Football and Hegemony

The Era of Corporations: Who Wins in the Business of Modern Football?

By Sandro Angulo Rincón

Since it began participating in German professional football in 1979, Bayer Leverkusen had never won the Bundesliga, but it has just done so. The team is based in the city of Leverkusen, which has a population of 163,000 and is located in the state of North Rhine-Westphalia in western Germany. Winning the title has delighted its fans and a part of the football world that saw how it managed to dethrone Bayern Munich, a team that has held an almost monopoly on national league victories.

The focus of this report is not to disclose the formula for Bayer Leverkusen’s first championship win but to examine the controversial hegemony of certain football clubs—mainly European ones—that have perpetuated their power in sports this century. Here, the concept of “hegemony,” proposed by the Italian Marxist theorist Antonio Gramsci (1891-1937), is referenced to explain how a social class maintains dominance through force or coercion and discursive strategies so that its ideas and values are widely accepted by other classes as if they were laws or part of common sense.

Some football clubs follow this hegemonic logic, promoted by the media and business strategies, and the flexibility of legal norms to naturalize this superiority that, in reality, few enjoy, others criticize, and many are indifferent.

The analysis will meticulously focus on Europe and America’s top 10 football leagues, as the International Federation of Football History and Statistics (IFFHS) ranked. This comprehensive study aims to uncover the actions that have led to pronounced asymmetries in the competition. The leagues under scrutiny include Italy’s Serie A (rank 1), England’s Premier League (2), Spain’s La Liga (3), Germany’s Bundesliga (5), and France’s Ligue 1 (6) (the Big 5 of UEFA), and Brazil’s Brasileirão (rank 4) and the leagues of Argentina (10), Colombia (11), Paraguay (13), and Ecuador (17) (CONMEBOL).

Leagues that are more media-centric, such as Mexico (36) and the United States (63) (CONCACAF), are not considered since the portal positively scores those that have accumulated significant victories in 2023.
(In this first installment, we will delve into the Big Five and soon into the Five Clubs of America).

The Elimination of Salary Caps

British player Jimmy Hill led a campaign to eliminate salary caps in English football in 1960. He argued that thanks to the footballers, the league in that country sold more than 20 million tickets per season, making them deserving of unlimited salaries. Thus, Hill’s efforts and the support provided by fans enabled the authorities of the English league to yield to this request, bringing both positive and negative effects to the game. On the positive side, athletes achieved fair remunerations; on the negative, since that year in Europe, only a few teams have been capable of winning leagues and international championships because they have the financial resources to buy the best players and, especially to afford their large salaries—a feat that clubs from small cities with weak economic and financial structures cannot afford.

In that context, a footballer who stands out in the professional team of his hometown would prefer to leave it if he has an offer that doubles, triples, or more his current salary unless he has strong emotional ties with it. They will think about their international projection, the possibility of winning titles with less difficulty, and the prospect of their children living in a metropolis that offers them a promising future.

Today, although the American League (MLS) imposes a fixed limit for all teams and the European Club Association (ECA) suggests calculating the salary cap as a percentage of the team’s revenue to balance competition, both systems do not fully equalize the economic possibilities between large and small teams.

The triad: corporations, television, and spectators
The evolution of football clubs in recent decades has seen a shift towards corporate structures. Under this new paradigm, ownership is concentrated in the hands of those with the financial clout to invest, affording them a significant say in the team’s future. While traditional club members are not excluded from this arrangement and can acquire shares, their influence often remains marginal, leaving them disadvantaged in the company’s administration.
A corporation divides its capital into shares, and its owners, the shareholders, limit liability to the amount of money contributed, meaning they only lose the investment made in the shares and do not personally assume the company’s debts. Additionally, they can invest in the stock market if their board of directors decides, potentially opening up new avenues for financial growth and stability.

As Ángel Cappa (father) and María Cappa (daughter) assert in their book “También nos roban el fútbol” (“They also steal football”), the television broadcast of the 1960 UEFA Champions League final between Real Madrid (ultimately the winner) and Eintracht Frankfurt sparked the interest of significant capital.

The reasons for this are evident in modern times, but in the 1960s, sports broadcasting was innovative. Television increased viewership in countries where the signal reached, and the audience became interested in consuming the products advertised during the match, thereby positioning brands in the minds of transnational fans. The business becomes successful when you add to these sectors the profits from player transfers, the sale of television rights, game ticket sales, league cup prizes, and merchandise sales.

Ángel and María Cappa claim that the model was already very profitable by the end of the 20th century. Furthermore, what is the role of the fan? The fan is not a co-owner of the club but rather someone who spends money so that the majority owner can increase their capital because they buy the team’s jersey, tickets to the stadium, and subscribe to cable or internet television (free-to-air television hardly broadcasts matches anymore).

The Big 5
The leagues of Italy, England, Spain, Germany, and France are considered the most important in Europe due to the sporting results of their clubs, as established by the International Federation of Football History & Statistics (IFFHS), and because their revenues exceed one billion euros each season, as researchers Luis Carlos Sánchez, Ángel Barajas, and Patricio Sánchez point out in their article “Fans in the ownership of Big Five leagues: lessons for better football governance.”

These returns are made possible by the arrival of national or international investors who, despite not having an emotional connection with the clubs, identify opportunities to multiply their profits through hyper-commercialization, including the sale of television broadcast rights, the increase in share value, the exploitation of fans’ passion, player transfers, ticket sales to stadiums, and various monetizations on social media.

According to researchers Luis Carlos Sánchez, Ángel Barajas, and Patricio Sánchez Fernández, North Americans were the first investors in European football, incentivized by the ease of the eurozone in circulating their money and in the face of the failure to extend their international competitions such as American football (NFL) in Europe.

The transformation of clubs into corporations is part of this equation, where ownership of the teams shifted from being in the hands of members/fans to being concentrated in a few shareholders. This business model turns fans into consumers who need more participation in choosing boards of directors, controlling, and making decisions. The result is that the new owners act at their discretion, without oversight, indebting the club and, therefore, jeopardizing its assets, often under the guise of legal loopholes.

The Big 5 Analysis

Only 25% of the teams in Italy have won a league title in the 21st century out of the 20 teams competing each season. Juventus leads the ranking with 11 victories (50% of 22 total tournaments), followed by Inter with six (27.2%). It is worth noting that suspicions of match-fixing for betting often fall on Italian football. For example, the justice system of that country did not declare a champion in the 2004-2005 season due to the scandal known as Calciopoli or the scandal of rigged matches involving the suspicious selection of “favorable” referees, which implicated Juventus, AC Milan, Fiorentina, Lazio, among others.

The model of Serie A is one of private ownership concentrated in majority shareholders, many of whom belong to influential families in the country. Notably, the victorious teams come from four cities, all significant hubs for Italy’s economic development. However, the capital, Rome, has not seen a local team champion for 23 years, with Lazio and Roma.

The English Premier League is a league that, in this century, has seen a relative variety of teams (6, which accounts for 30% of the 20 teams in competition) with chances of becoming champions among the Big Five leagues. Manchester City leads the number of titles with seven obtained in the last decade, coinciding with the arrival of their new owner, the Abu Dhabi United Group from the United Arab Emirates, and amidst accusations of alleged mismanagement. City will likely be sanctioned and fined this year for breaching UEFA’s Financial Fair Play regulations and 115 financial rules of the Premier League in nine different seasons.

The charges against Manchester City are grave, suggesting that the club’s expenditures have consistently exceeded their incomes. Furthermore, there is a lack of transparent accounting for various operating expenses. The implication of an investment that surpasses the permitted limits is that the club may have overspent in its pursuit of the best players, coaches, data analysts, and medical and nutrition staff. This overspending, if proven, could give them an unfair competitive advantage over other teams that appear to be operating within the rules.

This action is a consequence of the rivalry observed in the Premier League, particularly in the other five teams that won the national tournament in the 20th century. Their ownership model is based on the acquisition of clubs by foreign investors, mainly from North America and Asia. This model is more likely to be rejected by teams with a winning tradition like Manchester United (as indeed happened), acquired by the Glazer family from the United States, rather than by those aspiring to achieve such success, as is the case with Leicester Football Club, the league champion in the 2015-2016 season, owned by the Srivaddhanaprabha family from Thailand, based in the city of Leicester with a population of 348,200.

Chelsea FC, according to researchers Luis Carlos Sánchez, Ángel Barajas, and Patricio Sánchez-Fernández, represents an exciting exception because fans control the ownership of the stadium and the club’s naming rights through the Chelsea Pitch Owner corporation, thus limiting the power of the majority shareholder, American Todd Boehly, through his Clearlake Capital consortium.

The tournament in which very few teams manage to win the championship is the Spanish League. Only four have won, accounting for 20% of the 20 participating clubs. However, the supremacy of CF Barcelona with 11 titles (47.8%) and Real Madrid with 8 (34.7%) is undeniable. Although both clubs are structured as corporations, they are run by their members by creating member associations that can elect boards of directors and influence administrative and sports matters. Barcelona has more than 140,000 members, while Real Madrid has more than 90,000. Atletico Madrid is owned by the Wanda Group, a Chinese corporation, and Idan Ofen, an Israeli entrepreneur, through his Quantum Pacific Group. Meanwhile, Valencia is owned by Peter Lim through the Meriton Holdings organization.

As mentioned in the article “Fans in the ownership of Big Five leagues: lessons for better football governance,” the league has not been exempt from controversy. The courts of justice in Spain declared it illegal for the principal shareholders of several teams to have acquired club shares with resources not from themselves but from the club itself.

On the surface, German football distributes the titles among five teams in the 21st century, as out of the 18 professional teams in the Bundesliga, five have won the league title, accounting for 27.7%. However, this percentage is a fallacy when considering that Bayern Munich has won 17 out of the 23 seasons (73.9%), followed by Borussia Dortmund at a distant second with three (13%). Nevertheless, according to a study by the University of Braunschweig, this hegemony made Bayern Munich the most hated team in Germany in 2018.

Most German clubs have collective but dispersed ownership. In other words, they must adhere to the 50 + 1 rule, a regulation aimed at preserving the influence and control of the club members in crucial decisions, ensuring it remains in the hands of its members and fans. Thus, at least 50% plus one share must belong to its members, meaning external investors cannot have majority voting power. Although the club governance tends to be more democratic, the Bundesliga, by restricting the influence of foreign capital or large corporations, does not stand out in Europe for multimillion-dollar player signings, as is the case in the Premier League, La Liga, and Ligue 1.

Among the list of winners, it is worth highlighting Wolfsburg, a team from the city of the same name with only 126,123 inhabitants, which clinched the top spot in the 2008-2009 season.

In Ligue 1 of France, eight teams (40%) out of the 20 competing have been champions in this century, demonstrating that regardless of the city and capital, there are options to win national titles. However, a notable aspect in the last decade has been the hegemony of Paris Saint-Germain, owned by Qatar Sports Investments (QSI), precisely since this group acquired it in 2011. From the 2012-2013 season until 2022-2023, PSG has won nine league titles out of 11 possible. In 2017, they transferred Brazilian player Neymar da Silva Santos Júnior from Barcelona to PSG for 222 million euros, constituting a record transfer fee.

French teams are controlled by large shareholders, some of whom are foreign, such as American Frank McCourt, owner of Olympique de Marseille, or Russian Dmitry Rybolovlev, owner of Monaco.

La resistencia y los modelos alternativos

On April 18, 2021, six of the most representative clubs in English football (Arsenal, Chelsea, Manchester City, Liverpool, Manchester United, and Tottenham Hotspur) announced their participation in a new European Super League with AC Milan, Real Madrid, FC Barcelona, Juventus, Atletico Madrid, and Inter Milan. Upon learning of this intention, football fans mobilized to resist the proposal through street protests, media campaigns, and political lobbying. The result of this mobilization was decisive, as within 48 hours, this exclusive project’s leaders had to withdraw it.

This is a striking example of how organized fans, with a deep understanding of the sport’s values, realized that this group of separatist teams was acting against these values. They recognized that the focus was shifting towards concentrating wealth, discriminating against lesser-known clubs, avoiding relegation, and diverting attention from over-indebtedness due to the loss of income during the COVID-19 pandemic. Their commitment to preserving the true essence of the sport was unwavering.

The fans’ actions can be comprehended through the lens of moral economy. This concept seeks to recover the morality of an economic environment detached from ethical reasoning and broader social values coined by individuals. This concept, as articulated by Professor Daniel Fitzpatrick in his article “The Moral Economy of the English Football Crowd: The European Super League and the Contingency of Football Fan Activism,” Sensitizes the importance of subjective interpretations of well-being. In the case of the European Super League, fans were protecting the traditional, symbolic, non-monetary rights of the club that were being threatened by commercial discourses, overlaid with promises of more spectacle and victories.

In Italy, the Centro Storico Lebowski in Florence was founded in 2010 as a team organized by the fans to strengthen community cooperation ties. Zachary T. Andrews and Lorenzo Giudici, authors of the article “The Deprofessionalization of Football: The People’s Football Movement in Italy,” recount the experience of this team incorporated into calcio popular or people’s football, an alternative movement to current industrial football. Although Centro Storico Lebowski still competes in lower leagues, it aspires to reach the professional divisions.

The end of the match

Reversing the trend from anonymous societies to clubs where fans are co-owners seems romantic as long as capital continues circulating and reproducing with minimal regulation worldwide. Agon&Areté’s stance is that improving the governance of professional football teams requires giving fans more participation in administrative and sporting decision-making. Rewarding fans’ loyalty with symbolic prizes, such as incorporating a trophy into a museum, is not enough.

Asserting that the conversion to anonymous societies and including foreign or domestic capital from entrepreneurs or corporations is the only option to win titles—a position propagated by proponents of concentrated ownership—does not justify further disconnecting clubs from their fan base, which contributes a portion of the revenue.

Regarding the elimination of salary caps for footballers, continuing with this policy is counterproductive for clubs’ healthy indebtedness and economic sustainability, even for those with the highest incomes. A legal and ethical agreement among football governing bodies, investors, governments, and fans, ensuring a financial and economic balance among competitors, is essential to avoid hegemonies in the king of sports.

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