Blog on football ownership

[Creaky]

Of course there should be regulation to ensure football clubs don't make a loss beyond a certain level. As Matthew Seyd explains, a lot of foreign owners are prepared to pump lots of money into clubs for the prestige that football may confer upon them:

I'm not arguing they should be allowed to but, if as Drew is claiming, football clubs are just a business like any other then there is no reason why, unlike any other business, there should be regulations that say they shouldn't be able to make whatever level of loss the owner wishes.

I'm arguing for the imposition of penalties on those who are responsible for those losses, (ie the owners), rather than on the clubs which only penalises fans and the wider community.

 

[drew]

So as a business why should there be regulations to say they cannot make a loss beyond a certain level? - I can't think of any other business where such a regulation applies.

The laws of 'natural selection' govern whether businesses survive. If they consistently make a loss with no prospect of turning that around then they get liquidated. What the football authorities are fed up with seeing are clubs regularly mismanaging their business, going bust, and then not paying creditors in full, many of which are other clubs who can then find themselves in problems. We know clubs don't have the mobility of other businesses in that they can't just up sticks and move to a totally new area which may have cheaper overheads and better market. Finally, the only people that can regulate football are the football authorities. The government can't get involved as I believe FIFA can suspend associations if Governments interfere which could include imposing regulatory bodies on clubs.

 

[drew]

I'm not arguing they should be allowed to but, if as Drew is claiming, football clubs are just a business like any other then there is no reason why, unlike any other business, there should be regulations that say they shouldn't be able to make whatever level of loss the owner wishes.

I'm arguing for the imposition of penalties on those who are responsible for those losses, (ie the owners), rather than on the clubs which only penalises fans and the wider community.

I would point out that fans benefit when owners overspend so why shouldn't they suffer too. Pompey are going through the mill at the moment but you didn't hear too many complaining when they got to two cup finals and played in Europe.

 

[Machiavelli]

This well argued debate illustrates just how far football has come since it was a game played in emergent industrial towns where the only aim was to get the ball from one end of town to the other. Football has deep roots in working-class communities, and it's been hijacked by middle-class professionals over the past few decades. This is highlighted by Drew's claim that football is just a business. I side with Creaky and Goldstone Rapper in thinking it has to be more than that. The devotion to the game/club on NSC shows that. The logic that football is just a business allows a club from Manchester -- the birthplace of industrialisation and the proletariat -- to be owned by a dynasty that excludes the working class from citizenship and subjects them to horrific working conditions. The same principle applies to the World Cup in Qatar, where several non-citizens building stadia have died on the job. This has been enabled by FIFA -- surely one of the most corrupt institutions in the world, and boy isn't there some competition on that front -- and will continue until sufficient working football fans speak out and publicises this.

 

[Creaky]

I would point out that fans benefit when owners overspend so why shouldn't they suffer too. Pompey are going through the mill at the moment but you didn't hear too many complaining when they got to two cup finals and played in Europe.

The answer to that is control and responsibility.

If fans and the wider community had a say in the way in how a club was managed then your argument would have merit - as things stand however that is not the case.

Any benefit or disadvantage a community may experience from the way in which a club is managed is purely incidental and has no bearing on how or on whom 'penalties' should be applied.

The irony of this whole debate is that you consider football to purely be a business and yet support the current FFP regulations which are totally anti-business.

On the other hand I believe football is more than just a business or a plaything for the uber rich and believes that the current FFP regulations are aimed at the wrong target as well as being totally impractical.

 

[Aristotle]

Good debate. I'm clearly on the 'football is not just a business side'. Part of the original point I was trying to make is that when people say that football *is* just a business, it is they who are being overly romantic - imagining some idealised model of free markets where everything works out as it should as long as governments or regulators don't interfere.

But markets never operate that way, and often the distortions cause significant harms unless they are corrected for by government or regulatory action.

The way football is organised takes it far away from anything that looks like a free market, so why allow clubs to be run like free markets businesses? Globally, FIFA - a corrupt and unaccountable NGO - has complete control over the global game. Nationally, clubs are awarded 'golden tickets' which guarantee their place in an incredibly rigidly structured industry. To some degree this has to be the case since the game needs structure for leagues to work. However, this also suggests there should be strict controls on how clubs can exploit their privileged status.

Another point that has come up is that, since clubs need money to run (players must be paid, etc.) there is no option but for them to be run as businesses. That just is not the case. Governments need money to run, but we don't allow countries to be run as private businesses (well, we shouldn't anyway).

We just seem so conditioned to think of everything in business terms, it's often hard to imagine any other way of working. But as has already been well said, forms of regulation operating in other sectors, such as the financial or energy sectors, could be the basis of managing football. FIFA might not like that, but, frankly, someone needs to challenge that organisation soon - it is part of the problem.

 

[drew]

Good debate. I'm clearly on the 'football is not just a business side'. Part of the original point I was trying to make is that when people say that football *is* just a business, it is they who are being overly romantic - imagining some idealised model of free markets where everything works out as it should as long as governments or regulators don't interfere.

But markets never operate that way, and often the distortions cause significant harms unless they are corrected for by government or regulatory action.

The way football is organised takes it far away from anything that looks like a free market, so why allow clubs to be run like free markets businesses? Globally, FIFA - a corrupt and unaccountable NGO - has complete control over the global game. Nationally, clubs are awarded 'golden tickets' which guarantee their place in an incredibly rigidly structured industry. To some degree this has to be the case since the game needs structure for leagues to work. However, this also suggests there should be strict controls on how clubs can exploit their privileged status.

Another point that has come up is that, since clubs need money to run (players must be paid, etc.) there is no option but for them to be run as businesses. That just is not the case. Governments need money to run, but we don't allow countries to be run as private businesses (well, we shouldn't anyway).

We just seem so conditioned to think of everything in business terms, it's often hard to imagine any other way of working. But as has already been well said, forms of regulation operating in other sectors, such as the financial or energy sectors, could be the basis of managing football. FIFA might not like that, but, frankly, someone needs to challenge that organisation soon - it is part of the problem.

What are you babbling on about? Firstly, if you knew anything about me from my regular posts on any political thread you will know I would never romanticise about a free market. I have never said it is just a business, just that clubs are run as a business. As for the so called 'golden tickets', you only earn those by promotion. Any other way would not be sport.

As for your comment about clubs needing money what viable alternative are you suggesting? Governments need money to run and where do they get it from? The taxpayer, ie you and me (assuming you are old enough to pay taxes!). Clubs need money and they get it from fans. Whether that be by ticket sales or through fans watching tv.

I agree that Fifa is corrupt but maybe that will change when Blatter departs, just as the IOC has improved immeasurably since Samaranch left. Are you suggesting Governments should run football because there are plenty of governments around the world that live by corruption.

Finally, you cannot compare an need for regulation with regard to power and heating and public safety with a desire by some to follow a particular sport, as big as that sport is. Also, despite there being regulatory bodies for finance and the utilities, those providing a service in those sectors are still businesses or had that fact escaped you.

You might have a good turn of phrase when writing but there is absolutely no substance to anything you have said.