The New York Times: Football’s market correction

This piece originally appeared in The New York Times Goal blog, on 22 June 2010.  The link is here:


“Minnows Batter Reputations Of Game’s Traditional Powers”

This World Cup is not going according to plan. That much is obvious.  If we look at the tournament results so far, we quickly become aghast at the vast number of bizarre results. Italy drawing with New Zealand? England drawing with Algeria?  Spain losing to Switzerland? Uppity countries with meager FIFA rankings are queuing up to outthink and outplay their more distinguished opponents; and we can’t remember the last time a World Cup saw so many anomalies.

But, whispers an economist’s soft yet insistent voice, maybe they aren’t anomalies at all.  They’re merely a manifestation of something that we’ve seen happen to dot coms, and to the housing market. That’s right, international football is going through its bubble-burst. Let’s call it the reputation crunch.

The credit crunch, as we painfully know by now, was what economists airily call a “market correction”: when the value of overpriced shares come crashing down to their true value. Following that analogy, the reputation crunch is what we’re seeing at this World Cup, where teams hyped as titans have been laid embarrassingly low. And, like all crunches, we really should have seen it coming.

Football’s own finances have been giving us hints for years.  At the beginning of this year, UEFA published a report – “European Club Footballing Landscape” – that looked at the parlous state that the sport had giddily spent itself into.  From UEFA’s findings, one statistic in particular stood out and that was that 18 English Premier League clubs – whose number did not include Portsmouth and West Ham United, two notorious spendthrifts – were responsible for 56 percent of the total debt of all professional clubs in Europe.

At a glance, this statistic reveals one thing: that Premier League players are the most overpriced in Europe. This is something that fans worldwide claim that they’ve taken for granted, which doesn’t explain why they’re startled when England draws, 0-0, with Algeria.  Look, they proclaim, England is ranked eighth in the world; Algeria is ranked 30th.  A goalless draw is an appalling, anomalous result.

But then our economist nervously raises his hand, and says that, er, it isn’t. What’s more, he says, the market of international football began to correct itself some time before the World Cup.  Look at Algeria, he says, and who they defeated to qualify.  They defeated Egypt, the African champions and their sworn enemies.  For goodness sake, he says, look at Slovenia, a nation of 2million, who beat 300 million-strong Russia over two legs in a playoff.  These were not shocks, he says, but the logical progression of a world where talent and tactics have been truly globalized.

At the start of a tournament, the instinct of many a viewer, and no less a player or manager, is to look through the list of fixtures for matches where an easy victory is assured.  But simple wins at this level are a thing of rarity.  In fact, it’s results like Portugal’s 7-0 thrashing of North Korea that are an anomaly, coming only when the Asian team abandoned the defensive rigidity that had seen them lose by only a goal to Brazil.

No, the position is clear, and the football market is correct, no matter how much money we try to throw at it to distort the true picture. The reputations have been crunched, and the reality of the modern game is not only that anyone can beat anyone; it is that anyone will.

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