Football Management

Commentary on the management of over 160 English football clubs by Dr John Beech, winner of the FSF Writer of the Year Award 2009/10 Twitter: @JohnBeech Curator of Scoop.it! Football Finance

The increasingly irrational world of football club owners

Posted by John Beech on September 10, 2010

My blood boils far too easily these days.  Perhaps it’s an age thing.  Or perhaps the wacky world of football finance really is going insane. Three stories in the last few days have had me reaching for my gun. I’ll deal with them alphabetically by club, but Mansfield Town fans and Nottingham Forest fans can be assured that I cite their clubs merely as examples of what is wrong – it could have been so many other clubs that I could have used to make the point.  I’m not having a go at their club; I’m having go at their directors, and directors at other clubs who make similar comments. In short, I’m making a general point, which happens to be triggered by comments made by their directors.

First a bizarre quote from the Ilkeston Town saga.  Former owner Chek Whyte is quoted as saying “From the point I took over we had got it up to the next league and the league above that, which is the highest the club has ever been.  The only reason we let the club go was because the new owner could take it to the next level, but he has not done that” (1).  So we are asked to believe that his decision to sell the club was entirely as a selfless move to make sure that the greater interests of the club were respected.  Erm, nothing whatsoever to do with the fact that his debts had risen to £32m (2) then.  But Whyte is known for his interesting explanations – he had been banned from being a company director in 1999, which he told the Salford Advertiser was because he was dyslexic.

Meanwhile, over at Mansfield Town, the club is up for sale (3).  ‘Why?’, you ask.  Well, according to the club website, “The Board believe they have taken the club as far as they can and now is the ideal time for someone new to takeover the helm and move the club to the next level“.  Two of the most irritating clichés in football ownership: ‘taken the club as far as they can‘ and ‘move the club to the next level.

What on earth does ‘taken the club as far as they can‘ mean?  In another announcement the same day on the club website it becomes clearer: “Chairman Andrew Saunders has admitted that both he and his fellow board members cannot continue to make any further ‘major financial commitments’ towards the football club” (4).  He and fellow directors had been ‘investing’  approximately £10,000 a week to sustain the club.

At the very least, this is an admission of poor business practices.  They are directors of a company which is losing over half a million pounds a year.  From a different perspective, they haven’t recognised that a true benefactor, in the traditional mould of Jack Hayward or Jack Walker, has deep enough pockets to keep on benefactin’.  Perhaps they were simply naive when taking on the club.

Over at Nottingham Forest, where chairman Nigel Doughty, who has invested more than £60m in shares and loans during the last decade, may curtail his investment in the wake of recent criticism from fans, some gems from Chief Executive Mark Arthur: “Nigel has regularly put in over £5m over the last few years. Last year his commitment was £13.4m which is double the amount we received from season-ticket revenue and match-day ticket revenue” (5).  When you are committing financial doping on such a blatant scale, you might expect more success than Forest have achieved.  This has resulted in criticism from fans.  Now Doughty hints darkly at stopping his ‘investment’ unless the fans are nicer to him.  Again, he hasn’t understood what a ‘benefactor’ really is.  And he seems to think that everyone must like because he owns the club.  He doesn’t appreciate that buying the club (i.e. the company) doesn’t mean he has bought what fans see as the club (i.e. the social construct).

A true benefactor accepts that he is on a hiding to nothing and throws money at a club, without a hint of complaint, in a deliberate attempt to upset the competitive balance of the league the club plays in.  Increasingly, today’s ‘benefactors’ insist on ‘investing’ with soft loans, which they then get the wobbles over as the money flows straight the club and out again even though they should have some control over it as directors.

Concentrating so much power in the hands of so few people, often new-comers to both the club and the football business, so often leads to clubs struggling hard to survive.  The benefactor model has clearly had its day.  Members of Parliament of all hues agree, as the recent debate showed (6; well worth reading if you haven’t already done so).  Supporters Trusts, and other co-operative/community-involved variants, are the only way forward.

One Response to “The increasingly irrational world of football club owners”

  1. http://www.footballeconomy.com/content/stags-find-benefactor

    [Mansfield Town has been bought for £1 by someone who has already 'injected' £250,000, and wants to take the club into the Championship.]

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

 
Follow

Get every new post delivered to your Inbox.

Join 132 other followers

%d bloggers like this: