Recession marring 'Beautiful Game'

Ronaldo is among those taking a pay cut at Inter Milan. Grazia Neri/Allsport

By Simon Hooper, CNNSI.com

LONDON, England -- Football's multi-million dollar stars are returning to preseason training with recession eating away at Europe's biggest clubs.

The bottom has fallen out of the transfer market as clubs put a hold on investment and try to cut mounting debts. And players are feeling the pinch as executives examine inflated pay packets.

Brazil's World Cup hero Ronaldo, the game's hottest property, has agreed to take a 10 percent pay cut at Inter Milan along with Italian forward Christian Vieri and Uruguayan Alvaro Recoba, to help the club's cash flow and improve the public image of players often branded by fans as greedy and disloyal.

"If a club can't pay the players, then we need to be honest and accept a pay cut for the good of everybody," Recoba, reputedly Italy's highest-paid player with annual wages of almost $8 million, told Inter's Web site.

Traditionally, Italy's Serie A has attracted the world's biggest stars by paying the highest wages and splashing out the most extravagant transfer fees.

But with even a giant like Inter concerned to trim the payroll, it is hardly surprising that the normally hectic pre-season transfer market has fallen virtually silent, with many clubs content to swap players rather than invest in squad-strengthening.

Heavy borrowing

Elsewhere in Italian football the fallout of financial crisis has been felt even harder.

Fiorentina, formerly a Champions League qualifier and perennial title contender, crashed into Serie B last season after being forced to sell star players like goalkeeper Francesco Toldo and Portuguese playmaker Rui Costa and only narrowly averting bankruptcy after years of heavy borrowing against non-existent revenue.

And with clubs now being told to prove they have the resources to complete the forthcoming campaign, Roma president Franco Sensi says the season may have to be postponed by a month while Italian football gets its finances in order.

Even European champions Real Madrid, who have broken the world transfer record for each of the past two years to attract Luis Figo and Zinedine Zidane to the Bernabeu and who spent more than $60 million before the start of last season, have shown no interest in adding to their collection of superstars.

"The club's policy is to bring in genuine stars and there aren't many of them about," club president Florentino Perez, who once boated about signing a new superstar every summer, told Spain's Marca newspaper.

But Arsenal coach Arsene Wenger was perhaps more honest when he spoke to reporters at a press conference to announce the signing of Lille defender Pascal Cygan for a modest $2.1 million, the English champions' only outlay ahead of the new season.

"We all thought the car was going into the wall and the accident was about to happen -- but the car has already hit the wall," Wenger said. "At the moment we are in a depression. I put that down to a disastrous financial situation in football in Europe."

Saturation point

After a decade in which football's bubble has been swelled by stock market flotations and huge sums generated by the auction of television rights, the collapse of the financial markets and evidence that television coverage has reached saturation point have hit the sport hard.

Having spent recent years competing to throw money to clubs, the broadcasting companies, stung by the failure of pay-per-view experiments and falling viewing figures, are now cooperating to force the cost of rights downwards.

Germany's Bundesliga clubs have renegotiated a deal with Kirch for US$250 million less than the US$940 million the broadcaster was originally ready to pay.

With many of England's lower league clubs facing possible extinction, the Football League was forced to accept a £149 million ($210 million) deal from Rupert Murdoch's Sky after the bankrupt ITV Digital defaulted on a contract that had been worth US$495 million to the 72 clubs.

In Italy, television revenue is expected to drop by 50 percent next year when the current Serie A broadcasting deal comes to an end.

Salary cap

But there are signs that football is adapting for an uncertain financial future.

In Italy the players union and the league of Professional Football Clubs have reached an agreement that will see a proportion of players' wages linked to performance and will introduce automatic salary cuts if a club suffers relegation.

And in May the G14 group of Europe's top clubs advocated a salary cap, limiting a club's expenditure on wages to a percentage of its turnover, and a code of conduct to cool the over-heated transfer market.

European governing body UEFA has also announced a club licensing system, to be introduced in 2004, that sets strict financial criteria that clubs must satisfy before being allowed entry to the Champions League and UEFA Cup.

But not everyone has been hurt.

Manchester United, who have forged ahead of their domestic and international rivals in terms of marketing, merchandising deals and revenue-generating, have signed a US$466 million kit deal with Nike.

Chief executive Peter Kenyon says the club intends to use that financial muscle to press for honours, after surrendering the league title to Arsenal and losing in the semifinals of the Champions League last season.

"We are cash-rich and work on a well-resourced basis. That's helped us to do as well as have over the past decade," Kenyon told the Daily Mirror.

With England defender Rio Ferdinand poised to sign for the club from debt-ridden rivals Leeds United in a deal reportedly worth $50 million, Kenyon is set to put the club's money where his mouth is.

Perhaps the lesson for United's rivals is that fiscal management is now more important than touchline management in gaining an advantage on the pitch.

 

Related information

Stories

Inter's top stars agree to take pay cut Italy mulls performance-based contracts

Multimedia

Visit Video Plus for the latest audio and video