In Nigeria, it is easy to feel or think the Barclays English Premier League is the biggest European football league but when you look at the statistics, the Bundesliga is actually the biggest football league in Europe.
Trying to predict the longevity of European football leagues, a study once predicted that by 2012, the football leagues in England, Spain and Italy would have failed because according to the report, government, investors, media, and other stakeholders would have been looking elsewhere for investment. Without these powerful lovers of the sport, the leagues will die out.
One thing that surprised some sport industry watchers is that the Bundesliga was not mentioned among leagues that would perish in a short while. In 2009, the same study proclaimed that the Bundesliga would overtake the English Premier League in a year’s time. It gave a few reasons for posting such hypothesis, one of them being that the league generates better on-field results than any other European league.
Helping to increase its credibility, the brains behind the study claimed that they were approaching the survey findings in such a way that Forbes would approach its business surveys. The findings were said to be based on economic, social, and environmental performance. They were not analyzing football in terms of losses, wins, or ties but they were interested in using comprehensive business model to judge their findings.
But since then, things have changed in the world of football. Now, England’s Premier League is seen as providing better on-field performance and yields more in the sense of profits, German Bundesliga still positioned to be more structurally profitable in the near future because of larger crowds and better financial setting.
Some other thing that German teams are better at is that they are curbing players’ salary expenditures and reducing player’s transfers more often than other leagues. They are also good at spending more money on training new talents every year for sustainability sakes.
The most dangerous aspects of EPL existence is that it runs on deficits when you talk about Returns on Assets (RoA), same goes for leagues in Italy and Spain, while the Bundesliga runs on 2 percent RoA. This business strategy is reported to be at par with the 3 percent RoA for German companies.
True, as the study claimed, England’s Premier League leads the overall ranking in social performance, particularly in diversity, it’s also an area becoming more important both from ethical standpoint and as tool to market football beyond nationalities. Yes, up until now, the good thing about England and even Italy is that many foreign players like to perch in these two countries. Even if most players from foreign lands don’t prefer coming to Germany, the Bundesliga still commands large amount of crowds.
For any league to maintain its sustainability, drastic changes need to be made. The example of leagues that ought to have made changes in their heydays are English and Italian leagues. During their periods of prosperity and dominance, they refused to pursue reforms that would ensure their long-term sustainability and now, some of their top football clubs are basically relying on very wealthy personal investors to stay afloat and alive. This scenarios show the importance of making changes just when it’s needed most. Now, passing the bulk of profits to players is no longer the right way to sustainability for football leagues. In the same way, over-investment and extreme risk-taking to fulfill stakeholders’ on-field expectations doesn’t make sound economic sense. Not anymore!
So to avoid a systemic crisis and ensure long-term economic sustainability, European football leagues must evolve to a viable profitable business model.