Is Football a Business? – Steven Falk
By iSportconnect | February 19, 2013
Football might be a sport but it is also a serious commercial enterprise for the clubs competing at the highest level. And as in any other business, each must make a profit to survive.
This may seem obvious, but it comes as a shock to those traditionalists who bewail the game has lost its working class roots; traded its integrity for media content; and sold its soul to big business.
The evidence for the naysayers is seen in the dominance of corporate hospitality that prizes the prawn sandwich brigade over the ordinary Joe; in prima donna player mercenaries who dive their way to even more lucrative contracts; and in foreign owners who treat their clubs no differently from their trophy asset partners. First spending lavishly to impress, then divorcing in bitter acrimony when the glamour starts to fade.
But in truth, it’s many years since football was a working mans game offering brief respite in a week of unremitting toil. Flat caps and local heroes sharing the same bus ride to the stadium have long since given way to designer replica kit and obscene chanting. Nostalgia just ain’t what it used to be.
For some, the reality of the modern game is defined by a simple formula:
Winning=Success=Money=Better Players=Greater Success=More Money
If only it were that simple. While it is true that commercial success must be underpinned by positive results on the pitch, victory cannot be guaranteed in sport. The most expensively assembled team can simply fail to perform however well endowed the owner. In this respect the economics of football defy business logic, as even the most creative accountant is unable to factor the emotion of sport into a balance sheet. Consequently, the cost to clubs of remaining competitive over time creates a risk dynamic that can fluctuate wildly between glorious triumph and total ruin.
In the UK, the stock markets were quick to welcome the injection of popular glamour as leading clubs queued to list in the 1990s. Corporate investors were just as quick to vote with their feet as they realised the precariousness of any return on their investment could be impacted significantly by a linesman’s decision or a ‘keeper having an off day.
In this respect, the business of football is a paradox. It boasts a truly global following and a level of brand recognition for the leading clubs that rivals much larger organisations. But enduring success is a rare commodity for investors and workers alike. Star performers are hired and fired with alarming regularity and stellar reputations can be obliterated by the next bad result.
Football is a blockbuster movie without a script. It’s a business Jim, but not as we know it.
Steven Falk is founder of Star Sports Marketing a consultancy providing advice on sponsorship activation, brand development, membership programmes, CRM and affinity marketing. Clients include Chelsea FC, World Academy of Sport and Jockey Club Racecourses.
Star Sports Marketing can help you to devise and implement an effective partnership strategy.
You can follow him on Twitter: @steven_falk