From shame to standard practice?
29.10.2007By Marcus Hoy
Professor John Beech, Head of Sport and Tourism Applied Research at the UK’s Coventry University Business School told Play the Game of his involvement in a large project examining the causes of and attitudes to insolvency in modern football. Why, he asked, have we seen so many English football clubs becoming insolvent over the past 15-20 years? Insolvency – the state of being unable to pay ones creditors – used to be looked upon as an extremely shameful moral situation, he said, and was usually punishable with a prison sentence. Today, football clubs are declaring themselves unable to pay their creditors on a regular basis, seemingly without too much ethical agonizing beforehand.
According to Beech, the current situation is due in part to the provisions of Britain’s Insolvency Act of 1986 and the Enterprise Act of 2002, both of which sought to ease the devastating effects of insolvency. These well meaning acts have given rise to a whole industry of specialist insolvency advisors, he said, who offer different ways to exploit the rules. “The ease in which clubs can avoid their debts through administration is encouraging a culture of greater risk taking”, he warned.
Dr Simon Chadwick, Professor of Sports Business Strategy and Marketing at the UK’s Coventry Business School, spoke of the "dash for cash" by European football clubs marketing themselves to overseas fans, primarily in Asia. At a time when the global game is thought to be worth around $12 billion, he said, European clubs continue to use traditional marketing techniques in Asia, viewing fans as a "homogonous mass" with little or no individuality.
According to new research carried out in China, South Korea, and Japan, major differences exist between fans in different parts of Asia. In Japan, for example, English football is perceived to be of a "superior quality" to its rivals, while in South Korea it is the presence of domestic players in European leagues that generate the most interest. Generally, he stated, football clubs are simply seen as western brands in competition with other brands in what can be a cutthroat market.
Football clubs seen as western brands
An example of bad PR, he said, was Manchester United’s 2005 tour of China. The trip did not include meetings with fans, and high ticket prices showed no respect to local wage levels. Fans need access to their heroes for their loyalty to be sustainable, he concluded. For any club to build a sustainable Asian fanbase, local markets need to be examined in much greater detail.
Andy Stevens, a UK-based event and venue management consultant, spoke of best practice management of grassroots sport. Referring to the growing popularity of the FUTSAL five a side game, especially at the corporate level, he stated that good governance in amateur sport is just as important as management in the professional game. When it comes to participation sport, he pointed out, five-a-side is more popular than eleven-a-side in the UK.
In the future, he said, national governing bodies of all sports should be willing to place more focus on the needs of participants and the standardizing of their laws. They should also be investing in referee and coach education, setting up national and regional networks and developing facilities. In conclusion, he said, competent management in grassroots sport is critical, and can be a lot more complicated than many believe.
Rasmus K Storm, a Senior Research Fellow at the Danish Institute for Sports Studies, spoke of his research into the financial aspects of professional sport. Despite their apparent success, he said, most Danish clubs either break even or operate at a loss. In soccer, overall growth rates are almost wholly due to income generated by Copenhagen’s “big two”, Brondby and FCK, and this growth is not translating into higher profits. Figures related to Denmark’s second most popular sport, handball, were similar.
Storm portrayed professional sport as a “complex mix between state, civil society and the marketplace” and referred to the “peculiar logic” where overspending is the only way to compete with overspending opponents. In conclusion, he stated, professional sports clubs are not traditional businesses and their performance should not be measured using purely economic tools.
Journalist and author Steve Menary gave an entertaining insight into how the political climate on the divided island of Cyprus has been reflected its football politics since it gained independence in 1960. He related the story of a controversial game in the summer of 2007 when Luton Town ended up playing amongst themselves after Greek Cypriot officials complained that the English club’s proposed friendly match against a Turkish Cypriot team would violate the current sporting embargo. However, as Menary pointed out, many see FIFA’s attitude to Cyprus as hypocritical.