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! Football Finance

Posts Tagged ‘Economic impact’

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 »

An upside to England’s early exit?

Posted by John Beech on July 13, 2010

As well as my involvement in sports management research, I have another part to my day job – researching tourism management.  These two worlds overlap in the topics of sports tourism and mega-events.

Catching up with my monitoring of tourism management developments, I came across a couple of reports suggesting that England’s early exit was going to be mainly rather good news for English travel agents.  Andrew Pozniak, Director of e-Commerce for Google, has pointed out that “Travel searches on Google leapt by 15% after England went out of the World Cup in 2006” (1), and TravelMole offered more direct evidence: “Within an hour of England’s defeat to Germany, reported a sudden surge in web traffic, around 40% increase compared to the previous week” (2).  *

It’s an ill wind and all that, although on the other side of the coin Thomas Cook Sport had knocked more than £600 off its remaining four-day packages to South Africa for the quarter finals.

On the morning of the game I noticed a lot of general St George paraphernalia on sale at half price.  Did they know something or had they just over-purchased?  Whichever it was, the actual economic benefit was undoubtedly greater for the Chinese manufacturers than the English retailers.  But which figure would be used in an economic impact analysis – purchases from China, projected sales revenues at full price, or actual sales revenues?

Spin-off and indirect effects make forecasting, and post-event evaluation, of the economic impact of mega sports events at best an informed guess.  Costs are relatively easy to forecast (although projected costs always turn out to be rather lower than actual costs – I wonder why 😉 ) but projecting increased revenues is rather more problematic.  Increased beer and flag sales may well be directly attributable to an event, but what about, for example, increased television sales?  Those seeking to big up the economic impact of Euro2008 would have, as it happens, included my purchase of an HD TV a week before, but I can now reveal (my wife is not interested in football and does not read the blog) that Euro2008 may have triggered the purchase, but a purchase would have taken place anyway – it replaced a 25 year-old set that I was under considerable pressure to replace.  I might have held out a couple more years, but a new TV was going to appear in the Beech household at some point fairly shortly, Euro2008 or not.  Should my purchase really be included in the economic benefit?

Pronouncements on the economic benefit of a mega-event such as the World Cup need to be treated with caution.  And it always important to bear in mind who is making the pronouncement – what vested interest do they have in inflating the figures?

* Late Extra: A similarly upbeat prediction from The Co-operative Travel should England fail here.

Posted in 2010, Economic impact | Tagged: , | 1 Comment »

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