Thanks for the nice episode, as always. I want to touch on two economic things that came up in the show, mostly by you, @GNetzer.
Clubs have no financial buffers to cope with extraordinary events like a natural disaster or the coronavirus now.
Well, that’s true, but that’s perfectly normal and I would even be worried if it were otherwise. Economically speaking, a football club is a regular business. It is not the object of a business to hoard money like Scrooge McDuck with his ‚Money Bin‘. Our economy has moved past the stage of mercantilism where the goal of business and trade was to accumulate vast monetary reserves, the larger the better.
By now, people have realised that money needs to go around to raise the level of wealth for everyone. Thus, it is much rather a sign of a healthy business (and economy on the whole, for that matter) that the vast majority of the money that comes in in revenues is turned over in productive outlets like wages for employees, production of goods and services, procurement of resources and other production factors, and so on. If a business manages to run a profit at the end of the financial year, they may elect to put away a portion of that profit for later use (investments, buffer for unforeseen circumstances etc.), but for most companies that portion is usually rather small, as it should be because that money is not immediately productive.
And I would not fault a football club for failing to put money away for the unlikely event that a whole season has to be cancelled half-way, would you? That’s a bit like putting money away in case the moon fell onto earth. The consequences would be massive, but the probability is extremely low. I for one would question the business sense (and in fact mental sanity) of my club’s bosses if they told me now that they had secretly built up an emergency stash of money for exactly such an event - money they could not spent on players, improving the club’s infrastructure, or salaries for their employees.
There is no sensible argument to make that football clubs should have been prepared for something like coronavirus. They should be prepared for likely events (maybe a cancelled matchday or two due to a large demonstration or bad weather), but otherwise spend the money they earn. The functioning of our economy depends on this flow of money (with money as the physical representation of stored-up economic activity). It comes in the one end and goes out the other. If everyone behaved like Scrooge McDuck and put the money they earned safely away in a huge Money Bin in case the world came to an end, our economy would collapse.
Max, at one point you said something like - I paraphrase - that the economic bubble of football was completely hollow because it was so immensely far removed from physical reality, i.e. tangible, material products. The Bundesliga depended on money from TV rights holders, who, in turn, for their economic survival were dependent upon money from airing commercials.
I would like to object to that. From an economic point of view, a service like airing a commercial or broadcasting an event is just as real as a physical product like a car or a windowpane. Both are definable entities, both can be produced and offered on a market, for both there can be a real demand, both have a price that is a result of offer and demand and so on. Just because a service has no material basis doesn’t mean it isn’t real. Go try tell that to your tax accountant.
On a similar note, Christian Amend at one point in the show so aptly said that watching football on a Saturday afternoon was the one time during a week when he could let go of all his worries, sit back and relax his mind for 90 minutes. He is so right. I would bet that, in this sense, watching football at the weekend on TV or attending a game with your friends is probably the most real thing many people have in their lives - even though when you switch off the TV or leave the stadium, you won’t have gained anything of a material nature.
I know it sounds abstract, but you should rid yourself of the idea that only material goods are real and seemingly meaningless services like airing commercials on TV are any less real and valuable for the parties dealing in them.
Oh, and Stefanie’s lovely portrayal of her childhood experience with Hannover 96? Moment of the show. Hands down.