Soccerex Global Convention 2017: Notes from day one

5 September 2017 |
A recap of the biggest stories to emerge from day one of the Soccerex Global Convention, which began today in Manchester Central.

With the Premier League’s landmark 25th anniversary edition having just got underway, it was appropriate that opening this year’s Soccerex Global Convention was one of the men who helped to bring the commercial behemoth into being in 1992.

As well as his instrumental role in the breakaway of England’s top soccer division from the Football League, David Dein has also served as vice-chairman of both the Football Association (FA) and Arsenal Football Club, making him one of the most prominent figures in the UK’s soccer industry.

Dein began his opening address with an honour to the memory of Soccerex founder Duncan Revie, who sadly passed away just weeks after the 2016 Global Convention. “The football community owes an enormous debt of thanks to Duncan,” said Dein, noting that the Soccerex conventions that have taken place around the world since 1995, when the organisation was founded, have transformed the way the business of soccer is carried out and talked about.

It was perhaps fitting, then, that the first Duncan Revie Award to be handed out since his passing was to another much-missed giant of the soccer community in Dutch icon Johan Cruyff, who died in May 2016. The award was accepted by Wim Jonk, the former Dutch international midfielder and current chief executive of Cruyff Football, the charitable body established in Cruyff’s memory. “Johan asked me to bring his memory into the world and that is what we are doing with Cruyff Football,” said Jonk. “This award shows that we have begun to do that.”

The ICC and the growth of US soccer

With that 25th birthday still on everyone’s mind, it was also somewhat appropriate that the first discussion session of the day was a one-to-one interview with Charlie Stillitano, the American co-founder and chairman of Relevent Sports, which operates the International Champions Cup (ICC) pre-season tournament and who most recently achieved a level of infamy, in the UK at least, for supposedly attempting to mastermind an end to the Premier League’s hegemony.

The prospect of an “elite” European league, featuring the top teams from each country breaking away from the traditional national league system, rears its head every few years – usually whenever a major TV rights deal is coming up for renewal – and last time it did, Stillitano was one of those supposedly trying to engineer the breakaway, resulting in him being labelled a “poster boy for greed” and a “corporate goblin” by the British press.

However, asked about the incident by moderator Andrew Croker, the former Perform Group executive chairman, Stillitano dismisses that any such discussions took place.

“We met with the clubs to tie them down to long-term deals to play in the ICC,” explained the American. “It was described as a ‘clandestine meeting’ – well, it was a clandestine meeting where everyone involved entered and left through the front door of the Dorchester Hotel.”

Stillitano believes that the rise in popularity of the ICC – which takes the form of a friendly, pre-season version of precisely the kind of elite competition supposedly being proposed, regularly featuring the likes of Manchester United, Juventus, Real Madrid and Bayern Munich – became a “useful interloper” for the clubs – “although they wouldn’t put it like that.”

The impact of the ICC is plain to see. Earlier this year, Miami’s Hard Rock Stadium hosted a tie between Real Madrid and Barcelona, becoming only the second-ever El Clásico to be held outside Spain and, according to Stillitano, generating the highest ever ticket revenues for a sporting event in the US, barring Super Bowls.

The overall revenues for the ICC have risen from US$18 million annually in 2010 to over US$150 million in 2016, while the fixtures held in America this year out-sold games in the Concacaf Gold Cup, the biennial continental competition for teams from North America, Central America, and the Caribbean.

Seeing this, Stillitano feels that the ICC – and the spectre of an elite breakaway league – was used as leverage from the big clubs who wanted a bigger slice of the broadcast revenue pie.

This is confounded by the growth in the popularity of the sport in Stillitano’s home country, where soccer presents a “real opportunity” which will bring further wealth into the European and global game.

“Other sports haven't declined as such, but their growth has slowed down dramatically,” he said. “International soccer has already surpassed the National Hockey League [NHL] and will surpass Major League Baseball [MLB] at some point in the next few years. We have a very competitive rights market and now Turner have just bought the Champions League rights out of nowhere, so that's another major player in the game.”

Stillitano also held forth on the US-Canada-Mexico bid for the 2026 Fifa World Cup, which he believes is “ours to lose.”

“I can't imagine that we don't have it,” he said. “It's going to be by far the most profitable World Cup ever – because all the stadiums are there, all the infrastructure, all the hotels, there’s not really anything to build so nearly everything that comes in is profit. When you look at recent World Cups, the financial success has maybe not been there because the likes of Brazil and South Africa have had to construct almost all the necessary infrastructure. This will be 48 teams with 60 games in the US [Mexico and Canada will hold 10 a piece under the proposed bid]. It's almost a given that it's going to be there.”

Is there anything, then, that can stand in the way of a second World Cup final taking place in the United States? “Well every day I wake up and I see that our president has tweeted again,” said Stillitano. “There is a very small chance that that situation could put a spanner in the works somehow.”

Making the switch

Outrage from fans and pundits over players switching clubs for ever-inflating transfer fees has become as much of a soccer staple as the transfers themselves, and this summer has been yet another astonishing new chapter in that story.

The size of the sums involved is so quickly normalised that they bear repeating and considering in greater detail, and to talk the Soccerex crowd through that was Esteve Calzada, chief executive of Prime Time Sport and author of The Football Transfer Review.

The headline figures remain incredible. Of course, there was the €222 million transfer of a single player in Neymar’s move from Barcelona to Paris Saint-Germain, which contributed to a six per cent increase in overall spending in Europe’s top five leagues (England, France, Spain, Italy and Germany) to over €4.4 billion in total. That transfer – along with Kylian Mbappé’s switch to the same club, initially on loan but counted in the figures for the Prime Time review because there is an obligation to buy next summer for €160 million – contributed to an extraordinary 449 per cent increase in spending by France’s Ligue 1.

Calzada also turned to some “smaller” transfers – though still for astronomical amounts of money – which nevertheless indicate a shift in the soccer landscape. “This summer we’ve seen Theo Hernández move from Atlético Madrid to Real Madrid, and Alex Oxlade-Chamberlain move from Arsenal to Liverpool,” noted Calzada. “These kinds of deals between the top rivals aren’t deals that would have been done until very recently.

“Clubs are more concerned with how much they can get for a player than who he is going to, which means of course that the bigger clubs who can afford to pay more are going to do more of these kinds of transfers.

“The big question is whether we see anyone move from Barcelona to Real Madrid, or the other way around. I think it will happen eventually, though not under the current regimes at either club.”

Also notable was Calzada’s view that the inflated transfer market is actually a consequence of less, not more, investment from wealthy owners into soccer clubs. With PSG an obvious exception, the recent waves of vast spending have been propelled by player sales and increased broadcast revenues, not “sugar daddy” owners pumping money into the market.

With players now by far clubs’ most valuable assets, they are looking to squeeze as much value as possible out of every sale in order to reinvest that into the transfer market, which this year has created the bubble that has seen a dramatic increase in what Calzada termed “mid-level” deals – those in the €20-€35 million range.

Who disrupts the disruptors?

Post-lunch saw a session on the topic that is engulfing the entire sports industry at the moment: that of disruption in the broadcast marketplace and the emergence of over-the-top (OTT) platforms  – a panel that the moderator, Seven League chief executive Richard Ayers, described as “five geeks giving their perspectives on the broadcast landscape.”

With one of those geeks being Jerry Newman, sport partnership lead for EMEA at Facebook, the discussion almost immediately turned to the social network’s brand new streaming platform, Facebook Watch – arguably the most disruptive of all the recently launched broadcast platforms because of the pre-existing audience Facebook has access to.

“Watch is designed to host episodic content to engage specific communities,” Newman explained. “We are clearly not a traditional broadcaster, but it’s not an OTT service either. We don't own rights, it's a surface that sits within Facebook and hosts content.

“At the moment it’s a case of us needing to learn. We need to educate broadcasters how to adapt to a new environment and ourselves on how to work with our partners. The episodic approach to Watch is crucial.”

The platform offers potential global reach for rights holders to distribute episodic content – except, as Newman noted, for China, where Facebook is banned. His fellow panelist Gordon Xie, general manager for marketing and PR at Chinese OTT company Tencent, explained that the Chinese government’s strict control over the internet, as well as the presence of state-run behemoth CCTV, has led to a situation in China where “internet business is traditional business” – meaning the process of acquiring and distributing media rights is the same whether you’re a linear channel or a new online platform.

“When we talk about disruption in the marketplace it is different in China, so Tencent is trying to disrupt itself,” said Xie. “That is why we are putting efforts into short-form video, with the intention of converting casual sports fans into hardcore consumers.”

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