It's the Champions League, or how a rich competition can ruin your finances. Here’s Francisco Ferreira.
It may sound weird, but the facts are there to see: most small clubs that managed to have some success in Europe's top competition are now facing a wide variety of problems. Some of them are actually on the brink of a financial meltdown. How to justify such a strange phenomenon? Is it a curse? Maybe just bad manegement.
Think about the UEFA Champions League. What comes to your mind? Exciting matches between some of the best clubs in the world, sold-out stadiums, huge prize money, high TV revenues. Your thoughts should be somewhere around those things, for sure. That's why the Champions League is the biggest and most important club competition in the world, with lots of attention from the media and football lovers in general. And that means every single club's dream is to play a Champions League match. The anthem, the crowded stands, the big names. For a small club (from either a small or big country), the Champions League means money, and probably a crucial step forward in your financial and sporting status.
Since 1992, a number of small clubs managed to fulfill the dream, and played along the likes of Man Utd, Barcelona, Real Madrid or Bayern Munchen. We've seen some interesting surprises, like Swiss minnows FC Thun reaching the Group Stage, or Lierse, Willem II or Boavista outplaying their local opponents and securing a place among the European elite. And these clubs do have at least two things in common: they were outsiders, but were better than some big names; and after their dream years in the Champions League, they fell into the lower divisions or bankruptcy nightmares.
We're not talking about four or five clubs, we're talking about dozens of clubs. Around 20, at least. Let's start with a well-known example: Leeds United.
In the late 1990's, Leeds had some of brilliant players on the books, and that was enough to secure a place in the UEFA Champions League. 2000/2001 was a season to remember: the club not only played Champions League football, but surprised most football enthusiasts reaching the semi-finals. The future looked bright: millions were coming in and the team was playing amazingly. The nightmare was yet to come.
Instead of investing wisely, Leeds started spending loads of money on new players. Not that they weren't top quality, but Leeds couldn't just afford them unless they were receiving UEFA money every season. Rio Ferdinand, Robbie Fowler and Seth Johnson moved to Elland Road, and the board probably expected recent success would continue, and the club would sit along Europe's elite. Things went terribly wrong: Leeds didn't finish the season in a Champions League spot, and the wages and transfer fees were there to be paid. The solution was easy to find: to sell some of their key-players for above-market values. Keane, Ferdinand, Bowyer and Kewell moved, leaving the squad miles away from their recent Champions League status. We all know where Leeds are now, and even though the club seems to be slowly recovering, it's quite hard to understand how can a massive football club drop from the Premiership to League One in less then a decade.
Leeds is just an example. If you cross the Channel Tunnel, and drive all the way to Nantes, you'll find yet another club in the same situation. In 2001/2002, Nantes had a short period of local and European success: the French outfit were surprisingly crowned Ligue 1 champions, and managed to reach the second Group Stage Phase in the Champions League. Not long after, they were trying to avoid relegation in Ligue 2. Instead of playing against Man Utd and Bayern Munchen, they're trying to be stronger than small local clubs, like Amiens or Tours. And if you rent a car and drive east, maybe you'll find Lens. Maybe you know the local team, RC Lens: in 2003, they won 0-1 against Arsenal, much to the despair of Arsene Wenger (yet again). Nowadays, just a few years later, you'll see them playing against... Nantes, in Ligue 2. More recently, AS Monaco, Champions League finalist in 2004, finished last season's Ligue 1 in the red zone, and are now trying to avoid the last places in Ligue 2. Unbelievable? Think again.
A bit further east, in Beligum, Lierse is another club that faced the “Champions League Curse”. They won the league in 1997, and that meant a place in Champions League. It didn't take long before they went down, returning to the top-flight in 2006, only to be relegated again.
In sunny Spain, for example, just think about Galician giants Deportivo La Coruna and Celta de Vigo. Both teams had extraordinary seasons in the Champions League, collecting millions of Euros from wins and participation fees. That didn't keep financial troubles away, and in 2012, both teams are now playing in Liga Adelante, the second tier in Spanish football. Celta's case was a bit of a scandal: the team reached the last sixteen in 2003/2004 and were then knocked by Arsenal. In domestic football, things were far from brilliant: the Sky Blues didn't escape relegation that very same season. After coming back to the top-flight just one year later, Celta couldn't avoid an immediate return, and they recently struggled to avoid relegation to Segunda B. Depor joined their local rivals last season, after impressive seasons in Europe: how can you forget their thrilling match against AC Milan, in a season when the club missed a Champions League final by a single goal?
Not far from Galicia, in Porto, Portugal, Boavista’s name can also be added to the list. The Portuguese club won the League in 2001, much to the surprise of everyone, and had two spells in the Champions League. In 2007, they were demoted because of a corruption scandal. But, back then, the club had already unbelievably high debts, and were actually relegated again to 2nd Division B, this time because of poor results (and a very weak squad). That meant Boavista was playing third level football just six seasons after knocking German giants Borussia Dortmund out of the Champions League. Twice.
The list is far from over, but some examples are stranger than others. FC Thun is a very small club from Switzerland, that played amateur football for the most part of its history. Just nine years after their first-ever Champions League campaign, they were playing in Swiss Third Division. That didn't stop the club to enter the Champions League, even though their budget was limited to €2,000,000. Entering the Champions League meant €4,000,000 prize money, plus Television and Gate revenues, and some more extra money from a draw and a win against Sparta Praha. In theory, Thun had made enough money to be financially healthy for seasons to come. Things turned differently: the Swiss club spent not so wisely, faced serious financial problems, and were eventually relegated to semi-professional Challenge League.
In Scandinavia, for example, it's impossible to ignore Molde's or AIK's seasons among some of the best clubs in the world. A Champions League participation was supposed to mean more domestic success in the future: in leagues where the clubs have smaller budgets, UEFA prize money should be enough to build at least a small advantage. Right? Wrong. Molde, from Norway, and AIK, from Sweden, were both relegated short after entering the Champions League.
But why? Is it some kind of curse? If you believe football is full of myths and paranormal moments, then maybe. Otherwise, it's time to look a bit closer. It's important to have in mind that most of these clubs weren't expecting such a level of success: Thun wasn't planning a Champions League participation, Monaco's goal was probably to have a decent run in the competition but weren't even thinking about making it to the final, and Boavista would be glad enough with a 4th or 3rd place in the Portuguese League and a UEFA Cup participation. The unexpected millions seem hard to manage: most clubs (and board directors) simply don't know how to manage such big amounts of money. Most teams choose the easy way: they pay higher wages and try to hire better players. Besides, playing in the Champions League also means a huge footballing challenge, and most teams want to do well in Camp Nou or Old Trafford. Often, things go wrong, and the clubs find themselves miles away from Champions League money again. After all, they're moving back to their “natural zone”, between 6th and 10th place, maybe. And then there's no way back: wages are there to be paid, and you're back to your old revenues.
How should these small clubs be spending their fresh money? Certainly not in low-quality and ageing foreign players, but in young talents that can be sold in the future for a higher price. In Youth Facilities also, of course. With €1,000,000 you can hire some better coaches, you can create new and improved training areas, and that will help you finding some of the best local talents.
The Champions League also means a lot of reputation, so it'd be a wise decision to invest some of the revenues in new Marketing and Communication departments, trying not to loose momentum both locally and at an international level. Scouting is also important, and at least a small part of those european millions should be wisely invested in both domestic and even international scouting networks. That kind of investment takes a club to the next step, not higher wages and higher debts. And most important: clubs (and their Directors) must start to understand that they can't set budgets expecting more than a normal campaign.
To expect more Champions League success when the team usually finishes no higher than 4th place is not wise at all. But it keeps happening. If Michel Platini's Financial Fair Play was ready and in use back then, maybe most of these clubs wouldn't be facing financial difficulties right now. But only time will tell if the new rules will totally avoid this scenario, for the good of European football and its domestic leagues, that keep seeing historic clubs on the brink of a complete financial meltdown, ironically just a few seasons after their bank account was grown bigger thanks to the UEFA Champions League.
To read more from Francisco, visit his blog.