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

Archive for May, 2011

Sepp Blatter’s already legendary Jim Callaghan impersonation

Posted by John Beech on May 31, 2011

Blatter’s demeanour at last night’s press conference was clearly one of defiance – it seems he really is blind to the mess the world governing body is in.  Mind you, if you watch again withe sound turned down (1), his body language is less self-confident – the ceaseless paper shuffling, and constantly tweaking the pair of microphones in front to him as if a pair of nipples had suddenly been thrust at him in some seedy nightclub.

The chances then of some serious reform of FIFA on his about-to-be-extended-unopposed watch are as remote as ever.  He is only vulnerable to pressure from outside stakeholders such as broadcasters and sponsors.  Broadcasters are unlikely to bother too much – the World Cup will be watched as eagerly by fans whether he or Caligula’s horse is in charge of FIFA.  Sponsors may yet prove more difficult to accommodate however, and there are already mumblings (2).  Sponsoring is not merely a questioning of gaining exposure for your brand – it only works effectively if there are shared brand values.  Interestingly, Coca Cola list their shared company values as ‘Leadership, Passion, Integrity, Accountability, Collaboration, Innovation, and Quality‘ (3).  It’s hard to see that the present circumstances are helping Coca Cola present their values of leadership, integrity and accountability much.  Adidas too will not be particularly happy bunnies this morning – they state on their webpage for Vision and Governance: “But leadership is not only about results, it is also about how success is achieved. We are accountable for the way we do business… We are committed to good governance“.  Not a great deal of brand synergy going on there at the moment either.

The one thing that can be said of Blatter is that he is a survivor.  Allegations that he acted corruptly date back at least to 2002.  As Nick Harris reported in The Independent nine years ago: “Sepp Blatter was yesterday accused by 11 senior Fifa colleagues of trying to buy votes to secure his re-election as president of football’s world governing body. The dramatic move could end the 66-year-old’s long career in the game.  In an unprecedented move in Fifa’s 98-year history, Blatter became the subject of a formal legal complaint filed in the Swiss courts by five Fifa vice-presidents and six other Fifa executive committee members.” (4)  Maybe we can’t expect too much in the way of sponsorship withdrawal as these allegation haven’t stopped them.

Blatter does have an Achilles heel nonetheless.  FIFA remains under investigation by Swiss federal authorities (5), as revealed by Matt Scott of The Guardian.  The Swiss may be more fussy than Adidas and Coca Cola when it comes to seeing their national ‘brand’ under threat.  Exemption from anti-corruption legislation for FIFA may well be lifted, especially as it applies to ‘not for profit’ organisations, an increasingly badly-fitting description for a body with reserves of almost three-quarters of a billion pounds (6).

One way or another, we shouldn’t expect a swift cleaning of the Augean stables, especially as Blatter is no Hercules.

Posted in Corruption, Ethics, FIFA, Governance, Public relations, Sponsorship | Tagged: , , , , , | 3 Comments »

Of (dream) stadiums at Plymouth and Southend

Posted by John Beech on May 29, 2011

While the insolvency process has many shortcomings when it comes to football clubs, one good thing it does do is shake some of the skeletons out of the cupboard.  As a Pompey fan, I’m expecting some pretty shocking data, and, who knows, even legal proceedings, to emerge as forensic accountants work on the liquidation of the old company (1).

At Plymouth Argyle a bit of a shocker has emerged (2) – the sum spent on the ill-considered attempt tp get a new stadium on the back of England’s inglorious 2018 World Cup bid.  If you haven’t already seen it, sit down, because it was an eye-watering figure of up to £1.2m.  It doesn’t take the 20/20 vision of hindsight to see that this was plan that didn’t make sense for Argyle – see my posting Are we going stark stadium bonkers? from April last year.

Argyle fans might spare a thought for the fans of Southend United (see postings passim), where £1.2m had been spent over a year ago on the as yet unstarted Fossetts Farm new stadium, of which club Chairman Ron Martin’s family will be the financial beneficiaries.  A year on and this figure has certainly gone up.  Last February the club requested Southend Council’s Development Control committee to confirm the development of the new stadium as two components (3), which required the preparation of two new detailed plans for the submission.  This request has been approved by the Council (4).  Meanwhile there is the matter of getting shop owners out so that the Roots Hall redevelopment by Sainsburys can be given a clear run (5), doubtless with the lawyers adding to the overall final bill.

The Roots Hall redevelopment by Sainsburys cannot begin until the first part of the Fossetts Farm development is completed.  I just wonder how long Sainsburys will tolerate the delays  as this whole saga of a move to Fossetts Farm has been dragging on for over ten years.  Perhaps I should be more understanding – Pompey have been talking of a new stadium since the 1970s, but then they haven’t pursued the idea as relentlessly, and I suspect at a rather lower cost to the club.  Who knows, perhaps the investigations surrounding the liquidation of the old company may reveal a secound bout of absurd 2018 profligacy on the South coast (6).

Posted in 2018, Insolvency, Stadium | Tagged: , , | 2 Comments »

Tears before bedtime at Plymouth?

Posted by John Beech on May 26, 2011

The announcement that Peter Ridsdale is expected to become the new owner of Plymouth Argyle (1) at a purchase price of £1 seems to have come as no surprise to anyone other than the Spinmeister himself apparently.  He says “This is not a transaction that I sought or contemplated but, if it is the only route to guarantee a future for Plymouth Argyle Football Club, it is a route that I am prepared to take.”  Very noble of him I’m sure.

The situation at Plymouth is undoubtedly dire, a word Ridsdale himself used back in January (2): “This situation is dire and I can’t even find the words to put into context how bad it is. It is probably worse than you can imagine. This is a race against time.”  A race in which he now appears to be the winner.

There are a number of general aspects to the situation which are a cause for concern.

The most immediate one in my book is that yet again property speculation by an, in effect, outside party has been the driver of the deal, and yet again a club has found itself no longer the owner of its ground.  Ask Rotherham or Leeds fans what they think of this.

There is a question of, if indeed, it is the only route to be taken.  It may well be that it is given the working parameters of the Administrator, who works within constraints that apply to any business, and which take no account of any specificity, to use the as-yet undefined EU term, of sport businesses.  It is in the crisis time of Administration that consideration needs to be given to the continuity not only of ‘club as company’ but also to continuity of ‘club as construct’ (see here if you are unsure of the distinction I am making, and here for an earlier posting on this theme).  There are a number of areas in which sports businesses can argue that they should have a particular legal status with exemptions (partial or total) from some pieces of legislation, and the area of insolvency law is one of the more obvious.

There is also the timing of Ridsdale’s likely ownership.  In case you have forgotten, he currently faces a number of charges: two offences under the Consumer Protection from Unfair Trading Regulations 2008 and another under the Fraud Act 2006, brought against him by Cardiff Council’s Trading Standards department (3).  These are:

  • Being knowingly or recklessly engaged in a commercial practice which contravenes the requirements of professional diligence under Regulation 33a of the Consumer Protection from Unfair Trading Regulations 2008. Materially distorted or was likely to materially distort the economic behaviour of the average consumer with regard to a product, namely season tickets, contrary to Regulation 8 and 13 of the Consumer Protection from Unfair Trading Regulations 2008
  • Being a trade engaged in a commercial practice which by omission was misleading under Regulation 6 of the Consumer Protection from Unfair Trading Regulations 2008 in that its factual context omitted material information, namely that they were subject to an embargo imposed by the Football Association on the registration of new players at the said Football Club and as a result caused or was likely to cause the average consumer to take a transactional decision he would not have taken otherwise, contrary to Regulation 10 and 13 of the Consumer Protection from Unfair Trading Regulations 2008
  • Committed fraud in that you dishonestly made a false representation, namely the sale of season tickets intending to make a gain, namely using revenue to purchase new players, contrary to Sections 1 and 2 of the Fraud Act 2006.

They are charges which he totally refutes, but ones which he will have to defend when the cases come to court – just the teeniest of distractions surely while he is weaving his traditional ‘magic’, as he did at Cardiff and Leeds, to turn Argyle round.  If he were found guilty, this too would be something of a distraction because of a subsequent ban on him being a director of a football club.

I would have to be honest and say that, on the evidence which is in the public domain, and in the specific circumstances, Brendan Guilfoyle, the Administrator, almost certainly was faced with no viable alternative.  More’s the pity.  At Wrexham, and of course at Exeter, we have seen the importance of a powerful Supporters Trust to present a viable alternative.  All power to the nascent and growing Argyle Fans’ Trust.  Their uphill battle should be a clarion call to the fans of other clubs who have not yet formed and developed a Supporters Trust – check here to see the situation for individual clubs.

Posted in Insolvency, Ownership, Trusts | Tagged: , , | 2 Comments »

A day of reckoning

Posted by John Beech on May 23, 2011

I managed to follow the great play-off between AFC Wimbledon (to whom, many congratulations) and Luton Town (to whom, commiserations) at least live online.  Football at its most exciting.  I wonder if Andy Burnham chose quite the right words though when he tweeted “Wimbledon back in Football League. Brilliant. A great victory for all football supporters over the money men. Well done to all at AFC.”  I’m sure he wasn’t referring to Luton as ‘the money men‘, although his comment would have been entirely appropriate if Wimbledon had beaten Crawley Town.

Yesterday, with the final day of Premier League games, unfortunately found me in the Tirol in a hotel room, arriving and logging on just after the games had started.  Heady stuff, and probably the most exciting afternoon in the PL all season.  As Alan Hansen was moved to write (1), “The big winner has been the Premier League itself, because this season has shown it to be the most exciting of the lot. ”  I’m not sure that I would enirely agree with his argument.

It struck me, particularly as I was feeling somewhat removed from the action, that it was distinctly odd that all the excitement was over who would or wouldn’t be relegated.  Aston Villa v. Liverpool, Everton v. Chelsea, and Fulham v. Arsenal were attracting very little attention from the twitterati.  Is this the grand scheme of things that the greedy breakaway Chairman of the old First Division envisioned some twenty years ago?  I came to the conclusion that in fact, yes, it was, had they bothered to think their plans through.  To me it is yet another symptom of what is wrong with the governance of English football.  Who is or isn’t relegated is clearly an important part of the general excitment of football, but it surely shoudn’t be the major focus.

The sacking of Ancelotti (2) because “this season’s performances have fallen short of expectations and the club feels the time is right to make this change ahead of next season’s preparations” to me provides yet more evidence of just how dysfunctional the Premier League has become.

Relegation from the Premier League undoubtedly puts serious financial pressure on a club.  When the drop in broadcasting revenues is netted off against the parachute payment, one is looking at a drop of £30m-£25m in revenues.  To this must be added a drop in matchday revenues (reduced attendance and lowered ticket prices) and a drop in merchandising sales, although these will vary from club to club, depending on the loyalty of their fans, in particular how large the core of ’till I die’ fans is.  Clubs may face a contractual drop in sponsorship fees, and may or may not have had the wisdom to include relegation clauses in their players’ contracts.  In other words, any club relegated faces a financial problem, but some may face significantly harder problems than those who had planned for the eventuality.  Clubs will also be in different states of financial health to start with.

Last week I was asked by BBC West Midlands to review the prospects for Wolves and Birmingham City should they be relegated.  On virtually every financial measure Wolves looked far more resilient to facing the drop than Birmingham City.  West Ham will undoubtedly face serious difficulties too, and only Blackppol look reasonably equipped to face the drop.

The Football League season is not quite finished, but further down the pyramid things are clearer with respect to next season.  AFC Wimbledon and Crawley Town are joining the Football league, the epitome of fan ownership and ‘benefactor’-induced financial doping respectively.  At the other end of the Conference National, it’s goodbye to Southport, Altincham (whose luck in benefitting from other clubs’ financial problems finally ran out, Eastbourne Borough, and Histon.  I’m sorry to see Eastbourne Borough go down as they were the most senior English club which is a Community Interest Company (CIC).  As an interesting aside, the Scottish Premier League may well have a CIC as a menber in the coming season – St Mirren (3).  This is a case that is well worth following, as the current owners are seeking to sell the club in a way that was  “making sure it remained sustainable and debt-free” (4).

Lower down the pyramid, the upcoming movements are plotted here.  Good to see resurrection clubs AFC Telford and Farsely on the way up.  It’s interesting to note that Ilkeston are listed as ‘reinstated’, good news for their fans following their resurrection (5), but I wonder what, for example, King’s Lynn fans or Grays Athletic fans will make of the reinstatement decision.

Finally I turn to a football story that is relevant to me in my immediate circumstances, but which does not seem to have well covered by the English-speaking  media, although due credit to Yahoo! Sport (6) for being an exception.  The story quite simply is that a major derby match between Rapid Vienna and Austria Vienna was abandoned after 26 minutes following a major pitch invasion – see here and  here.  Disturbing images that we hope we will not see moving further northwards and westwards.  After thirty minutes of disruption, the police felt unable to guarantee the safety of the players in a resumed match.  We seem to have moved onward from such dark days in England, and it was good to note the Birmingham City fans staying on at White Hart Lane to show what they had in common with Spurs fans (7).

Mind you, I suspect that “Thursday night, Channel Five” is not really going to catch on on the terraces.

Posted in Broadcasting rights, Costs, Economic impact, Fans, Football Conference, Governance, Merchandising, Premier League, Promotion, Pyramid movement, Relegation, Revenues, Sponsorship | Tagged: , , , , , , , , , , , , | 2 Comments »

The Spinmeister in a spin too far?

Posted by John Beech on May 15, 2011

Peter Ridsdale faces charges of two offences under the Consumer Protection from Unfair Trading Regulations 2008 and another under the Fraud Act 2006, brought against him by Cardiff Council’s Trading Standards department (1).  These are:

  • Being knowingly or recklessly engaged in a commercial practice which contravenes the requirements of professional diligence under Regulation 33a of the Consumer Protection from Unfair Trading Regulations 2008. Materially distorted or was likely to materially distort the economic behaviour of the average consumer with regard to a product, namely season tickets, contrary to Regulation 8 and 13 of the Consumer Protection from Unfair Trading Regulations 2008
  • Being a trade engaged in a commercial practice which by omission was misleading under Regulation 6 of the Consumer Protection from Unfair Trading Regulations 2008 in that its factual context omitted material information, namely that they were subject to an embargo imposed by the Football Association on the registration of new players at the said Football Club and as a result caused or was likely to cause the average consumer to take a transactional decision he would not have taken otherwise, contrary to Regulation 10 and 13 of the Consumer Protection from Unfair Trading Regulations 2008
  • Committed fraud in that you dishonestly made a false representation, namely the sale of season tickets intending to make a gain, namely using revenue to purchase new players, contrary to Sections 1 and 2 of the Fraud Act 2006.

Ridsdale told the Plymouth Herald, “I will totally and vigorously refute all the charges and will go back in July to vehemently rebuff them.

The case is of course sub judice, and it would be improper of me to make any comment on it.  While ‘Comments’ remain open, please be aware that I will be mindful of this when deciding whether to publish them or not.

Ridsdale is not of course alone in the world of football management in facing legal proceedings.  Harry Redknapp, Milan Mandric and Peter Storrie are all currently facing court proceedings relating to matters which occured when they were at Portsmouth.  So far as I am aware, all but Storrie are carrying on in football as their innocence is to be presumed.

The four cases are individual, and the seriousness of the charge(s) varies with its relevance to their current work.  What does strike me however as being in marked contrast to practice in many other sectors is that there does not appear to have been serious consideration given to the possibility, and some might argue the appropriateness, of ‘going on gardening leave’ until their names are cleared.  Not that I’m surprised – football in general is not a sector which has placed a great deal of stress on ethics.

Posted in Ethics | Tagged: | 3 Comments »

The points deduction lottery

Posted by John Beech on May 13, 2011

As we move towards the end of the season and the state of ‘ups’ and ‘downs’ begins to harden, I am, as usual (here are my earlier findings on this topic), looking more closely at how the deduction of points impacts on the particular clubs who are promoted or, more typically, relegated.

The impact (or lack of it) can be five-fold:

  • No impact even to a club at the top of the table.  A classic example is that of Arsenal who were still Champions of the old Division 1 in 1990 in spite of having three points deducted.
  • Points deduction results in a club failing to be promoted, as happened to Leeds United in 2008, when a 15 points deduction moved from a guaranteed promotion spot into the play-offs (where they failed to gain promotion).
  • The position of the club is so ‘mid-table’ that the deduction of points is irrelevant other than to their final position.
  • A club is forced into relegation because of the points deduction.
  • The deduction of points is irrelevant because the club was going to be relegated anyway, as was the case when Portsmouth were ‘punished’ with a ten points deduction last year.

You can see where I’m going with the reference to ‘lottery’.

It’s too early yet for a systematic survey, but some examples are all too apparent already.  Plymouth Argyle have been relegated because of their ten points deduction (1), and St Albans have been relegated anyway (2), although by a narrow margin.  Their fans must look enviously north of the border to Dundee, where, in spite of a massive 25 points deduction (3), the club has managed to escape relegation.  Their fans may not necessarily see this as ‘a lucky escape’ however, as, without the deduction, Dundee would have finished a single point behind champions (and automatically promoted) Dunfermline.

The most interesting case is one in which no points have been deducted – that of QPR.  A disgracefully slow investigation finally concluded with a massive fine but no points deducted for 7 alledged breaches of FA financial regulations (4), five of which were found ‘not proven’.  As QPR finished the season as Champions, and 8 points clear of the play-off places, any points deduction would have proved highly contentious to whichever set of fans affected.  The saga may yet continue, as Swansea, who would have been automatically promoted had QPR been deducted nine or more points, are, at the time of writing, undecided as to whether to mount a legal challenge (5), preferring to wait until the full judgement is published.

The use of points deduction as a sanction is unarguably dysfunctional.  The real question is whether it is the ‘least bad’ alternative.  Certainly alternatives need to be explored, and thought given to whether it is possible to distinguish between offences that affect performance on the pitch and more technical financial or administrative offences which have no impact on sporting performance.

Posted in Ethics, Governance, Points deduction, Sanctions | Tagged: , , , | 6 Comments »

The great governance debate

Posted by John Beech on May 13, 2011

The House of Commons Select Committee on Football Governance certainly finished their hearings with a bang.

First up was Mike Lee, ‘strategist behind the 2022 Qatar World Cup bid’, and late of the London 2012 Olympics bid.  His appearance was bound to be confrontational given the submission of new evidence by The Sunday Times (1) regarding the awarding of the World Cup to Qatar.  He was given a bit of a hard time, and, unusually, received an apology for this (2).  Qatar has become such an issue that even the International Olympic Committee have ordered a Qatari bribery investigation (3).

Next up, and the final witness, was Lord Triesman.  His allegations about the bidding process for 2022 were made under parliamentary privilege, and have caused a considerable, and appropriate furore.

Important though the governance of the national is, I was disappointed that the Committee had drifted off what I saw as the main topic – the governance of leagues and clubs.  Judging by the written submissions, this seems to have been the topic that was generally seen as more important.

There is perhaps a different reality, one in which the reform of club and league governance remains centre stage.  On Wednesday Supporters Direct an launched two special briefings put together by Supporters Direct and Substance.  Both concern encouraging supporter community ownership in football; the first is on Developing Public Policy and the second is on Developing Football Regulation.  (I should admit a vested interest at this point – some of my research is quoted in the latter.)  Both are downloadable pdfs, but note their length before you rush to print them.

Dave Boyle (Supporters Direct) and Adam Brown (Substance) at the launch

Far from simply being an advocation of fan ownership, they set out clearly how the current financial model for running football clubs is broken, the specific ways in which it fails, and how a sustainable alternative model would work.  As well as fan ownership, a strong case is made for club licensing along the lines of the systems practised in Germany and in Northern Ireland.  The briefing papers also spell out the role that government should take in driving reform through effective changes in legislation rather than through some more direct intervention.

I found it particularly encouraging at the launch that there were 3 MPs present.  Governance reform is definitely still on the political agenda.  As Dave Boyle of Supporters Direct pointed out, a pile of all the official reports on football is now over a foot high, yet their recommendations have, on the whole, not been implemented.  Such is the current state of football governance that the failure to take action cannot be justified.  In real life, doing nothing is always an option whatever anyone might claim, but doing nothing would have a culpability to the disintegration of professional football attached to it.

Posted in Governance, Law, Politics, Uncategorized | Tagged: , , , | 6 Comments »

 
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