Invest in Football Yes, but not just for Profit

The financial problems putting the survival of Bury, Bolton Wanderers and many other lower league and non-league clubs at risk are caused by one over-riding factor: the current football environment.

Yes, rogue owners are culpable. Yes, the football administrators are culpable. But the overarching issue is the ‘money first football nowhere’ culture of the modern game that facilities such behaviour and mal-management.

If the financial rewards in the game were not so ridiculously high, then no-one would use an existing club simply just to try to get access to that reward.

People typically get into football club ownership nowadays for the potential financial gains that can be made from the game rather than for the traditional reasons of potential glory for the club and for the town from where it resides.

Yes, everybody wants to make a profit from their investments even if they have an altruistic reason for being involved in a football club. But size of profit potential should not be the main driver for investing in a football club.

But the sums of money to be potentially earned from the game are currently vast and growing. However, this substantial growth in income is only being realised by ever fewer clubs, so much so that people wanting a share of it have to gamble with a club’s future in order to have any chance of doing so.

And the majority of clubs that pursue that money will fail, and the likelihood of being able to break into the elite diminishes every year. Therefore, more and more clubs will fail, and more and more clubs will go the way of Bury FC.

Football should never have been about how much money one can make from it, it should always have been about how much silverware one could potentially try to win.

Yes, those clubs that are more successful should be rewarded financially for their achievements. But that size of prize need not be so great in comparison to the amounts those who are not successful can earn.

Yes, clubs with more viewer appeal should get more of the TV revenue, but again the proportion received by a small number of current popular clubs should not even be close to being greater than that received collectively by everyone else.

My proposal is that the earnings potential by clubs from TV rights and competition success in any one season should be capped.

This would have the benefit of discouraging people from getting involved in clubs because it was a way of making vast amounts of money. It would get rid of rogue owners overnight.

Successful and popular clubs would still earn the most money, only the difference between what they earned and what every other club earned would be nowhere near as great.

The difference between what is earned now and the capped amount would create a pot of money that could be used to help develop football across the country, providing funds for clubs that can show they are developing players, facilities and communities from the money. A process that could be strictly controlled and run by an independent financial organisation.

This would create an added positive to football in this country, making it more competitive. If the added investment required to try to compete with the top clubs was reduced then more clubs would have a chance of trying to do so without recklessly putting the club’s future in jeopardy should they fail.

Currently it is nigh on impossible for a club to break into the top six and to have any chance of winning major silverware. Obviously, there are exceptions, namely Leicester City, but the best that clubs can usually hope for is to reach the fringes of the lesser European competition qualification or win an occasional domestic Cup. And even that is currently only feasible for a small number of clubs.

And for the vast majority of clubs that don’t even make it that far? Well, for them their future long term existence would be in doubt.

It should not be the case that the only way to be successful is to have to invest silly money or borrow at crazy interest rates to do so. And it should also not be the case that those clubs who are more prudent in their financial management should have little if any chance of being successful.

Some might say that an earnings cap would discourage sponsors of major competitions from investing in the game, or reduce the amount of money put up to show games live on TV, but I argue, ‘why should it?’

The reality is that from their perspectives the situation would be no different. The competitions would still be run and would be competitively participated in by all the same clubs, maybe even more competitively so. The appeal of the TV audience is not affected by the amount of money a club earns, and so that demand would stay the same and needn’t change.

Some might say that clubs would die without the backing of investors who are only investing to make significant profit. But I’d argue two things. Clubs would still be attractive to investors, maybe even more so.

Sizeable profits could still be made and earnings could be enhanced through more traditional means of merchandising, player transfers and match day experiences, all of which the bigger clubs would gain the most. However, even the lesser supported clubs could make a healthy profit.

And secondly, it would mean investors in clubs were doing so because they had the best interests of the club as their key motivating factor for doing so. This would bring about more stability for clubs as a whole, enabling them to have more chances of football success in the future.

It would also ensure the game in this country had a much healthier long-term future, too.

 

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s