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

Chester revisited

Posted by John Beech on June 28, 2011

Not a return visit to the carryings on of Stephen Vaughan, or the resurrection at the Deva, but a revisiting of the Report of the Committee on Football, aka The Chester Report, published in 1968.  With the current Select Committee report on Football Governance in preparation, it seemed timely to have look at what has and hasn’t changed since Norman Chester and his committee found when they looked at the game almost forty-five years ago – his committee was appointed in June 1966 and first met on 19 July 1966.

In this first posting I’m going to look at how the context has changed, and then, in a couple of postings spread over a couple of weeks, I’m going to focus on the similarities and the differences of then and now, and finish with some thoughts on whether we have learned any lessons.

His terms of reference are interesting: “To enquire into the state of Association Football at all levels, including the organisation, management, finance and administration, and the means by which the game may be developed for the public good; and to make recommendations”  (the emboldening is my addition).  What I find interesting is that the Committee took what we would today describe as broadly stake-holder approach.  They included looking at the game from the players’ perspective, and from that of referees and linesmen, but, although a view from the fans’ perspective is often explicit, the committee didn’t explicitly report on the state of the game from a fans perspective.  The notion of fan ownership of professional clubs was yet to emerge.

Most striking too is the financial state of the professional game at that time.  Gates had been declining since a peak shortly after the war, and professional clubs were beginning to have to come to terms with the scrapping of the maximum wage and destruction of the retain clause following the Eastham case.  The writing was on the wall that the game was going to see a flurry of wage escalation and that commercialisation would be the inevitable response, although shirt sponsorship, for example, would still be banned for almost another 15 years.

Given the generally weak state of the game, the following data is perhaps surprising.  It is in the report but its source is the 1966 PEP report on English Professional Football.

Match receipts and
Other Operating Income

Salaries, team and
admin expenses

Profit/Loss
on all matches

Profit/Loss adjusted
by Average Earnings

Division 1

£3,770,333

£3,310,667

£459,667

£47,700,000

Division 2

£1,674,333

£1,937,000

-£262,667

-£9,090,000

Division 3

£1,149,667

£1,658,000

-£508,333

-£17,600,000

Division 4

£691,667

£1,160,000

-£468,333

-£16,200,000

LEAGUE TOTAL

£7,286,000

£8,065,667

-£779,667

-£27,000,000

(The original data was for the three seasons from 1963/64 to 1965/66, which I have averaged, and the final column I have added using the MeasuringWorth.com calculator to give an idea of the profit/loss in today’s terms allowing for inflation.

‘Wealth at the top’ is still the case today, although the Premier League clubs would be happy to turn the kind of profits being turned 45 years ago, inflation adjusted or not.  There is a financial disparity between the tiers, although it was nothing like as large as today – broadcasting rights had yet to be a major factor in football.

Interestingly the disparity between levels had been growing significantly over the previous ten years, as this table from the Chester report shows:

Match receipts
1956-1966

Team and Ground Expenses
1956-1966

Division 1

+72%

+157%

Division 2

+15%

+131%

Divisions 3 and 4

+11%

+114%

The lower tiers were already failing to keep income up to a level to cover expenses even more miserably than the old Division clubs.

More to come in later postings, but interspersed with more typical postings on the current scene.

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