There's more than simple national pride at stake at Euro 2008: there is a great deal of money too Adidas forecasts sales related to Euro 2008 of €1.2 billion, a 30 per cent increase on four years ago
FOUR YEARS ago Theodoros Zagorakis, the captain of Greece's national football team, held up the glittering Delaunay trophy after his team of 60-to-1 outsiders beat hosts and hot favourites Portugal in the final of Euro 2004.
Depending on your level of cynicism there were two readings of Greece's triumph. The positive spin was that it signalled the dawn of a new era, a sign that the game is moving beyond the big five superpowers of Europe. The second, glass half empty view, said the Greeks won because the big teams were simply too tired to put up a fight, yet another sign that the club versus country battle has been won by Manchester United, Real Madrid and Chelsea over the players' respective national sides.
This is an issue that extends far beyond the playing field. Euro 2008 opened this month and will run over three weeks across Austria and Switzerland, with the final held in Vienna on June 29th.
Away from the field of play, however, the business of football faces questions of an equally challenging nature. There is more than nationalistic pride at stake over the next month: there is a great deal of money too. Just over €184 million in fees and prize money has been earmarked for the 16 teams competing for the European title, compared to the €130 million distributed at Euro 2004 in Portugal.
Each of the teams' national associations will receive a participating fee of €7.5 million. During the group phase there are also performance bonuses of €1 million for a win and €500,000 for a draw.
Once the tournament enters its knockout phase, there are no more performance bonuses. Instead, the eight quarter-finalists will receive an additional payment of €2 million. The financial prize for reaching the semi-finals is an extra payment of €3 million. And for the two teams who take the field for the final at the Ernst-Happel Stadion, there will be a reward of €4.5 million for the runners-up, while the 2008 European champions will receive €7.5 million.
It means that, if the winners have also won all three of their group matches, the total prize money they earn will amount to €23 million, compared with €17.7 million in 2004.
The European Championships are the third most viewed sports event in the world behind the World Cup and the Olympics with each match of the tournament expected to draw an average audience of over 150 million people. The commercial rights to Euro 2008 are owned and sold by UEFA, the governing body for the sport in Europe.
The number of countries taking TV coverage of the tournament is now well above 200, evidence that it is now a genuinely global showcase. The tournament is expected to inject €1.4 billion in to the European economy. Sales of television rights account for two thirds of UEFA's income from the tournament, with an additional 20 per cent from sponsorship and the rest from selling match tickets and corporate hospitality packages.
UEFA expects to earn €1.3 billion from the event, up from €804 million four years ago. Of this, TV rights will reap €625 million, sponsorship €240 million and merchandising €900 million.
The economic effects extend far beyond the stadium however. Industries such as betting, pubs and tourism each put Euro 2008 at the centre of their business plan. The pub trade in Ireland and Britain is likely to feel the absence of their national teams from the tournament.
When England played Portugal in the quarter final of Euro 2004, over eight million watched it in the pub, and 12 million extra pints were sold. This night alone represented takings of €62 million on top of average daily takings of €75 million.
The absence of Ireland and England in particular robs the bookmakers of that cherished beast, the emotional punter, who bets with his heart rather than his head. Last time around William Hill saw revenue jump 40 per cent, due in the main to Greece's win.
Sponsorship of the European Championships has also evolved dramatically over the past decade. UEFA has sold its sponsorships for between €15 million and €20 million to a host of international companies such as McDonalds, Castrol motor oil and Mastercard, which is using football to help launch more than 200 separate promotions in 30 different markets. For a start, customers can win tickets and other Euro 2008 related merchandise.
"We're looking at brand value, reputation and specific business objectives," says Paul Meulendijk, head of sponsorship for Mastercard Europe.
Adidas, another UEFA sponsor, supplies kit to Germany, Spain, France, Romania and Greece, as well as the match balls used in the tournament. The profile of the tournament allows the German company to forecast sales related to Euro 2008 of €1.2 billion, a 30 per cent increase on four years ago.
However, such growth in its commercial power has brought UEFA in to direct conflict with FIFA, the world governing body. Both have been huge beneficiaries of globalisation and the fragmentation of media.
FIFA's ownership of the World Cup remains its top card, a cash cow that continues to generate huge sums from broadcasters and sponsors.
FIFA has restructured how it sells sponsorships for 2010 and 2014, reducing the number from 15 to six. The enlarged product categories cost between €200 million and €225 million, dwarfing the average €38 million paid by FIFA's sponsors for the 2006 World Cup in Germany. Sepp Blatter, president of FIFA is a man unafraid to air his opinions.
Ironically, it is globalisation of a different type that worries him. "There are 60 million players in Brazil and I think around 10 per cent of them, that's six million, are probably good enough to play in leagues around the world," he said recently.
"There are countries out there which have made it easy for these players not only to play for their clubs but to obtain passports. Not just residents papers but full passports which allow them to play for their national teams."
There are plenty of examples of this trend. Villarreal's Spanish passport-holding Brazilian Marcos Senna will be one of the stars of Euro 2008 as would have been Arsenal's Brazilian born Croatian Eduardo, had fate in the form of career threatening injury not intervened.
Blatter uses his platform to protect the integrity of international football, the game upon which FIFA's influence and wealth depends. This campaign includes the controversial 6+5 quota system, recently given the support of the FIFA Congress. This has as its aim the limiting of the number of foreign players in club football.
UEFA president Michel Platini, the former French captain, has set out his own agenda for the European game over the past year. Many of his pronouncements are aimed at levelling the playing field between the big clubs and the rest; the haves and have yachts.
Money he says, is spoiling the fun, distilling wealth in to the hands of a small cabal of teams. This season's results across Europe speak for themselves: The domestic titles of England (Man Utd), France (Lyon), Italy (Inter), Spain (Real Madrid), Portugal (Porto), Holland (PSV Eindhoven) and Greece (Olympiacos) have all been retained by the same team for at least a second season. Olympiacos and Porto collected their fourth title on the spin and for Lyon this season's win represented their seventh league title in succession.
For this reason, Platini wants to change the way teams progress to the UEFA Champions League, the engine of the top clubs' wealth. By doing this he hopes to spread the money more evenly and make club football more competitive.
He faces an uphill battle, not least from the Premier League, which sells itself on the array of foreign stars playing week in week out. The other group who will resist the wishes of both Platini and Blatter are the big clubs and the new generation of owners, who have bought in to football because of its global appeal. Quotas and limited access to the Champions League would not sit well with the Glazer family (owners of Man Utd), Roman Abramovich (Chelsea) and Tom Hicks and George Gillett (Liverpool), men who owe their billions to the workings of the free market.
As the focus shifts from the club game to the national teams, the performances of Europe's top players in Austria and Switzerland this summer will be watched closely by the game's various commercial stakeholders. On and off the field, there is much to play for.
