Anatolian clubs rise with new fund drive

James M. Dorsey ISTANBUL - Hürriyet Daily News

Black Sea’s Trabzonspor is blazing a trail in football funding strategy as it builds a hydroelectric power plant as a guaranteed source of income ahead of new rules. Hürriyet Photo

Trabzonspor, the first Turkish football club out of Istanbul to win a national title, is now leading the way in the financial aspect of the game. Trabzonspor is building a hydro-electric power station to fund the football club.

A top football club from the Turkish hinterland is cementing Turkey’s economic shift away from the commercial capital of Istanbul to the Anatolian inland with plans to increase revenue by building a hydroelectric power station in a country with growing energy demand and no oil or gas reserves of its own.

Trabzonspor, which is competing in this year’s UEFA Europa League, has added power to its funding strategy, which has traditionally depended on ticket sales and the merchandising of club shirts and scarves. The innovative strategy was developed in advance of the European football body’s imposition in 2014 of financial fair play rules that will bar clubs from being funded by wealthy owners, according to the Financial Times.

The project could well spark other major European clubs to think out of the box about how they will fund themselves once the new UEFA rules kick in and merchandising and sponsorship prove insufficient, particularly for the purchase of high-priced players.

The legendary club received this month government approval for a 28-megawatt plant in the hills above Trabzon, the Black Sea city it helped make famous and that is known for its fanatical football fans and hot-blooded residents who pick a fight first and think later, according to the Financial Times. The plant is expected to cost up to $50 million and gross annual revenues of $10 million. Trabzon is considering building a smaller, second plant.

‘Guaranteed source’

Trabzonspor chairman Sadri Şener, a local construction magnate, expects the hydro plant to benefit from the mountains surrounding the city and its usually high annual rainfall. “The club needs a guaranteed source of income, and we have the ideal conditions for hydro power,” the Financial Times quoted a Trabzon club official as saying. 

Energy is a booming market in Turkey that grows by 8 percent a year. The government projects that it needs to increase installed capacity by 45 percent from 55,000 MW to 80,000 MW in the next eight years to be able to meet demand. 

Trabzon’s move prepares it not only for the introduction of UEFA’s financial fair play rules but also for concerns that Turkish football runs the same risk of economic difficulty that the country faces. Turkey got a taste of the risks when external funding tightened last year because of the global financial crisis and the country’s currency devalued more than had been predicted.

“Turkey’s declining success in football can be mapped to economics,” a Renaissance Capital research note said early this year.

Like the economy, Turkish football “imports almost all their best players from abroad, and exports [only] one or two good players every year,” incurring high levels of debt to attract stars, the note said. It said Istanbul clubs like Fenerbahçe, Beşiktaş and Galatasaray operated as commercial companies that eschew competitiveness for profit.

Renaissance Capital cautioned that buying expensive but old has-beens such as former Real Madrid stars Roberto Carlos and Guti boosts merchandising, but does not add real quality to a team. The proof is in the pudding. Turkey’s top Istanbul clubs have dominated the country’s football for decades, but now Anatolian clubs are making an impact. Bursaspor and Trabzonspor played in the Champions League in 2010-2011 and 2011-2012 seasons, leaving the Istanbul clubs out of the top-level European club competition. The poor performance mirrors a trend in Turkish economic development as growth shifts from the country’s economic capital to Anatolia. 

Bursa and Trabzon boast trade surpluses while Istanbul accounts for 60 percent of Turkey’s trade deficit, as Renaissance Capital stated. 

The model in contrast to the Turkish clubs has often translated into performance for their European counterparts. One reason is that Turkish clubs have not seen the kind of influx of foreign investment. Nonetheless, in contrast to the Turkish economy and most European clubs, Turkish football – thanks to domestic demand – has so far not faced problems accessing funds.