Category: Sports

Continuing my research into soccer-business (see my previous post, 10 Things to Learn from Sounders FC), I recently finished Mihir Bose’s Game Changer: How the English Premier League Came to Dominate the World. Although the book may discuss the TV contract negotiations / creation of the Premier League in the early 90’s a bit too much, there is a lot of great insight into the modern game (from a business perspective).

Here are 10 things that I would like to highlight from the book:

1. All the major English clubs have targeted these fans and Chelsea have been particularly active trying to target disillusioned fans of other clubs who are not doing so well. These fans follow success and do switch loyalties.
2. Indians probably watch more live Premier League matches, including the 3pm Saturday kick-offs, than most do in Britain.
3. When the Premier League was founded in 1992, La Liga in Spain and Serie A in Italy were the dominant European leagues, secure in their own homelands and in the wider world. Italian football had even invaded England’s football scene, being broadcast every Sunday afternoon on Channel 4. But in the last 20 years all that has changed.
4. In another curious reversal of the American experience, football embraced segregation in order to cope with fan violence. The Americans spent much of the 1950s and 1960s trying to eliminate segregation based on colour from their society. English football in the 1970s decreed that fans could only watch if there was strict segregation between fans of rival teams. For all the changes that have since occurred in football, this separation of home and away fans still exists, with grounds having large signs directing them away from each other. And even in new stadiums such as the Emirates, Arsenal’s ground, it is made clear even in the executive box areas that fans should not be wearing the colours of the visiting teams.
5. Against this background, it is hardly surprising that English football failed to attract non-white fans. This failure persisted even throughout the 1990s when English football made strenuous efforts to oppose racism. The most prominent initiative, Let’s Kick Racism Out of Football, was launched jointly by the PFA, the Commission for Racial Equality and the Football Trust, and within a year all but one of the professional league clubs in England and Wales had signed up to its 10-point plan. This effort was supplemented by multiple individual initiatives from clubs, fanzines and community groups. However, in 2001 the FA Premier League’s national fan survey found that only 0.8 per cent of “active top-level fans” were Black British or British Asian. This represented a rise of only 0.1 per cent since the previous survey in 1997, and compared to a total minority ethnic representation of 13 per cent in the UK population. The same survey found that 7 per cent of all Premier League fans had reported witnessing racism against other fans and no fewer than 27 per cent had reported racism displayed against players at matches.
6. Hilly’s great idea was to take the score and the time and put it on the screen. I remember thinking, “Oh fuck — why have we not thought of that before?” It had never been done. Anywhere in the world. Can you believe it, only 20 years ago when you were watching football, you’d switch on and you didn’t know who was playing, you didn’t know the time, and you didn’t know the score.
7. The Champions League was born! The new marketing concept was both innovative and commercially adapted to the changing market conditions. Each sponsor would receive exclusivity in its product area, not only in the stadium as was previously done, but also on TV, with commercial airtime spots and programme sponsorship. By linking stadium advertising together with on-air sponsorship, it became almost impossible for non-sponsors to associate with the competition. The three pillars of stadium advertising, commercial airtime, and programme sponsorship generated a “multiplying media effect” that offered new levels of recognition to the sponsors. A “less is more” approach was taken and a maximum of eight international sponsors was decided upon. The sponsor package included four stadium advertising boards, ticket allocations, and identification on TV interview backdrops and in the VIP and press areas. Each of the sponsor ticket holders was also invited to specially arranged hospitality suites before and after the matches.
8. In the years since 1995 the Bosman ruling has led to other changes in the transfer regulations. It led to transfer windows allowing player transfers only twice in a season, once at the start and once in the middle. But most significantly, it greatly increased player power. The court ruling meant that footballers were now free to move when their contracts expired. And this in turn paved the way for footballers to earn multi-million-pound salaries. Sport could no longer be exempt from EU competition rules and had to be treated like any other business. The net effect was that unless a club arranged a transfer before the player entered the last year of his contract he was free to move at the end of it. This tilted power decisively in favour of players and away from clubs. Now players, particularly high-profile stars, were masters of their own destinies. And as free-agent players they could suddenly demand huge signing-on fees and salaries on the basis that the club they were joining did not have to pay anything in transfer fees. Football clubs were powerless to prevent their best players from leaving at the end of their current deals. Conversely, players under contract could demand bigger, better and longer deals — because the threat of being able to leave for free, especially if they would otherwise command high transfer fees, was something clubs could not ignore.
9. In his very first season Abramovich spent £111.3 million on transfers. Not only was this more than anyone had ever spent before in English football, but the Russian dramatically changed the terms of trade. He paid the full transfer fee at the timing of signing the player. This broke with the usual convention of fees being spread over a period of time. Cash on the nail proved a lifeline for clubs facing cash-flow problems. Indeed, it was immensely beneficial to clubs such as West Ham who were then under financial strain, as the then club chairman, Terry Brown, acknowledged. Since 2008 and the purchase of Manchester City by Abu Dhabi United Group, Chelsea have been challenged and even overtaken in transfer spending. In 2010–11 the club spent £141 million on players, the third successive season they had spent more than £100 million, double that of Manchester United and comfortably ahead of Chelsea at £91 million.
10. While the 20 Premier League clubs had an income of £2.3 billion, the remaining 72 clubs in professional football in England between them had an income of under £700 million. Two of them, Port Vale and Portsmouth, are in administration and 13 of the clubs in these three divisions are classified by financial experts as in distress, meaning that they have serious court actions against them, including winding-up petitions and high court writs, or have been issued with striking off notices for late filing of accounts or have county court judgments against them.