The Beautiful Game and the Dismal Science: Effects of Bankruptcies and Tragic Loss of Life on Footba
On 28th November 2016, the footballing experienced one of its biggest shocks in recent memory. LMI2933, a plane flight operated by the Bolivian charter airline LaMia, crashed in Colombia, killing 71 of the 77 passengers on board. On board the flight at the time was the Brazilian football club Chapecoense, where 19 out of the 22 players and staff lost their lives. They had been about to play the most important match of their lives, the Copa Sudamerica final, the South American equivalent of the Europa League.
What made the event even more tragic was that this had been a club in the middle of a meteoric rise, possibly as miraculous as Leicester winning the Premier League. In 2009, they were competing in the fourth tier of Brazilian football. In 2014 they were competing in the top division and, just two years later, they were on the verge of winning the second most prestigious trophy in South American football. This is a small club, competing very much beyond their means and expectations.
The response from the football community has been nothing short of stellar. “Chape” was awarded the Copa Sudamerica as well as the $2 million in prize money by the South American governing body CONMEBOL. Chapeco, their home city, held a large public funeral service which over 100,000 people attended. Fixtures all around the world, including those in the Premier League, held minute silences and wore black armbands as a sign of solidarity. Brazilian clubs offered to loan players to them, and former high-profile players such as Ronaldinho, Juan Roman Riquelme and Eidur Gudjohnsen have also offered to play for them.
What we are interested in here are the long term effects of tragedies such as this on the clubs themselves and the wider community, comparing them with another form of footballing “death”: the bankruptcy.
Thanks to the other Brazilian clubs in Serie A offering to loan players to Chapecoense for free and the fact that it will be immune from relegation for the next three years, they should be able to rebuild, maintaining a steady revenue from having their status in the top tier guaranteed and match day income which should increase substantially. They were only ranked 17th out of 20 in terms of revenue from TV rights, around $7 million compared with the league average of $20 million. However, since the crash over 13,000 fans are now paying members of the club, more than doubling their 9,000 members from before the tragedy. Undoubtedly there will be more fans attending matches, so the initial signs look positive.
However, we can only speculate for the moment as this is such a recent event. In order to help us form a better judgement, it is worth seeing the effects of a similar tragedy.
It can only be the Munich air disaster of 1958, where eight of Manchester United’s so-called “Busby Babes” had their lives cut short under similarly tragic circumstances. At the time they were on course for a third consecutive league title and performing well in what was then the European Cup (now the Champions League). Due to the fact that the majority of the team and backroom staff survived, they continued in those competitions, where they finished 9th in the First Division and reaching an impressive FA Cup final.
With the loss of such promising talent as Duncan Edwards (who by the age of 21 had already had over 150 professional club appearances and around 20 caps to his name), you would be forgiven at the time for thinking that the club would be content with mediocrity. However, thanks to their manager Sir Matt Busby surviving the crash and recovering against the odds, they were galvanised and, with the acquisition of the likes of George Best and Denis Law (who with Bobby Charlton would go on to form the formidable triumvirate), just ten years later they went on to become the first English team to win the European Cup.
This was arguably the defining period of their history. The miraculous and awe-inspiring comeback story is arguably one of the reasons why Man United cemented its place as one of the most well-known and successful clubs in the world.
It has even been argued that this event made a strong impact outside football. There was much media attention which was considered to be intrusive and disrespectful, taking photographs without players’ consent and hindering the progress of the doctors and nurses, highlighting the need for change in press self-regulation. It has also been discussed that the Munich Air Disaster contributed towards the mending of Anglo-German relations. World War Two was still fresh in the memory, and the fact that German doctors and nurses were so willing and able to help the British United players proved that Germans were not the hostile and “evil” people as the British public was led to believe in wartime.
The main difference between Man United and Chapecoense is that United was already one of the biggest and most successful teams in the country and they had the talent and the funds to make the comeback possible. With Chapecoense they have arguably a greater level of support and show of solidarity due to the presence of social media. But, the fact that the majority of its players and backroom staff was lost, the psychological impact and the fact that it earns so much less revenue than the likes of Corinthians, Sao Paolo and Santos means that it will take longer for it to become competitive again.
Now we move on to how this affects the wider society. For this we should draw comparisons to what happens when a club ceases to exist and goes bankrupt. The financial meltdown and subsequent insolvency of Rangers FC in 2012 was a shock for the whole footballing world. The club had been consistently spending more than what they were earning, losing around £13 million for the previous 11 years, which included a scheme called “employee benefit trusts”, a way of paying players more to attract talent. A fee of around £75 million in taxes and penalties coming from HMRC which the club could not pay was the final straw.
As a result, Rangers were relegated to the bottom tier of professional Scottish football and were, in effect, reformed as new club with a new holding company. In terms of employment, a lot of the first team players sought work elsewhere and there was a restructuring of the ownership and board.
What was affected though was the Scottish Premiership. With Rangers gone, it was a foregone conclusion that Celtic would win the league. This took the suspense and interest out of the league, meaning attendance fell for Rangers and the other Premiership clubs (with a 50,000 capacity stadium, attendance reached lows of 20,000), as did revenue from TV broadcasting and sponsorships: 94% of all TV viewership for the 2011/12 season was for Rangers and arch-rivals Celtic. This meant that there was less income available for government tax revenue and community action initiatives, like the Rangers Charity Foundation and similar programmes for the other clubs.
Due to the financial recklessness, negligence and incompetence shown by the Rangers board and ownership, fans such as Gus Oakley spoke to the Guardian about their overall disdain over the state of their beloved club and how it was being run. The same can be said about clubs like Portsmouth, Leeds and Parma in Italy. The economic impact is worse and more far-reaching, as the business model employed by the ownership has failed. However, bankruptcies rarely result in a void being left in a community: they are almost always replaced, often under the same name. Even clubs like Wimbledon FC, which moved to Milton Keynes to form MK Dons, were replaced by AFC Wimbledon, its spiritual successor.
In the case of Chapecoense, Manchester United and other tragedies like Hillsborough, there would be an inquest for the perpetrators, but generally there would be a show of solidarity across the sport, and fans, sponsors and broadcasters would react more positively as they were unfortunate events completely out of their control.
When clubs go bankrupt, the ownership is derided and protested against by the fans and support falls. When tragedy befalls a club, like Chapecoense, all in the sport help them find their feet again so they can survive and reach even greater heights.
Find the rest of Christopher's article series 'The Beautiful Game and the Dismal Science' here!