What Will The Future Bring For European Soccer Financial Success?

From IMF.org (Article by Stefan Szymanski):

European soccer’s success can be credited, in part, to the liberalization of the players’ market. But what will the future bring?

The soccer World Cup in Brazil will be the biggest sporting event of 2014, likely dominating the news and lives of fans for many months. For some of the players, this will also be the defining moment of their careers.

Attention will focus on established soccer stars such as Argentina’s Lionel Messi and Portugal’s Cristiano Ronaldo and whether they can do as well for their countries as for their clubs (Barcelona and Real Madrid, respectively).

The World Cup will also create several new millionaire players—players currently working for small clubs in places like Costa Rica, Croatia, Greece, or Japan will earn lucrative contracts with mega clubs such as Bayern Munich and Manchester United on the back of star performances in Brazil. Almost every player’s ambition will be to play at the highest level in Europe.

Thanks to fundamental changes in the regulatory regime and other factors, international mobility in Europe’s soccer labor market has increased markedly in the past two decades. Today, the size of the expatriate labor force in European soccer (at more than one-third of the total) far exceeds that in the wider European labor market, where foreigners comprise only 7 percent of the labor force (Besson, Poli, and Ravenel, 2008; European Commission, 2012). This internationalization is a key factor in Europe’s soccer success.

If you want to understand the history and consequences of European soccer transfer system then read the above hyperlinked article in it’s entirety. Stefan does a great job of explaining how the “Bosman ruling” gave us the current transfer system we see today and how it influences the finances and competitions of the various European teams and leagues. For those who understand the salary-cap system that American sports use, Stefan compared the two in order to explain the positives and negatives of both systems. After reading this I learned a lot about the problems with the European transfer system and how they affect the leagues and players we currently watch. However, it is evident leagues such as the NFL have problems as well with their salary-cap system so it is hard to tell which system is better. Personally, it seems as though there is no perfect system. Instead you just choose which setbacks you have to deal with when choosing between the European system and and the American system. However, it is interesting to hypothesize on whether the American salary-cap system would work in European and if it would be received well.

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