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Christophe Lepetit: "The crisis must push sport to reinvent itself"

2020-05-01T14:44:38.231Z


Director of studies at the Center for Sports Law and Economics in Limoges, Christophe Lepetit provides a broad overview of the consequences of the crisis on the sports world.


All sports and all levels will be affected by the consequences of the pandemic, which are the most threatened?
The clubs that either have no equity and / or no very solid shareholders, or a solid shareholder but who is so impacted that he will not have the capacity to invest, are the profiles most in danger. If we refocus on football, the clubs that have made player transfers the only element of their economic model are likely to suffer very strongly because the transfer market will be complicated this summer and perhaps during several transfer periods. We should also be worried about the clubs which have an economic model based on sponsorship revenues, because if the competitions resume in September behind closed doors, they will be in trouble. Rugby, basketball, handball and volleyball clubs can be in very big trouble.

We see a deep distortion arise between economic obligations and the health emergency, professional sport is at the heart of criticism, how should it do to preserve its interests without damaging its image?
Its actors are a little caught between the hammer and the anvil. They have an interest, especially for football, to resume so as not to compromise the payment of television rights which is compromised for the 2019-2020 season. It should not be for the following season, especially with the entry into force of the "contract of the century" (with Mediapro, Editor's note). In professional sport, even if there are important issues, we don't just talk about players, it's often the shortcut that we make but the clubs also employ administrative staff, there are also a lot of shops around their sports organizations, so this indirectly impacts their activity. But they have to face a situation that they do not control and that nobody controls. They have a real duty of exemplarity. Care must be taken between the urgency of economic considerations and the reason for adopting the health situation. The recent cacophony has not helped improve the image of football.

Will the financial bubble in football explode?
It is considerably deflating. The question is: will this bubble inflate or not? And if so, under what conditions? The issue is whether the situation is lasting or temporary. If it were to be temporary, the foundations must be laid for a reflection which would make it a much more sustainable and much more solid sector.

"Today, with a real drop in income which will be significant in 2019-2020 but also in 2020-2021, this certainly requires asking the question of the long-term economic model"

Christophe Lepetit

Did professional sport live beyond its means?
He lived in an inflationary system with incomes which have increased very strongly over the past thirty years, due in particular to the liberalization of the audiovisual markets which has exploded broadcasting rights, all sports combined and in particular for football, even for rugby. And then, more recently, with the explosion of commercial revenues from major international advertisers who have invested massively in professional sport. With income inflation, mechanically, there has been an inflation of expenses which unfortunately has often been quite higher than income inflation itself, since sport and in particular football has been able to live above its limits. means and sought, what can be described as artifices, a way to balance its debts, and was able to find thanks to the liberalization of the labor market the parade with transfer allowances. We have entered a kind of headlong rush. Legitimately, one can wonder if all this is very durable. This was so as long as income inflation continued. Today, with a real drop in income which will be significant in 2019-2020 but also in 2020-2021, this certainly requires asking the question of the long-term economic model.

How can football reinvent itself?
All the ingredients are there so that there is a broad reflection on the mode of regulation of football. Which has never been the case. At one point, France tried to influence European regulation, we ended up in financial fair play, but we never had the general conditions for all countries, clubs and players to get around of the table. This is the case today. All the actors are hard hit by this crisis, the consequences will be very important for them. Today, two paths are emerging to get out of this crisis: that of a much stronger and much stricter regulation of world football, and in particular European. And there is the other way, which would see the appearance of several closed supranational or national leagues which would ask other questions. I hope that we will opt for the path of global regulation: financial regulation with financial fair play strengthened and rethought when we are out of the crisis, labor market regulation with all the tools that we can put in place on the salary ceiling, the limitation of the workforce and on the transfer market. By this way, we will make football both more sustainable and we will give it the conditions necessary for an even higher valuation and for a renewed interest of all stakeholders.

How long can it take?
For a long time unfortunately because these are questions that require putting a lot of people around the table. There have already been attempts to reform, for example the transfer market. The last major one dates from 2001, it required a lot of effort and great pressure from the European Commission. It will not be a snap of the fingers. There is an emergency today which is imposed on the clubs, it is an economic emergency which for some may go as far as survival.

“Sport is not going to go away. He has the means to come out strengthened ”

Christophe Lepetit

What prospects do you imagine for globalized sports such as Formula 1, tennis, golf or motorcycling which have a vast international calendar?
If we broaden the reflection, we can ask the question in terms of environmental issues. In a world where it will be 4 degrees higher by the year 2100, will it still be socially acceptable to have this type of organization and will it still be profitable economically? There is a real issue of survival for these organizations in the more or less short term. Will it still be possible to organize a world F1 circuit in a world where it will be more complicated to get around? And will it be profitable, it is not at all guaranteed. These environmental positions in a horizon which is not at 200 years, this can lead to the disappearance of a certain number of organizations or in any case push to find new forms even if it means having competitions which take place on much tighter territories, requiring less travel.

What about cycling whose economy relies almost exclusively on the Tour de France?
If the Tour did not take place this year, which today is not a far-fetched hypothesis, that would put many professional teams and cyclists in difficulty, because some teams rely on sponsorship thanks to the Tour. This could therefore cause a certain number of sponsors to withdraw and thus completely change the panorama of professional cycling. There is a real stake in the fact that the Tour de France can take place for a certain number of teams, but it cannot be done without taking health considerations into account.

What may be the repercussions of the crisis on the Tokyo Olympics?
They were postponed by a year, it's already a major explosion. There will be a definite economic impact. There are estimates circulating. I do not know exactly how they were established, the latest to date speaks of $ 3 billion, linked to the additional cost because it will be necessary to ensure an additional year of exercise of the organizing committee. If the Olympic Games can be played under normal conditions, this will not change the concept. The upheavals, if they must occur, will rather occur on the Games of Paris 2024 which however have more time to anticipate…

Faced with a historic crisis, will sport manage to recover?
The crisis is going to do a lot of damage, it is still too early to assess it with precision but the clubs will have to go through this crisis with revenues at half mast and charges which will remain at a high level even if they reach an agreement on a reduction in wages in the coming weeks. The crisis must push professional sport to reinvent itself, to carry out a large introspection. Today, it is very, very exposed, just like the entire French economy, but with its own characteristics. It may be going to transform itself even more than amateur sport, although amateur sport will not have to do without a transformation to open up either. The sport will not go away. He has the means to come out strengthened. Professional sport has all the ingredients to reinvent itself and find a much more sustainable model…

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Source: lefigaro

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