The Football Shake-Up Q&A, Part One
Who is to blame for the current disparity between rich and poor teams and what can be done about it?
Gary Andrews: Good question, and there’s no magic all-encompassing answer for this. It’s worth pointing out, first off, that there’s always been a disparity between the rich and poor clubs. The more popular, successful clubs with the bigger stadiums and catchment areas will naturally have more money. It’s unrealistic to expect Manchester United and Accrington Stanley to compete on a level playing field.
That said, the Premier League and Sky can shoulder some of the blame for this. There’s a lot of money sloshing about, mainly from TV and very little of the money trickles down to grassroots and lower level football. The FA hasn’t really stood up for their members either. I mean, does anybody think parachute payments are good for competition? They just reward failure and make it easy for the same old names to return to the top flight. There’s also the slightly unrealistic expectations placed on clubs. They’ve either got to spend lots to keep up with the big teams, which is money that they don’t have, or spend within their means but watch the more reckless spenders overtake them.
Salary caps would be one solution. Another would be a slightly better deal for lower league clubs with TV money, better protection of young assets and “rocket payments”, as proposed by Dr John Beech. These are the opposite of parachute payments, and offer a little financial assistance for newly promoted clubs so they don’t overstretch with money they don’t have in order to be competitive.
Rocco Cammisola: The obvious answer is Sky, other extortionately priced satellite broadcasters are available. The creation of the Premier League, and the huge amounts of money being pumped in have created a divide that is far greater than it had been before. This isn’t necessarily a bad thing because it is still, to some extent, an entertainment industry. Ultimately it is the responsibility of the clubs to take control of the risks that they are taking in trying to achieve – sometimes infeasible – higher levels.
Matt Tickner: It’s hard to pin down one sole factor for the financial disparity, but to take it at a general level, there seems to me to be a certain common denominator – the greedy businessman.
The financial strain felt by football clubs chasing success on and off the pitch, has seen 53 insolvencies among the 72 Football League clubs, since the Premier League began. Of course, some clubs have mired themselves in financial ruin on more than one occasion and the pressure to maintain both a sound economic base and successful squad has seen football teams fall from grace. It seems to me as if businessmen think there is a quick buck to be made in football. I’m not talking about the wealthy oligarchs and sheikhs – those that can run a club as if they were Bobby Manager – but at a smaller level, property developers and the like, who come in to a club with the sole purpose of financial gain. They feel, with their relatively modest investments, they can see a large return, opting to jump ship if it doesn’t appear to be working out for them, leaving the club in a state of disrepair. We only need to look to Plymouth Argyle for an example here. The investment Argyle saw with the hope of the World Cup 2018 being awarded to England immediately went into hiding when the tournament was given to Russia.
I don’t think the collapse of ITV Digital helped Football League clubs as I genuinely believe they may have seen that guaranteed broadcast investment as a necessary and consistent income stream. Since then, either teams who oversubscribed themselves to the money, or those who never felt its benefit have been playing catch-up, trying to get to a level of stability they ceded on sign-up to ITV. Some clubs have managed to regain that air of stability, except in the cases where boards and businessmen have been irresponsible, at Home Park, Fratton Park et al.
Ian Stirling: Two things are to blame – dropping the requirement for equal gate shares of league matches in the 1980′s, since when money has gravitated towards the big city clubs with bigger gates in exactly the way the equal gates shares rule was designed to prevent. Secondly there is the competition structures and the distribution of prize money. Prize money is split by league position and the number of TV appearances, with top four already getting the lion’s share and being rewarded with a CL place.
Mark Pitman: I think the fundamental problem is not restricted to football. Who is to blame for the current disparity between a supermarket giant and a corner shop for example? It’s a social situation, and like most social situations, it reflects in the modern-day religion that is football. Some people blame Government for problems in society, others simply blame parents. Is there one central cause for blame as the rich clubs get richer and the poor clubs fold? Apologies for answering with more questions than answers on this one! For me it comes down to good management and bad management of each individual club, both in the present and in the past.
Gavin Brightman: TV money is undoubtedly the reason for the disparity, but I’m not sure who is to blame as such. As crass as The Premier League can be at times, there is no doubt that it is a stroke of marketing genius that has seen unimaginable revenue pouring into the game in the form of the television deals. The Football League desperately tried to cling on to the coat tails of this, unfortunately with little success.
The collapse of ITV Digital in 2002 obviously triggered a lot of financial problems for clubs, whilst leaving Sky to swoop in and pick up the rights for the relatively low price of £95m for a four-year deal. Compare that to the £315m three-year deal from ITV Digital and it’s easy to see where things went wrong. As a result, The Premier League has seen its TV deals increase into the billions. The lack of competition for The Football League rights has seen Sky squeeze the market, picking up the exclusive rights in the latest deal worth £195m over three years, down from the previous agreement of £264m. Football clubs are ultra-reliant on television money and at this moment, The Football League just doesn’t have the same box-office draw as the top-tier of the English game. Sky aren’t paying big money for this ‘lesser’ coverage and rightfully so. After all, it’s a business, not a charity. They will only pay what they perceive to be the market value and therein lies the problem.
Maybe the blame then actually lies with the marketing of The Football League? They need to look at better ways of building a more unique brand first – ‘Football for the Common Man’ perhaps?
The billionaires playground should be left to the billionaires. The focus of the lower leagues should be a consolidated push to grab the attention of everyone sick of seeing the vulgar Premier League beast rampaging through the English football landscape, wearing it’s Sky branded bathrobe, sporting jewellery emblazoned with pound signs and stomping on any football ground with less than 10,000 capacity.
Jimmy Daniel: It’s a tough one really, and I don’t think that there is a definitive answer. I do think that the formation of the Premier League in 1992, plus the TV deals with Sky are huge factors in the gulf between the rich and the poor. The prize for getting to the Premier League is so huge for any club that those who take a gamble to get there by paying over the odds for players and wages etc, and then fail to reach the ‘holy Grail’, seem to become crippled by debt and risk administration.
The issue is that more people want to watch the bigger teams and the likes of Sky will therefore pay big money to show the bigger teams’ games. Unfortunately there is not much that can be done about this. Sky would lose vital advertising money if they decided to show Barnet Vs Plymouth so why would they choose to focus on such a niche game?
Rich Pye: The TV money that has, rightly or wrongly, poured into the game has changed its very nature immeasurably and made the whole English league structure top-heavy. Unless either the media companies stop showering top-level football with money, or the clubs themselves take steps to distribute more of the money into the foundations of the game, the house as a whole, will eventually crumble and fall.
From the bottom looking up, certainly far more lower league clubs need to take a serious look at the way their business is structured and how they operate. Poor governance and an over-commitment to creating a competitive squad have often led to clubs extending themselves far beyond their means.
Far greater scrutiny and guidance from the FA into how clubs are operating is also needed, as are stiffer punishments for those that run clubs into the ground through bad management.
The FA should install an independent committee to investigate the series of events which led to a club being placed in administration, and should possess the power to punish poor business strategy and bad management at an individual level, as well as being able to apply the competitive sanctions against the club’s in question that we see all too regularly today.
Club directors who have made poor decisions which jeopardise the long-term survival of professional clubs should no longer be allowed to simply walk away and return a few months down the line as a ‘consultant’ for another team. As such, I would suggest minimum 12 month ban from all football activity for any directors involved in taking a club into administration who are shown by the committee to have acted in a negligent manner. This however would require the FA to bare its teeth.
In the next part of the Football Shake-Up Q&A we’ll be asking the panel to consider who should be responsible for ensuring the survival of our nation’s clubs, big and small.
Posted on 04/10/2011, in 2. The Football Shake-Up and tagged finances, football, Football League, Football Shake Up, Plymouth Argyle, premier league, The FA, TV Rights. Bookmark the permalink. 2 Comments.