Economics drive Asia's interest in Western Football.

AuthorSerafini, Yuri

Football (or soccer, as it's called in North America) is famous for being one of the least efficient sectors of the sports and entertainment industry. Recent investment, however, has led to small steps being taken toward the "corporatization" of the sport, so that now the picture is much different from the one painted by the 2009 book Soccernomics--co-written by economist Stefan Szymanski and sportswriter Simon Kuper--the story of a sport managed via preconceived absolutes, which only implemented changes through trial-and-error.

Why is football so inefficient? In part because shareholder oversight of management is a rare exception in the sport. Unsurprisingly, the two most successful clubs in Spain, Real Madrid CF and FC Barcelona (respectively the second and third most valuable sports franchises in the world, according to Forbes' most recent ranking), are clubs whose fans can register as members and fundamentally have the same oversight rights as shareholders.

German clubs have strict restrictions on buying majority ownership, and it was through good management that Bavarian giant Bayern Munchen has been able to create a sustainable sports business model dating back to the 1970s.

There were a few early adopters of the concept of a football team as a business, rather than a sort of tribal pastime. Notable examples include English powerhouse Manchester United. "Man United" was listed on the London Stock Exchange in 1991, until a takeover and de-listing by Malcolm Glazer in 2005.

Although under Glazer's ownership Manchester United was able to secure lucrative sponsorship and TV rights deals, the club's growth was not enough to outpace the debt it had taken on. Even though results in the English Premier League suffered, a re-listing on the New York Stock Exchange in 2014 saw the club valued as the most valuable sports franchise in the world.

In the early years of this decade a trend--also predicted by Kuper and Szymanski--changed the face of football: the attraction of investment to European clubs. London was first to attract investment, with Chelsea FC, a club historically in the shadow of nearby Tottenham FC and Arsenal FC, earning the financial backing of Russian billionaire Roman Abramovich in 2003, and winning the English Premier League for the first time (since 1955) the following year.

Chelsea went on to become a powerhouse in European football, and finally won the Champions League trophy in 2013. This was an anomaly for English...

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