The third interview in SportsProMedia's series inspired by UEFA's Congress on the Future of European Football, there is some solid thinking here, but I must say that Bob Lord was a catalyst for innovation not a benefactor in the sense we now know it, though it was his money that bought Gawthorpe, John Moores at Everton put much more money into that club and team
Turner: Keeping the collective model is football’s biggest challenge
Frank Dunne - May 26, 2021
- Transfer value ceiling could be next phase of FFP
- Need to serve the community more inherent to European model
- Manchester United fans had a chance to own part of the club through pubic listing but didn’t take it
SportBusiness has conducted a series of interviews with senior figures from across European football asking them to define a ‘sustainable’ economic model for the game on the continent. Over the course of this week, representatives from leagues, federations, clubs and confederations, as well as independent economic experts, will outline the challenges facing professional football and the remedies that they would like to see implemented.
In the third article in the series, Frank Dunne speaks to Stuart Turner, the chief executive and founder of the Start Media Services consultancy who also served as the Football Association’s head of broadcast, from 2004 to 2011, and commercial director, from 2011 to 2016.
A wealthy owner or a genius
Football clubs have always been supercharged by one of two things and, very occasionally, both: they’ve either had a wealthy owner or they’ve come across a genius. The broadcaster Elis James had it right when he said all football clubs are waiting for their genius to arrive.
Manchester United had two: Matt Busby and Alex Ferguson. Arsenal had two: Herbert Chapman and Arsène Wenger. Liverpool had Shankly. These clubs were nothing until these people came along and they were supercharged by that. There are still instances where this can happen, but it will become rarer and rarer.
In the late 1960s and early 1970s, the biggest benefactor in English football was Bob Lord at Burnley. He oversaw a period of massive growth for the club. He was a butcher, like Louis Edwards at Manchester United. In those days, a merchant or butcher could supercharge a club. Now it has to be an oligarch or an American or Asian industrialist. The level has moved up as globalisation has taken hold.
It is increasingly difficult to have a sustainable team. Spurs are a good example. They are saddled with the debt of building a new stadium. They are the most indebted club in Europe right now, with £850m-£900m of debt on the books. They could get to a point where they are seventh, eighth, ninth in the league and their fans will say: ‘What is the point of us if we’re not involved in the top four? And if we get into the Europa League it only affects our ability to get into the top four next year, because of the number of games to be played.’
They don’t want to be involved in relegation, mid-table or the Europa League so the only solution is top four. Look at how Spurs were jeered by their own fans on their return to the stadium. They want to keep Harry Kane and, more than that, want [owner] Daniel Levy to buy players to win them trophies. That’s unrealistic with £850m of debt.
Fans’ demands for success means there is always pressure on owners to improve their playing stock. But things can go wrong when a club is ‘chasing the dream’.
Bolton Wanderers got themselves into huge debt by getting into Europe – what was then the Uefa Cup – bringing in players to finish sixth or seventh in the league. That money wasn’t being provided by the revenue streams of the football club. It was coming from a private investor, Eddie Davies. Fortunately for the club, he wrote off almost £100m of debt at the end of his life. What was left was £15m of debt, and they still very nearly went into administration. If not for an 11th-hour rescue, they would have been a Bury [the League Two club, which went into administration in November 2020].
Being a yo-yo club is probably the most sustainable model there is. For some teams, the height of their ambition is to finish 17th in the Premier League. If they don’t spend a fortune in player wages and transfers, they can go down but the next year they’ll probably come back up. This year, potentially, could be the first season we get all three relegated teams back into the Premier League. And I think that will happen increasingly often.
There is nothing to prevent any football club exercising their own spending restrictions but I worry about any economic model that has a forced element to it. A lot of people say it levels the playing field but I think it can remove competition. The only way you can do it is with an absolutely forced model where you have no relegation and promotion, a franchise system like the NFL. The franchise system works incredibly well. It’s fair in the distribution of players and the distribution of wealth. But US fans are used to that. They are not used to the jeopardy of competition, of relegation. That is what competition is about for fans in Europe.
A limit on transfer fees would prevent a club without any financial limits coming in and upsetting the market completely. A transfer value ceiling would inevitably lead to lower wages, which would make it easier to rely on the traditional income streams of broadcast, sponsorship, attendance and hospitality. I do think this will be the next phase of Financial Fair Play.
Sustainability in the community
From a purely financial perspective, sustainability in business used to mean being solvent. We know that football isn’t like any other business. In football, there is a nod to wealth sharing, commonwealth – the almost socialist ideal where the richer members of society help the more impoverished members of society. That’s a worthy aim in any society but whether it’s more than a nod in football is debatable. Many lower in the pyramid would argue it’s gesture politics.
Going forward, in business generally, I think it will include several other things: sustainability through social responsibility; sustainability in the economy of the wider community; and environmental sustainability.
Anyone who has tried to get investment in a start-up recently knows that those elements of sustainability are high on the agenda for investors. Governments around the world are forcing investors to look at whether the companies they plan to invest in are thinking about these things.
I live six miles away from Nailsworth, where [League Two team] Forest Green Rovers are based. We can look at their business model and say it’s sustainable in this wider sense: their ground is sustainable, the way they water their pitch is sustainable, the way they are a vegan club – it shows there are ways to make it sustainable. But we’re talking about a stadium of 2,500. Whether you can do that on a larger scale is open to question. It hasn’t been done yet.
My club is Bolton Wanderers. As soon as they were promoted this year, they talked about linking back to the community. The owners of Bolton Wanderers have had their most successful periods when they have linked to the community. Andrea Radrizzani did a very smart thing when he took over Leeds United. He bought back Elland Road, Leeds United’s football ground. That was a real sign to the community that he was thinking about them and wanted to include them.
The Milton Friedman model of economics is free markets and profit maximisation and perhaps this is most prevalent in football. It is a branch of economics still preached and practised in America, which is where the European Super League ideas were born. I think it surprised them [the US owners] that it doesn’t truly work in football if you don’t consider the community. The European Super League situation showed us about the importance of thinking about the community.
Super League not dead
I don’t think the idea of a European Super League is dead. If you’re a property developer and you want to build 200 houses, you ask for 300. There’s a natural reaction against the proposal and you demur. Ultimately though you end up with the 200 houses you originally wanted, but it looks like you’ve compromised.
A lot of it [for the six English clubs involved] was a reaction against the number of games in the Premier League and the new format Champions League. Is it a bad thing to want a reduction? Probably not. If you really care about player welfare, having fewer games is important. So let’s say they go down to 18 teams in the Premier League. There are also too many games in Europe now. So do they also get fewer games in the Champions League? Does it go down the route of a smaller, single Champions League for the elite teams, bringing in the French and German teams not involved [in the Super League plan], and a Champions League II for the others? That is, in effect, a Uefa-led European Super League.
I didn’t agree with the Super League but I am in favour of fewer games in the Premier League and fewer games in Europe. If they were two outcomes of the Super League proposal, without resulting in a Super League, I think that would be a good thing.
You have to be careful not to view what happened in England as indicative what the rest of Europe thinks. The English response was probably more in line with how fans see things in Germany, even though they have fan ownership there. But I don’t think Real Madrid fans are as against the idea of a European Super League as some of the English fans were.
I think Manchester United fans would rather play Burnley than the third-best team in Italy. They have a grounding in the history of their club and where it came from. Even though they may see themselves as the biggest club in England, they have a sense of unity with the Bolton Wanderers fan, the Burnley fan or the Forest Green fan.
But I don’t fully buy into some of what is being said at the moment by fans about club ownership. As soon as a club becomes a plc it stops becoming a fans’ club in the traditional way they view it. You could argue, though, that that was the point where it became an opportunity to become a fans’ club and they didn’t take it. United fans could have bought shares, and they didn’t in enough numbers.
Pressure on the collective
The biggest challenge going forward for European football will be maximising traditional revenue streams through the collective bargaining model and that model is going to come under threat as our viewing habits change.
What we are all doing as individuals is creating our own TV channels with content that we want. It will get to the point where you turn on your device and you have your own channel there, based on things you’ve watched and things you’ve saved, with really intuitive personalised content. It won’t be the bland online personalisation we see now, where you get still get an advert for 12 months because you looked at something online and may have even in fact bought it. It will be much smarter than that. The OTT platforms have realised they’ll need to buy almost as much content as traditional linear channels, not less, to cater for this.
As a result of that, some clubs will realise they have more power than other clubs. If I’m Manchester United, I want to sell my product directly to a fan in Singapore. If I’m Liverpool, I want to sell my product to a fan in Japan. This level of personalisation will put a strain on the collective bargaining model and while the overseas Premier League revenue realignment argument was put to bed a few years back, it will inevitably resurface.
Are the regulators regulating?
Fifa should be the global regulator of the game. That is their designated role. We are in a mess partly because we allowed Fifa to become what it is. We have cleared out the yard, to some extent. Not through prosecution but through minor slaps of the wrist and the fact that a lot of those involved have since passed away. Having cleared that up, their role was to go on the front foot and be a better regulator of the game in the world.
If Fifa is not doing it, who is going to remind them? And if it isn’t going to be Fifa, what is an independent regulator going to look like? Who will be on it? We have seen the difficulty of getting independent regulators in sport. It’s a hell of a job. And independent regulators can be influenced so they are no longer independent.
I also think Uefa have taken their eye off the ball of being a governing body for European football. Uefa does do a huge amount of good in football but they are too keenly concentrated on being a commercial entity. There wasn’t a great deal wrong with the old Champions League model. I think the latest iteration is the 13th or 14th version. It needs to adapt. But growing it isn’t necessarily the right way.
The situation for the Football League and the Premier League is that if they play on a night which is a Champions League or Europa League night, they get fined. Uefa increased the number of game nights. It is the only situation where Uefa fines you for a problem that you haven’t caused. They have. That’s over-extending your remit in my opinion, even though they do a great job in terms of the marketing, packaging and selling of the TV and sponsorship rights.
There is a huge tension between Uefa and Fifa. As far as Uefa is concerned, Fifa has parked its tanks on their lawn with the Club World Cup. That’s a club competition and should have nothing to do with Fifa. Uefa tried to park their tanks on Fifa’s lawn by trying to globalise the Nations League, taking it to the other confederations as an idea. A lot of that is down to personalities, not function.