Often Partisan

The Business of Football

As television rights pump more and more money into football, the sport as we know it has become richer than its wildest dreams and thus has become operated more and more on a business footing. These days it’s not just about how high in the league you finish or how many cups you win – it’s also about how much revenue can be brought in and how much profit can be made.

Without wanting to go into a discourse on the relative merits of capitalism, I am of the belief that the more Corinthian ideals of sport have long since been eroded in football. Whilst many talk of how the Premier League millions have ruined the sport it’s worth bearing in mind that Birmingham City do hold the honour of being the first club to become a limited company, having become such in 1888 (with the claret and blue mob from across the expressway following us soon after) and were in the first wave of clubs to be listed on the stock exchange when they were floated on the AIM in 1997. Therefore to moan about money ruining Birmingham City could be seen as somewhat disingenuous.

Ideals of sportsmanship aside, it makes sense for a football club to be run as a business – after all, if a club is going to pay players wages in the million pounds a year plus bracket, then it makes sense for the club to ensure it has the revenue streams to do so. Sadly, the days when the money coming through the turnstiles and in merchandise was enough to run a club have long since gone and clubs have to do what they can to establish that they are gaining the most amount of money possible via TV rights and corporate deals to ensure that they can continue to pay the wages of the players on the pitch – and remain competitive enough with other teams to continue to attract players to play for the club.

Thus it logically follows that to ensure a club is run properly a club requires executives at the top that understand how to run a business properly and can do so well enough to maintain a club in profit. Executives at that sort of level don’t come cheap and as such it’s not unusual to see directors of football clubs earning hundreds of thousands of pounds – if not millions – a year in wages and bonuses. As an example, Birmingham City FC is a business which turns over between thirty and sixty million pounds a year based on recent accounts which makes it a fair sized business to be in control of.

So what am I getting at? Well, I’ve seen lots of comment online about the money that is made by businessmen in football at all football clubs. Birmingham City is by far not alone in having fans who are unhappy with the way the club is run and in having fans who think that the people at the top aren’t doing their jobs properly. I think people have to accept that the sums of money flying around football clubs is the price we pay (no pun intended) for having massive television deals and multi-million pounds worth of players on the pitch. However, for the sums of money that are paid to people running clubs I think fans have the moral right to expect that the people running their clubs are doing so to the best of their ability and in the best interests of the club – at least financially.

Football as a business breaks down when clubs aren’t being run in the best way possible – especially from a financial or corporate governance standpoint. Having seen the mess that has been made at Portsmouth – which sees a side who won the FA Cup in 2008 plying its trade next year in League Two (albeit in fan ownership) and at Coventry where another former Premier League club is on the brink of meltdown it’s easy to see why fans get uneasy at the thought their club might be following down the same path. I’ve often held that problems at Blues aren’t necessarily the same as at those two clubs but as time ticks on and more and more news surfaces, I do start to wonder just how bad things might get.

For Blues, the fun really starts next week when club president and largest shareholder Carson Yeung goes on trial in Hong Kong. It’s now been nearly two years since Carson was arrested and I don’t think I’m alone in hoping that particular story is close to coming to an end. However, as much as it will be good to see closure in that particular thread of Blues’ shared history I’m of the belief that the much wider problems will not be sorted until a takeover comes – and in that, I hope that the people running the club understand that time has now run out for them and it’s time to go now whilst their dignity remains somewhat intact.

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37 Responses to “The Business of Football”

  • bkkblue says:

    If an individual takes millions out of a struggling insolvent business in salaries, expenses, commission and consultancy fees; then surely we should expect that the business is being turned around and that the future looks rosy. If not, then why are such huge sums of money being taken from such a poorly run business for so little in return?

    As you and the Blues trust have previously pointed out, it is not just the fans that stand to lose here, it’s also the shareholders. I find it hard to believe that what has gone at Blues is ethical from either a sporting OR business perspective.

    • Agent McLeish says:

      Couldn’t have put it better myself. I was shocked to read on the previous OP discussion that some fans actually believe that CY “loves the club”. Are these people loco?

      • John says:

        As a Blues supporters for the last 50 years,my alligance to the club, would be even stronger if I was paid £1 million a year as well !

  • sutton apex says:

    Blues directors like all others will chase the premier dream – £60,000000 i think this season before you kick a ball, then tv rights, placings etc.My worry is even if we get new owners they too will recklessly chase that dream – fan ownership is the way forward, aka swansea, pompey – thats why i joined the blues trust. If they get 12000 members any board will have to take them seriously

    • Paul Carter the visionary he says:

      If the Trust want to get anywhere near a 1000 members they have to be more overt, show their presence at matches etc…Problem I think they have is that they’ve made a few wrong calls by supporting Pannu in their early days and saying that they are not against te club but want to work alongside it when most fans can see through Pannu and want change.

      • almajir says:

        They’re getting there Paul – at around 500 members now and I think you will see the fruits of their labours soon.

        • Paul Carter the visionary he says:

          500 is impressive, had no idea they had that many

          • Alex T says:

            I hope they sort out the organisation side of things…. I applied for membership and payed my £5, but heard nothing back. So I may or may not be a blues trust member, but who knows?

          • almajir says:

            I would suggest contacting them via email mate.

  • Mickey07 says:

    Dignity???yeh right…

  • Paul Carter the visionary he says:

    Mate told me yesterday that he had seen an article staying that Pannu is in the top 5 in the country CEO earners at any football club including all the premier ones.

    Surely this ain’t right? Dan?

  • Paul Carter the visionary he says:

    How immoral is that?

    • steve-0 says:

      Maybe, maybe not. Wouldn’t an executive who can take a smaller club to bigger status worthy of more than somebody who ismply babysits a bigger club and maintains?

      A lot of people in the technology industry are paid a fortune by smaller companies aching to establish themselves and they call on vast corporate experience to get them there. There is much more reward for getting a smaller business up there, than there is working in a billion dollar company.

  • Evesham blue says:

    It’s like shares. Do you flog em and cut your losses or do you hold onto them in the hope they go up again? I’m of the opinion they won’t sell up unless they are forced to. They own it. It’s not up to us to say sell up for a loss and leave.

    Besides we have heard all this Doom for so long about finances and we are still operating. Last time I checked LC was still offering contracts to players so we are still a going concern

  • KeeprightCroydON says:

    Al I think current owners have lost sight of reality. They seem to be incapable of running it as a business but seem determined to hold on to it at any cost. Delaying tactics by withholding the accounts, appointing new directors at a whim are just some of the tactics used to avoid selling. As the longer this goes on, the more the club sinks….and still they bury their head in the sand and try to cling on.

    As for PP at No.8 in the country. My word! Current owners kicked up a right rumpus, rightly so at the time, with regard to Karen Brady’s pay off. But it has to be said, like her or not, she earned her salary when she was MD at Blues and ran it an good business lines. We can always argue there could have been more investment, but Blues were one of the few clubs who always were in the black. They did not pay over the odds for the wages of people like Hleb, who always gave the impression that he did not really want to be here. I like Ziggy, but he’s not worth the salary he picks up, and Brady would not have countenanced it. PP and others” running” the club sanctioned these deals which have got the club into its predicament. Which begs the question: are they worth the fess they are getting? I know what I think. No 8 indeed. PP has some explaining to do.

  • Evesham blue says:

    Always looking backwards about the past when we should be looking forward? The club is in the process of readjusting to champ revenue. It don’t happen overnight. In fact the process probably won’t be complete until zingy is off the books

    • bcfc1976 says:

      Glad to see will packwood can continue his football education with blues. I wonder if Clark looking for him to play in central defense next year?

  • Masaccio says:

    Hopefully we will come out of this in better shape, with some brummy kids playing for us. Can;t wait for next season with the kids getting new deals this week. Well done Mr Clark, looks like he came good in the end?

  • Atahualpa is a BlueNose says:

    The club really is at a crossroads.

    CY is probably hoping and praying that somehow this unholy and complex situation gets resolved in his favour – events are fast being taking out of his control, and there is a catch-22 situation; does he wait and try and string it out further until Blues get promoted and he can attempt to claw some of his investment/ loans back, or he gets his asking price if Blues are promoted (but then would he need/want to sell)??

    PP cannot really justify his salary at Blues – how on earth can the club function with a so-called “Acting Chairman” thousands of miles away and rarely in attendance??
    There really should not be a way back for this individual. Many have said over the last few days that why would he have a sense of urgency to sell the club when he is so handsomely rewarded?? It gets over-looked sometimes that he is the one that has urged CY/BIHL to sell if at all possible (his statement in the matchday program against Blackpool in last season’s play-off), and as he is due a wedge from any sale, it is in his interest to try and identify a suitable buyer.
    Sooner or later the other shareholders can start asking questions of PP if nothing is happening in moving forward with what has been said regarding a sale, and how much longer can PP bullshit and bluster his way through things??

    There shall be more members joining the Blues Trust today.

  • mark says:

    with sorting out player contracts who do you think Clark is answer too? pp or carson!!!!! I am sure the buck stops at pp door in carson absent……….or maybe carson still has input still from his cell great things laptops…………

  • StaffsBlue says:

    The fact that so many academy lads are coming through is the most pleasing thing in this up-and-down season. They’re all died-in-the-wool Bluenoses too, which means they’ll sweat blood, run through brick walls for the club and earn every penny they get. That’s cause for real excitement imo.

    Who was it that once, famously, said, “You’ll never win anything with kids.” *cough* Hanson! Maybe not, but it could be fun trying. =)

  • Gary says:

    If Brady was such a paragon of virture she wouldn’t have needed to have smashed up hard-drives (if that story is true!).

    The fact remains that even in the Premier League most football clubs are essentially small-medium sized enterprises that require a decent administrator in charge. Most of the commercial decisions that matter are taken collectively (i.e. by the EPL or Football League) leaving clubs to negotiate player wages and relatively small commercial agreements such as shirt sponsorships, corporate adverstising, hospitality etc. I believe Faulkner at The Vile only earns around £250k which seems about right to me.

    I can see the need to wheel in a big hitter or two when acquiring or disposing of clubs but that’s where the Investment Banking Community help out – you certainly don’t need such services on full time payroll (or full time consultancy retainers).

    Let’s face it, the pigs have had their noses in the troughs and have gorged themselves silly at the expense of the wellbing of the club itself and certainly those that have supported it all their lives. I hope that whatever The Trust is about to disclose lays bare the lies and corruption that seems to riddle the club. All just my own opinion of course!

  • Lee H says:

    Completely off topic but after Robert Lewandoski’s goal scoring achievements last night, I can’t help remembering us mentioned with his signing years ago http://www.birminghammail.co.uk/sport/football/football-news/birmingham-launch-62million-bid-for-striker-94692

    Good job we favoured Benitez instead :/

  • Tony says:

    Agree with Gary Smashing up hard drives, missing files, with Brady look at her old man how he made his money Its nothing new, its been going on for many years, I recall talk of similar in the Coombs time.

  • KPG says:

    Good article thanks for sharing your views.
    With Money coming in from Russia, Malaysia and goodness knows where in the future I would be surprised if Carson is he last owner to face money laundering charges.
    Their are not many industries where £millions can be generated in a single transaction.
    KRO

  • Martin says:

    How would you go about joining the trust?

  • Poppa999 says:

    Small Heath F.C. Ltd. was the limited company.

    Aston was still not part of Birmingham until 1838 – I can remember when it was all fields around here! lol!

  • DoctorD says:

    “It logically follows that to ensure a club is run properly a club requires executives at the top that understand how to run a business properly and can do so well enough to maintain a club in profit.”

    The problem is that when Brady, Gold and Sullivan sold the club, they assumed that Carson Yeung — because he apparently had a wodge of cash — was someone who knows how to run a business properly.

    The problem is, it is possible to run a business really badly and still make loads of money, at least in the short term. There are plenty of examples of this – one thinks of that great British company GEC which was riding high on the stock market in the dotcom boom of the early 2000s before going bust thanks to the actions of their CEO and others on the board making bonkers decisions.

    Sadly business success is not something that can ever be 100% guaranteed. Mix it in with football, whose supporters have a relationship with it that is very different to any “normal” business, and the results can be disastrous.

    Sorry to sound depressing.

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