The People’s Game? (Football, Finance & Society) by Stephen Morrow

Abstract

The stated aim of the author of this short book is, ‘to provide an insight into how changes in football and football clubs, both economically and socially, have altered the relationship between clubs and their changing communities’. He does this in order to address a bigger question. In the face of increasing commercialisation, can football remain ‘the people’s game’?

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Burns, T., (2016) “The People’s Game? (Football, Finance & Society) by Stephen Morrow”, Entertainment and Sports Law Journal 4(1), p.10. doi: https://doi.org/10.16997/eslj.108

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The stated aim of the author of this short book is, ‘to provide an insight into how changes in football and football clubs, both economically and socially, have altered the relationship between clubs and their changing communities’. He does this in order to address a bigger question. In the face of increasing commercialisation, can football remain ‘the people’s game’?

1

In the space of five carefully researched chapters the author proceeds to elucidate the issues arising from the changing business structure of football and to construct an answer to the question of whether football can be the people’s game in the 21st Century. In chapter one, the author focuses on the rapidly changing finances of club football in Europe. He describes how revenues from the sale of television rights and merchandising have brought in huge sums of money for the clubs, with the larger, more successful Premier League clubs acquiring the biggest portion of these revenues. However, this new-found prosperity has had some deleterious effects on the game. A large portion of the new funds has been spent on players’ wages, which has strengthened the relative positions of the biggest clubs in the top leagues, but has reduced the uncertainty of outcome in many matches where the larger clubs play teams from the lower reaches of the league. Newly promoted clubs to the Premier League often find that they cannot effectively compete against the larger, richer clubs and consequently often face the prospect of relegation at the end of the season. As a result, the competitive balance of the league has been damaged by the new economics of football, with many of the smaller clubs facing an uncertain financial future.

2

In chapter two, the author examines the extent to which there is a serious conflict between the role of football clubs as profit-seeking businesses and football clubs as social institutions. There is undoubtedly a greater emphasis being placed on the business objectives of football clubs now that some of the largest clubs have become public limited companies, not least because they are subject to the stock market imperative of maximising shareholders’ returns. Morrow notes that this tendency may be disadvantageous for the stakeholders (e.g. the supporters and local communities). For example, the increase in ticket prices (partly to cover the higher costs of players’ wages and to boost club revenues for the benefit of the club’s shareholders) is in danger of pricing out young fans, low paid fans and fans from amongst the unemployed from attending live matches. This erodes support from an important section of the loyal fan base.

3

The author claims that one way of reducing the exploitation of the fans by the clubs could be to improve the stakeholders’ input to club football by strengthening the status and role of supporters’ trusts. He suggests that these collective structures can enable supporters to work together to influence the behaviour of the club’s managers and so prevent the management from focusing too narrowly on profit maximisation. Another suggestion made by the author is that clubs should be encouraged to become more involved in community by supporting, financially, certain community projects, such as the setting up of soccer centres, or providing coaching disabled players. There is much scope to increase the level of activity in this field. This is apparent from the author’s ‘league table’ of corporate community involvement in which he lists the (limited) extent to which English and Scottish clubs give money or resources to their local communities.

4

Chapter three focuses on the organisational and ownership structures of football clubs in the UK, The Netherlands, Denmark and Italy. Morrow notes the differences among them and the extent to which there is genuine communication and accountability to the stakeholders of these clubs. In a case study in chapter four of the book, the author examines four prominent clubs from each of these four countries (Tottenham Hotspur (England), PSV Eindhoven (The Netherlands), FC K?benhaven (Denmark), and Inter Milan (Italy). The author considers the extent to which the clubs’ current governance and accountability structures might provide some examples of ‘best practice’ from which other clubs might draw inspiration. In at least two cases there is evidence that directors are willing to include and involve stakeholders in various ways, not least because they recognise that improved stakeholder relationships can be good for the business of the club.

5

As football has become more market-driven and more business orientated, the final chapter of the book examines the extent to which there is adequate and appropriate communication of financial information by the clubs to the stakeholders in order to promote accountability and dialogue. The author identifies and analyses the sources of financial information about the clubs. As a Chartered Accountant turned academic, he is able to offer a critical overview of the current state of affairs on financial reporting by football clubs. He offers some valuable points of guidance on the interpretation of financial statements and highlights some of the more unusual methods clubs have employed to raise funds, such as by the securitisation of gate receipts and the sale and leaseback of players. He points out that there is a cause for concern where fans are given inaccurate or incomplete information about the finances of their club and he records that the tabloid newspapers, which are an important source of information for many fans about the finances of football clubs, are particularly poor at reporting financial stories about football clubs.

6

In his conclusions, the author contends that football can only remain a ‘people’s game’ if the people (i.e. stakeholders) understand the imperatives of business and have a say in how football is evolving, both as a sport and as a business enterprise. The crucial challenge for the business managers is how to promote and foster a culture of inclusiveness. In this respect, the author is hopeful that the examples he has identified, where business managers are operating their clubs in an inclusive fashion, can provide paradigms of best practice that the football authorities might adopt as a new standard for member clubs.

7

One of the virtues of this book is that it offers a wealth of detail on the changing nature of the business of football. This makes it a particularly good reference book for those wishing to understand football as a business and the impact that this increased commercialisation of the sport has had on supporters and local communities. However, the business of football is a dynamic force and inevitably there have been some significant changes since the book was published. Some of the biggest clubs in Britain are becoming less dependent on the stock market. Manchester United is no longer a listed company. It was subject to a £790m takeover bid by Malcolm Glazer, the American sports entrepreneur. The club has also become somewhat less profitable in recent years with a dramatic 20% drop in profits being reported by the Financial Times in January 2006. Some multi-millionaires have been buying British clubs. In England, the Russian billionaire, Roman Abramovich bought Chelsea FC and has poured millions into the club to buy some of the top international players. This has had the effect of altering the competitive balance in the English Premier League, where Chelsea now reigns supreme.

8

In Scotland too, a Premier League club, the Heart of Midlothian FC, has come under the control of a Lithuanian multimillionaire (Vladimir Romanov), while a major stake in Celtic FC has been bought by the Irish millionaire Dermot Desmond. In Europe, the Spanish club, Real Madrid is currently pursuing a commercially successful policy that may be at the expense of its success on the field. This case raises the classic conflict of interest issue between the club’s business aims and its sporting aims that the author of the book had hoped would diminish. In this particular case, Real Madrid has bought a team of star players (the ‘galácticos’) that include players like Luis Figo, Zinedine Zidane, Ronaldo and David Beckham. The aims of the club were to field an ‘unbeatable’ team and enhance the brand image of the club, internationally to promote the club’s merchandise world wide. Unfortunately, some of the star players that the club has purchased may now have passed their peak and it is an unhappy fact for the fans of Real Madrid that the club has failed to win a single trophy, either in Spain or abroad, since 2003. Yet the revenues from the club’s commercial activities, in the form of the licensing of image rights, advertising, merchandising and sponsorship deals, have never been higher. This failure to match commercial success with sporting success is causing some disquiet among the fans of the club and it will be interesting to observe how this conflict is ultimately resolved. Will the ‘people’ (i.e. the stakeholders) be able to change the club’s priorities when the present course of the business is so profitable, or will the short term business goals of the owners prevail?

9

In conclusion, ‘The People’s Game’ is an interesting, well-researched book that raises many (as yet unresolved) issues about the business orientation of the game and, accordingly, it has a great deal of contemporary relevance.

10
Tom Burns
School of Law, University of Aberdeen

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Tom Burns (School of Law, University of Aberdeen)

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