Football crazy ? Who are the real winners?

With flags waving from passenger car windows, fever pitch is with us again during the Euro2004 campaign. However, ever wondered how football became so popular over the last 10 years with club management and footballers claiming & gaining huge hikes in transfer fees, club earnings and sponsorship deals? With widening and varying audiences.

The FA Premier League was formed by the leading clubs in the Football League Division One breaking away. They did so to gain more control over TV rights and to have more control generally over their own destiny

However, we need to ‘dig’ a little deeper to uncover some realities! Until the early 1980s football clubs were mainly loss-making. They were primarily social rather than a commercial organisation. In addition, they tended to be privately owned, usually by locally based, wealthy and indulgent benefactors motivated by a desire for prestige in the local community or a personal hobby. Attendances were declining.

By contrast, today we see the industry is increasingly incorporated into the conventional commercial ‘leisure’ sector (with stock-market-quoted firms listed under ‘Leisure, Entertainment and Hotels’). Ownership by institutional or multi-national corporate investors has started (consider the recent bid from Thailand!?) Some large clubs have been transformed into highly profitable purveyors of leisure-related product lines, attracting an increasing number of spectators from across the full range of income groups.

Since the early 70s to the early 90s the industry could be considered to have been in a state of crisis. One view is that the lack of investment in grounds coupled with inadequate club management was to culminate only a few years later in the Heysel (1985), Bradford (1985) and Hillsborough (1989) stadium disasters. One could argue that football clubs were never intended to be conventional profit-maximising firms but needed to act as sporting clubs. Two key factors have driven the recent transformation of the football industry: the opening up of this previously closed sector to market forces (think also about how football has also become appealing to both sexes & age groups) and effective governmental regulatory intervention.
Regulatory interventions enabled football as an industry to re-construct itself. The emergence of satellite TV has had a major impact on football. The satellite companies, mainly BSkyB, developed a system to draw viewers prepared to pay the extra cost (known as pay-per-view), away from terrestrial channels. The sums of money TV companies were prepared to pay for television rights meant that it became possible for a minority of clubs to pay extraordinary sums of money to players, and still make handsome profits. This influx of money into football encouraged many club owners to float on the Stock Exchange while retaining controlling interests.
So who’s making the money and from who? In fact it’s the club shareholders and board members and players that are receiving vast funds or revenue. However, it’s Joe & Jane Public and their children that are coaxed into merchandise and related consumer products. NB Fans tend buy merchandise as a means of associating themselves with their sporting heroes, but also as a means of expressing solidarity with their fellow fans. The revolution in changing the football industry should have benefited the football supporters, but it continues to fall short. Instead the national press continue to create player icons and unnecessary associated obsessive pursuits.
The popularity of football may also have a long term impact on the reduced take-up of other sports. Remember Seb Coe, Steve Cram and Steve Ovett, some of the fastest and greatest record breaking field and track sportspersons. The growth of the sport of football shows yet another imbalance caused by commercialism.

Categories: 2004

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