Soccer clubs short of money across Europe

LONDON – The collapse of the television rights market has wreaked havoc across Europe’s soccer leagues this season. Television money, the driving force behind soaring player transfers and wages over the past few years, inflated a bubble of excess that finally burst last year as expensive contracts became unsustainable. Many broadcasting deals collapsed and the value of others now up for renewal is unlikely to reach the levels seen at the height of the media and technology boom in 2000. Germany’s Bundesliga is one league to have suffered a severe reality check. It has been badly damaged by the fallout from Kirchmedia, which filed for insolvency last year owing 70 million euros ($78.3 million) to the league’s clubs. Lost revenues for the current season could reach 200 million euros. As many teams slip into the red, the German soccer league has warned it will not renew the licenses of 24 of the 36 clubs in its top two divisions if they do not resolve their problems. Infront, a marketing agency that now owns the rights, has been trying to sell them elsewhere but so far has received only an offer of 40 million euros from Sat1 channel, half the amount it is asking. England’s first, second and third divisions were similarly affected by ITV Digital’s liquidation a year ago. The league was able to renegotiate various new deals but for much less money and a number of clubs have struggled this season, with seven going into receivership. «The demise of ITV Digital has had a devastating effect on our finances,» said Chairman Theo Paphitis in first division Millwall’s first-half financial results statement in February. Collective sale Even England’s premier league, the richest league in the world following its 1.1-billion-pound ($1.76 billion) three-year deal with Sky, which ends next season, has had problems. Despite a minimum of 10 million pounds a season for each club, most top teams reported increased losses for the first six months of the financial year, while the next deal, from 2004, is not expected to match the previous sum. The start of the Italian season was delayed for two weeks last September as eight smaller Series A clubs were unable to secure TV contracts. It was not until the six wealthiest clubs agreed to help the rest of the division with a cash boost that the season was able to begin. Greek fiasco Whatever the problems suffered elsewhere this season they are nothing compared to what has happened in Greece. TV channel Alpha Digital arrived midway through the 2001-2002 season to compete with long-term subscription broadcaster Supersport, but, after promising the riches seen in other leagues, it attracted only a handful of subscribers and folded within six months. Clubs demanded a share of the profits from the state-run soccer betting pools to try to stem their losses but were swiftly rebuffed. «We will not cover the expenses of professional clubs, not one drachma. We didn’t create the problem and we can’t act as a firefighter,» said Sports Minister Giorgos Lianis. Supersport said it would not pick up the pieces and told clubs that had defected to expect half the money they were earning prior to 2001 in any new deals. «Under the new circumstances, the income of the professional clubs is next to nothing,» said Thanassis Kanellopoulos, president of the Greek League of Professional Clubs. Over half the first division teams are in serious financial trouble and state auditors have begun an investigation into the finances at all top-flight clubs, with a full report expected in June.

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