Wrexham, Plymouth, Darlington, Charlton, Bournemouth, Halifax, Portsmouth, Crystal Palace……….. I could continue. What do they all have in common? Administration.
Let me start with Darlington. Now, I’m not going to spew forth a huge pile of numbers, but at some point this club had enough money to build the Reynolds Arena, a tidy place that wouldn’t look out of place in the football league.
Now, Reynolds turned out to be as sharp as blu-tac when it came to finances. He funded the stadium with high interest loans and neglected to invest in a team that could bring the success needed to fill the place. Misguided attempts to sign messers Gazza and Asprilla indicate the upside down nature of his approach. And so, they entered administration and we see them repeating the dose just recently. Most annoyingly the most recent incumbent tried to do it the same way again. Seeking out more money to pay off already owed money, and the cycle continues.
Possibly the highest profile case would be Leeds United. They took a gamble, which for a time really paid off. Had they sustained that level of achievement perhaps they would have gone on to operate in the same way as a lot of high profile clubs. These clubs which Leeds saught to emulate have such high turnover that they are technically capable of paying back their outlandish loans within a reasonably short period of time. Thus, investors will back them with more money. The fact that teams miss out on the Champions League is now spoken of in terms of being as much a financial disaster as a footballing one. Indeed the modern malaise would say far more the former.
But Leeds nearly got it right. The wrong way, but now maybe the only way? Do any of you think that a team can break into the upper echelons of established leagues on playing merit alone or is it all a game of money?
It has amazed me the number of clubs who have entered administration when they are the only club in a reasonably big town; York, Chester, Bradford, Ipswich, Derby, Middlesbrough. The trouble is that a) the Premier League and Champions league are far more enticing for the majority of fans (think Nou Camp vs Priestfield) and b) it all hinges on success. If you build it they will come. But only if you win Mr Costner (and anyway, what do you know, Mr ‘Waterworld, that’ll make us a pretty penny’).
For smaller clubs, the likes of Chester and Darlington being a prime example, the biggest reason for failure; idiotic chairmen. The chairman seeks success, plows in money in the short term, but can’t do this forever. Revenue streams can’t keep up with expenditure, but the initial outlay has increased expectation with maybe a promotion. Eventually the costs spiral, the club doesn’t generate the income to match it’s inflated ego, idiot chairman implodes, club goes to shit. Utterly ridiculous and disgraceful behaviour by people who treat football clubs as their plaything. Portsmouth as a club have some wonderful fans. What must they think having seen their club sold from on ‘fit and proper
wanker person’ to another, each time failing like before.
There have been positive examples of how a club can be run properly. The supporters trust is one way it has been done. Supporters own 3 current league teams; Exeter, Brentford and AFC Wimbledon. What we find in these clubs is clubs which don’t loose money, have loyal fan bases who feel valued, and all three have made positive strides in their own ways in recent seasons. Lets not forget as well, that Barcelona and Real Madrid are owned entirely by supporters. It hasn’t done them too much harm. Do supporters understand what is best for their club or do you think football is the preserve of big business now?
At the other end of the English scale, Liverpool FC have a raft of supporters represented by the supporters charter. My initial reaction was that this would pay lip service to the fans but was a nice bit of PR. However, I have to admit they wanted to address the key issues felt by the supporters, the key one being access to tickets. This has been a key issue at Anfield for years. Carling Cup final ticket sales have shown that even a ‘big’ club can get it right when they listen to the people who really own the club. Instead of season ticket holders getting tickets regardless, it has now gone to ANY fan who has met the criteria, basically attending all the games in that competition. Exactly the right way to do it IMO. Thoughts?
And so to today, and the shocking news that Glasgow Rangers are likely to head into administration before the month is out. How can you not run a club which averages 45,000 per home game, has European football EVERY season and shares dominance of media and sponsorship revenues? It beggars belief that this package can not be put together in such a way that it makes money.
I don’t really have much need for formulas, so bare with me. Lets treat a as income, b as expenditure and c as the net result of this. So, a-b=c. a would allow for all known revenue streams, not variables (i.e prize money, cup gate receipts etc.) and b would be the opposite, wages, fees, bills et al. If b never went higher than a then c could never be preceeded by a – sign. The income would be very likely to be above initial expectations, but then that would only strengthen the profit, which in turn could be spent once it was actually in the bank.
Now this is a vastly simplified version of football economics, but my question is this; why can’t it be done. The alternative? Too much, paid to too many with money you don’t have. Now where’s the sense in that.