When Turkish businessman Ali Koc took over as chairman of Fenerbahce last summer, he was unpleasantly surprised to discover that the Istanbul club’s debts were much greater than feared: 620 million euros (US$703 million at the current exchange rate), two-thirds of which must be paid within a year.
“The banks began to knock on the door,” Koc said in July last year, one month after he took on the role.
“I certainly did not expect to land in a rose-tinted world, but I did not expect that either,” he said.
Turkey has in the past few years become a favored destination for proven, albeit declining, players from European leagues, many of whom have joined the three Istanbul powerhouses: Galatasaray, Fenerbahce and Besiktas.
The incentives were not lacking: passionate supporters, a booming championship and clubs ready to do everything to become more competitive, mainly by dipping into their pockets.
However, this infatuation has since faded.
Heavily indebted and hit hard by economic turmoil since last year, the clubs have sold or released key players since last summer to bring in cash and cut their payroll.
Galatasaray were forced to release French striker Bafetimbi Gomis — the league’s top scorer last year — while Besiktas let go of their Portuguese defensive stalwart Pepe and Fenerbahce lost Brazilian midfielder Giuliano.
“The total debt of Turkish football clubs has reached 14.5 billion Turkish lira [US2.8 billion],” said Tugrul Aksar, a banker specializing in Turkish soccer economics.
“Clubs don’t seem to be able to solve their financial problems on their own, because there are big gaps between total revenues and expenses,” Aksar added.
The Turkish Football Federation announced a restructuring agreement on the debt owed by Turkish clubs that it evaluated at 1.7 billion euros, with 86 percent contracted by the three Istanbul giants and Trabzonspor.
The collapse of the Turkish lira, which last year lost 28 percent of its value, has complicated matters for the clubs, as they pay the transfer fees and salaries of foreign players in euros while a large part of their income is in lira, Istanbul Medeniyet University economics professor Ferda Halicioglu said.
The latest star to seek new pastures because of the clubs’ dire financial situation is Portuguese winger Ricardo Quaresma, who is reportedly looking to leave Besiktas because of delays to his salary payments.
The country’s economic situation might have exacerbated these difficulties, but the plight is in fact the result of “years, actually decades of unaccounted spending,” said Emre Sarigul, cofounder of the specialist Turkish Football Web site.
The problem stems from a lack of transparency and impunity for club chairmen who, during their few years, bring in experienced players to satisfy fans and get results on the field, while turning a blind eye to the long-term future of their teams.
However, such reckless behavior, which has led to the current disaster, could be coming to an end: In exchange for the restructuring of their debt, the Turkish clubs have committed to having a balanced budget and not to incur new debts.
“What we are witnessing is the transition of Turkish football from a system plagued by mismanagement, unaccountability and a lack of vision to a more professional and organized structure,” Sarigul said.
However, he said that there is a silver lining in this dire situation, pointing out that it has forced the clubs to increasingly rely on homegrown talent who thus gain visibility.
Since 2015, the number of Turkish players joining European teams has increased, with the likes of Cengiz Under at AS Roma or more recently 18-year-old Ozan Kabak, who joined VfB Stuttgart.
A sign that they are coming to terms with reality, the three Istanbul giants have mainly resorted to loans to strengthen during the latest winter break.
With no transfer fees involved, such additions allow the clubs to satisfy their fans, who want to see new players, without spending big.
While the deal with the banks might help bail out clubs in the short term, it “has not solved their problems in the long run,” Halicioglu said, calling for clubs to be “financially audited on a regular basis,” and “subjected to limits in terms of transfer fees and budget.”
Barring strong measures to force Turkish clubs to be more reasonable, the crisis could actually worsen, analysts have said.
University of Aix-Marseille sports sociologist and researcher Daghan Irak said that the restructuring deal risks giving the clubs a “feeling of immunity” by showing them that “the government will not let big clubs with millions of fans and potential voters fail.”
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