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 October, 2011

Wages and the distortion of the pyramid

Posted by John Beech on October 30, 2011

The data just published by Sporting Intelligence (sourced from internal PFA files) adds more fuel to my argument that the football pyramid is becoming utterly distorted in the sense that the scale of finance in the different tiers is being ludicrously stretched.  In a recent public lecture as part of the  Coventry Sporting Conversation series (a podcast is available here beginning at 02:05 mins.), I put the case that the lifting of the maximum wage started to stretch the level of financial activity across the tiers, and that when the Premier League broke away and negotiated its own broadcasting rights this process accelerated dramatically.

While the Sporting Intelligence data in its tabular form excited me, it was when I put into Excel and produced some graphs that I got really excited.  The full set of data on average players’ basic wages , together with UK average wages as a benchmark is shown here:


(All graphs can be enlarged by double-clicking on them)

At first glance it is obvious that things started to change with the appearance of the Premier League, but if we plot pre-Premier League and post-Premier League separately, the change can be seen as an acceleration of the existing trend:


The most striking features of the data emerge when you compare the average basic wages over time in each tier with the average UK wages.  The Premier League data confirms the stereotype of the ability to live the Ferrari-driving playboy lifestyle:

In 1984/85 the average Premier League player was earning two-and-a-half times the average UK wage, but by 2009/10 this had grown to 34 times the average OK wage, with no sign of slowing down.

On the other hand, life for a player in today’s League 2 is rather different from this stereotype:

Starting from a position in 1984/85 of below the average UK wage, things did slowly get better until the dawn of the Premier League.  Apart from a strange positive blip in 2003/04 (and no, I can’t explain it either), his lot has been scarcely different from the average UK worker’s wage.  Given that a footballer has a limited career, I wonder how a League 2 player ever manages to get a mortgage and buy a house, especially if he’s a goalkeeper – other data I have shows that goalkeepers are the worst-paid players.

This distortion in wages up and down the pyramid is simply a reflection of the disparity in revenues.  Of course higher levels deserve higher broadcasting rights and should be able to pay higher wages to attract the best talent, but when the size of the difference between tiers has become so vast, the traditional view of a club having some ambition and a local businessman to back them has long gone.  The only way upwards to the top is with an Arab prince or a Russian oligarch.  This is of course hardly news, but the data above makes abundantly clear that unless 92 Arab princes or Russian oligarchs come along, performance on the pitch will continue to be grossly distorted by the richness or otherwise of a club’s benefactor.  That is, unless change in governance takes place, and Financial Fair Play is imposed rigorously up and down the pyramid, financial doping is stopped, and a measure of sporting competitive balance returns to the game.

Posted in Benefactors, Financial doping, Wages | Tagged: , , | 18 Comments »

Stadium developments (and redevelopments)

Posted by John Beech on October 24, 2011

In the last couple of weeks, stadiums, both those which are newly planned and those where there has been or will be redevelopment, have being popping up on my radar screen with surprising regularity.

The saga of what to do with the Olympic stadium shows no signs of reaching resolution.  Sadly we seem to be drifting into an Athens 2004 legacy situation.  When I visited last year, the lady from the company still tasked with the legacy management of the infrastructure told me, with refreshing honesty, “You will have read a lot of bad things in the press about our legacy issues.  All of them are true.  But there also some good things.

Basically the problem had been that everyone was too busy preparing the Games sites to worry about legacy until after the Games had taken place.  No one could accuse LOCOG of not thinking about legacy – it’s just that their thoughts have never quite got round to making decisions.

Two issues trouble me with our stadium:

  • Why is there still any question of any club other than Leyton Orient moving there?  For West Ham or Tottenham to move there would be a clear breach of Premier League or Football League rules (see previous posting).  Simply ignoring this most fundamental point does not in any way legitimise the situation.
  • What of the issue of public money being spent on installing a football club there, and the blatant prejudging of who is to go there by Bojo (1)?  If FIFA were in any way consistent in condemning political interference (and note my use of the subjunctive), we should be seeing the legendary FIFA gunboats heading up the Thames any day now.

Meanwhile, across London, Chelsea are faced with an unusual situation as they plan to move from Stamford Bridge – the way that the Stamford Bridge stadium ownership was tied up Ken Bates to prevent it being sold.  This was undoubtedly his greatest footballing contribution, although pedants might question my use of a superlative that implies he made three good footballing contributions.  This looks to be a saga in the making because of the failure to keep records up to date (2), and the club will face opposition from its fans (3), focused into the Say No CPO group.  The club management must have been off sick when Marketing101 was scheduled.

Close by, Fulham have announced plans to redevelop part of Craven Cottage (4).  This pursuit of the ‘Molineux model’ rather than following a high risk ‘new stadium’ strategy is to be commended.  The alternative is the infinitely depressing ‘Fossetts Farm model’ (see postings passim or Southend United’s own New Stadium webpage).

When planning turns to stadium development or redevelopment, much depends on the attitude of the local council.  Three current cases are:

  • Plymouth Argyle, where the local council has agreed to pay £1.6m for Home Park and rent it back to the club for £135,000 a year.  This will hopefully facilitate a last-ditch rescue, but it should be remembered that the club had bought the ground from the council for £2.7m in 2006 (5).
  • Swansea City, where the council-owned Liberty Stadium is rented to Swansea City and the Ospreys, and continues to be run at a loss (6).  Can any reader with a deeper local knowledge explain this unlikely scenario?
  • Doncaster, where the council-owned Keepmoat Stadium seems to be creating a worrying financial burden for Doncaster council tax payers (7).  Again, any deeper local insight would be appreciated.

What is disturbing in all of this is the reliance on the public purse.  Any talk of ‘rich clubs’ is a joke in the broader footballing context.  Mind you, mention of ‘rich clubs’ and the public purse must raise a reminder of the shockingly bad deal (from the perspective of Manchester council tax payers) struck between the local council and Manchester City.

Posted in Assets, Stadium | Tagged: , | 5 Comments »

Unsung heroes

Posted by John Beech on October 14, 2011

The news that Plymouth Argyle’s players and administrative staff are still failing to get their full pay (1) is not, of course, really news at all.  This situation has been going on for roughly a year.  It’s a message of despair that has become as familiar as Peter Ridsdale cooing that he expects a deal to be finalised very shortly.

There are still those who do not break out in sympathy with the players at least – you know the sort of stuff: “Overpaid prima donnas.  Serves then right.  No sympathy whatsoever.”  This is of course nonsense.  Plymouth Argyle is not a Premier League club, and the majority of players are on salaries that do not even begin to approach the telephone numbers that Premier League players command.  They do have the professional Footballers Association supporting them though.  Still, it’s hardly easy to adjust to dramatic changes in family income whatever your salary is.  I should know: I once had no choice but to make the first Mrs. Beech redundant from our shared workplace.

The administrative staff will undoubtedly be on generally lower salaries, and I have even more sympathy for them.  Apart from being worse off financially, they didn’t sign up to a profession where a transfer to somewhere else in the country was going to be an industry norm.  I’m sure most of them are local folk, who have more than demonstrated their loyalty to a club which is not just their employer but a club that they care about.  They are the real unsung heroes.

In a different news story today, another super-loyal administrator (in the non-insolvency sense of the word) has left his club/employer after an amazing 38 years – now there’s loyalty.  This is the case of Portsmouth’s Club Secretary, Paul Weld (2) .  As the club website points out: “Paul has worked through nine changes of ownership, 19 different managers (22 if you include Frank Burrows, Alan Ball and Harry Redknapp, all of whom managed Pompey twice), encompassing two periods of administration, four relegations, four promotions, one FA Cup final triumph, one FA Cup final defeat and a season in Europe!”  No doubt it was the two periods of Administration that must have caused the greatest stress in the Weld household.  Why did he remain so loyal when there must have been more secure job opportunities open to him over the years?  Well, “A Pompey fan, Paul was an active member of the London Supporters’ Club before arriving at Fratton Park from the Football Association as assistant to the then secretary Jimmy Dickinson, before taking over as club secretary.”  So, someone to whom it was clearly more than ‘just a job’.  And here’s a hint, Paul – yours is an autobiography that I can’t wait to read.

I’m sure there are similar stories to be told at a myriad of clubs.  Let’s not forget these unsung heroes, especially in the troubling circumstances of the current Plymouth Argyle administrative staff.  A club is much more than just the team who turn on Saturdays.  Let’s hope that those directly involved in the takeover negotiations can bring a rapid close to the brinkmanship and haggling, and show a little humanity to their loyal staff and their families.

Posted in Community, Human Resource Management, Identity, Insolvency, Investors | Tagged: , , , , | Leave a Comment »

A hint of significant change at FIFA?

Posted by John Beech on October 8, 2011

Well, don’t hold your breath, but there is just a possibility.

The conferences I usually attend are for academics, and any confrontation is usually so subtle that it needs to be decoded.  Which is one reason I particularly enjoy the two-yearly Play the Game conferences, with their exciting mix of investigative journalists, academics and sports practitioners.  The latter group normally does not include anyone from FIFA, but the conference which has just finished in Köln proved to be a notable exception.  The Play the Game organisation, for those unfamiliar with it, describes itself as “an international conference and communication initiative aiming to strengthen the ethical foundation of sport and promote democracy, transparency and freedom of expression in sport” (1).

Sepp Blatter had been invited, but with stunning predictability he turned the invitation down “due to a great amount of similar demands” (2).  If he meant demands that he face his critics over the way FIFA is mismanaged, that’s probably understandable.

On Thursday, however, in a joint session with presentations by the indominatable Andrew Jennings, long-time scourge of FIFA, and his opposite number in Germany, Jens Weinreich, who should be in the audience but Walter di Georgio, FIFA’s newly appointed Director of Communications (now there’s a job I wouldn’t want!), sitting just two rows behind me.

Confrontation was inevitable, especially when Jennings, produced a list of what he said was 167 bribes recorded by the Zug Prosecutor’s office, which he (Jennings) is fighting to get published (3).  Di Gregorio took understandable exception to Jennings’s assertion that FIFA had the classic characteristics of a Mafia family.  Worse was to come when Jennings and di Georgio clashed over the reason for Jennings being banned by FIFA from its press conferences; this concluded with Jennings shouting “Liar!” from the podium.

It will be interesting to see whether di Georgio comes good on his offer to speak to the next Play the Game conference in 2013.  Apart from anything else, he will no doubt have to survive a post-conference debriefing with Blatter, which I’d love to be a fly-on-the-wall at!  Assuming Jennings is finally successful in publishing the Zug court documents – there is a slow Swiss legal process to go through yet – we will have to see whether Blatter survives.

Among other football-related topics discussed at the conference was a two-hour session entitled Financial fair play, or football’s foolish plan, chaired by Supporters Direct Europe’s Antonia Hagemann.  Speakers were, in order, Sefton Perry (UEFA’s Benchmarking Manger for Club Licensing), Professor Stefan Szymanski, myself, and Christian Müller (until recently the Chief Financial Officer of the German Football Association [DFL]).  The four presentations and the following discussion can be viewed here, following an incongruous 30 seconds beer advertisement.  My own contribution is at about 40 minutes in.

The final session of the conference turned to a key issue for all sports today, that of ‘quis custodiet ipsos custodies?‘ or ‘who guards the guardians?’.  The outcome was a call to the IOC to gather all stakeholders to draft a code for good governance in sport (4).  While I welcome such a move in general, I have a problem with it being under the auspices of the IOC.  How likely is this to find a positive response from ‘barely Olympic sports’ such as football and tennis, and non-Olympic sports such as F1, the rugby codes, North American sports and golf?  At the heart of this is the fact that the major professional sports do not fit well with the sports already engaged with the IOC.  And of course there is, for English football, the whole ‘Home Nations’ issue, an already touchy subject.

Posted in FIFA, Governance, UEFA | Tagged: , , | 1 Comment »

Manchester United and the Monkees

Posted by John Beech on October 3, 2011

A comparison that doesn’t fully stand up to scrutiny, I promptly concede, but the ‘soulless’ way Manchester United is run as a business must trouble many a fan of what was once ‘the beautiful game’, and has often in the past been referred to as ‘the people’s game’.

An article in the Financial Times really caught my eye (1) – an interview with Richard Arnold, United’s Commercial Director by the redoubtable Roger Blitz.

It wasn’t the business plan that Richard Arnold was setting forth was other than a sensible one in business terms, but here was someone who has ‘sold his football soul’, if, that is, he had had one.

It was the calculating and almost cynical way he viewed his ‘customer base’, and the language he used.  Here was someone who made no distinction between running a sports business and running any other kind of business – a distinction which I believe to be vital (and bear in mind that I have been teaching and researching sport management, working in a university Business School, forponsored over fifteen years).  Yes, there is much common ground, but sport businesses are a distinct variety of business, not least because their customers see themselves as having psychological ownership of the product.

God help the present and future fans of Manchester United who are to be milked like a cash cow, even when incurring charges on their club-s credit card.  And just how comfortable does Sir Alex Ferguson (see my previous posting) feel working for them.  I caught sight of him, appearing, rather incongruously, in a video shown last week at the annual Labour Party conference.  He has long been a Labour Party supporter, and, for the benefit of overseas readers of this blog, the Labour Party for many, many years played Left Half in British politics.

Another football supremo also caught my eye since my last posting- the peerless Peter Ridsdale.  He was claiming that “he yearns for a life out of the public eye” (3).  Had this claim appeared in the form of a press release by fax from some rural hideaway out of the public spotlight?  No, in fact he was sitting “sipping coffee in Cardiff’s Mercure Holland House hotel” giving a press interview.  How torn the Spinmeister must be in deciding whether to follow his yearning.

Posted in Globetrotterisation, Marketing | Tagged: , | 2 Comments »

 
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