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Posted by on Jan 21, 2013 in MLS, Recent | 0 comments

The Soccer Club: Business Venture or National Treasure?

The Soccer Club: Business Venture or National Treasure?

 

Go to the pub. Go to the stadium. Wear your colors. Cheer till your hoarse. Get so mad you want to shake the referee silly for the bad call, or the call he should have made against striker who so blatantly fouled against your club’s midfielder.
At least among the passionate fans I know, we love tradition, history, and passion in our clubs, making them the institutions that they are or are in the process of becoming. Many of us keep a watchful eye over any meddling from management so that our passion is not stifled by corporate greed.
But what if your soccer club had to sell players just to keep its doors open? What if your club took one too many risks securing the “best” forward or “the missing piece” on the starting lineup, resulting in lost championships, reduced attendance, and bankruptcy? What if certain fan groups presented themselves as the”face” of the club–much to the organization’s detriment? Worse, what if attendance dips for your club’s home matches? Diehard footie fans often question a dominating corporate presence in clubs such as say New York Red Bulls. But in this day and age, if clubs are to survive, clubs need to find a way to toe the line between business operation and sporting culture centerpiece. Given the global nature of soccer/football, to ensure survival, club traditions must go hand in hand with business strategy. And there has to be a balance of power between the Front Office/Ownership Groups and fans, to ensure that the soccer club moves in the right direction.

When did the business aspect of soccer become so important? For those die-hard dedicated fans, we know that many clubs started out simply because people wanted something to do in the wintertime (Sheffield FC—the world’s oldest club in England—is an example of this), as organized athletics in public schools (e.g. England in the mid 19th century), or to build a sense of identity among immigrants or expats in other countries (e.g. the spread of football by British businessmen in South America in the late 19th early 20th centuries). The formation of FIFA and the World Cup spurred the need for championships, first in Europe, then eventually into Latin America. Country federations affiliated with FIFA were forming from Australia to sub-Saharan Africa. This piece will focus primarily on European football because, whether you solely follow ‘footie here in North America or in South America, soccer fans generally have to be aware of the latest happenings in Europe. And Europe was where modern association football sprang forth to the rest of the world, and where the global business aspect of soccer took off.

By the 1980s, TV stations in Europe such as Rupert Murdoch’s SKY TV in Great Britain and Silvio Berlusconi’s Mediaset in Italy challenged state-run European TV stations for the rights to broadcast football matches. These media giants and others saw football/soccer as “the people’s game.” European media companies wanted the right to broadcast the games. The process was further accelerated with the dissolution of international economic and political borders (e.g. fall of the Berlin Wall and disintegration of the Soviet Union), the unification of national economies (e.g. the European Union, a reunified Germany), and technologies that brought the beautiful game to virtually every living room that had access to Cable TV and the Internet.

In 1992 Europe accelerated toward economic Union, and the English Premier League was launched in England by chairmen of the top English football clubs. Resting at the top of England’s soccer pyramid, formation of the Premiership allowed independence from both the English Football Association and the Football League, as well as the freedom to negotiate its own broadcast and sponsorship agreements. The Champions league was formed a year later as a means to guarantee more matches and subsequently more TV coverage and money for Europe’s top clubs. Similar ideas and structures spread to Latin America, North America, and the rest of the world. Beyond media companies, companies that produced everything from beer to financial services wanted to associate themselves with the beautiful game because there was money to be had. Everyone wanted to make sure THEIR league gained as wide an audience as possible through the best players, secured through the best deals that would ensure a steady stream of cash flow into their clubs. Cash flow pushed salaries up and pushed up the fees to transfer players from one club to another. More foreign players played in leagues from Argentina to China. But of course not everyone within the front offices of football clubs had the business sense to realize that the best players come with a price tag. Facilities needed to be improved to insure continued record attendance; improved requirements came with a cost. The intellectual property of the clubs—the logos, the shirts—had to be protected, lest that property be poached by knockoffs of shirts, hats, and kits. All of this costs money, which will ensure that clubs continue to stay afloat.

The commercialization of the game really took off in the 1990s, coinciding with the digital/dot-com boom. Perhaps it would have behooved businesses that over extended themselves through massive investment in TV rights to broadcast soccer matches to have taken economics courses. By 2002, many companies–primarily in Europe–who overextended themselves to get a piece of the soccer pie had folded, were forced to cut back on expenditures and personnel, or renegotiate their investments. This coincided around the time the dot-com bubble burst and digital companies were folding or restructuring left and right. Economic conditions forced many clubs to seek bargains for top players, forcing down top players’ salaries as a result. Globalization and capitalization had an effect on football that has led to the foreign ownership groups we see today in such European clubs as Manchester United and Juventus. As long as the ownership pumped into clubs much-needed funds to pay off debts, improve existing facilities, etc., it didn’t matter whether the ownership were citizens or foreigners. Yet for those clubs who couldn’t enlist the help of foreign capital to keep them moving, some found themselves in a position to sell off their most expensive players, in order to remain competitive.

Thus while fans often look with a suspicious eye on the front offices and ownership groups that manage teams, the business units of soccer clubs–the front offices– are absolutely vital to the survival of the clubs and may mean the difference between the FIFA Club World Cup or obscurity (does anyone remember the Tampa Bay Mutiny?) In fact both the fan groups and the front offices need each other: the Front Office needs the fans and fan groups to ensure it remains at the pulse of the club. The fans need the Front Office to “steer the ship”, ensuring that their club remains financially sound and that it deploys the strategies that allow it to remain competitive relative to other clubs in the same league.

The commercialization of the sport previously described justifies the need for responsible ownership groups and/or front offices. Soccer clubs need to ensure that they have the necessary players to win championships and to fill seats. They also need to ensure that potential fans in the surrounding areas are aware of the team’s existence, as well as appropriately target and market to those fans. Clubs cannot accomplish such tasks without the guidance and strategies of the club Front Office, as they will remain uncompetitive and cease to exist. We can look to the old North American Soccer League (NASL) of the 1970s as a cautionary tale. That league folded in large part due to ownership groups who focused on “growing” the league without paying attention to the financial costs involved with club expansion and paying the lofty salaries of aging soccer stars. The blatant lack of knowledge among Front Office management about soccer and how to effectively “sell” it to the general public at that time further contributed to the NASL’s demise in 1985.

Above all, ensuring continuous, open dialogue between a club’s fans and its Front Office is also critical for a club’s survival. Based on my own experience supporting clubs both here in the U.S. and abroad, it is that sense of ownership and loyalty that makes football fans unique among sports fans. Club front offices need to be aware of these sentiments among fans, and strike a balance between being responsive to fans and ensuring the continued viability of the club. In at least one MLS club (Seattle Sounders FC), fans have the opportunity to even elect members of the front office! Within the context of my own fan experience, this open communications has created a degree of ownership and personalization that has solidified my passion for this sport. Open dialogue ensures that the Front Office/Ownership groups stay close to the pulse of the fans and at the same time, ensures that resources are deployed so that the club can continue to operate and function for decades.

While open dialogue is recommended, I would argue that the balance of power should not rest entirely with the front office or the fans. A balance of power must existing between the fan groups/fans and front offices , especially regarding statements or issues that, because of one racist fan or fangroup, or one ignorant front office executive, may ruin the survival of the club. The recent case of Zenit St. Petersburg (Russia) and the demands from a Zenit fangroup to not allow any more black or homosexual players onto the squad lends the question: does this one fan group truly represent the Club when it comes to these types of sentiments? I checked Zenit’s English Language Web Site ; there was an entire section focused on how Zenit was against racism. The only post from 2012 came from an interview with the head coach, Luciano Spaletti, in an effort to demonstrate how Zenit is “against racism.” Perhaps I am unaware of the organizational structure of Zenit, and, for that matter, the Russian Premier league, and maybe coaches do have more power in that league than the front office. Yet I would argue that the “against racism” campaign would have more teeth and appear more convincing if club management stepped up and condemned the recent actions of this fan group.

There’s no denying that, in order for a soccer club to survive, it needs to do what it can to stay competitive. It stays competitive by attracting the best players and coaches, who, in theory, will win championships and boost attendance. Fans–especially those who have children such as myself–need to feel safe when they go to games. But the soccer club is, in this day and age, very much a business venture. If it is part of a vibrant league and continues to make history for its fans, the club will very much become that national treasure. But someone needs to steer the ship. Those cheering and watching the action on the soccer pitch need to remind those steering the ship where the heart of a club lies, and remind the captain when the ship steers off course. Those steering the ship, together with those watching the matches, need to ensure that everyone feels good and is a part of something big. Unified, and the soccer club can easily be both business venture and national treasure for decades to come.

FURTHER READING
Goldblatt, David (2006)”The Ball is Round: A Global History of Soccer” New York: Riverhead Books.

Hunt, Chris Ed. (2012) “The Complete Book of Soccer, Second Edition.” Buffalo: Firefly Books