There’s an old adage about team ownership in sport. Want to make a small fortune? Start with a large one.
Isitan Gün is a rare species: both a soccer club owner AND a soccer finance expert.
An oxymoron, of sorts.
The Turkish businessman started out in the sport at Galatasaray, spending almost two years at the Istanbul giants, first as director of strategy, project and business development and then as chief operating officer.
It was while there that Gün first saw the potential of investing in a smaller club, being part of a taskforce that explored cooperation opportunities for Galatasaray across Europe.
“If you manage a club properly, it can be a sustainable business, satisfying fans, players and all other stakeholders,” he says.
Gün “parked the idea” after leaving Galatasaray at the end of 2014, but the seeds of ownership interest had been sewn.
Some 18 months later, after being introduced to the powers that be “through a friend of a friend,” he had taken the reins at Fortuna Sittard.
Situated in the southernmost province of Limburg, a region popular with Turkish immigrants that borders Germany, Sittard is a city with little more than 37,000 inhabitants, a third of whom could squeeze into the Fortuna Sittard Stadion.
The club has no significant imprint on modern Dutch soccer, other than a couple of dices with bankruptcy, caused by financial mismanagement after relegation in the early part of the 21st century that almost led to the club losing its licence in 2010-11.
Gün says his priority was to bring “financial due diligence” to the club, underpinned by his experience as vice-president of private equity fund Met Capital Partners and director of Fokus Yatırım Holding, an investment holding company.
His first impressions when he walked into Fortuna Sittard?
“It was hell,” says Gün abruptly. “The most striking thing was a classic case of mismanagement for 15 or 16 years after the team was relegated in 2002. Nothing existed when I came in. There were two employees and no structure whatsoever [in the commercial department]. There was practically nothing.
“The first task was to build up the organisation, which we did. We are now one of the best managed clubs in the Netherlands, a small but extremely efficient organisation.”
While that is no mean feat, it perhaps should not come as a major surprise.
Gün is, after all, a professor of financial strategy in football at The Football Business Academy.
So, is it possible to run a financially successful soccer club, I ask?
“In one word: yes. In two words: maybe not,” he quips.
“If you are in the Championship [in England], it is quite difficult because the name of the game there is to go up to the Premier League and benefit from the huge TV money.
“In our case it is possible. Among the European professional clubs, I think 60 to 70 per cent are recording profits. Obviously after Uefa introduced Financial Fair Play in 2012 things improved significantly across the board.
“I teach football finance and what I tell my students is that every club that went into a crisis did so because they overspent, and they overspent on their squad. That is where budget discipline comes into play. You cannot get ahead of yourself.
“When teams get promoted they get carried away and have unrealistic ambitions. We did not do that. We are trying to be financially prudent to survive.”
Fortuna gained promotion to the Eredivisie in the 2017-18 season, the accomplishment achieved with the lowest budget and youngest team in Dutch history.
Favourites for an immediate return to the second-tier Eerste Divisie, Fortuna finished 15th in the 18-team Eredivisie in 2018-19 on a budget of €7.9 million ($8.75 million).
This season they are operating on the second smallest budget in the league.
“There is a strong correlation between the money you spend on your squad and sporting performance in the long-term. In the short-term you may get some movement on that,” Gün says.
“Specifically in the Dutch league, the benefits of promotion are not as big as say the Championship to the Premier League because the money is quite small.”
That takes Gün onto his pet subject/pet hate: the Eredivisie’s media rights distribution model.
He calls it the most unfair in Europe and last year, as he puts it, “stuck my neck out and described the giant elephant in the room.”
For that 15th place finish, Fortuna received the smallest media rights payout of €1.95 million, some 2.4 per cent of the total average €80 million shelled out annually by Fox Sports as part of its 12-year broadcasting contract.
By comparison, champions Ajax took home €10.29 million, a 12.95-per-cent share.
Gün subsequently published a white paper arguing that in no other European league is the ratio between top and bottom as wide as the Eredivisie's 5:1.
In the Netherlands, the pot of TV funds is divided on the basis of performance over the last 10 years, with the most recently completed season having the most weight.
Gün advocates the introduction of a new model, whereby: 40 per cent of the total is distributed equally among the 18 clubs - a baseline fee; a further 40 per cent is distributed based on the performance of the past 10 seasons; and 20 per cent is divided based on the performance in the current season.
Using his calculations for 2018-19, that still would have resulted in Ajax earning the most money, but only receiving €7.56 million, with €1.67 million coming from topping the league. Fortuna, meanwhile, would have earned €2.92 million in total.
He wrote at the time: "There are five clubs in the Eredivisie that receive less than three per cent of the pie. More than in all other competitions [in Europe]. The share of the top three? The largest of all competitions. The share of the bottom three? The smallest of them all.
"These figures are as clear as anything: the Eredivisie has by far the least equal distribution system in Europe. It is undeniably tilted to a few clubs, at the expense of the silent majority.”
It is, understandably, still an issue that grates, and I get the impression he feels he’s fighting the good fight alone.
While there may have been private messages of support, no other club owner has publicly come out backing Gün’s view.
He says: “This was not an opinion piece, it was a statement of facts. Everyone is agreeing with the interpretation of the facts.
“Here you speak to the league, they say this is the agreement, there is nothing we can do. You speak to the federation, they say it is not up to us, it is the clubs that decide. You go to the clubs, everyone is saying, except for the big ones, you are right. But the big ones dominate such critical decisions.”
Under the terms of the Eredivisie’s statutes, any changes require the consent of five-sixths of the 18 clubs.
Domestically they have no problem with choking smaller clubs and then complaining they need better competition
The status quo suits the big three of Ajax, PSV Eindhoven and Feyenoord, making change almost impossible to enforce.
“I would not call it the most democratic system,” Gün continues. “It is absurd. They complain about unfair distribution in European competitions, and rightly so, where Dutch clubs receive less than their counterparts for the same sporting performance.
“But domestically they have no problem with choking smaller clubs and then complaining they need better competition.”
If the distribution model cannot be amended, then the overall pot will need to grow.
Fox Sports holds live domestic rights to the Eredivisie until the end of the 2024-25 season. The agreement is worth, on average, €80 million per season, with a 5-per-cent increase each year.
In March, the neighbouring Pro League in Belgium finalised a five-year deal with Eleven Sports, the international subscription broadcaster, worth €103 million per season, beginning in 2020-21. It has been raking in a similar annual sum to the Eredivisie over the past few years.
Gün says: “They signed this contract in 2012 for an unprecedented 12 years. Of course, it is easy to criticise now looking back and say it wasn’t a good deal, but at the time everyone said it was a good deal.
“I’m hoping that when the new cycle happens, the total pool has to at least double, and the distribution model should be more humane.”
As to whether the Eredivisie is presently undervalued in terms of its media rights, he laughs: “Absolutely. I think the broadcaster is enjoying the period tremendously.”
Mention of the Pro League brings up another bugbear for the Fortuna owner, the much-mooted merger between the two leagues.
The KNVB, the Dutch soccer federation, and the URBSFA, the Royal Belgium Football Association, are known to have held meetings to discuss an 18-team BeNeLiga, which the federations hope will compete with other major leagues in Europe.
While the proposal has actually been talked about for the past 20 years, it was revived last year with Belgium's Club Brugge, Anderlecht, Standard Liege and Genk and Dutch outfits PSV Eindhoven, Ajax, Feyenoord, AZ Alkmaar, Vitesse Arnhem and Utrecht leading the charge.
Such a league would comprise eight teams from Belgium and 10 from the Netherlands.
But not Fortuna.
Gün says it’s not just Belgium-Netherlands where this is on the table, citing similar discussions in Austria-Switzerland, Romania-Hungary and Northern Ireland-Republic of Ireland.
He lays much of the blame at consultancy and advisory firms with fancy financial projection models, but “no skin in the game.”
He explains: “I know this is contradictory from my position as a club owner, but I’m really against this obsession with growth, not only in football. Everybody is obsessed with growth, growth, growth. I believe football is a local function of the society and should remain so. What are the benefits of this merger? We don’t know. It’s just a set of functions from some sort of consultant. I used to be a consultant. At the end of the day they have no skin in the game.”
This is not a jealous response – Gün is fully aware of Fortuna’s place in the Dutch pecking order – rather contempt for how the issue returned to the table.
“It all happened with a secret meeting without informing the rest of the gang, which is extremely disrespectful,” he notes.
For Gün, a fully-united Eredivisie, with greater media rights revenue, could set the league in good stead to become ‘the best of the rest’ in Europe.
He explains: “Speaking from a Dutch side, I think the Belgian clubs need this way more than we do. Everyone talks about a big five (England, Spain, Germany, Italy and France). If managed properly, I think the Dutch league is well positioned to become a permanent number six in European football.
“My personal view is we should be concentrating on that as the target rather than finding these artificial solutions that no one knows if they will work.”
Isitan Gün, owner and chairman, Fortuna Sittard
With his soccer ownership hat on, Gün believes cross-border leagues or closed shops, as certain major clubs in Europe have pushed for in the Uefa Champions League, should be stamped out at all costs.
“Sport is about competition and everything that regulators and competition organisers should be concentrating on is levelling the playing field. This is an action to limit the long-term vertical mobility of clubs.”
Now donning his fan hat, Gün adds: “Maybe the TV money will increase, but nobody is thinking about the fans. This is a big mistake. I think they are overwhelmingly against it. Take a local game between ADO Den Haag and Ajax. They play 100 times and Ajax win 95 times. That’s ok. But that local rivalry is a cultural phenomenon. It would take decades to have such a rivalry between, let’s say, Ajax and Anderlecht.
“It will affect the football pyramid. This is not the football we grew up with. I’m not old and I’m not too nostalgic about the past, but if it’s not broken don’t fix it.
“Last year in the Eredivisie, there was a discussion about going from 18 to 16 teams. Again they hired a consultant. Thankfully it was voted off. You cannot substantiate the benefits of going down two teams in a league. It is not a significant change.
“I think the main problem is an agency problem. The decision makers are not affected by the decisions they are making. It comes to a point where football is run by lifetime bureaucrats who have no real skin in the game.
“The best clubs are trying to superficially create this mechanism that assumingly and supposedly will improve their finances.”
With the coronavirus pandemic having paused sport across the globe, Fortuna Sittard find themselves 16th in the Eredivisie with eight games left in the season, and will face a battle to avoid relegation when the league finally resumes.
The team was knocked out in the last 16 of the KNVB Cup, losing in extra time to Feyenoord, who have gone on to reach the final.
It amounts to another season of struggle and while Gün admits silverware would be nice, he is under no illusions at the size of the task facing Fortuna and similar-sized clubs in the Netherlands.
“I do not think in my position it is right to come in and say ‘ok we will be in European competitions in X number of years’. If it worked, yes great, but Dutch football as a whole is a feeder system. Over the last 10 years, the average net transfer proceeds to Dutch football is €56 million. Last year it was €250 million, this year probably the same. We are the number one in terms of net player exporting.
“Clubs like us are in a position where we develop players and then sell to bigger clubs domestically or internationally.”
And that is where the prudent business mind comes to the fore.
“Our business model is to reach operational break even and make money from player sales. I observe many Dutch clubs and they are quite open about manifesting this to the outside, including the fans. The level of football sophistication among fans here is high. They understand the dynamics. It is not the same in every country,” Gün states.
“Our fans appreciate that the club still exists because in 2016, it could have been game over.
“If you had done a survey in 2016 of the general public in the Netherlands and asked them will Fortuna be an Eredivisie team in three years, they’d think you were a lunatic.”