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Servette's demise is "tip of iceberg"

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Servette Geneva are not the first prestigious Swiss football club to go bankrupt – and experts predict that they are unlikely to be the last.

This content was published on February 2, 2005 - 16:34

In an interview with swissinfo, leading European football researcher Rogan Taylor says Switzerland is probably too small to sustain more than a handful of top-flight teams.

Friday's decision by justice authorities in Geneva to declare Servette bankrupt came after the club failed to fill a SFr10 million ($8.32 million) hole in their finances.

Servette had been due to kick off the second half of the Super League season on February 20 with a match against Grasshoppers Zurich – a club which is itself in financial trouble.

Last month Grasshoppers unveiled a drastic cost-cutting programme in an effort to stave off the threat of insolvency. Club president Walter Brunner described finances as “desolate” and ordered his players to take an immediate salary cut.

But Taylor, who heads the Football Research Unit at Britain’s Liverpool University and is director of an MBA course in football industries, says most clubs will never be profitable – however hard they try to keep costs from spiralling out of control.

swissinfo: Are you surprised to hear that Servette have been declared bankrupt?

Rogan Taylor: I’m not surprised at all. This is probably just the tip of the iceberg, as it is for clubs across Europe. Here in Britain we’ve got used to football clubs – and not just the small ones – going to the wall after many years of struggling against insolvency.

Clubs have lived by the skin of their teeth for a long time, always in the end relying on either public or private benefactors.

Servette had been hoping that Lebanese investor Joseph Ferrayé would come in and save the day by offering SFr147 million [$124 million], but it hasn’t happened and they have now [been pushed over] the edge of the precipice.

swissinfo: What could Servette have done to stay financially afloat?

R.T.: That’s difficult to say, especially when you bear in mind that Servette probably haven’t made any money in their 115-year history.

The secret is to try and break even by running a tight budget, based on a realistic assessment of income and by paying players within that budget. And if you can’t break even, you have to persuade a local entrepreneur to fill the gap.

In England, most of the 93 professional clubs have survived because of this kind of benefaction. The problem is that football across Europe seems to be running out of these last-ditch saviours.

swissinfo: Other Swiss clubs, notably Grasshoppers Zurich, are also struggling to make ends meet. What would be your advice to them?

R.T.: [One solution would be to] let fans buy shares in their own club and give them a say in how things are run. This has happened at more than 40 British clubs, and what you see is that fans tend to run a very tight ship, because they only spend what they’ve got and… they tend to ensure that they don’t run out of money.

In Servette’s case, it may well be that the club can be re-born by a kind of fan trust, where supporters can buy shares and help to run the thing properly.

swissinfo: Is Switzerland simply too small to sustain a Super League with ten football clubs?

R.T.: That may well turn out to be the case. The problem is that television rights provide 30 to 40 per cent of the income of many clubs in Europe today. And if you can’t generate enough cash from this because your domestic television market is too small, then there’s not much you can do.

swissinfo: Some countries have tried – so far unsuccessfully – to pool resources by setting up joint football leagues. Would it be of financial benefit to Swiss teams if they competed in a league with, for example, clubs in neighbouring Austria?

R.T.: Undoubtedly. But the problem is that [European football’s governing body] Uefa does not appear to approve of such reorganisations. Attempts have been made in the past, but Uefa has always rebuffed them. So under the present circumstances it’s hard to see how this can happen.

swissinfo-interview: Ramsey Zarifeh

Key facts

Rogan Taylor is director of the Football Research Unit at Liverpool University.
The unit was established with the aim of conducting academic research into the social, economic, historical, business and political aspects of football around the world.
Taylor runs an MBA in Football Industries, which focuses on the business and marketing of football.

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