Why Football is a Business and Fans aren't important

There's a lot to be said for football cliches. Or is it that there's lots of football cliches said? Either way they form an integral part of our game. They are part and parcel in the game of two halves, the funny old game that often leaves you at sixes and sevens early doors, when there's no easy games because they're all to play for, even if you do take them one game at a time! Whole passages of play can be described in cliches (see here, for example) and the atypical pre-match interview does not sound like this!

So why are cliches so important in football (and to a certain extent, sport in general) and how do they relate to the commercial aspect of the sport? There are many definitions of cliche, the one that lends itself to football probably being: [OK, 'lends itself' will be the last intentional cliche]

cliched - repeated regularly without thought or originality; "ready-made phrases"

wordnet.princeton.edu/perl/webwn

This definition is relevant to football for it serves two purposes: it epitomises the closed-shop, comfortable and familiar aspect that a sporting mentality brings; a world in which you can become accepted and belong by adhering to a simple code, and with its ready-made phrases it simultaneously sticks two fingers up at the business and media obligations to the sport. Anyone can play the part by learning the lines (again reference the template example above). 

Football cliches serve to minimise the importance of the business role, to diminish the contribution of finance and maintain the perception that sporting principles rule, OK? As has been proved year on year since the Premierships inception, that is no longer the case. The power balance within football has been shifting for the past 17 years and is now firmly held in the corporate world's favour. Naturally such a change will encounter resistance and even denial, especially when encountered during the period of change. Fans are no longer the most important institution in footballer. However much it is disliked, the facts to support such a claim exist. 

The average ticket at Liverpool this season costs approximately £38 (see LFC website). For premiership games, an average gate of 44,000 over the 19 home games brings a fan-based revenue of £31,768,000 (2006 results for Liverpool show £25,219,000). Add to that merchandise revenues (Liverpool made £16,322,000 in 2006) and that makes a fan-based financial contribution of approximately £47,000,000. Consider the corporate revenue streams available to football clubs and the picture changes slightly. In 2004/5 Chelsea earned £30,000,000 from Sky by winning the premiership (source: telegraph). For the 2008/9 season the winner will collect £50,000,000 from Sky whilst the bottom club will collect £25,000,000 (In 2005/6 Liverpool collected £29,643,000 according to their annual report). Even under the older Sky deal, that's a big income. Move into the world of corporate sponsorship and the numbers are there again. To continue the Liverpool example, sponsorship revenue in 2006 was £17,904, seemingly a poor return attributed to a dispute with Reebok (the kit is now manufactured by Adidas) and 9% lower than the previous season when they won the Champions League. Consider for the 2009/10 season Liverpool are planning to increase this amount to £60,000,000 when renewing their agreement with Carlsberg (source: IMScouting) and again the picture begins to form more clearly in the business world's favour. Finally add in £22,000,000 of shareholdings for Liverpool (source: 2006 annual report) to complete the picture. 

In summary (and by no means the result of any qualified analysis!) sources of finance for Liverpool can be attributed as the following:

Fan-based: £47,000,000

Corporate: £132,000,000 (assuming they win the League and gain the maximum sponsorship deal with Carlsberg).

By no means do I advocate that football is all about money. It's not far wide of the mark, however. If you were to view Liverpool as a business, your major stakeholders are without doubt Carlsberg, then Sky, then the fans followed by the Shareholders. But in truth the shareholders have a large stake in the company as they own it, so that leave the fan base out in the cold. 

The argument is based on the assumption that money matters, and it does! From a fans perspective they need money coming into the club to strengthen the team, ensure ticket prices remain reasonable and allow the club to develop, progress and ultimately improve on the pitch [is that a football cliche?]. It is important to note that out of a combined income of £179,000,000 the fan-based income weighs in at a significant 26%. It's this 26% that affords the cliched-indulgence that fans are the most important aspect of a club. Another factor that furthers this perception is that the fans are also the club's (and more importantly their benefactor's) customers. As a customer to Liverpool football club, purchasing tickets and merchandise you are afforded a certain importance. As a captive market for sponsors and other third parties this importance is furthered yet still. 

In fact the entire premise of the fact that football fans aren't important to clubs anymore stems from this. If no fans turned up to Anfield all season, Liverpool would lose that revenue. However Sky could still show their games, advertise and promote their own products and people would still watch. So Liverpool's value to Sky remains despite Liverpool fans attendance at games. Liverpool's relationship with their fans is a necessity of Liverpool's relationship with Sky. A similar scene can be found with Carlsberg (to a lesser extent).   

If it is accepted that money is now the most important factor in football, and that this has changed the dynamic between clubs and fans, then why has money and thus business, become so important? Ironically in some ways it's because of the fans! Take any aspect of a Premiership football match where money is concerned, and the entity that ultimately funds it is the fan. How many times is a new player or stadium funded (at least in part) with ticket price increases? Why does Carlsberg pay Liverpool so much money? So it can persuade the Liverpool fan to drink Carlsberg. And Sky? So football fans in general will buy Sky to watch the matches. Convinced? Take it a stage further. How do Sky find the money to fund football? Companies pay to advertise during their TV programmes. Why? To convince Sky's viewers to buy their products and services. And Sky's viewers are......!

Football is a business. Simple. Further to that, football has become a business to make money out of fans. In economic terms a club is merely an entity with much-valued assets: fans. So how do the football businesses keep their assets? They indulge the cliched lifestyle of a football fan and ensure they remain loyal to the club through marketing the club attractively and promoting fans' core values. Football clubs want loyal fans so they can facilitate other businesses direct marketing to them. Everything else, unfortunately, is a side-show. 

To determine whether this shift to corporate-dom is good or bad is difficult. If on balance a football fan is still relatively happy, is that OK? If money is flowing in football than the non-financial aspects of football will remain healthy as a result. At least they should. As a pure concept though, money in football will mean the sport can no longer be a sport, and that for many is a problem. For the vast majority of people they will learn to accept a compromise. Where the situation often gets complicated, is when the football fan feels aggrieved for a particular reason and cites the corporate world as source of that grievance. 

This can be seen recently with Setanta's coverage of the England internationals. The debate in the Guardian summed the conflict up quite well. To summarise my contribution to that blog, Setanta took the blame from most football fans and I pointed out that this took focus away from the FA and the government's decision to make money through the coverage as opposed to focusing on the wishes, wants and needs of the fans. I argued that English football needed a Setanta-type figure to challenge Sky's monopoly on TV rights, and that this was merely an example of how the concept was right, the execution not so. Finally I concluded with:

Either change the current perception that it's the fans that are the biggest stakeholder in football in the UK (to a realisation that money talks!) or change the structure of TV rights to ensure the fans can watch football at affordable prices.

Now whose going to volunteer for that? The FA, the government, Media????

The decision point is clear: money talks or put fans first. I doubt the latter can ever win.