Summer of Economic Contradictions

This summer in American sports can be defined by one word: strike. The economic downturn that has hit world economies since 2008 has finally hit the sports world, as players want more financial protection and information. In America, the NFL and the NBA players union went on strike, while the NFL players concluded their strike before the season would have been cancelled. The NBA players are still on strike and there’s small talk about players, especially elite players like Darren Williams of NJ Nets, going overseas to play, but for the most part this just depends by players trying to create some bargaining leverage.

The financial distress in the American top leagues has also reverberated to the professional women’s soccer league, WPS, as there is talk that this might be the last season for the six team, three year old league. Owners are losing money, as their teams have not yet generated enough revenue to be a sustainable business. The inequality in the salary structure of the players would have to be addressed in this off-season as 85 players are free-agents, due to the fact that World Cup elite players make double of the league average salary of $27,000. And the world’s best female soccer player for the past five years, Marta of Brazil, is the highest earner at $500,000. Marta’s former team and 2010 league champions, FC Gold Pride (of the San Jose Bay Area), folded after the 2010 season as the owners could not find additional investors. Marta now plays for the inaugural team, Western New York Flash. Along with FC Gold Pride, Washington Freedom also folded after the 2010 season. In total, 4 times, including Los Angelos Sol and Saint Louis Athletica (who folded in the middle of the 2010 season) have folded since the inaugural first season in 2009. Chicago Red Stars left the WPS to join the second division WPSL as they couldn’t comply with the financial requirements to stay in the WPS. The union of WPS players knows that a salary restructuring and possibly a salary cap are necessary for the financial health of the league. The financial distress of the league did not dampen the end of the season as Western NY defeated the Philadelphia Independence on penalty kicks this past Saturday in front of a record crowd of 10,461, the highest attendance to a championship game in the three years of existence.

The troubles of WPS have crossed the Atlantic to the Spanish Armada, La Liga, which is a story of contradictions. On the one hand, you have the best club in the world, Barcelona, bringing back Cesc Fabregas (the former captain of Arsenal) to the Nou Camp. And then you have six of the twenty teams in La Liga in bankruptcy court and 200 players have not been paid in months. The result is no games last week with the memory of the Real Madrid vs. Barcelona scuffle and Mourinho’s finger assaulting a Barca coach, as the last image of La Liga football. The players union, The Association of Spanish Football Players (AFE), could not agree with league officials of the league guaranteeing payment of $70 million of unpaid salaries to more than 200 players. The earliest the domestic season could start would be September 10; however, the players will still attend practices and play in the early round stages of the Champions League. In September, Spanish Parliament will rule on whether to demote insolvent teams to the third division which can have some serious impact to the league, especially to Real Zaragoza which is indebted to everyone.

Update: On Thursday, August 25, AFE and La Liga officials agreed to pay $72 million in owed salaries to over 200 players and to allow players out of their contracts if their teams failed to pay their wages. League games resumed on Saturday, August 27.

As soon as the Spanish strike ends, Serie A in Italy goes on strike, ooh the wonders of football never end. This might be the new future of European football, as the financial crisis and national politics has now seeped into football in Italy’s case. The strike has two issues: 1) force unwanted players to train away from the first teams and 2) force players to pay the new solidarity tax increase for high income earners. The new austerity package that passed in Italy would require an additional 5% on an income above $128,250 and 10% on income above $213,750. The clubs voted 18-2 against the players offer on Wednesday. This is the second time in Serie A history the players are on strike, the previous strike was in 1996. Serie A was scheduled to start their league games this weekend, and their next round of league games is the weekend of September 10, currently in jeopardy. What this means for Italian soccer are players with not much football in their legs when they began their European championship qualifieres against the Faeroe Islands and Slovenia on September 2 and 6, respectively.

The woos of La Liga and Serie A mirror the financial crisis that the nations of Spain and Italy are experiencing as a whole, while the strikes in US do not mirror the economic crisis US is going through, but seem more a reflection of rich players and owners arguing about semantics. Can you imagine 200 NFL or NBA players continue to play league games without receiving any paychecks or agreeing to pay an additional 10% tax increase? US professional athletes would not play even a game if they knew they were not going to get paid and maybe some players would agree with the tax increase, but it would be safe to say that there would be no solidarity tax increase in US, not with Michele Bachman and others throwing around the idea of tax cuts. The AFE put their league and most importantly the game ahead their financial needs or egos but could not enter another season without receiving wages, and La Liga eventually agreed and the strike ended quickly. Let’s hope the Italian strike also end quickly, because there are a lot of Italians who are struggling financially and the tax increase will help to balance the books in the government and not put too much financial strain on middle to low-income families and the national government. What Europe and US do not want is the Italian economy to collapse and need to be rescued by the EU Central Bank and the IMF. It is bad enough that southern Europe is in serious financial strain but they cannot have Italy and Spain follow Greece. And, moreover, we cannot have our passion and our outlet from reality follow they way of their national economies.

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  1. [...] Summer of Economic Contradictions. By Nnennaya Okoro {August 28, [...]

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