Turkish soccer crisis dents Erdogan’s political prospects

Crisis deepends: TFF Boss Mehmet Ali Aydinal (Source Murad Sezer, Reuters)

By James M. Dorsey

Turkey's soccer federation has rejected a proposed rule change that would have prevented teams found guilty of match-fixing from being relegated in a move that counters Prime Minister Recep Tayyip Erdogan’s catering to soccer bosses and their corporate backers and plunges the country’s troubled multi-billion dollar league into an even deeper crisis.

The vote during a tense emergency session of the federation’s general assembly also threatens Turkish soccer’s efforts to become more competitive.

It came two weeks before the opening of a trial against 93 people, including Aziz Yildirim, president of Istanbul’s Fenerbahce SK and 14 players, in a match-fixing scandal involving eight teams that affected 19 league games last season.

Despite being threatened with relegation and loss of its league title, Fenerbahce was among those opposed to a more lenient treatment of offenders. Fenerbahce has already been barred by European soccer body UEFA from Europe’s Champions League because of the match-fixing scandal.

Under the proposed change of article 58 of the Turkish Football Federation’s (TFF) disciplinary code, clubs found guilt would have been spared relegation but penalized with a minimum 12-point deduction.

The rejection puts the TFF at odds with UEFA which urged the association on the eve of the vote to take quick disciplinary action against those allegedly involved in the scandal. UEFA threatened to exclude Turkish clubs involved in the scandal such as Fenerbahce, Besiktas and Trabzonspor from future European competitions.

Fenerbahce alongside Istanbul rival Galatasaray, which has not been implicated in the scandal, justified its opposition to the rule change with the need to wait for legal proceedings to first take their course. In a written statement from his jail cell, Mr. Yildirim called the proposal "a black stain on the history of Turkish football." Echoing Mr. Yildirim, Galatasaray chairman Unal Aysal warned that “you can't change the rules when the game is being played."

The political fallout of the scandal has highlighted the battle lines in Turkey’s ruling Justice and Development Party (AKP) between Mr. Erdogan and his party comrade, President Abdullah Gul in advance of elections in 2014. Mr. Erdogan last month drove against Mr. Gul’s will a controversial bill through parliament that reduced penalties for match-fixing from a maximum 12 to three years and prepared the ground for the rejected TFF rule change.

The legislative move further fuelled controversy over the match-fixing scandal. Mr. Gul opposed it, arguing that it would render the law as an insufficient deterrent. Mr. Gul said parliament’s penalty reduction would be viewed as benefitting those currently under suspicion.

Mr. Erdogan is widely believed to want to succeed Mr. Gul as president when his third term as prime minister ends in 2014. For his part, Mr. Gul is believed to be weighing his options, which include returning to active politics or accepting an international job, once he steps down from his largely ceremonial post. Critics charge that Mr. Erdogan is pushing for constitutional reform in the next two years as a way to shift power from the prime minister to the president in advance of his becoming Turkey’s next head of state.

Mr. Erdogan’s chances of success ride to a significant degree on Turkey’s continued economic performance. Economists however predict that economic growth in 2012 will drop from a stellar seven per cent to about three per cent as a result of its reliance for growth on foreign capital and government-backed stimulus programs, an unorthodox monetary policy and a widening current account deficit.

In emotional remarks TFF chairman Mehmet Ali Aydinlar responded to the rejection of the rule change, saying that at stake was the image of Turkish soccer. "We have made all efforts so that Turkish football is not harmed or loses prestige abroad. But people spoke differently to us than they did behind their backs. Everyone is innocent and only we are guilty. We came with honour and that's how we'll go. History will write the truth," Mr. Aydinlar said.

If Mr. Erdogan’s political future is hitched to the economy, it is also linked to the country’s soccer performance given that the beautiful game is a reflection of the economy.

Economists worry that Turkey’s imminent economic problems could result in a hard landing for its economy unless it moves quickly to streamline its monetary policy and starts focusing on reducing its macro-economic imbalances and particularly the current account deficit. Turkey got a taste of the risks it faces when this fall external funding tightened because of the global crisis and the country’s currency devalued more than had been predicted.

Turkish soccer faces the same risks because it operates on the same principles, according to a sports research note issued last month by Renaissance Capital. 

“Turkey’s declining success in football can be mapped to economics,” the note said according to the Financial Times.

Like the economy, Turkish soccer “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 clubs like Fenerbahce, Besiktas 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 Gut boosts merchandising, but does not add real quality to the team. The focus on sales rather than soccer performance produces the ills many Turkish companies face:  complacency and reduced competitiveness.

The proof is in the pudding. Turkey’s top clubs have dominated the country’s soccer for decades but failed recently twice in a row to win the Turkish league or qualify for the Champions League. The poor performance mirrors a trend in Turkish economic development as growth shifts from the country’s economic capital to the Anatolian inland, according to Renaissance Capital.

Two of Turkey’s recently most successful teams, Bursapor and TrabzonSpor, hail from the former Ottoman capital of Bursa and Trabzon on the Black Sea. The finance house pointed to a further trend in line with the economy: Bursa and Trabzon boast trade surpluses while Istanbul accounts for 60 per cent of Turkey’s trade deficit.

The similarities between the economy and soccer are not absolute. In some way, Turkish soccer is more in line with its European counterparts than the economy is. Turkish soccer economics mirror those of European clubs that operate on the basis of high debt levels to import rather than export talented players.

European spending on players as of Friday, two days before the Premier League player transfer window closes was down by more than half compared to the same period last year, according to Dan Jones, a partner in business advisory group Deloitte’s sports business. “Their comparative restraint is indicative of an overriding reflection on spending levels,” Mr. Jones said.

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, particularly from the Gulf, from which teams like Manchester City and Paris St. Germain have benefitted. Nonetheless, in contrast to the Turkish economy and most European clubs, Turkish soccer thanks to domestic demand has not faced problems accessing funds.

The outlook for non-soccer Turkish companies is far bleaker. “Without an increase in competitiveness Turkey is trapped with manic depressive success,” Renaissance Capital said.

For Turkey to maintain or restore economic growth it will have to enhance competitiveness. Turkish soccer will have to become an important soccer player exporter rather than merely an importer.

James M. Dorsey is a senior fellow at the S. Rajaratnam School of International Studies at Nanyang Technological University in Singapore and the author of the blog, The Turbulent World of Middle East Soccer.