The Business of Football

[Fiero]

Just some thoughts I'd like to discuss.

Football is a business. Clubs are brands. Their main objective is to make profit. In every business, the goal is to sell the consumer a product or a service. So what are football clubs trying to sell? Tickets, merchandise, TV subscription, ad boards in the stadium and ad space on their shirts. Naturally, the more successful the brand is, the wider its fan base expands.

Now since there are fans involved with the whole 'business', the term Loyalty enters the equation. Fans add the emotional dimension. Any human input creates an emotional reaction in one way or another, but while in most jobs the 'loyalty' factor would enter between co-workers or an employee with his boss, in football players are not only expected to be loyal to their co-workers, bosses, and company, but also to the fans. Which is kind of unfair.

Players are employees, it is just their job. They are paid to play football for their employers. The sentimental factor with fans is present for a couple of reasons. Firstly, the players are humans and not machines, thus they're prone to experiencing and expressing different emotions which the fans interpret in a wrong way. They mistake the momentary affection of any player as a gesture that he loves the club just like the fans. Secondly, the media factor.

The media. What's their goal? More readers or viewers. How to achieve that? By grabbing attention. Either by reporting exclusive stories or by creating controversy. The media milk every incident and in a way, manipulate fans. They make heroes and villains out of players. Players who are, at the end of the day, just trying to earn a living.

They create false moral obligations, like loyalty. Why are players expected to behave like fans, when both are in fact very different? Fans are in it for the sentimental value, while players are in it for the money firstly. Which shouldn't be regarded in a negative manner. Most people work primarily for money.

The fact is clubs, sponsors, media, and fans are all connected in the football medium. Each influence the game in their own way.

 

[Pedro]

Their main objective is to win prizes, I thought.

 

[Fiero]

Their main objective is to win prizes, I thought.

The main objective is money. Not all clubs could compete for trophies, but all clubs could make a financial profit and that's what they primarily aim to achieve. Trophies are part of the sentimental value for fans. Of course trophies are an objective to some clubs, but not for the emotional value as much as for the monetary reward.

 

[Ashish]

Not many football clubs make money. Its about tribe brand exclusive group mentality. Money is important but not the primary concern. its about glory Roman and other sugar daddies.


Or it yield power
Or ours geo political b bilbao barca and lots of passion. Can't simply call it a business, sorry I couldn't read the first post

 

[manutd fan]

For owners it's all about money. Success usually brings money.

There is a club who's owners have taken out £25M each year to buy new holiday homes, and even help their other business that aren't doing so well, and who have cost the club an estimated £500 million purely on interest for the debt they threw onto the club, legal fees and the like.

There's very few owners who care about the clubs. Sad thing is most of those owners that do actually care for the clubs don't have much money compared to the American/Arab owners so the fans want them out. Example being Everton.

 

[Costanza]

Sports are TV based businesses. It's a part of the entertainment industry.

The best way known to this day to make good sports Tv, is by having leagues and tournaments.

Of course if you can win games and trophies, you're gonna get more fans ( viewers ) and more money ( tickets, merchandise ).

Smaller teams are created for many reasons :

A) Are famous within the local area, can make money.

B) they give leagues meaning.

C) they can develop stars.

D) In lower division leagues, they are actually people who just like to play the game.

It's not complicated. If Leo can understand it then everyone can.

 

[luke07]

win = money

money = win

simpe equation

but yeah AGAINST MODERN FOOTBALL/LAME STADIUM ATMOSPHERE

 

[Sven]

The main objective is money. Not all clubs could compete for trophies, but all clubs could make a financial profit and that's what they primarily aim to achieve. Trophies are part of the sentimental value for fans. Of course trophies are an objective to some clubs, but not for the emotional value as much as for the monetary reward.

It depends on what model the club work. Only the clubs that work like business companies aim for profit (some actually aim for a deficit to be paid by a sugar daddy ). They got an owner and are no different than usual business in that sense.

Though a lot of clubs, almost all of them from Portugal/Spain/South America for ex. are still clubs on the sense of societies. They're not business, they got associates and a board to control management decisions (and elect them) but nobody really owns the club and can claim their money.
Every single penny of profit is reinvested within the club. Sure they want to make money, but the money is a way to buy better players, stadium, training grounds, pay better salaries for better players. Not the aim per se.

 

[necromancer]

Yes, so broadly there are 3 models.

1. For profit - Half of the whining that goes on in the Rumour Commode is applicable only to these clubs, and Milan is NOT one. Udinese is a classic example. Arsenal is another.

2. Society-owned - Fans own the club. This is, in many ways, the best model - since the fate of the club is not dependent on the whims and fancies of a single owner. And there's no profit considerations either. Like Sven said, many clubs in Spain are like this.. I have a friend who's a Real Madrid society member. So technically, he owns part of the club.

3. Owner-run - Milan, Juventus, Inter, Man Utd, Chelsea, Man City etc.. This is HEAVILY dependent on the nature of the owner. If they wanna, like manutdfan said, make money through the club and invest it elsewhere, that's not necessarily good for the club. If it's like Milan, where the owner sees something positive that the club's success would give him, then he wouldnt mind making losses while running the club. And that's great. But from a sustainability point of view, this is the riskiest model. You never know when the owner would lose interest. That risk is sort of hedged by the club's popularity, since many rich people would love to buy the club in that case.

Overall, the main objective is money only in case 1. In case 3, sometimes the main objective can be money.

 

[Fiero]

Though a lot of clubs, almost all of them from Portugal/Spain/South America for ex. are still clubs on the sense of societies. They're not business, they got associates and a board to control management decisions (and elect them) but nobody really owns the club and can claim their money.
Every single penny of profit is reinvested within the club. Sure they want to make money, but the money is a way to buy better players, stadium, training grounds, pay better salaries for better players. Not the aim per se.

2. Society-owned - Fans own the club. This is, in many ways, the best model - since the fate of the club is not dependent on the whims and fancies of a single owner. And there's no profit considerations either. Like Sven said, many clubs in Spain are like this.. I have a friend who's a Real Madrid society member. So technically, he owns part of the club.

The question is, why aren't all clubs run like that? It seems like the logical and most sensible model to follow, and would stop football from turning into strictly business.

 

[necromancer]

The question is, why aren't all clubs run like that? It seems like the logical and most sensible model to follow, and would stop football from turning into strictly business.

Because of historical reasons. Berlusconi bought Milan from the courts, when scandals would have taken the club into Serie X and even complete implosion. Since then, he has built his brand with the club and given a lot to the fans. If a situation arises where the fans get fed up of the owner, I'm certain that things will move towards model 2.

So all those clubs in model 3 are being run by powerful/reasonable owners. Hence, there is no need to move into model 2.

 

[MilanMB]

The question is, why aren't all clubs run like that? It seems like the logical and most sensible model to follow, and would stop football from turning into strictly business.

Because some people want to own a club, and have enough money to do so.

Berlu for example have used Milan in his political career.

If I were as rich as Berlu, I'd also buy a football club and play with it.

 

[Fiero]

So all those clubs in model 3 are being run by powerful/reasonable owners. Hence, there is no need to move into model 2.

But what about clubs like Manchester United? Clearly the fans aren't content with the owner. They've even gone as far as boycotting United and creating their own team in the lower leagues as protest. Why can't they buy him out? Or in other words, what are the steps needed for them to change the club into model 2?

Was it you who provided the link of the Portsmouth situation? Is that the model 2 you're speaking of? I have a vague idea of it in La Liga with barcelona (didn't know Real were the same), and I think even Porto and some Portuguese clubs follow the same model as Sven said. Are Athletic Bilbao and the likes society owned as well?

I'd appreciate if you or anyone with prior knowledge about this subject shares it with us or even provides links.

Because some people want to own a club, and have enough money to do so.

Berlu for example have used Milan in his political career.

If I were as rich as Berlu, I'd also buy a football club and play with it.

Exactly. Which is sad in a way. In a perfect world, football shouldn't be a business. How better would it be if clubs were all society-owned? Like if it was in the rules.

 

[necromancer]

But what about clubs like Manchester United? Clearly the fans aren't content with the owner. They've even gone as far as boycotting United and creating their own team in the lower leagues as protest. Why can't they buy him out? Or in other words, what are the steps needed for them to change the club into model 2?

Was it you who provided the link of the Portsmouth situation? Is that the model 2 you're speaking of? I have a vague idea of it in La Liga with barcelona (didn't know Real were the same), and I think even Porto and some Portuguese clubs follow the same model as Sven said. Are Athletic Bilbao and the likes society owned as well?

Checked the La Liga thing. 4 clubs are owned by socios. Real Madrid, Barcelona, Athletic Bilbao and Osasuna. The rest are Serie A style owner-owned clubs.

In the case of United, the supporters simply need to have enough money to buy out the club. That's a lot of money. On top of that, Glazers have converted their debt from their other ventures to Man Utd. Which means anyone who picks up the club now, will have to carry that debt as well.

Steps needed to go to model 2 is enough money in a supporters' trust (Which naturally means some big shots backing the trust. Which implies big shots without profit motive. Which implies big shots who are actual fans. Which is so rare.), and an inclination by the current owner to sell.

The one flaw with a society model is the same flaw with communism. It is beyond human nature to equalize everything. There will always be some people who'll call the shots and control things. A society where everyone has equal rights remain ideal.

 

[Ash]

Checked the La Liga thing. 4 clubs are owned by socios. Real Madrid, Barcelona, Athletic Bilbao and Osasuna. The rest are Serie A style owner-owned clubs.

In the case of United, the supporters simply need to have enough money to buy out the club. That's a lot of money. On top of that, Glazers have converted their debt from their other ventures to Man Utd. Which means anyone who picks up the club now, will have to carry that debt as well.

Steps needed to go to model 2 is enough money in a supporters' trust (Which naturally means some big shots backing the trust. Which implies big shots without profit motive. Which implies big shots who are actual fans. Which is so rare.), and an inclination by the current owner to sell.

The one flaw with a society model is the same flaw with communism. It is beyond human nature to equalize everything. There will always be some people who'll call the shots and control things. A society where everyone has equal rights remain ideal.

I don't know

Society model works best in Spain because of it's Geopolitical issues

People over there have a strong connection to their roots and see the clubs a way to express them. If you look at the various clubs histories (especially the four owned by socios) you would notice that each of them have a significant reason of being owned by supporters

Real Madrid - Franco's club, the Capital's club, the King's club etc etc

FC Barcelona - Catalonia's club

Bilbao and Osasuna - Club of the Basques

I think these four have survived being owned by socios as they are seen major symbols of their respective communities and ethnic identities. Honestly can't see a similar system work in Italy as a result

 

[necromancer]

^ What is the connection that you are implying? What if a club does not have a geopolitical identity and still go for the socio-route? I dont understand the link that you are trying to imply..

 

[Sven]

I really don't know if it's possible to convert club shares and turn it into a society... I don't know about any similar case. Clubs like Real, Barça, Bilbao problably never had their membership converted into shares in the first place, they keep it like they're founded. It depends on national legislations, but problably they have dispositives in their statute/regiments that disallow such stuff.

Here in Brazil (I guess most of the South America) there was always a different law for football clubs, preventing it to become PLC and stuff like that. It changed in the 90's, allowing it to happen, to what clubs answered disallowing on their internal regiments.

The one flaw with a society model is the same flaw with communism. It is beyond human nature to equalize everything. There will always be some people who'll call the shots and control things. A society where everyone has equal rights remain ideal.

I like the model of my local clubs Grêmio/Internacional. It works roughly like western democracies. It's more about representation than equality. Associates elect the members of a council and the president periodically by direct vote. There's parties representing pov's within the council. The president is just a periodic mandatary, limited by the board and submitted to the regiments. Can't get more direct than that for clubs with 100.000 + associates.

Downside is that for a long time there was some really amateurish management. Just recently they got really efficient/professional.

 

[necromancer]

Yeah, practically it is very unlikely since the reverse is how practicality flows. Becoming a publicly traded company is pseudo-model 3 anyway, except the wealth is distributed a little bit. Major shares will still be owned by the owners.

 

[Fiero]

Also one issue the general public fail to take note of is the role of agents. I want to link this as well with how football is a business and that fans shouldn't demand or expect loyalty from players.

For example let's examine a guy like Jorge Mendes, who is arguably the most powerful agent in the world with Cristiano Ronaldo and Jose Mourinho as clients. How he influences the game is huge.

When Mourinho won the Champions League with Porto in 2004, he had a Brazilian small time agent who had already set up a contract with Liverpool, until Mendes swooped in the last minute and took him to Chelsea. There he signed Carvalho, Ferreira, Tiago Mendes, and Maniche - all players represented by Mendes.

Then in 2008, Mourinho went to inter and his marquee signing was Quaresma, another player represented by Mendes. While Mendes took Scolari to Chelsea and got him Deco and Bosingwa. Mourinho and Scolari were the 2 highest paid coaches in the world at the time, thanks to Mendes.

What I'm saying is that most people fail to see the impact of agents. Like when people say 'Mourinho signs flops for e.g. Quaresma', that sentence is wrong on so many levels. They fail to see the bigger picture. You reckon Mourinho is some kind of idiot who doesn't know football? Probably he would have preferred a different player but the fact that Mendes was both his and Quaresma's agent of course played a role in the transfer. The fact that Mourinho dropped and sold him in 6 months is an indicator of my point. And when Quaresma left in January on loan, where did he go? That's right, to Chelsea, with Scolari, another one of Mendes' clients.

So in real world football things are not quite like Football Manager. Things just don't work in that smooth way where a coach asks for a certain player and gets him, no. That's why it takes a real top class coach to succeed more than once. He has to mix and match, balance it out, and create a team out of all the pieces he gets. It boggles my mind when some people say statements like 'Mourinho is so uninspiring, he has an unlimited check and still can't create a better team at Real Madrid'. But they ignore the fact that just because he has the luxury of spending a lot, doesn't mean he could sign anyone he wants. Let's look at his signings in Madrid: Carvalho - Jorge Mendes, Coentrao - Jorge Mendes, Di Maria - Jorge Mendes. Do you reckon Madrid needed Coentrao that bad so that they spent €30 million on him while they had Marcelo? No. But football isn't that simple. You have to do favors to agents, help them out now so they help you later... it's an unspoken agreement. When Real signed Sahin from Dortumund, they got Altintop as well. They share the same agent. He got him Sahin, but in return they do him a favor and hire Altintop. And I don't just mean Mourinho BTW, I was just using him as an example to illustrate my point.

So in reality football is purely business. No one cares about a certain club, crest, or colors. It's strictly business. Players could be moving to one place and then their agent could take them somewhere else. There is only rare cases of professional players who play for their local club, and even then it comes at a price. No one doubts that Totti loves Roma, but do you reckon he would have stayed there all his career unless he was paid a certain amount of money and given unlimited amount of political power?

So fans should know better than to expect loyalty from players and then brand them traitors when they leave. There are so many factors involved including directors, agents, and coaches that play a part in transfers and so players shouldn't be blamed. It's basically a job for them and in many cases they're not the ones that decide their next move.

 

[ManU sux]

We dont have anything like promotion, relegation here, so I was wondering if the average fan their would rather see their team kick ass all season in division one, or get their ass kicked and just barely surviving in the premier?