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Simon Kuper, author of Why England Lose (Soccernomics over here), submitted an excellent op-ed to the Guardian yesterday, summing up what is more and more obvious to those of us following the current financial mess in English football: there is no money to be made in the sport. Kuper explains:
Football is not “big business”. It’s a piddling industry. Clubs such as Portsmouth rarely make profits and shouldn’t even try to. Instead of pretending they are Tesco, they should model themselves on not-for-profit local museums.
It was Portsmouth that set off the current kerfuffle over football’s debt. The club overspent on good players, won an FA Cup, and on Friday became the first Premier League club ever to go into administration. However, its rivals are almost as bad. Premier League clubs owe about £3.5bn between them. Clubs spend like big businesses – the average player in the Premier League makes well over £1m a year – but are small ones. A single large Tesco superstore turns over about as much as Portsmouth’s £70m.
This has been blindingly obvious for some time. So why do English clubs still attract interest by private investors, even when they promise very little return on that investment? Today, Owen Gibson provided a list of five major hurdles faced by potential owners of Crystal Palace, among them seeking ownership of Selhurst Park, sorting out previous owner Simon Jordan’s hedge fund, and somehow working out a strategy for Palace to stay in the Championship on a ten-point deduction. The list doesn’t include the £10 million commitment fee. Yet amazingly, Gibson prefaces his list by writing, “There is believed to be no more than a handful of realistic bids, including one from the United States.”
That anyone at all would be interested in an economic venture of this type seems, on the face of it, ludicrous. Paul Hayward puts it down to “hucksterism” on the part of the Premier League that it still manages to attract foreign investment: “While [the Premier League] decide[s] whether to be more like the NFL or NBA in America or stay as the TV deal-makers in a hucksters’ paradise they will hope that the punters in Hong Kong, Abu Dhabi and Africa have not noticed that one of the 20 masters of the universe hasn’t got 30p to use the loo at a London station.”
But perhaps what both Kuper and Hayward are missing is that football investors don’t always necessarily invest because they expect a Tesco-like return. Some owners get involved to shore up their own assets and leverage debts (Glazers), some get involved out of a naive love of their club (Simon Jordan, Mike Ashley), and some buy clubs seemingly to add them as a sort of luxury holding or to gain prestige (ADUG). The same thing that makes football exceptional as a business entity (i.e. little financial return, but lots of hope and glory) makes it exceptional for owners.
In any case, Kuper is right in writing that this investor-ship is doing damage to the sport. He concludes his article with some sound advice:
It would be a shame to let football’s current crisis go to waste. The English game should adopt a strict licensing system like Germany’s to limit clubs’ debts. It should again bar club owners from profiting from their investments. And it should instruct clubs to break even while serving their communities, as museums do. The only business of football is football.
- Via Fake Sigi. Soccer FanHouse on the new USMNT kit: The new uniforms unveiled/leaked by Nike this week invoke some traditions while abandoning others, and the result is a mediocre, frustratingly incomplete kit that could be so much better.”
- Maybe there is some money to made in football: the Independent reports that Sir Stanley Matthew’s boots from the 1953 FA Cup final garnered £38,400 from a private bidder.
- And finally, a lovely piece by Brad Woodhouse on the 1993-94 League Cup Final featuring Aston Villa and Manchester United, and how it compares to today’s game: “We are, however, troubled by a statistic that has been widely aired lately, which is that in his three seasons in charge at Villa, Martin O’Neill has yet to win a game in March. He has our permission to lose for the rest of the season if we can win on the last day of February.” Amen and amen.