This document discusses the impacts of the COVID-19 pandemic on football governance, decision making, and economics. It provides timelines of responses from FIFA and UEFA to the crisis and discusses potential long term effects, including increased government involvement in football and disruption to traditional revenue models. Solutions proposed to challenges include strengthening cooperation across clubs and borders, focusing on new revenue sources like online viewing and business services, and adjusting cost structures in response to expected declines in transfers and wages.
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Covid Crisis Impacts on Football Governance
1. COVID CRISIS 2020 IN FOOTBALL
Issue 3
Governance, Decision Making &
Football Economy
7 May 2020
2. Index
1 First Response
ā¢ Introduction
ā¢ FIFA Covid-19 Timeline
ā¢ UEFA Covid-19 Timeline
2
Covid-19 recovery and lessons
from the unfolding crisis
ā¢ Football economy and resilience
ā¢ Thoughts on potential solutions to the
challenges in the football economy
ā¢ Spotlight on state support
ā¢ Disrupting the current revenue model:
Finding new ways to increase
revenues
4
Structure of the football industry
ā¢ Covid-19 Response Phases
ā¢ Football club quick Covid-19 stability
checklist
ā¢ Challenges with how decisions are
made in football currently
ā¢ Proposed solutions to meet the
challenges in governance
02
07
10..................
................
...............................................
Scenarios
3
...................................................... 15
ā¢ Covid-19 return scenarios
ā¢ Three possible strategic pathways for
the football industry post-Covid
3. First Response
Football has traditionally been organised as a self-governing and self-regulating
system. Everything is based on the acceptance by all participants of a general set
of arbitrary rules (e.g. laws of the game), recognition of the sole authority of the
vertically-organised governing bodies and a focus on consensus or acceptance-
based decisions by all participants in the ecosystem.
This development path has meant that football bodies have accumulated in-house
activities. Over time, with the industry growing in complexity and increasing its
commercial footprint, governing bodies have amassed many different functions
beyond the initial regulatory and competition organisation ones. On one hand this
means that the football industry generally has been able to attract many passionate
professionals driven by authentic interest in the game, while in some parts people
with less holistic expertise or narrowed to one specific area have taken control,
limiting perspectives for the sector as a whole.
Access to ordinary justice mechanisms for resolving internal football issues
is very much discouraged within the industry.
This is being prevented both by convention and regulatory means, but until recently
most conflict resolution and arbitration was done by football associations and leagues
for their own members. Some steps have been taken by the emergence of an
independent Court of Arbitration for Sport, untied from its links with the International
Olympic Committee, and the creation of domestic sport dispute resolution bodies, but
this is by no means prevalent across the world. Football governance systems in many
cases continue to be arcane and reflect realities of the first half of the 20th century at
best.
2
Very often, governance structures of football at national and international level
are lagging well behind optimal corporate or even association governance
practice.
Major football organisations have incorporated such disparate and even conflicting areas
of responsibility as competition organisation and administration, regulation, arbitration,
membership support, commercial rights management, education or licensing. One can
easily imagine someone writing the rules to a competition, organising it, controlling
access to it, solving conflicts, judging compliance, selling commercial properties,
improving quality of management and organisation within membership, and even carrying
out education and certification of compulsory personnel.
Introduction
4. Self-regulation and self-governance are considered critical pillars of the football
industry, enshrined in Articles 14, 15 and especially 19 of the FIFA Statutes, for
example, whereas the linear hierarchical organisational structure is explicitly
mentioned in Article 11.
This has not prevented football in general across the world of benefitting from third-
party financial support, including state sponsorship and large-scale investment.
Although associations in some countries have been more connected with their
respective national governments than others, it has always been done in such a
way that on the surface independence has been preserved. Otherwise, international
governing bodies have typically been very quick to issue warnings or even suspend
national associations deemed in breach of this fundamental principle.
External intervention in the football industry has been fairly rare over the years, but
when it has happened, it has usually produced momentous shocks to the system.
For instance like the Bosman ruling in the 1990s, or the move towards selling media
rights in packages rather than as a bloc to a single bidder, which was not a strategic
business choice but rather stemmed from an intervention by the European
Commission. Overall external intervention from authorities, sometimes without
accurate sports expertise and football knowledge, may have led to producing the
opposite effect than desired.
Nevertheless, the Covid-19 (SARS-CoV-2) crisis in 2020 has seen widespread
influence of national governments on the running of their respective football
systems, going as far as preventing football from functioning at all due to its non-
critical nature as part of the entertainment and leisure industry with a high degree of
inter-personal contact. The fall-out from this widespread influence is only now
beginning to receive fuller appreciation, whilst the effects of this extraordinary turn
of events will most likely not be completely understood until many years have
passed.
The ideas developed below are also related to womenās football, but the Issue 4 will
specifically focus on womenās football in greater detail, concentrating on specific
impacts of Covid-19 on the womenās game, and potential development scenarios.
3
5. Timelines
30 January 2020 ā FIFA contacts
stakeholders about the impact of the
dislocation of Womenās Olympic qualifier
matches from Wuhan to Nanjing and then
to Australia, including an extension to the
international period due to the 14-day
quarantine of the Chinese team
21 February 2020 ā The Chinese
national menās team's World Cup
2022 qualifiers against the Maldives
and Guam is moved to Thailand
due to Covid-19 outbreak in China
11 March 2020 ā FIFA reschedules
its Congress from June to
September, and its Council meeting
from March to June/July 2020
13 March 2020 ā FIFA President
Gianni Infantino visits the World
Health Organisation to discuss
with its President how football can
help the fight against Covid-19
17 March 2020 ā FIFA President Gianni
Infantino issues a statement confirming
support to postpone major international
football competitions including Euro 2020,
Copa America 2020 and Club World Cup
2021, as well as announcing a monetary
contribution to WHO, a potential football
support fund and the start of a
consultation process concerning player
status and contract regulations
FIFA
3 April 2020 ā FIFA-Confederations
Covid-19 working group proposes to
suspend the June 2020 international
match window, organise
consultations on rescheduling of
qualifiers for WC2022, postpone
various women's tournaments and to
create a sub-working group looking at
the women's international calendar
21 April 2020 ā FIFA confirms
fulfilment of $1bn investment plan in
womenās football for 2019-2022
7 April 2020 ā FIFA issues legal
guidelines on the consequences of Covid-
19, particularly focusing on player contracts
and transfer windows, encouraging players
and clubs to work together but highlighting
that solutions will need to be found
primarily on the national level
10 April 2020 ā FIFA President
Gianni Infantino issues a video to
member associations, identifying three
priorities for FIFA to support football
during and after Covid-19:
health comes first, FIFAās help to
football and consultation regarding
future evolution of the sport
24 April 2020 ā FIFA announces it
will proceed immediately to issue
āoperational fundingā due for years
2019 and 2020 to its member
associations, amounting to around
$150m
4
7. 12 March 2020 ā Ä°stanbul BaÅakÅehir
vs FC Copenhagen and Glasgow
Rangers vs Bayer Leverkusen in the
Europa League are played with
spectators, all other matches of the day
are played behind closed doors
15 March 2020 ā UEFA
announces that all its club
competition matches scheduled
for the following week are
postponed until further notice
17 March 2020 ā UEFA announces a
joint resolution on Covid-19 response
together with ECA, EL and FIFPro,
including provisions to postpone
Euro-2020 to 2021, a commitment to
complete domestic and European
seasons by 30 June 2020 should the
situation allow it, and the creation of
two working groups: one on calendar
dislocation and another on economic,
financial and regulatory impacts
23 March 2020 ā UEFA
announces the postponement
of the finals of Champions
League, Womenās Champions
League and Europa League to
an unspecified date
1 April 2020 ā UEFA formally announces
the suspension of matches in all its
competitions, and agrees that the
ācurrent exceptional circumstances
necessitate some specific interventions
to facilitate the work of national
associations and clubsā
16 April 2020 ā UEFA calls to an
āinformation meetingā with General
Secretaries of its national associations
on 21 April and a UEFA Executive
Committee meeting on 23 April, where
the plans for the remainder of the
season are to be discussed
20 April 2020 ā UEFA President
Aleksander Ceferin reiterates in an
interview with Corriere della Sera
that it is ātoo early to say that we
cannot finish the [current] seasonā
2 April 2020 ā UEFA issues a
joint letter to all their national
associations also signed by
ECA and EL, confirming that it is
working on a plan to resume
competitions by July or August,
and saying that abandoning or
finalising domestic competitions
as they are would be
āprematureā for the time being
23 April 2020
ā¢ UEFA announces a new medical subgroup to look at health issues surrounding return to
play and link work already done by clubs and leagues. National associations are strongly
urged to try and complete their leagues and cup competitions and a Guideline on Eligibility
Principles for 2020/21 UEFA club competitions is issued It is announced that Euro 2020 will
keep its original name
ā¢ UEFA announces early payment of compensation for release of players to national teams
during Euro 2020 qualifiers amounting to ā¬70m
ā¢ UEFA officially announces that the Womenās Euro Championship is moved from summer
2021 to 2022
6
8. Provided the match itself can be played, there are no indications that the market
will fundamentally alter following the crisis. The main question is going to be
around the growth or reduction of importance of different inputs, such as ticketing
or broadcasting.
Structure of the football industry
There is also a fairly small but developing B2B service market, which at the moment
is rather limited to innovation and technology hubs launched by football clubs and
governing bodies. In that way, it is run as a shared service provision amongst club
groups with common ownership, and know-how consultancy, particularly in
specialist areas such as youth development, but that is practiced by a very limited
number of actors with a holistic approach.
Football economy and resilience
7
Modern football economy is based on several income streams, as explained in the
diagram. But in the end, it can all be brought back to two key sources:
Supporters, bringing direct revenue via tickets and merchandising, but also indirect via
subscriptions to broadcasters and via consumption of brands.
Player talent, which is at the core of the content, enabling clubs to generate transfer fees.
9. Spotlight on state support
Traditionally football has been happy to take as much as possible from the state
(economic breaks, favourable taxation regimes, infrastructure development) but
has staunchly protected its independent governance, at least on the surface.
In the current health crisis, government involvement has been deeply felt within
football globally, to the extent that football activity has been effectively ābannedā
due to the pandemic, and any restart is conditioned by state-level approval.
Individual national associations and leagues may be more welcoming to increased
government involvement in the football industry going forward. Nevertheless, it will
remain to be seen what the state authorities would want in return, and whether the
previous approach with ensuring independence from the sate will be maintained,
or full government involvement would become more acceptable.
8
1. Generate crisis planning scenarios and undertake risk
assessment and risk management regularly
2. Business models may need to change: widening portfolio of
activities to be less dependent on the āfootball matchā could be one
option to consider
3. Secure cash-flow for a full season
5. Be prepared for a new stoppage due to health or another crisis
6. Be more aware of non-football influence on football
ļ get out of your bubble!
7. Strengthen cooperation with clubs and stakeholders outside of the
domestic environment, generating horizontal and vertical connectivity
within the industry by sharing ideas, building capacities, generating a
bigger football economy
Thoughts on potential solutions to challenges of the football
economy:
4. Disrupt more, and more often
10. Disrupting the current revenue model:
Finding new ways to increase revenues
9
Youth development as a source
of revenue and āraison dāĆŖtreā for
many clubs. Paid transfer activity
is expected to be reduced with
lower fees and more free players
on the market. But wages will
most likely be driven down as
well. Will player-developing
clubs be able to find a new
equilibrium where their costs will
balance against the new
reduced revenues, thereby
creating a newly sustainable
business model? Will the market
need as many players coming
into the game if there is going to
be professional clubs
disappearing or reducing their
status?
New watching and experiencing
habits. People who are no longer
able to go to the stadium may
turn to watch match broadcasts
instead, and a reduction in
stadium capacity may lead to
higher match day revenues
through a transition to more
hospitality-oriented service rather
than the basic stand seating.
One area of growing significance
may be the B2B service market,
which most likely will see some
additional development as clubs
seek to diversify their operations.
Another area that is currently
seeing an uplift is the provision
of social and community
services. Clubs have quickly
realised that they need to remain
relevant during the ongoing
crisis, and without games or
match-related visibility their only
real outlet is their local
community and media
Focus on new sponsor
industries: IT and online,
pharmaceuticals, health and
wellbeing
Focus on new owners: Middle
East, Asia, Africa? Smaller but
more stable clubs taking over
larger clubs where owners canāt
sustain investment?
11. Covid-19 recovery and lessons from
the unfolding crisis
ā¢ Ensure
business
continuity
ā¢ Show
solidarity
ā¢ Preserve
ā¢ Increase flexibility
and business
resilience
ā¢ Pivot to online
ā¢ Adapt product
value proposition
ā¢ Review operating
model
ā¢ Explore M&A
ā¢ Capture pent-up
demand with targeted
customer
propositions
ā¢ Refine business
resilience
ā¢ Identify key drivers of
the end game
ā¢ Adjust cost and
operating models to
ānew normalā
ā¢ Plan for potential
aftershocks
ā¢ Pursue large-scale
organic and inorganic
opportunities for
growth
Covid-19 response phases
Clamp down Emerge Catch up End Game
TODAY
Reality/ size
of catch-up
Speed of
restart
Trough timing
Catch-up timing
CATCH UP
TROUGH
Pre-Covid-19
Trough
depth
Restart
Relapse
āPoint of
confidenceā
2- 4- 6 months 6 months- 3 years
Depth and length of
any extended
recession
Post-crisis
evolution
MAJOR UNCERTAINTIES
Source: LTT Sports Germany DT
10
12. Football club quick Covid-19 stability checklist
4) Size and development
level of domestic
football industry
5) Supporter base
6) Management quality
8) Available assets
9) Access to fresh
working capital
7) Business model
1) Cash reserves
2) Ownership status
3) Size and development
level of domestic economy
10) Covid-related state
support package
11
13. ļQuicker recovery period and return to normal function
ļBetter contingency mechanisms
ļMerger and acquisition mechanisms
ļMonopolisation of talent development networks
The crisis has highlighted some major issues with the governance
and decision-making systems at international and domestic level
12
ā¢ Little leadership was shown by the ātop of the pyramid bodiesā in the early stages of
the crisis ā both in terms of acting themselves and in terms of providing suitable
guidance to the national bodies for ways to proactively deal with the situation
ā¢ Inherent conflict between taking on enough authority to impose transnational
regulatory regimes (e.g. transfer regulations or FFP) and at the same time not taking
on responsibility for a generalised crisis response by leaving football to deal with it at
national level as much as possible Will this create a reputational deficit in future?
ā¢ Some of the decision-makers involved in the process are looking for rather short-term
solutions as they might not be in the football industry in the next few years, but still
have a huge influence on the football of the future
ā¢ The main solution seems to be waiting to see how the situation develops, and the
main tool is distribution of money to members
Smaller leagues and clubs will carry on, but their weight within the total market may
reduce further, together with their level of independence and impact on global
decision-making, leading to a general situation of instability and ownership turnover.
The same situation may well be mirrored across the different lands. Larger well
managed clubs will have a better chance of successful continuity, as long as they
engage in rational management processes and operate in a generally sustainable
way based on adequate information inputs and planning.
However, it does not mean that some larger clubs would not fall victim to the crisis.
It all depends on the risk levels contained within their existing business model,
quality of their management, and resilience of their structure and organisation.
Conversely, larger clubs also take on larger business risks, therefore any fall might
be felt more in case it happens.
One thing that seems likely is that, except for the very top level, clubs will need to
re-focus their attention domestically. Signing foreign players could become more
difficult, and even travel abroad for training camps, which has become standard
practice at all levels in recent years, may no longer be affordable at the middle and
lower level of clubs, leading to a lack of international projection.
Larger and more sustainable leagues/individual clubs will have the resources and
capacity to increase their dominance through
14. 3) At the same time, lack of leadership in crisis times is also extremely dangerous,
especially for longer-term sustainability and development
4) Small groups have been largely underrepresented
5) Large groups (with all stakeholders present) are unwieldy and difficult to
organise in a constructive way, but serve well for PR purposes by demonstrating
consensus
6) There is a lack of intelligence gathering and analytical capacity generally within
football. At the same time, some parties have developed it more than others,
and try to take advantage, whilst nominally being on the same level as others
without it
Challenges with how decisions are made in football currently
1) Normal approach to governance at domestic and international level is universally
replicated; boards are typically composed of representatives of the members of
those bodies. In case of associations it would be of the different stakeholders
within the ecosystem (usually based on outdated power balance pictures), and
in the case of leagues it will be representatives of member clubs. Under normal
circumstances it is possible to make this process work (of course, there will
always be those who are more or less satisfied with the outcome), but in times
of existential crisis it becomes clear that such bodies suffer from a legitimacy
deficit. Those elected are typically (and naturally, as survival is at stake!) guided
by self-interest of the primary organisation or the club they represent and their
specific situation at that precise moment, rather than wider interests of the game
as a whole. This will either create a conflict of interest in the decision-making
process, or a lack of representativeness
2) Any attempt at crisis leadership can be easily compromised by identifying the
individual interest in the proposed course of action or solution, because
decision-makers in football are typically also practitioners (see above)
13
7) Typically, people in decision-making position within the industry have broadly
similar backgrounds and outlooks, meaning that there is usually a uniformity of
opinions or a āstandardisedā approach to how situations are viewed
8) Some key stakeholders of the football industry value chain are generally either
completely absent from the decision-making process, or have only token
presence
9) āGuidedā or ārailroadedā process and decision making, which is typical for
football, relies on a small minority having the authority, capacity and information
to make and implement decisions
10) Generally, there is a lack of business continuity planning within the industry,
independently of organisational development level
15. 14
Proposed solutions to meet the challenges in governance
Develop and accommodate mechanisms within the regulatory framework for
fast creation of thematic expert groups or task forces, and establish dynamic
pan-European or global lists of competent experts in various fields to be able
to join such groups
Strive for a thorough separation of powers to limit inherent conflict of interest.
Ensure that competition organisation and administration are completely
separate from their commercialisation, and in turn the two are separated from
regulatory authorities
Have mechanisms ready for outsourcing decision-preparation processes on
particularly sensitive issues to competent external groups (i.e. a kind of jury
or task force, which will get full information on the problem at hand and will
be able to propose positive solutions in an objective and disinterested way,
rather than being tangled up in webs of individual self-interest)
1
2
3
Ensure a greater diversity across all levels of decision-making. This can be
done for instance through a more frequent use of independent or non-
executive board members, who can provide a competent and objective view of
the situation, rather than constantly falling into the trap of confirmation bias.
Including individuals of all backgrounds who are not stereotypical of the
football industry, will intrinsically increase diversity of opinions.
Introduce wide-ranging, universal and accessible dynamic business
information collection and analysis mechanisms across associations and
leagues domestically and internationally based on mutual interest and
collective input, to increase the quality of business intelligence, analysis and
planning available to individual actors in the game, as well as a live horizontal
industry-wide view
4
5
16. Scenarios:
1. Return to ānormalā over summer 2020 and thereafter Covid
becoming a seasonal reality
ā Catch up and adapt seasonal fixture list to new reality, bearing in mind likely delay to
start of season 2020/21 domestically and internationally, as well as the need to finish
the season early to accommodate Euro 2020, Copa America and the Olympic
football tournament amongst others + take into account potential close-downs during
the course of the new season. Long-term, there will be a need to review number of
fixtures in a given season to ensure there is flexibility and scope to postpone or
dislocate matches ļ more focus on domestic and even regional football!
ā A need for readiness to pause or dislocate activities at short notice for a relatively
lengthy period (e.g. in case of quarantine or regional outbreak)
ā New approaches to stadia: hygiene, social distancing, zoning
ā Balance between presential and broadcast content delivery
ā Changes in talent market: transfer prices will go down as clubs are unwilling to
commit such large amounts as at the peak of transfer spending in recent years, but
salaries will also be reduced to reflect the current economic reality of the market.
Therefore, own development of talent will become more of a priority, as it always
does in times of economic and structural difficulty for football clubs
ā āCovid-freeā industry:
o Testing and screening (technology, quality assurance)
o New kinds of infrastructure
āŖ āClean zonesā in stadia
āŖ Even less contact between players and society
āŖ Special infrastructure prepared to host matches for broadcast at
short notice (e.g. hotel resorts with football facilities ready to host
matches in case of dislocation from āhomeā) to minimise
broadcast disruption
o Lifestyle of key performers (e.g. players, referees)
ā Vaccine development
o Full return to ānormalā only possible when working vaccine is developed
and successfully introduced
o Variation will still be possible between different countries in terms of
vaccination rates or implementation of different zoning on a worldwide
basis, therefore creating additional challenges for cross-border matches
15
17. 3. Covid-19 disappears completely by summer, never to return
again
ā Dream scenario for football and the world
ā Economic and social impact of the last few months will still be felt very painfully for
years to come and noticeable through:
o Economic downturn
o Change in spending priorities
o Change in working practices
o Change in social habits
o Post-traumatic stress
ā Football clubs that had a distressed economic situation will still be likely to collapse
in the short term even with the existing level of impact. Although some might
disappear completely, most likely new owners will appear to take them over,
particularly in countries where there is significant state ownership, as the state has
to deal with the aftermath of the Covid-19 crisis on a wider scale and football could
lose its priority status
ā The impact on grassroots football will be unpredictable. From kids no longer playing
football because they have lost the habit or the interest, to volunteer coaches or
team organisers no longer there or no longer able to provide as much time as
before, due to individual challenging circumstances
ā Club owners and managers will be conditioned by the crisis experience in their
planning, but complete risk aversion is a very expensive choice
2. Return to ānormalā over the summer is cut short by a second
wave, which prevents completing season 2019/20 and start of
season 2020/21 with uncertain outlook
ā Economic pressure on clubs of all sizes and business structures will become
extreme
ā Fixture pile up will eventually become unmanageable, potentially reaching a stage
where it will no longer be viable to accommodate rescheduling once the crisis
reaches its conclusion, leading to major choices having to be made (e.g. having to
choose between Euro 2020 or World Cup 2022)
ā Whilst staff contracts will be normally accommodated within state furlough systems
(until when!?), player contracts, registrations and status will need to be examined
further
ā Sport broadcasting industry will see some significant long-term negative impact
ā Need to āmothballā unused infrastructure
ā Overall impact on the wider economy will be unprecedented and unpredictable
ā Psychological state of individuals will be generally negative due to unrealised hopes
of a relatively quick exit, and this will affect potential recovery
16
18. LTT Sports Insight: Three possible strategic
pathways for the football industry post-Covid
āCircular Economyā
The internationalisation of football will make it emerge as a more global product based on
the closed league model similar to Formula 1. As more events will be concentrated on
premium quality, cost and talent inflow rationalisation will become even more crucial, so
the large clubs participating in the international circuit will create their own economy chain,
based on a pyramid club network. The franchises will play in the most valued leagues and
a set of clubs and supply organisations will be directly linked to them in smaller-sized
markets to provide locally trained talent, test technologies or tactics, and a supply of fans
of the ācoreā club.
17
āSecured Leaguesā
Following the example of the league in Mexico that decided to switch from a promotion
and relegation model to a closed league for the next five years, the economic insecurity
leads the industry to look even more carefully at the US model of sport business.
In such a model clubs are ābusiness partners off the field, competitors on the fieldā, and
when you own a team, you own a share of the league. Therefore you care about the whole
league. In order to increase the value of the market, you also have to mutualise the risks,
give up cannibalisation and limit your market to a certain radius.
In Europe, traditionally there is a link between professional and amateur football, and it
sounds less feasible. But the Covid-19 crisis could serve to open some eyes of club
owners to the benefits of a āsecuredā league, leading to a reassessment of the benefits of
the US sports model, particularly focusing on the business side of the industry, as
relegation jeopardises the economic stability of clubs.
19. āeDevelopment and Digitalisationā
The lockdown period allows stakeholders to accelerate the digitalisation process, leading
to stronger digital presence, sponsorship visibility and introduction of more remote activity
in the game (acoustic āsupporterā system, referee voice). Infrastructure of stadia will
change and be readapted (see Club Affairs āReturn To Playā measures or Fenwick
Iribarren architectural design studio opinion) allowing a different presence and flow of
supporters in the stadium with a disappearance of separate āordinary seatsā and VIP
zones, as the whole stadium becomes focused on hospitality and guaranteed Covid-free
individualized premium experiences. In-stadium and at-home versions of watching football
morph into each other in the middle with the growth of VR and personalization, and
immediate on-demand consumption of associated products becomes part of the overall
approach.
18