From Socialist Voice, September 2009

Soccer, capital, and politics

Whether fans like to admit it or not, soccer (and all professional sports to varying degrees) has been transformed over the last century into a multi-billion business, with little resemblance to the game it once was.
     And so, like the development of capitalism as a whole from free and competitive to monopolistic, we have seen the progressive ending of fair competition within soccer and the emergence of monopolies—that is, teams that monopolise resources and therefore ultimately trophies.
     Soccer has an added dimension. In addition to being a market for capital to penetrate and use, re-creating itself along the way, it has the added psychology of being a plaything for the big boys of the business and political world. Examples range from Middle Eastern sheikhs to American billionaires and Italian politicians.
     This summer’s ludicrous spending spree by Real Madrid has all the traits of monopoly capitalism. Firstly, amid the so-called “credit crunch,” with some clubs being forced by their owners to sell players and tighten costs, Madrid stood out as the strongest, able to pick off the deals it wanted and take advantage of the weaknesses of its competitors, thereby strengthening itself and weakening those around it. Soccer, like any other industry in a recession, will see the weak disappear and the strong get stronger, creating further monopoly.
     Secondly, again like other monopolies, Madrid didn’t just buy the players it wanted but also purchased players so that other clubs couldn’t have them. This tactic is typical of a monopoly and has been made a fine art by such monopolists as Bill Gates and his company, Microsoft.
     But the question remains, how were Real able to come up with the capital necessary to further their monopoly? Their own argument—and it is certainly part of the answer—is that they are a “global brand” and will be able to sell merchandise. They didn’t just buy footballers: they bought brands that they can market and sell globally.
     But there is far more to it than that. They are registered as a non-profit entity, unlike clubs such as United, and so can take advantage of tax breaks from the Spanish government. The non-national investors can also take advantage of a tax rate of 23 per cent, compared with 50 per cent in Britain.
     Madrid, being the Francoist club, carries huge political and economic influence, to the point where in 2001 it sold its training ground to the city council for approximately $400 million, moving to the most up-to-date training facility built and maintained by taxpayers’ money, which they rent for a small fraction of the cost. This is an example of the welfare breaks and deals that are done throughout the business world to “incentivise” capital and investors.
     Finally, and arguably most importantly, the stature of Real is such that no creditor is going to recall its loans when this could bring about the collapse of the club. What Spanish bank, government or investor would risk such a backlash? This is again an example that we see throughout the business world: the more you owe, the better you are treated.
     Is it any wonder Newcastle were relegated!
[GM]

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