The strategy consulting firms EY and Sport Value, experts in strategic consulting, auditing and financing of professional clubs, came together around a common desire to reflect on the professional football of tomorrow.
You can find our analyses and our complete study in pdf format clicking here.
Like its European rivals, French professional football has been impacted by the health crisis. Adding to this, it is also affected by the uncertainty regarding the outcome of the imbroglio of French football’s broadcasting rights. As a result, it is going through the most important economic and financial crisis in its history. In order to build our proposals, we conducted a survey of about twenty top-level directors in French professional football and carried out nearly thirty hours of interviews with European football executives who shared their analysis of the situation with us.
THREE AXES TO RETHINK THE POST-CRISIS PERIOD AND BUILD A NEW SUSTAINABLE MODEL FOR FRENCH PROFESSIONAL FOOTBALL
Looking ahead to the post-crisis period, the directors said they expected more from the government, including a strengthening of support and recovery measures.
However, these emergency measures will only be effective if they are accompanied by a real reform of the French professional football model. Based on the analyses and exchanges carried out with directors and stakeholders, Sport Value has drawn up an action plan based on three priorities to reinvent the current model: governance, economic model and vision. The relaunch of professional football necessarily involves joint reflections on these 3 strategic pillars.
– IMAGINING A NEW GOVERNANCE FOR PROFESSIONAL FOOTBALL IN FRANCE
95% of the directors surveyed would like to see the interests of professional football represented by a single voice towards government bodies, as a precondition for a more global reflection on the governance of the sector in France.
Concretely, several tracks of reflection emerge in the field of governance:
- Improving internal decision-making processes and consultation;
- Establish the League as a “House of Football” that would focus on sports issues beyond financial and commercial matters;
- Enlarge the skills and the network of high-level expertise by not hesitating to open up to other professional universes in order to identify good ideas applicable to football.
– MODERNIZING THE FINANCING ANF THE ECONOMY OF PROFESSIONAL FOOTBALL
In addition to the emergency measures, economic and financing models of the clubs must be changed, based on the European best practices.
- Launch a major plan to recapitalize clubs in equity and quasi-equity by welcoming minority and bond investors to finance 5/7 years recovery plans;
- Experience financial innovations (creating a bond rating to open a secondary market);
- A new accounting method for transfers. The accounting of transfer revenues in one time while expenses are amortized over the duration of the contracts creates harmful effects (dependency, financing needs, etc.);
- A new mode of remuneration for the players, with more variability based on results;
- Facilitating access to credit. The need for liquidity is urgent and not all clubs can benefit from a capital increase.
– VISION AND APPROACH OF THE PRODUCT
For the French football executives and international experts we interviewed, this period can be an opportunity to create new operational modes. Among those innovations, executives insist on, for example, new way of broadcasting contents and a better management and promotion of their infrastructures.
Rather than a commercial company, the main proposition is the creation of a joint venture with a specialist in image production and realization to control the content.
Long-term matters have been discussed with experts and even if they don’t get unanimous support are interesting ideas for the future:
- A priori control of the wage bill and the number of transfers ;
- Closing the gap among the elites;
- Allocation of TV rights to prevent the clubs dependency regardless their size
- Optimization of national and European calendars. In order to guarantee the show and the performances of the players.