to all places that are able to participate in a UEFA competition. We also cannot forget that teams from Azerbaijan play in the Europa League and Champions League and English clubs went there in the initial stages so they are part of the competition, like London, Rome, St Petersburg – Baku is part of the competition.
Gustavo: “Choosing a place like Baku is part of the strategy of taking football to all places that are able to participate in a UEFA competition.”
It’s part of the strategy of the governing body to be inclusive and bring football everywhere. Last year we watched the Champions League in Kiev, Ukraine, which is not an easy destination if we consider the centre of European football to be around London, Amsterdam, or Paris – countries in eastern Europe are part of the competition as well. I understand the way the final was configured with two English clubs and then needing to travel to Baku is not an easy trip – 52 hours by car and several obstacles. But we couldn’t have guessed before the competition started that two English clubs would make the final. We could easily have had a team from Russia like Zenit St Petersburg, who won it in the past, making the final this year and we wouldn’t have had that debate. It’s a potential outcome that happened and we need to adapt to that – but I see the strategy of the governing bodies as the correct one because they are making football inclusive no matter what and regardless of the influences of other factors.
