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 the ‘Marketing’ Category

So, is it really ‘goodbye Bluebirds, hello Red Dragons’?

Posted by John Beech on June 7, 2012

Like the old joke about anti-social behaviour in a lift, what is happening at Cardiff City is just plain wrong at so many levels.

The root causes of the problem lie in Sam Hammam’s decision to build a new stadium, the resulting deep financial difficulty that Cardiff got themselves into with Langston and the Damoclean debt hanging over the club as a result, and Peter Ridsdale’s decision to involve the club in what was, from the first, described as a ‘strategic marketing alliance’ with Malaysian investors (1).  As he said at the time, “It will be a long-term alliance.  It will include youth development, it will include the opportunity to explore the whole fan base.  It will certainly include sponsorship.  We are already talking to them about shirt sponsorship and stadium naming rights without any definite conclusions at this stage.  We are also talking about their assistance in trying to put this club on the sort of financial footing that we would have liked to dream of when I first arrived at this football club.

Needless to say, there was no public talk of the shirt sponsorship involving what has just been announced.

Indeed, as recently as 10 May Dato Chan Tien Ghee said, in an open letter to fans, wrote:

The new club crest and home colours which were being discussed were intended to demonstrate the symbolic fusion of Welsh and Asian cultures through the use of the colour red and the predominant featuring of a historical Welsh dragon under the Cardiff City FC name. This would have been a springboard for the successful commercialisation and promotion of the club and its brand, driving international revenues and allowing us to fund transfers and success locally, thereby giving the club the best chance of competing at the higher reaches of competition.

This was not meant as a slight in any way shape or form on the club’s traditions or history which we recognise are the lifeblood of any club. It was intended as a positive change to allow us to adapt and embrace the future. Notwithstanding a number of rumours there were no further plans to turn the stadium red or make other radical changes. ” (2)

His use of “were being discussed” and “would have been” must have suggested to many, including myself, that the rebranding of club with a change in shirt colour and change in logo were now a dead duck, a not unreasonable understanding as he continued In the light of the vociferous opposition by a number of the fans to the proposals being considered as expressed directly to our local management and through various media and other outlets, we will not proceed with the proposed change of colour and logo and the team will continue to play in blue at home for the next season with the current badge.

He kept his word for less than a month.

In his open letter he also alluded to the current instability in the club’s business model thus: “It is clear to all concerned that the club simply cannot continue to function and exist in its current state, effectively losing large amounts of money each month, while acquiring more and more debt.”  No one can reasonably disagree with view.

In the debate that has broken out in the last couple of days since the announcement of the decision to do a U-turn (3), or to use the language you might expect from someone engaged in a ‘strategic marketing alliance’ – “Following a comprehensive review of wider supporter feedback via email, letters, media coverage and polls run via the official Supporters Club and Media Wales and as a consequence of the above commitment, Cardiff City Football Club will also reactivate rebranding proposals with a view to exploiting and maximising its brand and commercial revenues in international markets” – attitudes seem to have become polarised into two camps.  On the one hand, what is happening is a Faustian pact which involves selling the soul of the club.  On the other, the club’s survival depends on a business plan that will result in untold wealth pouring in from new fans in the Far East.  As is so often the case, it is difficult to engage in debate regarding the relative merits of these two views because they are based on different meanings of the word ‘club’ (4).  The present attempt at debate assumes that these are two mutually exclusive and opposed views, and that there are no other possibilities, no room for overlap, and no possibility of compromise.  That certainly seems to be the view of the Malaysian investors.  Which raises a number of issues in itself.

It suggests that the future of the club hangs on the fickleness of future supporters in the Far East who a) would support a club in a red shirt but not one in a blue shirt, and that b) providing the club’s shirt is red and has a dragon on it they will support in sufficient numbers to pay off the rest of the ‘Langston debt’, reinvigorate the club’s fortunes (in both senses of the word), and allow the investors to see a return on their investment.  As to a), I think this is simplistic and over-stated.  As to b), I can understand the Malaysian investors looking to the marketing success of Manchester United, but they might better have a word with Balram Chainrai, or those behind the K&K Shonan Management Corporation (5), erstwhile ‘saviours’ of Plymouth Argyle.

What is happening at Cardiff is little short of seeing owners who view a club as a commodity which can have some brand value spray-painted onto it to make it stand out from the rest.  A simple question to Dato Chan Tien Ghee – if the key to your success lies in owning a red club, why didn’t you buy a red one?  If the answer is simply ‘Well, Peter hadn’t got a red one in his briefcase to show us’, God preserve us.

Others have tried this drastic rebranding, with some commercial success.  An obvious example is that of SV Austria Salzburg, which Red Bull bought and rebranded as FC Red Bull Salzburg in 2005, complete with change in club colours and logo.  The new club has enjoyed considerable success since the takeover, but the old club had also, and that is where the comparison begins to break down.  Red Bull bought an already successful club and turned it into an even more successful one.  But in doing so they alienated fans to such an extent they started a new club, which they called SV Austria Salzburg, and which has already climbed, Wimbledon and FC United of Manchester style, from the seventh tier of the Austrian football pyramid to the third tier.

I’ll leave my final thought to the SV Austria Salzburg fans who are reported as having raised this banner in the past few days.

Posted in Cashflow, Debts, Fans, Investors, Marketing, Merchandising, Ownership, Stadium, Strategy | Tagged: , , , , , , , , | 5 Comments »

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 »

The changing face of Premier League shirt sponsorship

Posted by John Beech on September 15, 2011

The news the other week that Manchester United had secured a lucrative sponsorship deal with DHL for their training kit (1) rather caught my attention.  It wasn’t the unique (?) case of training kit being sponsored – I would expect this to be a one-off, with all new shirt sponsorship deals having a clause requiring exclusivity over all shirts.  It was the fact that a global courier service was the sponsor.  Their business is truly global, they have previously sponsored sport (2), and a Premier League club would give them global ‘reach’.  No doubt we will see UPS signing up next season – they too are already into sports sponsorship (3).  They actually offer a handy application form on their website – commercial managers of football clubs get typing!

The news that QPR have finally signed up not one but two shirt sponsors (home/away kits) (4) allowed me to complete this season’s entries into my Premier League shirt sponsorship database.  More on this in a second, but I must warn you that the official QPR website has followed the Times in charging for content other tasters – a distinctly retrograde step and hardly fan-friendly.  Do these clubs need ‘naming and shaming’?

Two initial views of the data show some interesting trends.  First, some data on the country of the sponsor.  The graph is a tad grainy as presented I fear, but clicking on any of the images will open it up to a rather more legible size (I kept them small on the posting itself so as not to slow downloading).

Very broadly there seem to be three periods  apparent: from the start of the Premier League a steady-state period to roughly to the end of 1997/98, with sponsors falling roughly equally into the UK and foreign categories; a period from then until 2006/07, when foreign sponsors started to turn away, before starting to return; and the most recent period, showing a return to a roughly equal split.  I would have to admit that I can’t see a simple obvious reason for this trough of foreign sponsorship in the middle period.  Do any readers have any thoughts on this?

While the Premier League began with almost half the clubs sponsored by locally-based companies, there has been a slow but steady decay.  This I would simply attribute to the rising cost of shirt sponsorship, with foreign-based multinationals better placed to pay higher fees than the likes of, for example, the splendidly named Reg Vardy Motors, sponsors of Sunderland roughly a decade ago, and now part of Evans Halshaw.

It shouldn’t be assumed that ‘local’ necessarily means a UK company.  For example, Peugeot sponsored Coventry City for their first five years in the Premier League – the Peugeot 206 was at that time built at their Coventry site.

Secondly, data on the sponsor’s sector.

The graph shows the four most frequently occurring sectors over the two decades.  Financial services are just the largest grouping at 13.5%, closely followed by breweries at 12.8%, although, if the breweries are combined with the occasional sponsorship by spirits and cider manufacturers, alcohol manufacturers, with a combined total of 13.8%, slip into top spot.

It’s clear that financial services have grown steadily as sponsors over two decades, but gambling, the Johnny Come-Latelys of PL shirt sponsorship, is very much in the ascendancy.  Together the two sectors now sponsor 13 of the 20 clubs.  The early days of the Premier League saw a much greater diversification among shirt sponsors.

Finally a look at the Top 4 v. the rest of the Premier League clubs.  One would expect the clubs which have pretensions of being global brands to attract global sponsors, and this is indeed the case.

By playing more televised matches, especially when qualifying for the Champions league, the Big 4 have consistently attracted more foreign sponsors than the other clubs, generally two to three times more.  By being able to play a global market in attracting sponsors, they have been able to push their sponsorship charges up, and so increase their financial muscle.  There is thus a double effect of reinforcing their dominant position, by greater TV revenues and by greater sponsorship revenues.  Whatever happened to competitive balance?

Posted in Marketing, Revenues, Sponsorship | Tagged: , , | 7 Comments »

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 »

The wit and wisdom of Peter Hill-Wood

Posted by John Beech on April 14, 2011

With the sad loss of Danny Fizman, Peter Hill-Wood was moved, no doubt genuinely, to say:

“Danny Fiszman was a visionary Director, a gentleman and a true Arsenal fan.

“We are all deeply saddened by the loss of our dear friend Danny. His voice, wisdom and presence around the football club he so dearly loved will be sorely missed.

“Arsenal Football Club will forever be indebted to Danny for his invaluable foresight and contribution during the move from Highbury to our new stadium.” (1)

Fiszman had just before his death sold his 16.11% shareholding in Arsenal to Stan Kroenke (2), allowing Kroenke to become the majority (62.89%) shareholder in the club.

Of Kroenke, Hill-Wood famously said in April 2007:

“Call me old-fashioned but we don’t need Kroenke’s money and we don’t want his sort. Our objective is to keep Arsenal English, albeit with a lot of foreign players. I don’t know for certain if Kroenke will mount a hostile takeover for our club but we shall resist it with all our might.

“We are all being seduced that the Americans will ride into town with pots of cash for new players. It simply isn’t the case. They only see an opportunity to make money. They know absolutely nothing about our football and we don’t want these types involved.” (3)

and that he would be “horrified if the club were to go across the Atlantic” (4).

Football management is indeed a funny old game.

Posted in Ownership, Public relations | Tagged: , | 5 Comments »

Open season on interns?

Posted by John Beech on March 10, 2011

Yes, it’s the Gunfight at the Cobham Coral saga.

For those of you not up-to-date with the jargon of Higher Education, an intern is someone who, in Old Speak, was on an industrial placement from a sandwich course.  Typically this would be the third year of a four year undergraduate degree programme.  The thinking is that such a placement, or internship, gives a broader education and enhances the student’s employment prospects once he or she has graduated.

Reports that no charges are likely to be brought, and that the police investigation was so thorough that, it is reported, they didn’t even include speaking to either Ashley Cole or the shot intern, Tom Cowan, (1) simply beggar belief.

Chelsea are really sorting this one out though – Cole might be fined up to two weeks’ pay (2) and Ancelotti’s reaction is reported as “I am angry, obviously, but to read that [the training ground at] Cobham is out of control is totally wrong. I’ve been a manager for 20 years and one of the most important things is discipline. Players have to observe the rules.  Ashley made a mistake. When he said sorry he was really disappointed [with himself]. But what do we have to do now? Kill him?” (3)  Ancelotti ‘angry’?  Cole ‘disappointed with himself’?  For God’s sake get real guys – someone was shot in the workplace!

Imagine for one moment that the situation had been reversed – that Cowan had brought the air rifle to work and accidentally shot Cole.  Would everyone have been quite so laid back about it?  I would suggest they wouldn’t.

The incident, or more specifically its aftermath, bring shame on the club.  The silence so far (at least so far as I’ve been able to trace) of the Premier League and the Football Association speak volumes about the power of the club and the indifference of the governing bodies to such an incident.  What would it take to get them to condemn Chelsea – the death of an intern?

I find it staggering that the club hasn’t even bothered to make public more detail of what precisely happened, or what their internal investigation has shown.  After all, this incident took place two and a half weeks ago.  In the Ancelotti world of chronic understatement, I’m ‘disappointed with Chelsea’.

UPDATE – 12 March 2011

The police have said that they will not be taking any action (A).  There are two impediments – the incident took place on private property (in which case, the law is an ass; this is, in my opinion, utterly absurd – the incident happened in a place of employment, and employees should be legally protected), and Tom Cowan has declined to file a criminal complaint.  Make of the latter what you will.

The same report suggests that the club can fine Cole up to £250,000 (two weeks salary).  Have they?  The silence from the club remains deafening.

UPDATE – 29 March 2011

Latest ‘jolly jape’ involves a dart and a youth player (see here).  What sort of injury is it going to take before clubs take this kind of behaviour seriously?

Posted in Ethics, Football Association, Governance, Health & Safety, Human Resource Management, Organisational culture, Premier League, Public relations | Tagged: , , , , , , , | Leave a Comment »

Are our biggest clubs really global brands?

Posted by John Beech on December 9, 2010

You certainly notice the presence of Premier League clubs in Kenya (where I’ve just been on a somewhat delayed ‘summer’ holiday).

Can any Manchester United fan supply the vintage?

Curio seller in the middle of nowhere, Kenya. Can any Manchester United fan supply the vintage?

Well, of the predictable few.  Arsenal are, on the basis of an entirely unsystematic and unscientific survey of shirts and baseball caps and a pretty small sample, the clear number one English club of choice for Kenyan fans, followed not so far behind by Manchester United, with Chelsea a poor and third. That was it really. I did see Liverpool mentioned on a sandwich board outside a bookies, but no shirts. In fact the only other shirts were either local Kenyan clubs or Brazil.

The presence manifested itself not only through shirts, but also by slightly crudely painted club crests on cafés, and, in one case, the rather unexpected ‘Gunners Hairdressers’.  Presumably their Boro Primorac isn’t that popular with customers.

Apart from the fact that I found in yet another country only the famous few were present, two things struck me.

First, what did the clubs actually gain from their presence?  I would suspect that those wearing shirts had not contributed to direct sales, and that few Kenyans were avidly using the online club shops.  They certainly weren’t buying tickets for the games.  And how did a baseball cap with ‘Fly Emirates’ as the obvious feature do anything for Arsenal (as we passed, I didn’t even spot an Arsenal logo)?  Again only a suspicion, but I doubt that Arsenal have been leveraging up their price to Emirates on the basis of this particular exposure.  If there was any return, it was for the sponsor but not for the club.

Secondly, the presence of so many hand-painted logos might be seen as some sort of compliment to Arsenal, but the unlicensed use of logos said something about the nature of the clubs’ presence and the weakness of any commercial basis.  It was a kind of artificial presence.  The Arsenal or whichever brand did not have a presence on a par with that of a truly global logo such as Coca Cola.  And that’s probably the point – Coca Cola has an enormous presence in Kenya through their products and the infrastructure to support and develop the sale of their products.  Any unlicensed use of their logos would stamped on by locally-based Coca Cola staff,with the zeal of the IOC spotting that I had mentioned that event which is taking place between 2011 and 2013 in the UK capital by its conventional name.

Because of the lack of product presence, other than, that is, the intangible product presence through broadcasting, it’s hard to justify even the biggest Premier League clubs as global brands in any conventional sense.  The sale of official merchandising at the café (or hairdresser) can only be a dream.  The opening of Manchester United shops in the Far East, for example, is the first steps in becoming a truly global brand, but it is frankly just scratching the surface of an enormous potential market.  To be successful, these clubs will have to produce a radically different marketing mix with new 4Ps (product, price, place and promotion).

Posted in Broadcasting rights, Marketing, Merchandising, Sponsorship | Tagged: , , , | 3 Comments »

Run that past me again?!?

Posted by John Beech on December 3, 2010

As someone whose heart wanted England to get the 2018 World Cup, but whose head didn’t (in a nutshell, and amongst a number of reasons, we can’t afford it) I naturally had mixed feelings about our failure to win today.  ‘Failure to win’ is of course a massive understatement.  We presumably only attracted one vote from the other 21 FIFA Exco members.

FIFA, not known for its transparency, provides few metrics in its evaluation reports (available here).  They do however give a range of ratings related to risk.  Perhaps we had submitted a bid that was too risky.  Well, have a look for yourself:

ENGLAND NETHERLANDS / BELGIUM SPAIN / PORTUGAL RUSSIA QATAR
LEGAL EVALUATION
Government documents
Government guarantees Low risk Medium risk Low risk Low risk Low risk
Contractual documents
Hosting agreement Low risk Low risk Low risk Low risk Low risk
Host city arrangements Low risk Medium risk Low risk Low risk Low risk
Stadium agreements Low risk Medium risk Low risk Low risk Low risk
Training city agreements Low risk Medium risk Low risk Low risk Medium risk
Confirmation agreements Low risk Low risk Low risk Low risk Low risk
Overall
Overall legal risks Low risk Medium risk Low risk Low risk Low risk
OPERATIONAL RISK
Competition
Stadium construction Low risk Low risk Low risk Medium risk Medium risk
Stadium operations Medium risk Medium risk Medium risk Medium risk Medium risk
Team facilities Low risk Low risk Medium risk Low risk High risk
Competition-related events Low risk Low risk Low risk Low risk Low risk
Transport
Airports and international connections Low risk Low risk Low risk High risk risk Medium risk
Ground transport Low risk Low risk Low risk Medium risk Medium risk
Host city transport Low risk Low risk Low risk Low risk Medium risk
Accommodation
General accommodation Medium risk Medium risk Low risk Medium risk Medium risk
TV
International Broadcast Centre Low risk Low risk Low risk Low risk Medium risk
NO. OF VOTES
Round 1 2 4 7 9 11
Round 2 2 7 13 10
Round 3 11
Round 4 14

The rating of ‘High risk’ occurs only three times in all the ratings for 2018 and 2022 contenders – twice for Qatar and once for Russia.

It would seem that, far from being risk averse, the FIFA Exco members favoured risky bids!

Of course, I’m falling into that old trap of assuming that they behaved and voted in a rational way.

So, if it wasn’t content that wooed them, perhaps it might have been style.  No metrics here, but my impression was that we had come to the party with just the right blend of banalities and photogenic children that had worked so well in Singapore.  Certainly our effort was no more nor less vomit-inducing than the oppositions’.  Certainly it was no less contrived.

Inevitably we come back to the process of selection as the root cause of England’s failure.  We didn’t jump through the right hoops.  We didn’t pound the ground or press the flesh hard enough.  We trusted Jack Warner.  We were naïve.  The core question is which of those are things we should not be happy with.

As we wake up the next morning, sadly free of the anticipated hangover, criticism continues to focus on the role of our media.  It was Panorama and The Sunday Times wot dunnit.  Whether it was or wasn’t will be endlessly debated, but that misses the point.  Having a free press with a healthy body of investigative journalists who are happy to point out that the emperor has no clothes is something we should celebrate rather than lament surely, even if we don’t like the outcomes.  There is a need to distinguish between the process of selection and the outcomes of that process.

As for the outcomes, there could have been (from all the countries in the world) far worse choices than Russia.  Have a look at this clip of their plans for stadiums.  Mind you, it would hard to find a less appropriate choice than Qatar to be the host of football’s crowning glory.  I’m sure many a fellow academic is already planning their research on the socio-cultural impact of 2022 on Qatar.  I suspect that either fans will stay way (I would recommend Amnesty Internationals’ latest report on Qatar before you book your flights) or Qatar will unleash a lot of unwelcome behaviour in its hotels, which will test their public relations arm to the limits.

As for the media, there are in fact examples of both excellent and diabolical commentary.  Topping my list of excellent commentary at the moment is Declan Hill’s Stumped, Unanswered Questions and an Organization with a Credibility Death-Wish, closely followed by David Conn’s contribution, Jens Sejer Andersen’s contribution, Paul Kelso’s contribution and Ian King’s reflections over at TwoHundredPerCent. Dishonorable mentions must go to the Daily Mail, and to an amazing attack on the ‘eight villains of the piece‘ by the Guardian, although the last of these appears to have been removed from their website.

If there is any criticism to be made of our media, it is that they raised our expectations too high.  The strength of our bid technically may well have encouraged them to do so, but they didn’t seem to have noticed that the decision is made not by a committee of wise and rational men, but rather by a group of malleable football D-listers.  The evidence was there, thanks to journalists like Andrew Jennings, but was perhaps not given the prominence in mainstream media over the years that it deserved.

Posted in 2018, Journalism, Marketing, Media, Public relations | Tagged: , , , , | 8 Comments »

Pompey’s soap turns into pantomime

Posted by John Beech on October 23, 2010

The most recent events at Fratton Park would have been more at home in the King’s Theatre, where Jack in the Beanstalk opens in a few weeks time.

To give a flavour of the goings on, let me quote from the Portsmouth News Fratton latest update newsletter for today.  The four consecutive entries, in chronological order, are:

Cotterill hails Hermann deal as recovery continues [Friday 10:45]

Pompey could close and be liquidated [Friday 11:35]

Andronikou hopeful of Gaydamak deal [Saturday 03:02]

Ex-Hull City chairman wants to buy Pompey [Saturday 07:11]

A tad melodramatic by any standards – even Liverpool’s and Manchester United’s of the last week – I think you’ll agree.

So, mid-morning on Friday, everything looks by Pompey standards stable.  The long-running saga of re-signing Icelandic defender Hreidarsson has finally happened.  Not only that, he seems to be fully recovered from a bad Achilles injury which he suffered back in March.  But he presumably knew nothing of the club statement which was about to appear on the club website (1).  Notwithstanding the local newspaper’s scoop, the statement was not posted until 18:15.

To be fair, the statement does contain the sentence “it appears likely that the club will now be closed down and liquidated by the Administrators as they are unable to support the continued trading of the club“, albeit in the ninth paragraph.  The statement’s headline is “Sacha Gaydamak Puts Future Of Portsmouth In Jeopardy“, hinting at the possible purpose of the statement – to increase pressure on Gaydamak to sign the necessary papers.  The obstacle, at least according to the statement, is that “at the 11th hour the goalposts have been moved by Mr Gaydamak and this has now made the deal impossible to complete.”  Specifically “Mr Gaydamak has demanded a very significant upfront cash payment in order to allow the deal to proceed by releasing his security.

In pantomime tradition the, the response to the question ‘Is Pompey heading for liquidation?’ the answer appears to be ‘Oh yes it is!’.  That at least is what the twitterati thought, and, with retweeting of the news, the story begins to read that Portsmouth are going into liquidation.  Even my daughter-in-law was prompted to message me ‘Our thoughts are with you at this difficult time Portsmouth ‘likely to close down”, together with the link to a BBC story.

By quarter to seven the local BBC radio station had contacted me for a comment, and by ten past seven I was in the Coventry studio emphasising that this was a breaking story, with no doubt some twists to come.

Sure enough, Administrator Andrew Andronikou, apparently rather taken by the response he had provoked, was prompted to change ‘Oh yes they are!’ to Oh no they probably aren’t.’  By mid-evening Andronikou was denying the club’s imminent demise to The Guardian’s Jamie Jackson (2), and in the early hours of Saturday morning he told BBC Sport (3) “Yesterday evening’s activities were really a wake-up call for everybody to say ‘look, we just can’t sit here whilst everybody else finesses their position. It is about coming to the table and cutting a deal’

Among the journalists following the story, Nick Szczepanik and then the BBC’s Matt Slater were quick to rumble what was going on – an attempt to pressure Gaydamak through the media, one that went rather wrong because it was in a sense too successful.  The original ‘Oh yes they are!’ story was widely repeated internationally, generally without the later retraction.

What is strange about this PR fail is that Gaydamak, through his lawyers, has refuted the story, denying the allegations of his obstruction (4).  What the truth is we will probably never know.  All we can do is chalk it up to experience, and the Pompey fans among us hope that agreement and signatures really are close.  Hopefully one lesson has been learned – while lack of transparency is singularly unhelpful, selective transparency can have decidedly unexpected outcomes.

Posted in Journalism, Media, Ownership, Public relations | Tagged: , , , | 6 Comments »

Thin ice at Cardiff?

Posted by John Beech on August 18, 2010

The news of Craig Bellamy’s loan to Cardiff City, coming as it does on top of five other signings (Koumas, Heaton, Drinkwater, Oloinjana, and John), will have done much to lift the spirits of Bluebirds fans, and to offer them hope that this year they will make it to the Premier League following their recent disappointment.  Excitement in Cardiff has “seldom been so tangible” (1).  In the broader picture, the club now has the backing of Malaysian investor Dato Chan Tien Ghee (aka TG) too of course.

But is all as well with the club as might at first glance seem?

The recruitment of Bellamy has provoked a furious reaction North of the border, in Motherwell to be precise.  The background to this is the transfer of Paul Quinn from Motherwell to Cardiff last July for an estimated fee of £300,000 (2).  At the time Motherwell were in a CVA, having previously been in Administration.  Having turned small profits since agreeing the CVA in 2004, for 2008/09 the club had made a loss.

As is often the case, payment was agreed to be over a period of time.  Motherwell were due a payment of £100,000 last January and a further £75,000 this summer.  Neither payment has been made, and Motherwell are now claiming interest additionally.

Cardiff meanwhile have of course been through a traumatic period (see postings passim), appearing regularly in court to ward off winding-up petitions from HMRC.  On the other hand, there has been the much vaunted arrival of TG with a £6m investment at the end of May (3).  Not that the club’s woes immediately disappeared – they were last in court against HMRC just over a week ago (4), and the transfer embargo was only lifted the week before (5).  It was the subsequent spree of signings that have prompted Motherwell’s actions, although almost a month ago they had made clear their dissatisfaction with the fact that the Quinn debt was outstanding (6), declaring then “We have made clear to the board of Cardiff that we are left with no option but to pursue every possible avenue of recourse to secure our own club’s interests“.  Cardiff Chief Executive Gethin Jenkins responded by saying “We are fully aware of the debt owed to Motherwell and we are working to resolve the issue as soon as possible“.  Not quite hard enough it would seem.

On Friday Motherwell issued a writ against Cardiff City (7), with no-one from Cardiff City apparently attending the hearing at Hamilton Sheriff Court.  They did however offer to pay the money by installments – erm, isn’t that precisely what they have failed to do so far?  Motherwell Chairman John Boyle said “We’ve followed every football and legal regulation and we’ve been messed around. The bailiffs are coming towards Cardiff; be afraid. We will use every legal means at our disposal.”  Jenkins’ rather low-key response? “I see they jumped in ahead of us.  Our lawyers have been in communication with them and it will be resolved within the next seven days“.  Cardiff manager Dave Jones was reported this morning on BBC Radio Wales as suggesting dismissively that Motherwell were seeking “an opportunity to get on television“.

Motherwell are thus presenting themselves as the ‘David’ of the pairing, against ‘Goliath’ Cardiff, who barely seem to acknowledge that there is any problem.  By failing to score in the first half of the public relations game, Cardiff are in serious danger of giving the impression that they either can’t pay or won’t pay – either still on shaky financial grounds or cavalier in their attitude to paying for a player whose service they have had for a year.  Either way, it’s hardly an impression I imagine they would want to give.  It will not help them when they next dabble in the loan or transfer markets, and it gives easy ammunition to HMRC should they face each other again in court.  Not a smart move, as I would imagine that Cardiff’s scalp is up there with Portsmouth’s and Southend United’s as one they would dearly like to claim.

As a final thought, I am wondering what role, if any, Peter Ridsdale has played in the summer spending spree that kick-started Motherwell into action – when he stood down as Chairman in May, it was reported that he was “set to have a big hand in the Bluebirds’ transfer dealings this summer” (8).

UPDATE – 18 August 2010

Cardiff’s acquisition has attracted the attention of the Football League (A).  The club has been asked to prove they have the means to fund Bellamy’s loan move.  Without these assurances the League may refuse to register Bellamy.

Good to see this move.  As FL Chairman Greg Clarke says “Our job is to make sure there is an integrity of competition, that people don’t take on liabilities they cannot meet“.  Heaven forfend.

With an almost Risdalesque sense of self-rectitude, the club complains of Clarke “We are disappointed that he’s chosen to discuss these matters in public and will be in contact with the Football League on Thursday morning“.  No sense of having created the situation themselves then.  But at least slightly more sense of urgency than they have shown in dealing with Motherwell.

Posted in Debts, Public relations | Tagged: , | 4 Comments »

Who loves fans? Who doesn’t?

Posted by John Beech on July 26, 2010

There’s an interesting pair of stories in the news today.

First comes the news (1) that UEFA have introduced a new requirement in their club licensing requirements – the necessity for a club to appoint an operating supporter liaison officer (SLO).  The purpose of this rather clumsily named role is to “to ensure a proper and constructive dialogue between a club and its fans“.  The need for this is so fundamental and obvious that it is amazing that UEFA have only just come up with it!  In fact, they did so at the prompting of our own Supporters Direct (SD) and its SD Europe arm.  The SD website (2) offers this expansion on what exactly an SLO is:

Supporter Liaison Officers at clubs already exist in a limited number of European countries and primarily help improve the dialogue between the fans and the clubs they support. Most importantly, SLOs must be credible with fans, and therefore should have experience with and contacts to the networks in the fanbase at the club.

They inform the fans about relevant decisions made by the club management board and, in the other direction, communicate the needs of the fans to the board, as well as building relationships – not just with various fan groups and initiatives, but with the police and security officers, They will also engage with fan liaison officers of other clubs before matches to ensure that the fans behave in accordance with security guidelines.

To implement the new requirements, a network of SLO project contacts from each national governing body across Europe will be created and work together with the UEFA club licensing team and Supporters Direct to assist clubs and supporter groups improve communication in each of the 53 UEFA member associations. This year more than 600 clubs applied for a UEFA licence with many more applying for domestic licences based on the same or similar principles. Hence, the broad scope and significance of the SLO project.

Like the licensing system itself, the implementation and development of supporter liaison officers will be a tool to raise minimum standards; a dynamic system changing over time, and focussing on developing and improving the dialogue between the fans and the clubs.

An excellent development – here’s hoping it would be accepted throughout the English football pyramid rather than just by clubs hoping to play in Europe.

On the other hand, there is the news (3) that the vast majority (it appears to be all except Arsenal and Liverpool) of the Premier League clubs are simply ignoring the 2000 Premier League Charter which pledged that replica strips would be released every two seasons at a minimum.  Worst offenders are Tottenham, who have launched three new kits every year for six seasons in a row.  This coming season they will have different sponsors, and hence, it is reported, shirts, for their Cup games, resulting in no fewer than six shirts being offered, although at the time of writing only three shirts are being offered on the club website (4).

It’s not exactly difficult to see which is more pro-fan – UEFA or the Premier League.

Posted in Merchandising, Organisational culture, Premier League, Public relations | Tagged: , , , | Leave a Comment »

The trouble with new stadiums 2

Posted by John Beech on July 8, 2010

[See also The trouble with new stadiums 1, which looked at the argument that "We’re a club with ambition and we need more seats to reflect that ambition".]

The second case put for building a new stadium is:

  • We’ve got the wrong sort of stadium.  We need one better suited to maximising our revenue streams.

The first part of this argument I have no real problem with.  Virtually all English football stadiums are either ‘new’ (less than twenty years old) or ‘old’ (from the Victorian era), and, if your club’s stadium is in the latter category, then it is almost certainly suboptimal for players, fans and revenue generation.  Remember, I’m a Pompey fan, and Fratton Park was a disgrace for a Premier League stadium.

‘We need a better one’ in these circumstances can then seem perfectly reasonable.  However, there are two key questions a club needs to ask itself: a) Can we afford it? and b) Is this the most effective way of maximising revenue streams?

I suspect that in 99 cases out 100 the answer to the first question is a resounding ‘No!’.  Show me the clubs which already have the financial reserves to consider spending on a new stadium!  The new stadium will have to be financed, and if the club is worried about failing to maximise its revenue streams it needs to have a cast iron case that new revenue streams will be sufficient to even cover the cost of the loans needed to finance the new stadium.  Of course there will be exceptions, but it is worth bearing mind that even Arsenal, with a clear need for a bigger stadium and a sound business plan to finance it, have struggled because of the drop in house prices, and the subsequent difficulty in selling the houses on the stadium site.

If you want to maximise your revenue streams, the basic strategy model which is used for deciding the best way to grow your business is one called Ansoff’s Matrix.  This model considers whether to look at existing or new customers, and existing or new markets.  (There is a useful visual representation here which makes it much easier to follow.)  The 2×2 nature of the matrix results in four possible strategies, each with differing levels of risk.

The safest is ‘market penetration‘ – developing the sales of existing products to existing customers.  In other words, the simplest and most effective growth strategy for the vast majority of clubs, which have empty seats on a match day, is to try and get more bums on seats.  Clubs like FC United of Manchester have tried interesting tactics with pricing to achieve this, such as varying the price that fans pay to get a season ticket (see 1 for a discussion of imaginative ticket pricing, and 2 for FCUM’s approach).  Experimenting with different pricing strategies, such as BOGOF (buy-one-get-one-free), is quick, easy, low risk, and provides a useful indication of whether growth is possible – if you can’t get more bums on seats with this kind of approach, where’s the rationale for a new, bigger stadium?

Next two to consider, of medium risk, are:

  • Product development - developing new products for existing customers
    In other words you find new goods or services to sell to your existing fans.  I’ve blogged before (see On clubs and club shops) on what I see as an unimaginitive range of merchandising that club shops offer, and clubs could do a lot more with this medium-risk strategy that does not require vast capital investment.
  • Market development – developing finding new markets for the existing products
    In other words you recruit new fans.  Clubs do make efforts here, trying to encourage whole families to attend games for example.  More could be done, and again without vast capital investment.

The final strategy is the one with the highest risk – Diversification, in other words, moving into to some other area to find new customers to buy new products.  It’s here that the new stadium certainly raises it’s ugly head – without a new stadium we don’t have the right facilities to be able to do this, the proponents moan.  Of course, they are right, but they fail to recognise the attendant problems.  The problems with this case are twofold.

The first is the obvious argument that it is the highest risk strategy, and comes at the highest cost.  It simply does not make sense to attempt it until all the lower risk, lower cost strategies have been tried.

The second problem arises with what exactly the new products to be sold to new customers are.  A good rule of thumb is that the nearer the ‘fit’ with the existing product – in our case, football matches – and the nearer the fit withthe market – in our case, football fans – the better, the lower the new risk.  Why, oh why, then, do clubs who pursue this strategy look to build a new stadium complex with a hotel, restaurants or shops?  Could it just be that they think they are already in these businesses through their experience in ‘hospitality’?  I would suggest that there is a gulf of blue water between ‘pies & bovril’ and even prawn sandwiches, and I know I’m not alone in this view!  Similarly they see themselves as involved in ‘events management’ and see a connection between operating on match days and running conferences.  As someone who attends both, I would again argue that there is deep blue water between attending a football match and attending a four-day conference – they are world apart in terms of customers and the service these customers are looking for.  I would argue that the poorness of fit is every bit as big as it is with running a supermarket.  In a nutshell, building the new stadium with a conference centre attached is as sensible as an existing conference centre which is in poor financial shape deciding to build a new conference centre with a football stadium attached to ‘maximise revenue streams’.  Even if you sub-contract the running of the new business ventures, you’ve set up two poorly fitting businesses on the same site – not a recipe for success.

I’m sure you realise, and I readily, that I am generalising (and I’ll be looking at some exceptions in a later posting).  There is one way of lowering the risk in a diversification strategy, and that is to diversify into something which, for example, the owner is experienced, an area in which he made his fortune which is he is in danger of turning into a small fortune.  That is, with one major exception, which I will be looking at in my next posting in this series.  To give a wee hint as to what I see as the one exception that does not reduce the club’s risk, I’ll just remind you of the third case that is put when a new stadium is proposed:

  • There’s this amazing property deal we can do.  We’ll sell the old stadium for redevelopment and there’ll be loads of money to build the new one.

Posted in Assets, Marketing, Merchandising, Revenues, Stadium | Tagged: , , , , | 2 Comments »

Protecting sponsors

Posted by John Beech on June 17, 2010

My third World Cup posting has resonances much nearer to home; just bear with me.

Ambush marketing – the piggy-backing of events by companies who are not official sponsors (there is an excellent overview of the phenomenon in sports events here) – hit the news at the last World Cup, with Bavaria, the Dutch lager producer, engineering the celebrated orange lederhosen stunt (1 if you are unfamiliar with this).

Bavaria (see, more free publicity – which I regret, but it’s too contrived to write ‘ a certain Dutch beer manufacturer) have capped that incident in spite of FIFA’s best endeavours to protect the official World Cup beer sponsor (am I alone in thinking that is in itself just a tad absurd?), Budweiser.  Forty women sitting together in orange minidresses became this World Cup’s version of lederhosen (2, and for the prurient who find the incident hard to picture 2)

Bavaria have certainly achieved some success.  A Google search on ‘FIFA world cup beer sponsor’ currently finds Bavaria (remember, they aren’t) squeezing out Budweiser (who are) from the number one slot.

The whole issue of ambush marketing like this needs to be seen from two perspectives.  First, there is the need to protect sponsors against it.  The case is a clear one from a business perspective.  An official sponsor expects exclusivity in their marketing campaign, and pays for it.  If the event organiser does not stamp out ambush marketing he is not providing what the sponsor has paid for.

The second perspective is how the organiser goes about the ‘policing’ of potential ambush marketing.  Obviously prevention is the best policy, but, when ambush marketing does take place, how can the organiser best retrieve the situation?  In a sense they are on a hiding to nothing – too little reaction, the ambusher will be encouraged to try again; too much reaction, and the ambusher will get additional free publicity.  FIFA are in danger of veering towards the second course.  They are pressing criminal charges (3), which is logical from their perspective, but this is giving the story legs (and bear in mind that we are talking shapely legs in minidresses), with two of the women on bail, with passports confiscated (4).  The fact that they do not return to court until June 22 ensures that the saga, with attendant publicity, drags on.

It seems unlikely that the women involved were entirely dewy-eyed innocents.  The stunt was highly organised, and has other ethical connotations as it seems to have involved the illegal sale of corporate tickets – ITV’s pundit Robbie Earle has already lost that job as a result, although it is suggested that he will not be charged (5).  The saga has now grown to the extent that the Dutch Foreign Minister has weighed in, “describ[ing] the arrests of the two women as “disproportionate” and said it was wrong that they could face prison for “wearing an orange dress” to the stadium.”  She rather misses the point – it isn’t quite as simple as ‘wearing an orange dress’ now is it?

FIFA are facing a lose/lose choice.  Go soft and the story will die, but sponsors will be reluctant to pay for sponsorship in the future; go hard and the sponsors will be happy, but the Dutch government will turn the two women into martyrs.  The real problem for FIFA, however, is that Bavaria face a win/win scenario.

What strikes me in all of this is the rather surreal nature of what is going on.  Understandable it may be from a business perspective, entertaining it may be, but should a major issue in football revolve around lager and minidresses?  Bovril and flat caps maybe, but not lager and minidresses surely.  ;-)  It is just another manifestation of the incongruities that commercialisation has brought to the beautiful game.

The example of commercialisation, protecting sponsors and English football that I mentioned at the beginning revolves around the awarding of a 2012 Olympic football venue to Coventry (6).  The surreal is summed up in the two opening sentences of the Coventry Evening Telegraph report:

COVENTRY’S Ricoh Arena has been chosen as the new Midlands venue to host Olympic football matches in 2012 after Aston Villa pulled out.

The home of Coventry City will be renamed the City of Coventry Stadium for the 2012 games and all branding will be removed from the stadium.

To Coventry people, and football fans throughout England, the newish home of Coventry City FC is ‘the Ricoh’.  Pulling down branding (and of course putting it up again a couple of weeks later) will make no difference to this, although it may well see Ricoh looking for a better price when sponsorship come up for renewal.  It has to be done to protect Olympic TOP sponsors such as Panasonic however.

Just a little bit hard to see how exactly the scurrying around on the roof of the Ricoh by workmen will be ‘helping to build a better world through sport’ though.  Commercialisation and sport make strange bedfellows at times.

Posted in 2010, Ethics, Marketing, Sponsorship | Tagged: , , , | 1 Comment »

Warring at Walsall

Posted by John Beech on May 16, 2010

Rising up the pyramid when there are larger iconic clubs geographically close to you is always going to be difficult, because the size of potential fan base is constrained.  In the case of Walsall (League 1), within ten miles they have West Bromwich Albion (Premier League next season), Wolves (Premier League), Aston Villa (Premier League), and Birmingham City (Premier League).  That is not to suggest that Walsall is not capable of having a committed set of ultra-loyal fans; rather, it is to suggest that when ambition for the club is mentioned, it needs to be tempered with some realism.

The club was an early mover into a modern stadium, the Bescot opening in 1990.  It has a capacity of over 11,000, and conference facilities, allowing non-matchday revenue streams.  Its form in modern times has seen it fairly stably around its current level in the pyramid.  The size of the stadium has not really been a constraint, and of late it has not been well filled.

After a period of considerable turbulence, the club was taken over in 1988 by a consortium led by Maurice Miller, who appointed two directors, Ray Clift and Jeff Bonser.  Within ten years, Bonser was Chairman, a position he still holds, and owner of the stadium.  (For more on this turbulent period and the early years of this regime, a particularly useful source was a series called The Long Road to Bescot published on the Walsall-Mad website, but now seemingly taken down.*)

Given the continuity of ownership and the relative stability of the club within the period over the last decade, one might expect to see at least the emergence of a financially healthy club.  The accounts for the period available to me (1999/00 to 2008/09) make interesting reading.

  • Apart for the three years from 2002/03 to 2004/05, a profit has been achieved.  Losses were so great in that period however, a loss of just over £1m in 2002/03 in particular, that the average has been a loss of £137,000 a year.
  • Turnover grew to a peak of almost £8m in 2001/02, with a ten-year average of just under £6m – which is almost exactly the figure for 2008/09.
  • The wages/turnover ratio peaked at almost 73% in 2002/03, but in the past few years has been held at below 50%, a level which is unusually low for an English football club.  It is this figure that no doubt drives the complaints from fans of a lack of ambition.
  • Long-term liabilities leapt in 2003/04 by £1m to £1.4m.  By 2008/09 they had grown to £2.2m.
  • Directors’ remuneration has grown, for 2008/09 being £134,000.
  • There is nothing obvious in the version of the accounts I have seen to substantiate claims that the club is paying Jeff Bonser over £1,000 a day as rental for the stadium.  That said, there is no alternative figure explicitly stated either.

The overall picture is much what one might expect at a club owned by a ‘benefactor’ who is trying to run the club as a business.

The one football source of revenue over which a board does have a major control is matchday receipts.  Average gates at Bescot Park grew at the start of the decade, reaching a peak of just under 8,000 in 2003/04, a season in which the club was relegated from the Championship.  In the season just finished they had fallen 11.9% on the previous season to just over 4,000, putting only Hartlepool with a lower average in League 1, which overall averaged over 9,000 (although it should be remembered that the average is pulled up by the presence of Leeds United, Norwich City, Southampton and Charlton Athletic).

Whether you see a football club as a business, and fans are your ‘customers’, or you see it as a sports organisation which is a focal point of the local community, and your fans are, well, fans, it would not make sense to alienate them and drive away the one source of revenue which have some control over.  Here too there has been a stability in Bonser’s approach.  Consider this quote from him: “I have no intention to justify to anyone how I invest personal money. I have always viewed any personal investment I have made into commercial enterprises as the only way of securing the long-term future of league football for Walsall.”  This is from a statement he made in March 1998, reported in the Sports Argus as he threatened to sell the club.

The same report included the following:

Ken Morrall, chairman of the Supporters Club, who once spent a year on the Walsall FC board as the fans’ representative, hopes any new owner will talk to them.

He said: “Problems started when we asked the football club in 1995 if we could have a little breathing space from paying our £1,000 a month donations while we sorted out our finances.

“We just needed a couple of months, but the next thing we had been served with a writ claiming we had contravened the licence by letting in people who were not members.”

The supporters club claim that over the years they have handed over about £750,000 to help the football club stay in business.

Twelve years on, are relations between board and fans any better?  In a word, no.

Protest is not tolerated at Walsall under Bonser and Chief Executive Roy Whalley.  Banners recently raised against Bonser and manager Chris Hutchings provoked bans (1).  Predictably enough there were further protests at the next home game (2), resulting in more bans.  According to Whalley, the protestors would drive attendances down (3), an interesting example of cognitive dissonance.

At the final home game there was a protest in the form of a sit-in (4).  One fan unfurled a banner, and was ejected by stewards who showed a remarkable failure to notice the irony that the banner read ‘Freedom of Speech’.

Tempers may cool over the summer, but the underlying issues will simply fester.  At the very least, Bonser and Whalley might like to think a little about the advantages of good public relations – they seem to have been off the morning that was covered.  Unless there is some movement in the opposing sides, the club is in danger of ripping itself apart.  For a club with a modern stadium with good facilities for non-football revenue streams, a good measure of stability in terms of where they play in the pyramid, a loyal core fan base and a very clear sense of local identity, this would be just plain ridiculous.  ‘Dialogue not warfare’ would be my choice of banner.  I’m not optimistic though.

[In the light of problems with comments encountered by my friends at Twohundredpercent, I have decided to allow comments, but moderation is likely to take longer than usual for comments from readers unknown to me.]

* Andrew Van-Hagen has kindly contacted me to say that this excellent ‘The Long Road to Bescot’ five-part series, written by ‘Sadlad’, is now available as part of a Memory Lane section on his Walsall Web-Fans Forum: (A), (B), (C), (D) and (E).  Strongly recommended.

Posted in Assets, Benefactors, Censorship, Community, Fans, Identity, Ownership, Public relations, Stadium | Tagged: , , , , , , , , | 4 Comments »

The Portsmouth Horror Show

Posted by John Beech on April 24, 2010

It is to the credit of Andrew Andronikou, the Administrator, that with an unexpected transparency that he has published the report (1) to be presented to the creditors at the meeting on 6th May.  That said, there is little more that can be said to deserve the term ‘credit’ in this latest episode of the sorry saga of Pompey’s decline and fall.

The report sets out to the creditors the various options, which are essentially that they agree a Company Voluntary Agreement (CVA) or the club is liquidated in an attempt to pay off the debts.  It is abundantly clear that, while the creditors cannot realistically expect to recover anything like all the monies owed to them (reports have suggested that the crucial figure missing from the report is settling for 23p in the £ [2]), liquidation would be an even less attractive option for the creditors.  Whether the creditors will accept this kind of level of payment remains to be seen, but it is difficult to see why Andronikou is so optimistic that a CVA will be agreed, although the quite what the situation is with prospective new owners, and their willingness or otherwise to contribute to paying off the debt, is, as yet, known only to Andronikou.

Inevitably the richness of financial data in the report provides the entrails to be picked over in order to assign blame for Pompey’s decline and fall.  A good starting point is the fact that wages had risen to the level of 109% of revenues, not exactly a sustainable business model.  It could only be sustainable with a benefactor prepared to keep pouring money into the club – a luxury that Portsmouth has not enjoyed of late.  A major tranche of the club’s debt is to previous owners – £39.2m in the form of unsecured loans and £14.2m secured against the stadium, the better part of half the debts – who are not prepared to write their money off, in effect, as equity in the way that Abramovitch or Gibson have done at Chelsea and Middlesbrough respectively.

Is it as simple then as attributing Pompey’s ills to their involvement with the ‘wrong sort of benefactor’? Well, only at a very simple level.  At the next level down in a hierarchy of causation, there is the issue of how it would have been possible to have avoided the wrong sort of benefactor.  Certainly these benefactors must accept a major part of the blame – after all, they chose to take on the role.

To me the story of Portsmouth since Gaydamak decided to walk away has been a savage indictment of the obvious inadequacies of the benefactor model, offering examples of a benefactor who gave up, a benefactor who simply didn’t have the necessary funding, a benefactor so disinterested that he never visited the club, and a benefactor who ended up in that position by default rather than by plan.

The media have tended to focus more on the mid-size debts, and there are plenty of rich pickings among the entrails here.  The staggering level of debt to agents, for example.  The largest is to Jaques Perais for the sale of Diarra to Real Madrid, a matter of over £2m.  So significant is the debt that Perais is on the Creditors committee (a first perhaps for football Administrations?), other members including two football clubs Stade Rennais and RC Lens (again perhaps a first?).

The small-size debts reveal a particular horror show.  Among is the shameful debt of £2702 to those stalwart supports of the game, St John Ambulance.  Pompey fans have a history of dipping their hands in their pockets – in 1976 SOS Pompey raised £35,000 [which would be of the order of £200,000 today] from fans to save the club (3) – and it is not surprising that fan Tom Purnell established a webpage to raise money to clear the disgraceful debt, something that was achieved in roughly a day (4).  Well done Tom!

Since the publication of the report, it has been suggested that the figure of £119m debts may yet rise further (3).  In particular, there is still some uncertainty over future bonuses and appearance fees for players that will need to be paid.  The Portsmouth Evening News has already uncovered two unlisted debts that are even more shameful (4) – the club owes two cancer charities almost £15,000, money already raised in their names.  The fans have shelled out over St John’s Ambulance, the players have shelled out to keep ground staff in their jobs (5), so isn’t it time that the former owners and/or the former Chief Executive dug deep to stop the club’s name sinking even lower?

I must admit that although I am not often shocked by new stories of appallingly bad management in English football, Andronikou’s report is exceptionally disturbing reading.  Just how many more wake-up calls do we have to have before the game gets itself properly in order? The self-serving Premier League Chief Executive Richard Scudamore is right when he says Pompey’s problems are just that (6), but, unless the process of governance precludes the antics we have seen in the boardroom at Fratton Park of late, English football continues to head remorsely towards a brick wall.

Posted in Benefactors, Ethics, Governance, Insolvency, Ownership, Premier League, Public relations | Tagged: , , , , , , | 8 Comments »

 
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