Erdogan set to call the shots in Turkish football

Erdogan set to call the shots in Turkish football
A Fenerbahce wedding: Two-thirds of Turkish fans support either Fenerbahce or Galatasary.
By Carmen Valache in Istanbul August 1, 2016

2016 has been yet another rough year for Turkish football. The poor showing of the national team at the Uefa European Championship in July is just the latest stage in a mounting crisis brought about by hooliganism, match fixing, politicisation, cancelled sponsorships and clubs’ reckless spending. The end result may be further politicisation of the sport under soccer-mad President Recep Tayyip Erdogan.

The sport runs deep in the consciousness of the Turks, who have traditionally rallied behind the three largest teams in Istanbul and the country: Galatasaray, Fenerbahce and Besiktas. The first two are by far the most popular and enjoy the support of 69% of fans, according to a 2011 survey of 1.4mn Turks.

Boosted by neighbourhood and class rivalries – each of the three leading football teams corresponds to a neighbourhood in Istanbul – football matches in the Turkish Super League used to enjoy high attendances. The so-called “intercontinental derbies” between Fenerbahce and Galatasaray, in particular, drew upwards of 50,000 supporters to watch the biannual head-to- heads live.

Those days are largely gone, however. Attendance has been decimated by the imposition of a mandatory pass in 2014, leaving clubs scrambling to make up for the revenue fall even as spending continues to proliferate.

The Passolig membership card introduced in 2014 required fans to share personal details with private companies and the authorities if they wanted to attend matches. The government claimed that the move was justified by the increased violence at matches and would help identify violent fans, reduce swearing, crack down on black market ticket sales, and create a safer environment for women and children to attend games.

But while the move was justified by the spate of incidents in recent years in which referees, football players and their staff were attacked on and off the field with racist slurs and gun attacks, the Passolig has failed to deliver.

Turkish football fans have continued to perpetrate violence both in the country and abroad, prompting Uefa to consider disciplinary measures against Turkey for fans’ misconduct during the Euro 2016 tournament in France. Turkish football hooligans have made a name for themselves even outside of stadiums, prompting a Pegasus Airlines flight to make an emergency landing in February to drop off five drunken football fans in Sarajevo en route to Rome, where Galatasaray was due to play Lazio.

The violence is not likely to go away anytime soon, because “football reflects the current mood in Turkey”, according to columnist Cetin Cem Yilmaz. And, following the coup attempt this month, the current mood in Turkey is even less conducive to peace.

Meaningless investment

The image of football has also been damaged by a series of match-fixing allegations. Imprisoned after a match fixing scandal in 2014, Fenerbahce chairman Aziz Yildirim accused Erdogan of being a thief and of manipulating the trial against him and 92 other football executives in which he was sentenced to six years behind bars.

The falling attendances, endemic hooliganism and match-fixing scandals have caused investors to lose confidence in the game. ”I have to let you know that, unfortunately, today it has become meaningless to support teams or games thanks to such a fall in interest and value... When we became a sponsor, what we had in mind was the development of Turkish football, raising new players and success in Europe and the world. However, at the end of the day we could not find what we were looking for,” Yildiz Holding chairman Murat Ulker wrote in a letter addressed to the Turkish Football Federation (TFF) in January 2015, explaining why his conglomerate had stopped sponsoring Turkish football after investing some €200mn in the sport over the years.

Nevertheless, football clubs continue to spend as if nothing was wrong. Judging by Besiktas’ brand new €110mn stadium, the Vodafone Arena, which was inaugurated four months ago in the heart of Istanbul’s European centre, one would be forgiven for thinking that this year’s Super League champions must be doing well. But a look at their accounts suggests otherwise, for the so-called Black Eagles will be hard pressed to pay for the stadium investment and for the €126mn they have spent on transfers in the last six seasons from their modest yearly revenues of €50mn.

It is no coincidence that Besiktas has the lowest revenues among Turkey’s leading football clubs. The club is supported by working class Turks living in Istanbul’s Besiktas district, and its fans have often come into conflict with the ruling elites. For instance, Carsi, the largest Besiktas fan club, played an important role in the Gezi Park protests of 2013, marking its transformation into a political opposition group. In turn, that made the club less attractive to potential sponsors who did not want to antagonize the government.

Worst offender

Besiktas is far from being the worst offender at overspending. Twenty-time Super League champions Galatasaray were suspended for two seasons by Europe’s football governing body Uefa in March for failing to comply with its break-even requirements.

While the club was recently demoted from Deloitte’s Football Money League ranking of the twenty football clubs with the highest revenues in the world – it now ranks 21st – Galatasaray remains the wealthiest club in Turkey. It is valued at €275mn by Forbes magazine, representing a fourth of the value of the entire national football industry, with annual revenues of about €160mn over the last two years.

From their base at the Turk Telekom Arena, the Lions operate an entire business empire comprising a swanky island in an upscale district of Istanbul populated by posh restaurants, a chain of 81 shops selling branded gear, two of Turkey’s leading educational institutions – the Galatasaray university and Galatasaray high school – travel agencies, forex companies, an insurance company and an online betting company.

But the club has overstretched itself by spending an astounding €150mn on transfer fees alone in the last six years and more than double that on contracts with players, while failing to renew sponsorship deals with some of their largest sponsors – Turk Telekom in 2014 and Yildiz Holding in 2015. As such, its debt/total capital ratio soared to 236%, according to the Financial Times.

While Galatasaray is the worst offender in absolute terms when it comes to indebtedness, other Turkish clubs have taken advantage of the poor regulatory oversight in a country where they are exempt from complying with commercial laws. Football clubs have racked up some TL4.2bn (€1.4bn) in debt, around half of it owned to local banks; that’s 130% of the valuation of the entire Turkish football industry.

The solution to the current impasse will likely come from Ankara, which is eager to manipulate football fandom by drawing it closer to its sphere of influence. President Erdogan, a former semi-professional football player himself, has said he wants to see the Super League rank among the top four football leagues in the world by 2020.

The government is, therefore, mulling a scheme to relieve local football clubs of debt by having state-owned banks Ziraat, Vakif and Halk banks take over and restructure their loans over a 10-year period. Clubs are likely to seize this opportunity to lift the financial pressure off them, but it will leave football wide open to further politicisation.