Are the traditional values of football being
hijacked?
Last season, Chelsea FC posted a loss of over £90 million, the greatest
monetary loss for a football team in sporting history. Peter Kenyon,
chairman of the club, has stated his intentions to make Chelsea break even
by the 2009-2010 season. This would seem easily achievable, while being none
too modest a target given the generous number of years between now and then.
A recent report by accountancy firm Deloitte revealed Chelsea have moved
from 10th to 4th in the overall world football “rich list”, with revenues
increasing by 40% to £147.2 million[1]. Only three other clubs received a
higher income. Little doubt then, that football is now big business on a
global scale, with a club name as much a brand now as it is a symbol of a
localised, passionate interest. Geographical scope for the top clubs
stretches not only the length of the country, but also in regions across the
world. With competitions like the UEFA Champions League contributing to vast
media revenues, and TV content providers signing multi million pound
contracts to show games, the top clubs are increasingly becoming amongst the
most attractive blue-chip investments of tomorrow.
Chelsea manager Mourinho with chairman Peter Kenyon
But with the rise of the football transnational brands, little attention
seems to be paid to an issue which is being quietly neglected by the money
men. What happens when you take the spirit out of the sport? A typical
glance through a copy of the business section of any daily newspaper will
more than likely yield some article pertaining to the financial side of a
football club. While the presence of football related news would seemingly
be a pleasurable discovery, it is, conversely, an often nauseating read; a
distortion of the real issues which should be most prevalent to a
stakeholder in any team.
Quoted in an article on BBC Online, Michael Stirling, an investment advisor
for law firm Field Fisher Waterhouse, went on to describe in the most dry
and bland language, the issues involved in growing a top earning
multinational football club like Chelsea. Mr Stirling took the view that
“…if a club is doing well supporters will go to matches, use pay-per-view TV
and buy merchandise. If the club is failing, sales go flat very rapidly”. It
would be fair to assume that the average football fan in this country would
shudder at the thought of this analysis being applied to a football team of
their choosing.
A concern that can be attributed to Mr Stirling’s words is that it embodies
the attitudes that executives of football clubs are increasingly taking. The
stakeholders of the club are branching away from the traditional football
fans, or the community of which the club is a part of, and towards
investors; concerned primarily with financial, not football, results. This
is perhaps the reason we have Chelsea building its aims and budgets based
not on winning trophies, but on merely reaching the lucrative latter stages
of the Champions League[2], a fact which may be hard to swallow for many of
the clubs fans. Similarly, the lack of a stadium size compared with other
top clubs such as Real Madrid and Manchester United is limiting the revenue
gleaned from this source of income, one of the main incomes for any size
club. To combat this problem, Chelsea are looking into “imaginative ways to
satisfy its fan base” (Stirling), likely to be through “[Increasing] the
number of executive boxes and hospitality packages on offer”[3]. This
solution is another example of a club making decisions based on the
interests of the financial stakeholder at the expense of the ordinary
football fan. How long football fans are likely to put up with the contempt
they are shown by many of the large clubs is questionable, though in
Chelsea’s case it would be fair to point out that their fans are not
currently complaining given this season’s ascent to the top of the FA
Premier League.
There are signs, however, that clubs and their executives will only be
allowed to go so far before the fans react. The recent takeover of
Manchester United by American billionaire businessman Malcolm Glazer was met
with militant-like opposition from United fans. Indeed, the club’s fans have
set up their own organisation, Shareholders United, which aims to create a
financial stakeholder with genuine concerns to the everyday football fan,
which actively encouraged members to buy shares in the club. The group
threatened to take action by emphasising to the board that they would react
in the only way the board seems to understand: by boycotting merchandise and
staying away from matches, thus impacting on revenues. Today, a fund exists
to buy as much of the club back from the Glazers, if and when they decide to
sell.
United fans protested Glazer takeover
This group has been formed as a response to the changing financial emphasis
prevalent at top clubs, a trend which may continue in future at other clubs
if board members do not treat their own fans with more respect and
consideration. Directors would do well to remember the historical roots of
the clubs they serve, and who is crucial to its ongoing survival.
Attitudes prevalent in the business community are at odds with the
underlying reality and are presented as being cynical, demonstrating a
distinct lack of understanding of the meaning of a football club and the
needs of the “customer” (i.e. the fan base). In many cases, fans see the
decisions being made by the clubs owners as being contrary to the long term
interests of a club (as at Manchester United), and have been seen to react
to these decisions.
References
http://news.bbc.co.uk/1/hi/business/4269991.stm
http://news.bbc.co.uk/1/hi/business/4223893.stm
Photos – Courtesy BBC Online
[1] Source: “Man Utd top of football rich list” BBC Sport website article,
17 February 2005
[2] Source: “Chelsea vision under the spotlight” BBC News website article,
17 February 2005
[3] Source: “Chelsea vision under the spotlight” BBC News website article,
17 February 2005