Football (Soccer), Finance, and Business
It was Liverpool versus Nottingham Forest in the FA Cup semi-final, and many supporters of both clubs had much anticipated this match between these two giant clubs. As the clock moved up to 3.00 pm, everyone was waiting for the kick-off. But something appeared to be wrong. Some of the Liverpool fans on the terraces were having trouble breathing. Some were fainting, and some were no longer moving. And yet the crowds kept pushing forward, taking up their space, giving them no room to breathe, smothering them.
Usually, in England, football dominates the back pages of the newspapers with the latest results and match reports. Still, on the day after this semi-final, football found itself tragically on the front pages. Too many standing spectators had been allowed into one end of the ground at Hillsborough in Sheffield. The resulting crash led to the death of 96 Liverpool supporters and the injury of hundreds more. They had been trapped in the Leppings Lane enclosure. Due to various fences and barriers, they could not escape the crush when they became overcrowded.
This tragic incident followed other crowd disasters at Ibrox Park in Glasgow in 1971 and a fire at Bradford City’s ground in 1985. There were different causes for these events, but one major common denominator was that up until the time when they occurred, insufficient money had been spent on the infrastructure required to cope with the huge crowds which were then attending these popular fixtures.
Since World War II, football clubs had been drawing large crowds, but in general, the money earned had not been used to improve the facilities. Most of the stands and terraces at these stadiums had been constructed in the 1920s, yet they were still being used sixty years on. They were often in a poor state of repair, with cracked cement, stands built of flammable materials like wood, outside walls topped with rusty barbed wire, and toilets that needed to be refurbished to put it mildly. In short, the facilities needed to be completely modernized and rebuilt.
One of the real dangers lurking in these stadiums was the eventual catalyst of the Ibrox Park tragedy (see above). After a game was over, there would arise a situation where anything from 10,000 to 40,000 people needed to leave the ground simultaneously. The exits from the terraces were a series of long narrow corridors leading to the outside gates for many of them.
It is quite something to experience the crush of thousands of bodies all going along these corridors, with people pushing and shoving each other towards narrow exits. Those who have been in such a crush have described it as being swept along by the crowd with their feet barely touching the ground. For maybe 10 or 20 seconds, they have said they were no longer in control. It would have been fatal to fall down as it would have been impossible to stop such a crowd surging over anyone on the ground.
The Hillsborough disaster led to many reforms. A requirement was introduced that everyone attending a match at a stadium had to be seated. This refurbishment would mean every club in the football league would need to convert large areas of open terracing to seating. This would involve spending considerable sums of money. It also meant that fewer people could now be accommodated in the same space, meaning fewer gate receipts. This would all cost millions of pounds, so the question for each Chairman of the football club was how to finance it all.
Of course, a club would be able to charge more for a seat than for standing, but even so, the extra money would be required. In the end, some money came from public funds, but most of it came from a deal to obtain broadcast revenue from the new satellite broadcaster BskyB. Together with the BBC, this company stumped up £44 million to show 60 games a season in the newly re-branded Premier League, which began in August 1992. This was a 400% increase in revenue over the previous television deal, and the income curve has been upwards ever since. Only five years ago, in 2017, the twenty clubs of the Premier League shared revenue of around £2.7 billion, and matches were viewed in around 20 countries worldwide.
Such huge sums of money flowing around have affected the character of football in many ways, not all of which were foreseen. Because being a part of the Premier League is so lucrative and being successful in it even more so, clubs have felt that they had to pay to recruit the best players worldwide. And because of the money on offer, these players’ previous clubs have been keen to sell. Thus, transfer fees have increased quite exponentially in some cases. For example, in 1995, to obtain the transfer of Andy Cole, Manchester United paid Newcastle United £7 million, and this was a Premier League record at the time. But in 2018, to obtain the transfer of Paul Pogba, the same Manchester United paid Juventus £89 million, another new Premier League record at the time. This record was surpassed in 2019 when Philip Coutinho left Liverpool for Barcelona.
In step with these inflated transfer fees, players’ wages are also inflation. The players and their agents know that the best players are in big demand, and so their wages reflect this. The demand for talented football players is high as they increase the team’s chances of winning titles and entering lucrative competitions like the Champions League.
Successful teams also make more money from broadcasting rights and sales of merchandise and tickets, so clubs feel that they have to compete for the best players by offering the highest wages. If a particular club were to offer lower wages, then other clubs would simply outbid them. However, this is an area where it sometimes seems that things have increased to a ridiculous and unsustainable extent. It is often difficult to get hold of someone’s salary details for obvious privacy reasons. However, it was widely reported that when Alexis Sanchez signed on with Manchester United in 2018, his deal was earning him £500,000 a week!!
Now not everyone gets paid that much, but still, that is an incredible amount for one player. Was he really that good? And where was the money coming from to pay him? Well, after less than two seasons, even Manchester United realized that this was too much, and they paid him £9 million to leave. Well, that’s a nice deal if you can get it.
These huge amounts of money have inevitably made players and increasingly foreign-owned clubs more remote from their communities. Even years ago, footballers were always stars of their local areas with fan followings. This was normal at the time, but these days some fans must wonder what they have in common with someone who can earn more in a few months than most will earn in their entire lifetimes.
Then there is the actual cost of being a fan. Despite the television income, the cost of match tickets has soared, pricing many fans out of the game which they had watched as they grew up. Back in the 1970s, a ticket to stand on the terraces at Tottenham Hotspur in London would have set a fan back about 30 pence. And if that same fan had wanted to have a seat, that would have set him back about £1.25 or thereabouts. According to a 2018 article about Tottenham’s ticket prices, most of the ‘cheap seats’ were actually priced at £975 for the 19 games that season, which works out to just over £50 a game. And this is for the cheaper seats four years ago. With their new stadium (see below), the prices will have risen since then.
Some fans have also complained that now that everyone is seated in the stadiums, rather than standing on the terraces as before, the intensity of the atmosphere has diminished. This perception might be true for some people. However, probably most fans would say that watching in safety is worth the sacrifice of a bit of atmosphere. Certainly, no one would want to see any more tragedies like Hillsborough. However, just because the crowds are sitting down does not necessarily mean there cannot be an intense atmosphere.
At Tottenham Hotspur’s new stadium, which was opened in 2019, specific attention was paid to how the seating was arranged and the accompanying acoustics. The architects were able to enhance the whole experience in a way that probably exceeds even that which had existed before. This was by building it so that the crowd noise echoes back and forth. Of course, in this case, the new stadium was completely new construction, rather than just modernizing or adapting what had been there before. And it came for £1 billion, which is not the sort of money that most clubs can afford.
According to their 2021 accounts, Tottenham owed a net debt of £706 million, with repayment terms extending up to 2051. While that might appear daunting, the new stadium allows them to bring in much more revenue than before, so repaying this debt should not be too onerous, even if it will take another 30 years.
However, many other clubs might struggle to source this kind of money for rebuilding their stadiums. Some have already got into serious financial difficulties over this. Some are probably technically insolvent, although they know that they will be receiving large sums of television money each season. Of course, they can also keep going as long as the debtor does not insist on being paid right at this precise moment.
Various clubs have also pursued other lucrative deals with the likes of shirt sponsors, training gear sponsors, and even stadium naming sponsors. And then there are clubs where it seems that almost everything is for sale. Manchester United has an official brand of the automobile (Chevrolet), an official brand of chocolate (Cadbury), an official brand of spirits (Chivas), and on and on it goes. This is the complete list, and this appears to be more and more like a huge business enterprise rather than a football club. Or maybe this is just what a football club needs behind the scenes to be successful these days?
Ultimately, in order to solve the financial question, some clubs have just allowed themselves to be taken over by a rich consortium of businessmen (for example, Chelsea and Liverpool) or wealthy Saudi Arabian Sheiks (for example, Newcastle United), or wealthy United Arab Emiratis (for example, Manchester City).
When considering these new owners, it is an interesting question how closely the average fan feels connected to their club after so much change. Manchester City fans have enjoyed the success brought by (some might say “bought by”) the gentlemen from Abu Dhabi. In contrast, Manchester United fans are far from happy. This is because their American owners (a family by the name of Glazer) are accused by fans of extracting lots of money from the club in the form of dividends. In contrast, the fans would prefer that more should be spent on building up the club itself. However, the fans are no longer in control.
There have been many changes in English football over the past 30 years since the Premier League got started. Football, like many other industries, has gone global, with supporters, sponsors, and owners all over the world. Thirty years ago, it was an industry with an imperative need to modernize.
Unfortunately, it took some disasters and the resulting government legislation to bring everything up to a reasonable standard. These days things are much different, but maybe some changes have not been for good. We may not have any more disasters, but people connected with the game should ask themselves whether greed is perhaps suffocating the life out of the very game that they all love? Are we, in fact, heading towards an empty game that is only for the rich?
