HomeBusinessFootballTurkey

Turkish football creates its own FFP to deal with years of mismanagement

(Dean Mouhtaropoulos/Getty Images)

Turkey’s qualification for the finals of Uefa Euro 2020 has given the country’s football authorities fresh hope that their ‘Golden Generation’ of young players will help drive the commercial transformation of the sport in the country and help push its football economy further up the international league table.

According to Servet Yardımcı, vice-president of the Turkish Football Federation and Uefa executive committee member, success really does breed success and the performances of the current squad are going a long way to rekindling the passion for the national team ignited by the generation of players which finished third at the 2002 World Cup and reached the semi-finals of the Euros in 2008.

Speaking at the TFF’s state-of-the-art residential and training complex outside Istanbul on the morning after a 0-0 draw with Iceland had secured the team’s place at Euro 2020, Yardımcı is matter of fact about the past and excited about what may be to come.

By way of context, Turkey has a population of more than 83 million and, despite the relative success of national and club basketball teams, football remains the number one sport by some distance.

“We have a passion for football, it is in all of our blood,” Yardımcı says.

But despite that passion, Turkey’s Süper Lig – the top tier of football with 18 clubs – ranks sixth in the economic league table of European nations and the country has only 3,000 football clubs compared to some 40,000 in Germany.

New chapter

Yet Yardımcı appears confident that this period marks the beginning of a new chapter in the story of Turkish football, a story which has been marked by financial mismanagement driven by the ambition of rich and powerful club owners, and the difficulties of operating in an economy which has proved vulnerable to a range of external as well as internal events.

It’s now nearly two decades since Turkish football began to peak. In 2000, Istanbul club Galatasaray won the Uefa Cup and followed up with the Uefa Super Cup, becoming the first Turkish club to lift a major continental trophy.

“That’s when Turkish football started to make its presence in Europe. Clubs started investing hugely in players and infrastructure, but it went downhill from there, Yardımcı explains.

galatasary.jpg
Galatasary competing in the 2014 Uefa Champions League.

“Clubs got bigger and bigger, but they were not managed responsibly and incurred huge debts and there were financial fair play issues with Uefa.”

At different times those issues saw fines and squad and transfer limitation sanctions against a bunch of leading teams including Galatasaray, Beşiktaş, Fenerbahçe, Trabzonspor, Gaziantepspor and Bursaspor. Together with European bans against Galatasary and Beşiktaş for match-fixing, the picture over the past decade has looked increasingly bleak.

The reliance of the Turkish economy on hard currencies such as the US Dollars and Euros to pay its bills while receiving revenues in the local Turkish Lira hasn’t helped, leaving not only clubs but the TFF itself at the mercy of currency fluctuations.

However, says Yardımcı, things are starting to change.

Financial fair play

He says that the TFF has grasped the nettle of financial mismanagement by instigating its own initiative to help clubs meet Uefa’s standards.

“We put in place our own FFP, but it wasn’t strict enough to monitor and control the activities of the clubs and we realised it was high time something had to be done to come up with stricter measures,” he says.

“We worked closely with Uefa and the clubs came on board to give the consensus and unity required to come up with a system which is in place now.

“We have an FFP Committee, of which three members come from state-owned banks. Along with private banks they have participated in the project because some of the club’s loans had to be restructured to reduce the backlog of debt and enable them to achieve positive cashflow.

“The Committee goes through the clubs’ the financial details line by line to see whether they are compliant. That’s our biggest achievement.

“Turkish clubs have been mismanaged and have huge debts. The currency problem was just a year ago. The economy is strong but, because of extraordinary reasons, we had a dip in value of Turkish Lira in August 2018, which lasted for about 10 months and was a sudden hit. Since then it has stabilised, but it didn’t make it easy for the clubs whose expenses were in foreign currency. Now they have taken some measures to address the situation by changing contracts to Turkish Lira.”

That fresh level of financial scrutiny, together with a change in overseas player legislation to allow 14 non-Turks in a 28-man squad, has brought greater stability and lowered costs. Previous restrictions on overseas players had inflated the value of home-grown talent to the extent that it had become a burden and restricted investment. The new rules – which are still being evaluated – are designed to have a counter-inflationary impact.

turkey.jpg
The Turkish national team.

“It has been important because to be successful, clubs have to have a sound financial position they can build up from. Because of the limited resources they (now) have financially, they will have no alternative but to invest in youth development and academies, as Turkey has a wealth of talent. Turkish clubs can’t compete financially with Europe’s major clubs.”

That point is underscored by the comparison between the comparative wealth of the Süper Lig and the English Premier League. According to Deloitte, Süper Lig revenues for the 2017-18 season (the latest available) were €731m compared to €5.4bn for the Premier League.

Hometown support

Ironically, the financial difficulties of the major clubs may actually help the Süper Lig in the long run by making some of the smaller clubs more competitive and encouraging more hometown support.

Like many other European leagues, Süper Lig has been dominated by a handful of clubs. Historically some 90 per cent of all the country’s fans have supported Istanbul’s Big Three; Galatasaray, Fenerbahçe and Beşiktaş.

But, says, Yardımcı, the recent emergence of Tranbzonspor as a force to be reckoned with has resulted in a Big Four, with local fans are flocking through the gates and serving to encourage the others.

“Now people in Trabzon support the local team and this is a benchmark for the other teams throughout the country. More and more people around the country are supporting local teams,” he says.

Attendances across the league are trending upwards, although the figures illustrate the discrepancies between the sizes of the clubs themselves. This season Galatasaray’s average home gate has been just under 39,000 while Fenerbahçe has drawn 35,500 and Beşiktaş and Trabzonspor 28,000. That’s all healthy enough but, at the other end of the scale, İstanbul Başakşehir – a surprise package on the field – has attracted an average 3,700 and Kasımpaşa, 3,317.

Media rights naturally account for a major part of the league’s revenues and the dip in the value of Turkish Lira has had an impact on values there as well.

In the current SportBusiness Consulting Global Media Report, Süper Lig makes its debut in the Top 20 most valuable sports properties in the world. This is the result of a €2.5bn, five-year deal with beIN-owned Digiturk.

“BeIN Sports are a global player and when we did the first tender, we achieved $500m per year for five years. It was a big achievement for us but, due to the devaluation problem, there was a renegotiation of the terms to reflect currency. Still today it is over $400m per year which is still a very good income,” Yardımcı explains.

“I believe we deserve more than that, but we have not had the successes on the pitch which would help raise the values. Now the national team is successful again it will have an impact on improving the value of Turkish Football,” he says.

Yardımcı is convinced that if Turkey’s current crop of international stars fulfil their potential they can launch a new era for the game. But he also acknowledges the halo effect of a winning team has to be accompanied by the continuing tight fiscal control at club level which was absent in the late 90s and early noughties.

Hosting

For the Turkish FA, the immediate future includes the opportunity to host the 2020 Uefa Champions League final, just nine months after welcoming Liverpool and Chelsea to Istanbul for the Uefa Super Cup.

That is seen as a tremendous honour by Yardımcı and his colleagues who point to it as an indication that the TFF has earned the trust of Uefa.

Ahead of the big game in May, Istanbul’s Atatürk Stadium is being upgraded but further and more significant development will take place further down the line when the stadium is handed over to the TFF by the government.

“We will own and be responsible for the stadium, which will be our Wembley. It will be the home of the national team and for the Cup Finals and play-offs,” says Yardımcı, who indicated that a naming rights partner would be sought.

With transport enhancements in place, the stadium will be linked to the city centre and a massive new airport by metro and is likely to be the centrepiece of future Turkish bids for major events.

“As a result of government investment, we now have modern stadia in the major cities and towns across the country and although we have been candidates for major events four times now, we will never give up. We just have not made our minds up what events we will bid for,” he says.

Most recent

Longtime executive and industry lifer to remain leading the affiliated minors. But with MLB looking to overhaul the very notion of Minor League Baseball, the job has never been more complex

Barcelona, Paris Saint-Germain and AS Monaco have all invested in Rocket League esports, but the business case for doing so is shaky at best. Callum McCarthy examines an esport with huge, unfulfilled potential.

In just a short amount of time, the Wizards have put themselves in prime position to become the NBA's most-popular team in Japan following the arrival of Rui Hachimura. Bob Williams discovers how they have done it.

Opticians brand Specsavers used its title sponsorship of this summer’s Ashes series to focus on the resonances between its products and Test cricket, while a quick response to a Ben Stokes tweet showed the value in reactive marketing. Adam Nelson reports.