Abhik Sen | June 29th 2012 | @GlobalMkts
Just as surely as night follows day, so too must the England football team raise the hopes of its fans to a fever pitch before ultimately dashing them. After making an uncharacteristically stately progress to the quarterfinals of the ongoing European championship, England's overpaid and under-performing stars bowed to the inevitable: they got knocked out long before getting a sniff at the title.
The last time England won anything of note was the World Cup way back in 1966 . With each passing year, the despairing England fan becomes that much more desperate to lay his hands on some silver. How desperate? Well, in a poll of 16,000 people in the 16 countries participating in Euro 2012, English fans lagged only the Irish in their willingness to part with their cash to see their team lift the trophy. More surprisingly, in this survey commissioned by ING Bank the English were followed closely by the Greeks, Italians, Spanish and the Portuguese – the very people closest to bankruptcy in Europe. Somewhat less surprisingly, the people least keen on throwing good money after bad at fleeting pleasures include the Germans.
The sun might be setting on the European economy, but when it comes to football, the old continent still rules. Seven of the top 10 countries in the FIFA world rankings are European. Spain is the reigning world champion. The most competitive and lucrative club leagues in the world are still in Europe. If you dream of creating the next Facebook or Google you can go to Silicon Valley. Tomorrow's Warren Buffetts and Gordon Gekkos could always head to Wall Street, Singapore and Shanghai. Yet if you are a budding footballer anywhere in the world and you plan to be the next Maradona, Messi or Drogba, there is still only one place to go: a club in Europe. But for how much longer?
A closer look at European club football reveals an eery resemblance to the state of affairs in the European economy. Much like Spain itself, the Spanish Liga, home to world-beating clubs such as Barcelona and Real Madrid, is currently battling a debt crisis and owes hundreds of millions of euros in unpaid taxes. In the ever-lengthening list of euro-zone countries facing a sovereign debt crisis Italy is fast racing up the charts. And sure enough, many of the biggest Italian football clubs - even as they pay through their noses to hold on to their best players - are staring into an abyss themselves as losses mount unsustainably.
Back in Britain, Bank of England Governor Mervyn King said this week that the country is not even halfway through the financial crisis yet and warned his countrymen to brace themselves for five more years of pain. English football's Premier League may have recently managed to sell broadcasting rights for a whopping £3 billion, a 71% increase on the current deal, but that is scant comfort for English clubs that don't have foreign sugar daddies to bankroll them. Like businesses up and down the country, many clubs are either going bust or struggling to pay their bills. Eight of the top English clubs are believed to be under investigation for dodging their tax returns.
There is, however, at least one league in Europe that is getting it right and no points for guessing which one. Yes, it's the German Bundesliga. Just like the German government and most German companies, German football clubs too are prospering by living within their means and systematically planning for the inevitable rainy day. And now that the Bundesliga has also signed a lucrative broadcasting deal, the last remaining piece in the jigsaw that it needed to catapult into a league of its own is finally in place. Not only can we expect German clubs to stay competitive on the pitch for a long time to come, but we should also expect them to increasingly dictate terms off the pitch, too. Sounds quite a lot like Germany's relationship with the rest of the euro zone anyway, don't you think?