Article by Dr. Lutz Raettig and Hubertus Väth in Börsen-Zeitung
The ball’s rolling again. After the coronavirus has kept players off the pitch for more than two months, the Bundesliga’s reopening a few matchdays ago sparked controversy and emotionally charged discourse. Videos quickly spread showing players disregarding all rules for “social distancing” and minted once revered stars as negative role models.
Questions were raised and rightfully so. Are critical test capacities in sensitive areas such as medical care, security or education being diverted? Others must decide if these have been adequately answered. However, it is a strong signal at home and abroad, and the existential risk for the clubs was all too real.
As in many other areas, the long-term effects of the pandemic for sports clubs are yet to unseen. Before this crisis, football was a popular topic of conversation the morning after matchday. Football references would be peppered throughout market commentaries. Today, the echo is more restrained. Whereas previously surprises gave the game its spice, today the game’s reception reflects more the search for confirmation and certainty. A game’s reception is and remains a mirror of the current Zeitgeist. Destination: unknown.
So, what can we say about certainty concerning football and the financial centre in such tumultuous times? For one, there is the vexing truth that, whether on the pitch or the financial markets, there are in fact only probabilities, never certainties.
Huge investment for stars, precise analysis, big data, all this is often, but not always, rewarded. There are no guarantees. Once the whistle sounds or the market bell rings, anything can happen. Football and financial markets are merciless. Whether points and tables or euros and portfolios, only the results count. Mistakes, whether a bad pass or a poor decision, can, but do not have to, lead to losses. All this is not fair, as we often understand fairness today. Or, perhaps it is. Even both need their respective referees. Which, as the ECB proves, can also help.
Crises strengthen the strong
It is clear that football clubs are under economic pressure and will undoubtedly remain so for a while. Income from spectators and television rights has dried up as matches are suspended or even cancelled. Therefore, the coming transfer season should be rather exciting, as salaries and transfer sums will undoubtedly come under pressure. In particular, the wealthier clubs should be able to secure top talents at lower costs long term. Financially weak clubs will come under pressure to straighten up their finances and part ways with important players.
Similarities with the financial sector are not just coincidental. Both face the central question of how the world will look after the pandemic. Do we go all-in because we believe in a V-shaped recovery? Do we keep the powder partly dry because we expect a W pattern with a second wave? Or, are you even a pessimist who expects an L and therefore consistently reduces costs and risks? Of course, with the opposing risk of falling out of the competition.
City as a nucleus
Another parallel between finance and football is not apparent at first glance but explains why football is so beneficial to the financial centre. Both attract modern nomads, who also decide on the attractiveness of a location. At the same time, football clubs and financial institutions are deeply rooted in their cities, while also enjoying global appeal.
In his book The Nation City, Rahm Emanuel, former Chief of Staff to Barack Obama and former Mayor of Chicago, offers an impressive description of the role of cities in the choice of people who consciously choose a place where they want to live and work.
The heart of every club beats in its home stadium, that of financial institutions in their headquarters or stock exchanges. Clubs usually bear their city in their name. Many financial institutions signal more far-reaching ambitions through their names but remain closely linked to their location. For example, the competition between Deutsche Bank and Commerzbank for the sponsorship and naming rights of Eintracht Frankfurt’s stadium is a sound signal of increased awareness of precisely this connection. Deutsche Bank, who ultimately won the sponsorship rights, also wants to work with the club to develop new digital business models and products that will play a role in people’s everyday lives far beyond today’s stadium experience. People can help each other in many ways.
Football clubs are not just important for the regional economy. One should not underestimate their contribution to the international perception of a city. For Frankfurt am Main, “die Eintracht” has played this role beautifully in recent years. Eintracht was an original member of the Bundesliga when it was founded in 1963 and is ranked 9th in the all-time table. Since 2017, Eintracht has been in its prime. Twice they’ve reached the German cup final, winning in 2018, and in 2019 made it to the semi-finals in the Europa League. Eintracht’s recent successes coincide with a renewed increase in the importance of the Financial Centre Frankfurt following Brexit. A few years ago, Frankfurt had dropped out of the top 20 of the world’s international financial centres, but now the city has once again captured a good midfield position in its league of financial centres.
Football is traditionally male-dominated. However, this does not apply to the Financial Centre Frankfurt. With the 1st FFC Frankfurt, Frankfurt am Main is home to the most successful women’s football club in Germany. Since its foundation in 1998, the team has won 20 championships, including four international titles. The planned merger with Eintracht Frankfurt after the end of the current season underlines the growing importance of women’s football, which received support early on from the city’s banks.
Welcome – this is how integration works
Football and finance both stand for internationality and cosmopolitanism. Leading football clubs and financial institutions attract talent from all over the world. Only successful integration creates a basis for economic and sporting success. And that closes the circle between finance and football in Frankfurt am Main. The financial centre scores with Germany’s economic power, the diverse banking and exchange landscape, competent supervisory authorities and reliable legal system. Eintracht Frankfurt scores with its broad reach, pure emotion, comprehensive integration abilities and a clear societal cross-section. Together, these factors combine to create a powerhouse of positive energy in the city.
From an employee’s point of view, soft factors play an essential role in any relocation decision. People want a city in which they can not only work but also live, a city that has an efficient infrastructure and an exemplary healthcare system. A city is a place of longing, a magnet where you can and want to meet partners and friends and raise children. Frankfurt has ranked 7th in Mercer’s ranking of the world’s most livable cities for ten years – far ahead of metropolises such as New York, Tokyo, Paris and London.
Sport, and especially football, is the last “campfire” of an increasingly open and diverse society. Sports clubs are often the first anchor in a new city. Coronavirus will change a lot. Wherever the journey will go, that will remain. And that the financial centre and football will become distant in the process can also be ruled out.