CBS’s coverage of the Europa League was an unusual place for a viral clip about soccer finances to be born.
But, as things heated up between former Liverpool defender Jamie Carragher and Spanish soccer expert Guillem Balagué, the Reds legend went on a tirade that resonated well beyond the watching US viewers.
Balagué had been attempting to argue that the higher revenues earned in English soccer needed to be distributed around Europe because it “was all the same sport.”
“Real Madrid is a team who, for years, has come to the Premier League and cherry-picked the best players, whoever they wanted, whether it be Cristiano Ronaldo [or] Xabi Alonso. Barcelona [did the same] taking [Javier] Mascherano from my club [Liverpool],” an increasingly irate Carragher replied,
“Real Madrid and Barcelona don’t look after their own clubs in their own league,” he added gesticulating with his hands, the tone of his voice rising an octave, “and you want help off the Premier League?”
His argument failing, journalist Balagué had to retreat to the comfort of his position as an armchair pundit, “I’m not a Barcelona representative, I’m not a Real Madrid representative,” he cried before falling silent.
Many English soccer fans appreciated Carragher calling out the hypocrisy of the two Spanish giants, who for years plucked the best talents from English soccer, but now face a battle to do so because of their own league’s declining finances.
The failure of the Spanish giants, many have pointed out, is a product of them stifling the competition in their own division for decades.
Unlike the Premier League which distributes its international revenue evenly across the division Barcelona and Real Madrid earn many times more than their rivals.
The result is a competition with two genuine box office games a season and not a lot else, which, unsurprisingly, TV companies are not queuing up to pay large sums to broadcast.
Who hates the Premier League more? La Liga
In the offices of Barcelona and Real Madrid’s primary competition, La Liga, resentment towards the league in England is even greater.
“We read, the ‘strength’ of the Premier League, but it is a competition based on the clubs’ millionaire LOSSES (their ordinary income is not enough for them) — most of the clubs are ‘financially doped’,” La Liga president Javier Tuba’s tweeted shortly after the transfer window closed with an even greater outlay on new talent from the English division.
The social media post also included a post where La Liga’s corporate director explained how Spanish clubs were only spending what they earned, whilst over in England owners were injecting capital into the club to support losses that would be otherwise unsustainable.
He then managed to find a term even stronger than to describe the situation; cheating.
The concept of financial doping is brilliantly flexible, first popularised by Arsene Wenger when Manchester City’s spending started to unsettle the Premier League hierarchy in the late 2000s, it’s become an increasingly useful term for characters like Tebas.
It might refer to different clubs or practices, but, essentially, the complaint is always the same; it’s unfair, they have more money than us.
But the point Carragher used to silence Balagué and, which Tebas has been far less ready to discuss, is how the financial doping concept might apply to the league’s own distribution of wealth.
As the ex-Reds man pointed out, Barcelona and Real Madrid have always had an unfair advantage in revenue terms because they have taken a higher share of the television money.
This unfair distribution of the cash the league generates has made the league both unattractive to investors, who see little hope in breaking the established duopoly, and, increasingly, fans, who have grown bored of a competition dominated by two sides.
The anti-competitiveness is baked into the system and it’s being made even worse by the financial regulations Tebas’s regime has introduced.
Sustainable, but not competitive
For the past ten years at least, La Liga has been on a mission to create a more financially ‘sustainable’ competition.
There are many aspects to the vision which are admirable, not least the effort to have clubs live more within their means, to not load themselves with debts that threatens their long-term future.
“To create the best league it is essential that all clubs are financially sustainable,” another La Liga executive called Jose Guerra explained “through our system, we help clubs to spend freely and compete at the top level, without the risk of creating an unsustainable debt. No other league has something as comprehensive as this.”
“A club that is in a healthier financial state is more attractive to investors and increases employment opportunities, while attracting more and more top-quality players. This has a huge impact on our ability to promote LaLiga to international broadcasters, which only adds to the club’s growth potential,” he added.
It is a beautiful vision, that a sustainable division will create a virtuous cycle of growth.
But the reality is that is complete nonsense, investors are attracted by the size of the return on investment.
Take Fenway Sports Group, it bought Liverpool for around $478 million, this year the estimated price they were looking to sell for close to $5 billion.
That increase in valuation is in part thanks to good strategic decisions but is mainly due to being in a league where there is exciting competition driven by, often irresponsible, spending.
Guerra’s idealistic vision has one other pretty glaring omission, it ignores the polarising revenue gap between its two biggest sides and the rest of the league.
Last season (2021/22), La Liga handed champions Real Madrid $171.2 million which was three and half times more than the lowest performing clubs, Mallorca and Rayo Vallecano, ($48.9 million) received.
Even with a wealthy backer able to fund losses for several years, bridging such a gap would be difficult, not least because the two sides also have Champions League revenue and huge commercial earnings.
But with the rules that restrict clubs to only spending what they earn it becomes an almost insurmountable task.
How on earth could Rayo Vallecano hope to build a global brand to rival Real Madrid by only investing what it earned? it would be impossible.
Why the Premier League is so attractive to investors and viewers who tune in every week is that, essentially, the opposite is true.
A far greater range of clubs can possess ambitions of joining the elite, whether it is the Greek mogul who owns Nottingham Forest and the Saudi Public Investment Fund behind Newcastle United. There is no block on the dream to create a brand as big as Manchester United and Liverpool.
Those two clubs might be resistant to more competition, but as I’ve pointed out before, the arrival of new investment at teams outside the established elite has resulted on each occasion with a broadening of the league’s powerhouse clubs.
The ‘big two’ of Arsenal and Manchester United became a four with Liverpool when Chelsea when acquired by a billionaire and the massive investment in Manchester City saw Tottenham Hotspur make it a six.
I anticipate, based on the lessons of the past, Newcastle United’s acquisition by the Saudi PIF will result in a further expansion of competition at the top of the table.
Is this development good for the sustainability of the English game in general? Absolutely not.
Will it result in enhanced competition within the division? Certainly.
This is the main problem with the concept of financial doping, or financial fair play for that matter, it assumes the playing field was even.
It’s not and hasn’t been for decades, the teams at the top, like Madrid and Barcelona, spent years establishing a system that gave them financial advantages and meant the only way to challenge was through massive investment.
But when investors came with the funds to dethrone them, they claimed it was unfair.
Were Tebas to split La Liga money evenly across its 20 teams then we can start listening to claims about cheating or financial doping, until then you can’t have a fundamentally unfair competition but accuse other leagues of cheating.