Michael Farrow's sports blog

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…on the future of football clubs

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Selhurst Park

Selhurst Park - Aged, pokey, owned by loan sharks

With Portsmouth playing a game of chicken with the taxman and the lower leagues full of cautionary tales, the question is raised of how clubs can live within their means. They never have and they probably never will. For all the talk of controls on wages and such like, it still comes down to spending more than you earn and that likely would not be controlled by a simple cap on wages. When Martin Lewis, TV’s personal debt expert, talks about budgeting, he says alarm bells should be ringing when you have debts but nothing to show for it. Southampton built a cheap and nasty new stadium at a cost of 30m. Relegation killed their cashflow but, still, debts of 30m incurred by building a stadium are infinitely more healthy than Portsmouth’s massive but indeterminate debts, which were incurred on wages and player purchases. Martin would definitely bring out the angry eyes and the aggressive demeanour if he’d sat down with the boys at Fratton Park.

The number of times clubs have got into financial trouble since professional football began in England suggests that only a handful of clubs were ever self-sustaining, if any at all. Everybody has always been out for themselves rather than considering that collective financial health is better for the game overall. Clubs stopped sharing league gates 50-50 years ago and the Premier League TV money has always been distributed according to league position. The system of keeping things fair has been eroded for 50 years in the name of rewarding the best and it has just succeeded in making big clubs rich and keeping smaller clubs down. The only way to climb the ladder is to overspend, Burnley being a prime example. The Clarets would likely be in serious trouble this season had they not got promoted last season. The whole system is stacked against smaller clubs and the mechanism used to make sure that clubs knew their limits, bankruptcy, seems to have gone south, along with business ethics.

Clubs rob Peter to pay Paul and the only way to justify the whole mess is to try and grow the business. There’s no growth in Crystal Palace or Watford. They have neither the fanbase nor the infrastructure to make a go of it. Palace don’t even own their own ground! And where there’s no growth, there’s only decline. In both of those cases, both were third or fourth division teams that became successful, artificially in Watford’s case, and are now in positions they cannot sustain in their modern forms, even with outside funding. I refuse to believe that Simon Jordan hasn’t investigated every avenue to move Palace on to the next level and found himself stymied at every step by local and national politics but, at the heart of it, he’s still a glorified market trader pursuing his real-world business plan. They’re in an area of London where pretty much all the greenfield land is green belt and brownfield land is scarce and very expensive. So they’re stuck in Selhurst Park, paying rent to loan sharks.

Besides, real-world business plans don’t necessarily work in a country like England. There is no identifying profitable cores. Increasing your marketing can only do so much given that if you’re not a football fan, you’re likely entrenched in that mindset, and only a minority of football fans don’t already have a team. While expenses can be controlled and you could narrow your focus to, say, developing young players and players from the non-league, you can only get so far with that and you’re severely limiting your ability to market the team. It’s hard to re-win old fans when the cost of going is now so prohibitively expensive. Something has to give and usually it’s the club falling into financial difficulties. I am a big fan of Peter Wilt but he works in a minor sport in a system where professional sport is viewed much differently. His way is more applicable to a nascient pro sport, such as rugby union, in England, where there is interest in the sport without much entrenchment of supporters at a club level.

Ultimately, success over a sustained period is now the only way to win fans, which is the only surefire way of increasing revenues. And the price of success, and the cost of failure, have never been higher.

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Written by Michael Farrow

February 11, 2010 at 6:42 pm

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