Has football got lessons for how to deal with globalisation?

Football is and has been for more than a generation the global sport par excellence. There are more members of the Fédération Internationale de Football Association (FIFA) than there are of the United Nations and the World Cup is a greater sporting extravaganza than the Olympic Games. Now a World Bank economist, Branko Milanovic, has produced a study of ‘how forces of efficiency but also inequality unleashed by globalisation can be harnessed by the existence of global institutions to help improve the outcome for the poor countries’.

Milanovic has applied economic analysis to confirm what has been known to most people connected with the sport that recent developments, particularly following the Bosman judgment, have resulted in a concentration of talent in rich clubs in a few countries in Europe. Jean-Marc Bosman, a Belgian player, took his case to the European Court in 1995, arguing that his club FC Liege had no right to a transfer fee after his contract expired. The court found in his favour and also declared that limiting the number of ‘foreign’ players from other European Union countries was contrary to European law. Freedom of labour movement in football followed and talented players now gravitated towards the leading clubs in Italy, Spain, Germany and England.

The consequence, according to Milanovic, is that the chances of a club outside this elite reaching the final stages of the major European competition, the Champions League, or winning the league title in one of these countries has been sharply reduced in the last decade or so. In the European Cup, now renamed and reorganised as the European Champions League, from the 1950s to the late 1980s around 28 to 30 teams reached the quarter-final stages out of a possible 40 in any five-year period. In 1998–2002 that number dropped to 22. Milanovic is aware of the change in the structure of the competition which originally included one club per country to one in which the leading countries have up to four places in the competition, while the minnows have to compete in pre-qualifying matches for a very limited number of places in the qualifying rounds.

In Italy the gap between rich and poor has widened. For example, from the 1950s until 2000 there were on average three or four teams from the southern parts of the country, traditionally the poorest part, in the top division, Serie A. Teams like Napoli and Cagliari won the Scudetto, the Italian championship. Now, he argues, there is only one or none at all. While that may have been true at the time he completed his research, it is no longer so, with Palermo and Messina from Sicily, Reggina from Calabria and Cagliari representing the south in 2005–06. Representation from the region is set to increase even further next year with Catania  from Sicily on top of the Serie B. It is true that none is in the running for the Scudetto, and the poorer clubs have just challenged the leading group for a fairer distribution of the income from television, currently biased heavily in favour of the Turin and Milan clubs. Had Milanovic looked at other countries such as Scotland, Portugal, Uruguay and Holland he would have observed that concentration of talent in two or three top clubs and the marginalisation of provincial teams was of long standing and had little to do with globalisation.

On the other hand, when it comes to the World Cup, players may not change their allegiance (with very limited exceptions) and have to represent the country of their birth or parentage. Good players from poor countries who are attracted to the top European leagues improve their performance and hence have the ability to carry that back into the World Cup qualification for their countries. So there is greater evenness of competition in World Cup qualification and in the final tournament. In the four latest World Cups there have been at least two ‘newcomers’among the top eight finalists. For example when the cup was played in Korea/Japan in 2002, South Korea, Senegal, Turkey and the USA reached the quarter-finals (last eight).

In addition, the goal difference between teams competing in World Cup finals is decreasing, suggesting to Milanovic more even competition. Since the number of goals per game has been decreasing as well, it is perhaps less surprising that differentials have narrowed and, as Milanovic appreciates, the number of countries taking part in World Cup finals has increased from16 in 1978 to 32 since 1998, thus giving greater chances for lesser countries to take part in the final competition.

Milanovic concludes that the free circulation of labour has led to an increase in the quality of the top-level football competitions but a greater inequality between teams. For the fans improved communication means that they can watch top-level competition around the world, though their local team has little chance of winning anything or even playing in the premier league. However, when it comes to national competitions the poorer countries have a chance to do better. They can draw on a cadre of players who have experience of playing in the top leagues once every four years for the World Cup and sometimes more often for regional competitions. So in Australia we have Mark Viduka and Harry Kewell, for example, and now Archie Thompson of Melbourne Victory on his way to PSV Eindhoven, the club of Australian national coach Guus Hiddink.

Milanovic warns that the rich clubs chafe even under the mild redistribution of resources implied in the selection of their players for their country of birth in the World Cup and fears that the powerful clubs may gang up on FIFA in the form of a breakaway by the G14, a self-selected group of rich European clubs. Similar breakaways have occurred in the past; some successful, others not so. Milanovic suggests that the football model illustrates some of the benefits and many of the hazards implicit in globalisation and the fragility of rules and institutions designed to curb unfettered competition in the market. While some of its economic analysis may be a little daunting, this is the type of article anyone interested in the future of the game ought to read. It is published in the Review of International Political Economy.

Branko Milanovic, ‘Globalisation and goals: Does soccer show the way?’ Review of International Political Economy, volume 12, number 5, December 2005, pp. 829–850.

This article appeared on the Football Federation of Victoria website on 16 January 2006 at http://www.footballfedvic.com.au/ An edited version appeared in the Geelong Advertiser on Thursday 2 February 2006, p. 40 under the headline ‘Soccer shows the way to the world’.

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