Sunday 24 January 2010

The Rules Of Football

When I was a lad, the way it worked was some local businessman would make a lot of money and decide to invest in the local foot ball team, in my case it was Manny Cussins and Leeds United, but no doubt everybody has their own memories.

Why? A mixture of sentimentalism and ego, I guess, but make up your own mind on that.

You can skip a few years to Blackburn Rovers who enjoyed a brief period of success under "local steel baron Jack Walker", and in more recent times Abrahmovich at Chelsea, Malcolm Glazer at Manchester United, the Emirates at Arsenal (OK, that's a state-owned airline not an individual; and a sponsor rather than an owner) and so on, right up to the Abu Dhabi United Group and Manchester City in 2008.

As we know, owning a football club is a negative sum game, but the ego usually overrides the business nous that helped the owner make his fortune in the first place, and in the end all his money is gone again - for a current example see Malcolm Glazer's frantic efforts to refinance the debts he took out to acquire Manchester United. It used to be local furniture retailers or steel barons; now its Russian oligarchs and Middle Eastern petro-states, and the sums involved have got bigger and bigger over the decades, but the rules never change.

We could widen the debate by correlating 'businesses that have sponsored English Premier League Teams' and 'businesses that went out of business after the credit crunch', but that topic has been covered adequately elsewhere. Or by pointing out that Delia Smith has been bumbling along quite happily with second flight team Norwich for donkey's years, but then again she's a woman and so maybe her commonsense overrides her ego when it comes to throwing every last penny at staying in the top flight of English football, but that's details.

Just sayin', is all.

8 comments:

Ross said...

Football clubs are money losing businesses in general, but that is because of the way football competitions are structured. Promotion and relegation means that basically all clubs are obliged to spend as much as they can on players wages in order to stave off relegation or qualify for Europe.

If we adopted the American system of closed leagues, then clubs would spend much less on wages and be more profitable, and I suspect that this is what the American owners of Liverpool and Manchester United want to do, they certainly aren't sentimental about English football clubs.

A closed league also makes it much easier for clubs to beg for subsidies from local governments and the like.

stressymumsy said...

R, sure, but they can only lose money that people are prepared to pump in.

When people start pumping in more money than a club can earn under its own devices, i.e. ticket sales, TV revenues, that's the point where they become loss making.

Tim Almond said...

I seem to recall Alan Sugar making a comment about how he went into Tottenham to run it as a proper business but realised it was nothing like it.

Man Utd were owned by Louis Edwards who sold the meat pies at the ground which makes quite a lot of sense (Cinemas make their profit from the popcorn and sweets).

Delia Smith? Well, she's loaded and she has no children. She's not going to take it with her. And she's a proper fan, has been for decades.

James Higham said...

Yes, it always was an emotional calculation but hey - playthings are needed.

Lola said...

Let's look at motor sport, F1 in particular. More people have lost more money doing Grand Prix or other motor sport than just about anything else sporting. Except for one or two very clever characters. Frank Williams and Ken Tyrrell are/were probably the best for example. Why? Because they both did it because they love it, not for an ego trip at all.

Nick39 said...

No sympathy here because football is a luxury, so fans who get upset should be prepared to withdraw their financial support for the club.

What interested me is that Premiership clubs became safe havens for crooks - it was a place for Russian oligarchs to put cash where Putin can't seize it, for ChiComs / Thais to hide politically embezzeled cash, and for Arabs to launder terrorist / oil money.

And of course the recipients are quick to rationalise the source.

Tim Almond said...

Krauser,

"No sympathy here because football is a luxury, so fans who get upset should be prepared to withdraw their financial support for the club."

That's what makes me laugh about football fans. They'll complain like crazy about the price of football shirts but if you suggest that maybe they don't buy one, they look at you like you're an alien.

No other business, not even Apple has such slavish customers.

Gregg said...

Football clubs should be that, sports clubs. Real Madrid, Barcelona, Bayern Munich et al are owned by their fans because they are not, and should not be, businesses in the true sense of the word. If really interested in what has gone wrong with English football read David Conn's book 'The Beautiful Game? Searching for the Soul of Football.'

Unlike others Glazer bought United witout being able to afford it. He then burdened what had been a profit making club with what is now £750m of debt.As a shareholder I had no vote on selling to Glazer.

That is why, in 2005, many of us didn't renew our season tickets at United and instead formed FC United of Manchester
http://www.fc-utd.co.uk/home.php
AFC Wimbledon, AFC Telford and AFC Halifax Town are three other fan owned clubs but there are more.

Top class football is stinkingly corrupt and Alan Sugar started the PLC rot, against Football League rules, and the Football League looked away.

I like Optimistic Cynics comment about Louis Edwards but he didn't actually sell pies, not atv the ground anyway. The Edwards family were huge wholesale and retail butchers in the North West. The hated Martin Edwards was the twat who sold the soul of United to the Glazers, making himself even more than the multi millions he had already made from the PLC venture. he is despised in Manchester, but not as much as the Glazers.

I first went to a game at OT in 1964/65 but gave up my season ticket in 2005 never to return. A few more, from many clubs, should make a stand before it really is too late.