Insight: The changing landscape of football club ownership


Here we go again – a new football season across Europe. A new, wall-to-wall, Sky TV channel dedicated to football and the start of transfers between clubs of players commanding huge transfer fees and personal terms putting them on par with only one or two CEOs in the FTSE100 or Dow Jones. The back pages of the print media, possibly the media most in terminal decline, are once again full of stories manufactured in the myth machine, the hand maidens of manoeuvres to achieve higher transfer fees and exorbitant personal terms. The media is fuelled by broadcast deals ever more expensive, ever less sustainable with broadcasters fighting for the king of commodities – content. What a blessing there is so much football content as it drives up the price of the best competitions and provides many other national leagues around the globe.

When approached by global investors from countries passionate about sport, especially football, but with no domestic tradition in football, it is usually necessary to start explaining the myths. Some are surprising. Footballers will be classified on balance sheets as intangible assets despite the fact they are the heartbeat of the enterprise. When their weekly wages are published and already appear astronomical, the figure is very often the ‘after tax’ pay so the full salary is eye-watering. The players’ agents often act for both sides of a transaction at once. In football it is always the football creditors who must be satisfied first in an insolvency, ahead of the tax man or even the local emergency medical services. And so on.

In short, it is a curious business. Yet, although it makes sense not to get into football as a business unless you truly understand it, the demand to own clubs is huge. And, although I think the current model may be reaching its limits, pricing itself out of the market, many entrepreneurs from China, America, Thailand and Russia  remain enthusiastic purchasers. The question is why?

Firstly, it is a glamourous part of show business organized around a simple, yet stunning sport. It is a romance and lifestyle business with masses of passionate fans from the oldest to the youngest. They may seldom see a live match but they will pay for live and recorded TV coverage and to wear the same sports kit as their heroes. It doesn’t matter that a Manchester game played at Old Trafford can have fans far and wide. That fan can feel the same passion, elation, dejection and longing for the next week as the Manchester fan.

Second, entrepreneurs have come to recognise football is a multi-faceted business. From exploitation of the stadium to brand creation, global sales of TV and sponsorship rights to increasingly complex and remunerative intellectual property rights, from product marketing to the sale of football kit in every corner of our planet, from product endorsement to entertainment and conferencing, the football cake has many slices.

Of course, this multi layered cake depends on producing first and foremost winning teams. So developing talent in youth schemes to buying and selling players under the direction of coaches who are proven leaders, is central to everything else. Clubs need, as a consequence, specialist coaches, doctors, physiotherapists, dieticians, fitness trainers, psychologists, kit experts and many other disciplines.

I make these points because of personal experience in dealing with would-be club purchasers. They understand the broad parameters but they seldom have any prospect of the technical discussion needed to succeed in this industry. They do not usually know the cultural history of a club of the disposition of its supporters. They are often unaware of the poor reputations of key people they will inevitable meet who will exploit lack of detailed knowledge. While they may run a very successful company making white goods and with its own TV channels, football is a different world.

When I was the first independent Chairman of The Football Association, dealing and making agreements with many key actors in football – and I believe this was equally true of my successors in the job – if you didn’t know the industry in fine detail you would lose money and reputation rapidly.

And the opposite is true. Handling things well and with proper bench-marks for success brings many rewards. In future these tests will be more acute. The competition for rewards will be harsher. It can be a zero sum game with massive investment finding its way to more successful competitors. The business model will change as it did in American Football. It may well focus on show business and sport super businesses. The Chinese model will, for example, find this a challenge without the right advice from people who know the sport inside-out, warts and all.