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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