MUCH ado is being made of a club that finished at the top of the table in the English Premier League and another that finished pretty much at the bottom of the heap and their owners. While certain football purists seem enraged that Sheikh Mansour’s dough pretty much bought Manchester City the EPL title this season (this on the back of almost a half a billion £ binge over the last 3 years), others are miffed at Venky’s (the first Indians to own a Premiership team) for not having done enough, or cared enough to prevent an embarrassing relegation for Blackburn Rovers. With the whole of Europe springing a fresh instance each day of a football club in financial trouble (including venerable names like Barcelona, Real Madrid and Scotland’s legendary Rangers FC, who are in dire straits), the question about ownership and management of football clubs has never been this muddled.
The New York Times’ Indian twitter handle (@NYTIndia) asked a question on Twitter on 8th May in the context of Rovers’ relegation – Should companies with no prior experience in managing sports teams be able to own them? I had answered then that they should be allowed ‘…only if there’s a large degree of autonomy given to those running operational matters at the club – the manager & coaches’. NYT retweeted my opinion (which I assume to mean they approve of the answer J) but in Twitter you’re are limited to typing only 140 characters and I could not add a critical part to my answer. It went thus ‘…..Hahahahahahahahahahahaha…..as if that’s ever going to happen!’ Owning a football club has been touted as a ‘business’ investment in recent times (that’s the justification Venky’s gave for picking up their pie in Rovers back in 2010), but the truth has always been that football can never be quite run like a business. The said autonomy will only come if the owners who were not conversant with the sport did not interfere in running the operational (read sporting) side of the club.
But the fact is – owning a team is an ego trip pure and simple. Wasn’t it Pink Floyd who once sang that if they had money then ‘think I’ll buy me a football team’ apart from, as lyrical evidence from the song would suggest, other assorted goodies such as ‘new car and caviar’. Most owners regard the ownership of a club as an extension of their ego, a conspicuous consumption pissing contest – it serves them pretty much the same purpose as that Picasso on their living room wall which only a handful of guests get to ever see. By that token, and quite perversely profitability typically is not top of the mind priority and unsurprisingly, more than half the clubs in Europe do not make any profits (in fact, lose a lot of money) and even the most recognizable brands are burdened with excessive debt.
Research released by UEFA last week reveals that 56 percent of the 655 clubs whose financial accounts were studied lost money in the 2010 financial year, and their total debt was $10.9 billion! In fact, Europe’s top soccer clubs collectively lost more than $2 billion in 2010 which has led the UEFA to introduce a set of regulations known as Financial Fair Play (FFP) to prevent clubs from losing a handle on prudent spending in the quest for on field glory. Andrea Traverso, head of UEFA’s financial fair play project captured the problem in a nutshell saying “Clubs tend to spend more in order to obtain a competitive advantage.” But the latest research seems to point that clubs aren’t really readying themselves for meeting the conditions laid down by UEFA (which include limits on spending and obligations to turn profits and not just depend on owners’ largesse to get through each season without facing financial ‘relegation’) even though the UEFA threatens that such clubs maybe barred from lucrative European competitions like the Champions League and the Europa League if they fail to comply.
Which brings us back to the moot question. So, where did Venky’s go wrong enough to earn the wrath of the supporters? To understand that, we need to appreciate the way football club’s typically have to make decisions. In a report titled ‘Playing For Profits’, consulting firm AT Kearney almost exasperatedly notes that ‘Football is a game, subject to the Gods of fate, in open defiance of logic’ and then points out the single most important reason why ‘normal’ business rules go out the window when it comes to football – Fans, the media and the sponsors, create a high pressure environment, within which owners must make business decisions. Of course, the owner’s own prejudices (think Roman Abramovitch at Chelsea and his penchant for chucking managers out at the drop of a hat) play a part as well. Venky’s may have looked at Blackburn Rovers as a way to tap customers in the UK or leverage the club to build more buzz back home or in Asia but they seemed to have missed a significant social point about Football clubs. As sports economist Stefan Szymanski (who’s also co- authored a wonderful book called ‘Soccernomics’ with Simon Kuper) writes ‘just like bank credit holds together the economic relationships of a community, so football clubs produce a ‘social credit’, a shared sense of belonging. Like the banks, they can never be allowed to go to the wall because of the damage that it would do to the fabric of a community’. And that is why a Barcelona runs up debts of more than half a billion dollars and spends 85% of its revenues on player salaries but talk of Barca vanishing isn’t very rife because imagine what happens to the football culture of the Catalan region in Spain if this great institution disappears.
To be sure, owning football clubs (especially in this modern razzmatazz age) is not CSR or charity either, but the approach to profitability and business has to be more gentle. That’s the prime reason why Venky’s riled the Rovers fans (the new owner admitted that he’d never been to a football game in his life and the family hardly attended any of the games – a move that was clearly interpreted as indifference by the players, manager, and fans) and why Mansour pouring in quasi-state money from Abu Dhabi has led to the feeling that somehow just buying the best players (without them coming through a homegrown grooming or a farm system) can’t be the ideal example to set for football. Much pride as we may feel at the ‘Indian’ ownership and blame the British media for unfairly criticizing Venky’s in the Rovers fiasco, we have to keep in mind that soccer is not business as usual.
Perhaps, football is one of the last pure expressions of meritocracy left in an increasingly plutocractic world and new generation owners will always have to temper their business ambitions with the social side of the game if they are to remain invested in building a great brand, a team that will be universally loved. The sooner they understand this point, the better it will be for the game. Like a Liverpool University professor (and a Liverpool fan, like yours truly), Rogan Taylor puts it in the book ‘Soccernomics’: Soccer is more than just a business. No one has their ashes scattered down the aisle at Tesco.