A sideways look at economics

After a two-month pause, Germany’s premier football competition, the Bundesliga, resumes this weekend. With football matches suspended in every country in the world over the last few months (except footballing powerhouses Nicaragua and Belarus) fans like me have been starved of games, which is why all eyes are on Germany this weekend. Fathom’s TFiF editorial board had requested that we reduce the number of football-related posts, but I’m hoping that since there hasn’t been one for a while and in these exceptional circumstances (my excitement, lockdown rules slippage and the watertight link between this and economics) that this will get through. And for an extra bit of Friday afternoon indulgence, I share some ramblings on the beautiful game and why we need it.

It’s easy to get annoyed at footballers during global pandemics (I base this on a sample size of one – myself, during this global pandemic) since they have literally been getting paid hundreds of thousands of pounds a week to sit at home and do nothing, while frontline healthcare workers put their lives on the line to save our lives for far less. Some footballers haven’t even been able to do nothing properly, instead hosting parties and crashing their cars shortly after highlighting the importance of staying home to their thousands of followers on Twitter. There are also the usual criticisms that footballers are mercenaries, divas, prima donnas, etc. Frontline workers are the heroes, plain and simple. No debate. Nevertheless, I still want to make the case for football.

Not all footballers are morons. Some of them, like Juan Mata, do good things for the world. And then there are people like Yerry Mina, who has a foundation which empowers underprivileged kids back in his hometown in Colombia, and who has some top dance moves – how can you not love this guy?

Footballers don’t choose how much they are paid (they let agents take an obscene amount of money for doing that!), how much they are taxed, how that money is redistributed, or set the wages of NHS workers. Also, they are highly talented and are rightly admired for their skilful athleticism, quick thinking and an extraordinary ability to handle pressure.

Football can also teach us important life skills, such as the merits of hard work, teamwork, dedication, composure, focus, etc. Also, many of the world’s footballing superstars come from underprivileged backgrounds, highlighting how football can be a tool for social mobility. It can also be used to inspire, keep people healthy and keep vulnerable kids out of trouble.

Last, but not least, while it might be relatively unimportant in the bigger scheme of things, it does provide entertainment and a distraction from the stresses of work and general life. Exactly the sort of thing that would be great during a global pandemic! For this reason, the resumption of a major league is so exciting for so many football fans.

This is also a welcome development from a virological point of view, since the decision to resume football, a contact sport, suggests that the virus is under some degree of control in the place that it is being allowed. And as the chart below highlights, this appears to be the case in Germany where the number of new cases is relatively low (compared to Germany’s past and the current levels in some other countries). Suspend football when cases are low but rising fast. Resume football when cases are low and falling. This seems like a sensible path to follow. There is less controversy over the former, although there is much controversy over the latter.[1]

Football and COVID-19

France, for example, has scrapped its season, despite a sharp decline in the number of cases. Argentina has done the same, even though it hasn’t experienced a large spike in cases. Italy, Spain and England are working on plans to resume their football competitions around the middle of next month. The number of new infections has fallen sharply in Italy and Spain, but not nearly as quickly in the UK. A return in Brazil wouldn’t appear to be on the cards judging by the shape of their curve, yet their president is pushing for exactly that and some clubs have already returned to training.

The decision to resume football has clear economic benefits. It is a multi-billion-dollar global business: fans pay to be entertained and there are big commercial TV and sponsorship deals involved. That football is so global, tracking the timing of its resumption could be a useful way to compare the timing and likely outlook for a country’s GDP. I would guess that the sooner a country’s football league resumes, the sooner its GDP is likely to bounce back. But like many things with this virus, there are exceptions: ease restrictions too soon and risk a second wave and second lockdown; or resume football too soon and risk a second football cancellation.

While the resumption of football in Germany is an exciting development, I need to sound a major word of caution, throw in a serious damp squib: fans will not be allowed to attend any of the games in person. Understandable, given the way the virus spreads and the desire of authorities for us to socially distance. But the problem is, a huge part of the fun about football is the buzz from travelling to and from the game, being part of the crowd, the noise the fans make inside the ground, even the noise that fans would make watching the game in the pub (which is not allowed either!). What’s more, the players respond to the fans, the noise, the emotions and it’s not clear how they will perform without this important dynamic going on in the stadium. How many readers have watched a behind-closed-doors friendly? I thought so. There is a reason for this.

There has been talk about using recorded crowd sounds during the games. But how exactly would that work without being totally naff? Is there a DJ watching the game, switching between the LPs of fans cheering, booing or singing depending on what’s happening on the pitch? In Germany, some clubs are going to be putting cardboard cut-outs of fans in seats while the games are played. I’m not so sure whether this will encourage the players, even if fans can pay to have their face printed on those cut-outs. This is so crazy, yet I also, strangely, find it completely awesome.

This makes me wonder – could we replace ourselves with cardboard cut-outs in other spheres of life? For example, could I send a cut-out of myself to work, to the shops, to do that bungee jumping class I was planning on doing, or my daily exercise? If I gave it the money to do the shopping or go bungee jumping, the economic activity would still take place. Demand would stay the same. But if everybody replaced themselves with cut-outs on the other side of the equation, supply, things would probably be different. I wouldn’t jump (or pay) if a cardboard cut-out had fastened the harness before I jump off that bridge. In football, the quality of matches between cut-outs wouldn’t be as good as the real thing. And I’m also going to say with some confidence that a cut-out of myself couldn’t do economic analysis quite as well as I can. Would it get paid the same rate? Would a client be as happy with a project done and delivered by the cut-out version of me? I doubt it.

The point is, cardboard cut-outs are a cool idea in the circumstances – but they are not as fun, or as good for the economy, as the real thing. The economic benefits from football are reduced, too, with a lack of real fans, since a lot of football’s contribution to economic activity is indirect: people spend money on food and drink at the game, they spend money travelling to and from the game, sometimes using accommodation, buying memorabilia at the stadium, etc. The resumption of football matches has some economic benefit since we pay to watch it on TV, but a lot of the benefit will not be felt until the fans are allowed back in. This will be the same in industries like the theatre, where actors might be back rehearsing, but it might yet be some time before the public are allowed back in and the money starts to flow.

I’m not saying that the fans should be allowed in, and I’ll take what I can get this weekend in the circumstances. I applaud Germany for their efforts in getting the virus under control and for the resumption of their football league. What this weekend will sadly reflect, though, is that the easing of lockdown is unlikely to result in a massive burst of fun, or economic activity. Football returning brings back some normality, but like most things during these times, the new normal is weird.


[1] The decision to suspend football was made in most European countries within a few days of the decision being made in Germany, while the same decision was taken less than a week later in Brazil and Argentina. The decision to postpone the Chinese league was made a lot earlier, but when the number of new cases was rising at about the same rate as it was when the decisions were taken in Europe.