Adam Loos
When one is stricken with poverty in the European Union, the afflicted receive government funded housing, government funded health-care, and government funded food provisions. However, when a team in the German football Bundesliga becomes poverty stricken, it does not receive government aid, it sinks to lower levels. From within a heavily regulated economic system and society, one may expect every aspect of the society to be controlled in some way, in order to ”ensure equality”. While heavy regulation is present in most sectors within the European Union, the football clubs and their corresponding leagues are surprisingly exempt.
A football club sells one main product; players. This transaction affects their other main product: play on the field. In the end, good play on the field fills seats. Naturally, in order to get the best results, the clubs must be innovative. They create special academies to attract the best players, they scout new talent aggressively, and they provide intensive training and coaching in an effort to develop players that present attractive play on the pitch. Clubs must efficiently employ earned money from successful play to create better teams and thus better play. The clubs which utilize their money ineffectively generally sink to lower levels. When the London team, Chelsea, bought Shevchenko for the astronomical price of 30 million pounds sterling with limited results, Chelsea was not awarded compensation!
This competition for money and fans that relies on successful play on the field, results in high quality players, matches, and teams. Europe’s soccer leagues play at the highest level due to this healthy competition between teams. Furthermore, the football associations and clubs do not press for profit sharing, such a principle, based on some concept of “equality” is unthinkable. Imagine the Spanish bottom dweller team, Levante requesting a portion of the transfer fee of Luis Figo from Barcelon to Real Madrid, rumoured to be around thiry-eight million pounds! Nou Camp and the Catalans would be appalled and would never consider it. In comparison, even a non-sports fan can understand their disgust when they are asked to hand over nearly half of their hard-earned money in taxes.
The success of the European football associations is a compelling example of a working free-market transfer system, and an argument for the liberalization of trade between corporations. The increased competition between not only players and teams on the field, but also between the front offices of these clubs, dramatically proves this point. Increased competition creates innovation, in turn creating better football. When you watch your top-flight football team this weekend, thank the free-market.
