Tuesday, July 27, 2021
Poor but sexy?
Bavaria’s brutal fight for multi-million dollar contracts
From Justin Kraft
At the moment, FC Bayern Munich is trying to explain to the public with every syllable that it can be sexy for top players even beyond financial means. However, key players’ contracts are running out. There is a risk of non-transferable departures. What’s going on there?
“We try to be sexy differently,” said Hasan Salihamidžić. It was the answer to the question of how one would act in the transfer market in view of the economic limits. The pandemic has also hit Bayern. There is talk of a loss of around 150 million euros in sales. Bavaria’s answer is “to be sexy differently”. The sports director has said this a number of times. It will be exciting times in Munich. The contracts of Leon Goretzka, Niklas Süle and Corentin Tolisso will expire in 2022, and further key players will follow in 2023 with Joshua Kimmich, Serge Gnabry, Kingsley Coman, Thomas Müller, Robert Lewandowski and Manuel Neuer.
The complicated negotiations with Goretzka and the Thiago and David Alaba cases show: FC Bayern has long been no longer able to easily and easily convince every player. Why the talks with Goretzka are dragging on is unclear. In April, the midfielder said that the tendency was clearly towards FC Bayern. Meanwhile, Real Madrid, among others, are hoping to lure the German international to Spain for free next summer.
So there still seem to be differences at the moment. The exact references of the players are in most cases a mystery to the public. It’s a different situation for the players, of course. Goretzka’s advisory side knows exactly the value of the player on the one hand and the salary structure at Bayern on the other. She also knows exactly about the contracts Lucas Hernández and Leroy Sané received when the club didn’t know how much sales they would have lost in a year. And Kingsley Coman’s agent Pini Zahavi knows exactly what Robert Lewandowski deserves. He negotiated the contract. That was already problematic at Alaba.
The players know their worth
It is understandable that the player side demands this value, which is also influenced by possible offers from outside. On the other hand, there is the club, which has set itself just as comprehensible limits. Economically, FC Bayern is still doing better than most of the national and international competition. But other clubs seem to have been significantly less affected by the crisis. A look at France, where Paris Saint-Germain has a sinfully expensive squad, or a look at England, where Manchester United is investing heavily and even Aston Villa has signed a player for almost 40 million euros, is enough.
Bayern, on the other hand, are pursuing an aggressive austerity course. At his presentation at the beginning of July, the new CEO Oliver Kahn explained how the club would like to be “differently sexy” for the players: “We at FC Bayern have a great package to offer. Here you can shape an era.”
Other clubs are sexy too
The problem: You can do that elsewhere too. A large part of the players won the Champions League with Bayern in 2020. Nationally, the Munich are miles ahead of their competition anyway. Nine championship titles in a row, only a few slips in the cup – is this dominance really “sexy” for those top players who keep emphasizing that they want to challenge themselves at the highest level? Everything they can now achieve with Bayern is a repetition of the successes they have already experienced.
In the other top leagues there are also dominant clubs that are far ahead of the competition, but especially in England or Spain the championship battle is usually a little more open. Especially in the long term. And financially? It doesn’t even have to be discussed. It is reasonable that FC Bayern does not want to do business like FC Barcelona or Real Madrid, which have partially torpedoed their salary structures. But with the Bundesliga behind you, it will be difficult to convince the best players in the long run.
The Bundesliga and FC Bayern: a marriage that no longer works?
And that is based on reciprocity: just as the Bundesliga poses a problem for Bayern, the other way round the record and series champions with their dominance are not a particularly good argument for the attractiveness of the league and thus for marketing. Internationally, the quality of the German league is often ridiculed, the interest in other leagues is greater. The Bundesliga certainly has a lot to offer with its fan culture, exciting duels for European places and an often thrilling battle for relegation, but the championship battle is an essential factor for international marketing.
In the 2020/2021 season, the Bundesliga took in 230 million euros with foreign marketing, of which 177 million euros from television rights and the rest from license agreements. The English Premier League is increasing during the current rights period 1.6 billion euros per year from foreign marketing.
The fact that, despite everything, people are still very relaxed and easy going in Munich at the moment indicates that the situation is not yet very critical at the moment. From those around the club, optimism can be heard over and over again when it comes to the contract talks with the players. In the future, however, these will become more and more difficult.
Not really poor, but conservative
The fact is: The club is not as poor as it is. The report for the 2019/20 financial year shows that at the end of the year, i.e. in summer 2020, Bayern had 131 million euros in liquid funds. The operating cash flow, i.e. the liquid funds generated from operating activities, amounted to 49 million euros despite the first few months of COVID-19. In addition, FC Bayern has no long-term financial liabilities with banks.
Even if further losses and declines are to be expected for the 2020/2021 financial year, the club is still much healthier and better off than a large part of the European competition – with the exception of those who have particularly financially strong investors behind them. The Bavarians are unlikely to be threatened with a sell-off because they are still very solvent.
In contrast to other clubs, however, you are financially much more conservative – or more sensible, depending on your perspective. Therefore, Kahn can no longer rule out that there will be one or the other exit in the future if a player – like Alaba – demands more than Bayern are willing to pay. But then the question of perspective also arises. Can FC Bayern actually offer its players an attractive overall package, or isn’t players like Coman also drawn to England because they are challenged differently there in everyday life?
FC Bayern does not want to get involved financially among the super-rich, but wants to stay with them in terms of sport. And so it takes creative solutions in order to continue to be “sexy” for the players. In this regard, the Bundesliga is at least of no help for the likely soon ten-time series champion. You have now thought that a better thought-out Super League could eventually become such a solution.
.
