Ignacio Mas-Bagà, the new director of the Master in Football Business in partnership with FC Barcelona and CEO of Girona FC, hopes that “in one year, football will return to what it was before the coronavirus”, in an interview where he explains how the football industry has managed the crisis and what remains to be done
The history books will talk about the impact of Covid-19 in the world of football as it is one of the socio-economic engines of our society. Next to the name of the champions of the different competitions, there will most likely be an asterisk that will recall the exceptional nature of this season. All levels of football have been affected; the competitions came to a complete halt for a time, and little by little they went from shock to uncertainty.
Football was one of the first sports to establish protocols and resume professional activity, although it is necessary to continue enjoying the show on television. The adaptation had to be quick, has demanded a great capacity for understanding on the part of all those involved and will continue to ask for changes in the future. Ignacio Mas-Bagà, the new director of the Master in Football Business in partnership with FC Barcelona, and CEO of Girona FC, hopes that “in a year, football will return to what it was before the coronavirus.”
In this interview, Mas-Bagà discusses how the crisis has been managed since March, both at the club itself and by the industry in general.
Javier Tebas, the president of LaLiga, said that the football industry will be again like it was in two years’ time. Do you think so? Or do you hope so?
Well, Javier Tebas is a good reference because he has the big picture of the industry. But I think it depends on the club. Maybe in our case we could recover earlier, maybe in one year. The clubs have prepared and have been very prudent when building their P&L’s for next season. It depends on how the virus behaves and depends on the country, but hopefully in a year’s time we could be with the same numbers as last season.
What are the big changes in the management of a club that the pandemic has brought about?
The impact of Covid was something totally unexpected. A world pandemic doesn’t happen every day, so nobody was prepared. In terms of management, we had to focus on how to reduce the impact of the decrease of revenues in a football club. All the clubs have worked on seeking new opportunities to generate new revenues but also to reduce the impact of the decrease of revenues. How? Focusing on agreements with players because we have to resize their contracts according to the new situation. Also dealing with partners, because we also had to think of compensations schemes because we wouldn’t be able to deliver the assets. And also to think about our fans because they were also affected, they wouldn’t be attending the games and be participating in this big show. The clubs have also worked on different alternatives and compensation schemes for our fans.
“All the clubs have worked on seeking new opportunities to generate new revenues, but also to reduce the impact of the decrease of revenues”
Is the worst now over? Or will it be from September, as expected in other sectors, when the havoc caused by this crisis will really be seen?
Well, the uncertainty is there. Everybody reads the news, and it looks like by September-October the virus could come back to our homes, but I think everybody will be more prepared. Not only organizations, governments, states, I mean also the people, because we have learned to behave differently and that’s important to focus that kind of crisis. So, people will be different facing the crisis and, then companies, clubs, players and stakeholders will be ready and open-minded, because it has changed our mindset. I think it will be different.
At the time when it was decided to suspend LaLiga, in which areas did you have to allocate more resources? (Human resources, financial area, communication and marketing department?)
Everybody was essential for that moment because we were managing a crisis, so I was meeting everyday with the heads of department because everybody was essential at that moment. As you said, communication was crucial at that moment, not only external communication, also internal communication. Then, the part of financing, of course; we were calculating the impact of the virus for our business and our industry. And then also the part of marketing, because we had to think of creative alternatives for our fans and our partners. And then, human resources because we had to take care of our staff as well.
“At the time when it was decided to suspend LaLiga, everybody was essential because we were managing a crisis. Communication was crucial at that moment, not only external communication, also internal communication”
You came to Girona FC in 2015 and led the efforts to restructure the club’s business area and strengthen its image after it hit rock bottom financially in 2013. How much of that experience will now help you pull through again?
I think it’s important when you came from scratch, when you start in a club that was in a bankruptcy situation. The club has grown a lot in the last years, and I think being in first division has permitted us to learn a lot about this big business, but also we have always remembered where we come from and how we managed the club when it was so small. This season we had the opportunity of having this parachute payment that LaLiga has for the first season when you are relegated to manage and maintain the structure of the club. But now we are working on two scenarios because we don’t know if Girona will be playing in the first or second division next season. And, as I said, we always work with two scenarios because we are a small club that will be fighting for promotion or to avoid relegation. So, I think we have the expertise, we know how to resize the business, but it’s always tough to reduce costs. It’s difficult, but we will manage it.
A crisis can serve to unite or to separate people. How has the football industry reacted this time?
FIFA and UEFA built some work streams and work groups to find solutions to this new scenario, but with my expertise in LaLiga, I think we could have done better. Clubs sometimes only think of their own interests because in LaLiga, in the first division and the second division, the clubs are very different -different sizes, different budgets and different interests-. We have worked together to find solutions, but I think we could have done better.
“FIFA and UEFA built some work streams and work groups to find solutions to this new scenario, but with my expertise in LaLiga, I think we could have done better”
In which ways?
Not having an agreement on salary reduction with players was difficult because the players talked to each other and said ‘that club offers better conditions than yours’. I think that in our case, we have been very transparent with them, and we have shown the numbers, we have shown the impact. So it depends on the revenue sources you have and the weight that they have on your P&L. It was difficult then to find a common solution, that’s true, but I think we could have done better.
Everyone is saying that the ‘new normal’ will be very different from what we have known until now. How will the football industry change?
First of all, the first question will be: when the fans will be able to come to the stadiums. For us, it’s crucial because, as we have always said, fans are part of the show and we need them back. The clubs must show and build that trust with them, because it’s not only that we build and we show that the stadium is a Covid-free stadium and it’s saf. We have to convince them and tell them that we need them and we will deliver the safety that we have to have in the stadium.
“Not having an agreement on salary reduction with players was difficult because the players talked to each other and said ‘that club offers better conditions than yours’.
TV rights are one of the most important sources of income for clubs. How have those contracts been affected?
Our main worry was to finish the leagues, because if we don’t, the contracts of the TV rights would be damaged because the broadcasters buy a competition. And if you don’t finish the competition or you have to end it in the middle of the season, you won’t have champions and people are there watching games because they want to see who wins and who loses. That was crucial for us. This big effort and the protocols that we are following to finish the league have protected those contracts. It’s true that the TV packages that are sold to bars and restaurants have been damaged because people were unable to go to restaurants, but now I think that the situation is much better. Everybody will lose in this industry, but I think it’s balanced now.
Ticketing, annual subscriber fees and merchandising are also important aspects for a football club. How are you preparing for the return of the fans to the stadiums?
We are working together with LaLiga to build a protocol because we need the fans back as soon as possible. It’s also important to build trust with them because we need to make things easy for them. I think the clubs must be 100% digital because the distance that the Covid has caused obliges the clubs to have a platform where the fans can follow all the process to ask for tickets and reserve their seats. We are working on that, working on different capacities according to the regulations and I think we will soon have the answer and be able to explain it to the fans.
“We are working together with LaLiga to build a protocol because we need the fans back as soon as possible”
The summer transfer market is also an interesting part of the game. What scenario will the clubs need to face to prepare their future squads?
In our case, it’s very important because last season part of our revenues was the profit from players’ sales. And this season, according to LaLiga regulations, we have to start from zero, we cannot forecast any revenues from that part. But it’s only because of a prudent measure, I mean, if you start selling players of course you will be able to use that profit on your P&L and use it to sign new players. I think that the market won’t be as damaged as we expected at the beginning, things are going better, the leagues are finishing, and clubs will be able to sign players, maybe with lower fees. But I think that the market won’t be as damaged as we expected at the beginning.
How has the football industry had to innovate to continue to engage with fans during the lockdown period? Do you think these practices will remain?
Everybody has done videoconferences for meetings, but we have also used that kind of platforms to make interviews, and also to engage with fans and players. That will stay with us because it’s a new reality and virtual platforms provide us new and creative initiatives for our marketing department. We have been able to create new content because, as we didn’t have games on TV, we had to be creative to create new content to be close to our fans. We’ve been doing content with our physiotherapists, our nutritionists, community manager, coach, and people have participated with that because it was very important to engage with our fans. Everybody was at home and looking for entertainment.
“Spanish government should reconsider to ban the visibility of betting companies because it will have a big impact on our finances”
The Spanish government intends to toughen legislation and ban the visibility of betting companies in stadiums and on shirts. Other countries have already done so. How has this news been received? Is there expected to be a period of grace for existing sponsorships?
The lastest news is worse than we expected because in March we thought that the law was going to be different and they would allow betting companies sponsorships in Spain. It looks like it will change and the new law will be stricter. I think it’s a great damage to our industry because we have seen that most of the clubs in the first division have a betting company as main sponsor. We have to protect the collectives that are in risk because of this business, but in other industries we’ve seen what has happened. I mean, we have to be clear, transparent and explain how it works and also to protect our kids about this. But I think it’s a business that works and it’s been in other countries for many years and we should reconsider this because it will have a big impact on our finances.