Money Laundering through the Football Sector

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Money Laundering through the Football Sector – July 2009 five‟ European leagues (the exception being Celtic in Scotland). The other half of the total European football sector is divided between the other top and lower leagues in Europe and FIFA and UEFA. 39. Professional football in Western Europe relies on four main revenue sources: match day revenues (gate receipts and all-season tickets), television rights, sponsorship (brand name placing on shirts and around stadiums), and other commercial revenues (licensed merchandise, conference and catering services). As table 3 shows, the relevance of television money is especially big for top-division clubs in the big five European leagues, depending on the size of the television market (35 to over 60 percent of total revenues). Clubs in countries with less developed economies rely for the biggest part on financial support from owners and in some cases also local or national government. 12 - © 2009 FATF/OECD Table 3. Revenue breakdown for the ten biggest European leagues , 2006-07 Total (in million EUR) Matchday % Broadcast % Sponsorship % Other % England* 2 273 35 39 26 - Germany 1 379 22 35 26 17 Spain* 1 326 26 42 32 - Italy 1 163 13 63 12 12 France 972 14 58 18 10 Netherlands 398 30 17 40 13 Scotland* 259 50 21 29 - Portugal 239 33 19 13 35 Austria 151 13 9 60 18 Sweden 87 30 28 32 10 * Sponsorship and other commercial combined. Source: Deloitte 2008, chart 1.3 and 1.8. 40. On the spending side, roughly more than half of the budgets of professional football organisations is spent on salaries and related costs – which means players‟ salaries plus net transfer payments. Other payments include salaries paid to other staff, business costs, image rights, signing-on fees and transfer fees, including fees to players‟ agents. In smaller countries and lower divisions, players may be part-timers with a second job, or amateurs. 41. Within the big five European leagues, over half of the revenues is spent on salaries and related costs for players – these amounts paid to a very select group of top players, agents, managers, coaches. The industry is thus characterised by a very uneven distribution of income - ranging from amateur players at the lowest level, to half professionals, full professionals, and a select group of world star players. 42. To give an idea of the recent growth of professional football in Europe, total revenues in the big five European football leagues rose from EUR 2.5 billion in 1996-97 to EUR 7.9 billion in 2007-2008. Most of this increase came from broadcasting, of which a large part was channelled to increasing wage costs as the top European leagues attract most of the world's best players. Wage costs increased to over EUR 4.2 billion, compared with 1.2 ten years ago. 43. As already mentioned, the total size of the European football market is estimated at EUR 13.8 billion EUR, of which EUR 4.2 billion is spent on salaries in the big five European leagues, comprising only 98 clubs in total. This means one third of the football money flowing into the hands of a
Money Laundering through the Football Sector – July 2009 select group of just a few thousand star players and their managers. There are thousands and thousands of clubs – professional, semi-professional and amateur – scattered all over the world that fall outside the national and international elite of top clubs. The top clubs are able to attract young talent and best players from less wealthy clubs, including clubs in Africa and South America. 44. Considering these money flows, several important financial actors in the football industry can be identified: the clubs (basic cell of the industry), football players (most valuable assets of the industry), corporate sponsors (in most levels most important investor), media (especially powerful in top-league football), individual investors („club patrons‟), local business clubs or talent pools (investing in a club or in the acquisition of individual players), football agents (acting in the interest of the player or as an intermediary on the transfer market), (local) governments (subsidising clubs, acting as a lender of the last resort, sometimes owner of the stadium complex), tax authorities (in some cases a failing club will delay meeting its tax obligations in the hope of avoiding liquidation ), real estate proprietors (stadiums are not always owned by the clubs or local government). In addition associations or leagues can act as regulators as well and sometimes operate financial clearinghouses for transfer payments. In some countries, supporters provide large amounts of cash and have an influence over club owners, the management and supplying businesses as well as, in a small number of cases being allegedly linked with organised crime. If there is fraud, corruption, tax evasion or money laundering it takes place within the complex network of relations between these actors. © 2009 FATF/OECD - 13
Page 1 and 2: FATF Report Financial Action Task F
Page 3 and 4: TABLE OF CONTENTS Money Laundering
Page 5 and 6: INTRODUCTION Money Laundering throu
Page 7 and 8: CHAPTER 1: MONEY LAUNDERING AND SPO
Page 9 and 10: Money Laundering through the Footba
Page 11: Money Laundering through the Footba
Page 15 and 16: Vulnerabilities related to the sect
Page 17 and 18: CHAPTER 4: CASES AND TYPOLOGIES Mon
Page 19 and 20: Case 4: Corruption and PEPs Money L
Page 25 and 26: Case 11: SOGA I and II Money Launde
Page 27 and 28: Illicit trafficking in human beings
Page 29 and 30: Case 17: Tax evasion through the us
Page 31 and 32: National public authorities Money L
Page 39 and 40: REFERENCES Arnaut, J.L. (2006), In
Page 41 and 42: ANNEX - FATF QUESTIONNAIRE Money La

Money Laundering through the Football Sector

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