The official blog of The Social Democratic Party.

The Not-So-Beautiful Game

Big clubs were not simply taking a bigger slice of the pie; they were taking a bigger slice of a pie that was getting larger at an astonishing speed.

By: Andrew Collingwood

To social conservatives and communitarians, the public reaction to the abortive plans of Europe’s leading football clubs to form a ‘Super League’ were depressingly familiar. The announcement prompted expressions of outrage from fans, pundits and even the Prime Minister, and eventually strangled the league in the cradle. All of this was bizarre, because the things they were complaining about already pervaded every aspect of football. A breakaway Super League would have changed the official rules, but little of football’s reality. Stopping this move will ultimately mean nothing, as the war for football’s soul was lost years ago.

It started in 1983. Before then, clubs in the Football League (which comprised the top four divisions of the English league pyramid) were obliged to pay their opponents 20% of their match day gate receipts. This allowed smaller clubs to enjoy the financial benefits of playing at Old Trafford, Anfield or Villa Park once a season, somewhat evening the playing field between the larger and smaller clubs.

Under the guise of fostering a more commercially minded approach to the game, in 1983, the big clubs successfully pressured the Football League into removing the gate-sharing agreement. Now, the bigger clubs would get to keep their entire match day revenue. This gave them an advantage in the transfer market they had not previously enjoyed.

Manchester United’s 1989 signing of Paul Ince from West Ham United was a good example. Previously, West Ham had prided themselves on being able to keep their best homegrown talent. But in 1989, representatives from Old Trafford turned up at Upton Park and blasted anything West Ham could pay Ince out of the water.

This transfer market advantage bought the top clubs more success, and thus more lobbying power. In 1992, led by ‘the Big Five’, the top flight of English football broke away from the Football League to form the Premier League. The main difference was that the Premier League would negotiate its own television rights, and keep the money itself, with only token redistribution to the rest of the professional game. Before that, television revenue had been shared equally between the 92 clubs in the league.

This concentrated yet more money, and thus spending muscle, within the larger clubs, and made them even more powerful. The same year, UEFA changed the format and branding of its European Cup. Since 1955, it had been a straight knockout tournament including the previous season’s winners of each of Europe’s leagues. From 1992, it would be called ‘the Champion’s League’ and involve a league stage that preceded a knockout phase.

The idea was to prevent clubs from being eliminated in the first round after only one European home game. Reaching the league stage guaranteed three. Further, the television and sponsorship revenues would be channelled primarily toward Champions League clubs, rather than divided between the three UEFA club tournaments.

Over time, Europe’s biggest clubs pushed UEFA into broadening the tournament to ensure more guaranteed matches and a greater likelihood that the big clubs from the major TV markets would qualify every season. This diverted evermore of the game’s money, and spending power, towards the larger clubs.

The establishment of the Champions League and Premier League coincided with renewed public interest in football. Television executives realised that sport had an unrivalled ability to generate advertising revenue, and so came the advent of “pay television.” This meant that the big clubs were not simply taking a bigger slice of the pie; they were taking a bigger slice of a pie that was getting larger at an astonishing speed.

This breakneck accumulation of money attracted the interest of global financiers, sports magnates and the super wealthy as surely as dumping a pale of bloody fish heads into the ocean lures sharks. The families who had held stakes in British football clubs for generations were suddenly able to sell them for hundreds of millions of pounds. The Hill-Wood family had been involved with Arsenal F.C. since the 1920s, and eventually sold to the moneymen in the mid-2000s. The Moores family sold to American investors at around the same time, after having owned controlling stakes in Liverpool F.C. for half a century.

In a saner world, the clubs would not have been theirs to sell. The existing owners would have been seen rather as custodians, running the clubs to ensure their longevity for the fans and communities that had built and sustained them. Indeed, the original FA rules restricted dividends to 5% of the face value of the shares, prohibited the payment of directors, and said that if a club were wound up, any surplus had to be given to charity or another club. Owners were simply not expected to gain financial reward for their involvement in the game. Now, they made unfathomable fortunes selling to sheiks with briefcases full of cash and to plutocrats who funded their deals by loading the clubs they bought with debt.

Nobody cared about any of this. On the contrary, most of the pundits who spent much of last week mewling on Sky Sports about the European Super League once celebrated the massive injection of cash into the top tier football – be it from the Premier League’s ever richer television deals, the Champions League’s development into an virtual closed shop for the big clubs, or mega-rich club owners.

How many of those complaining can honestly say they felt similar outrage when ticket hyperinflation meant the working class fans who sustained the clubs for a century were suddenly priced out of the game? How many campaigned against the vast sums of debt piled onto clubs’ balance sheets? Who cared about the disparity between the top five or six clubs in England and the rest, or between the Premier League and many other leagues in Europe?

Where was the outrage about club money being funneled into the pockets of an small group of club owners and players, rather than being spread around to help the game as a whole and the communities the clubs serve?

To argue English and European football is still meritocratic because it has promotion and relegation is like saying Russia is a democracy because it holds elections. Consider Manchester United. In 1969, Sir Matt Busby, a great manager who had been in charge for decades, retired. The club made a series of poor managerial appointments and blunders on the transfer market. Eventually, they were relegated to what is now the Championship. When Sir Alex Ferguson retired, the club made the same mistakes, but this time the weight of finance was so heavily in its favour that the extent of its fall was to seventh place.

The rules still permit relegation, but the facts on the ground do not. Smaller teams still have a chance to play a superclub, but are given no realistic chance of winning in the end. In other words, the proposed European Super League was simply an effort to codify reality.

In this sense, football reflects our economy. Like many businesses that were privatised or deregulated in the 1980s, football clubs have become unmoored from their communities and purpose. Craven regulatory authorities and an indifferent government allowed them to be sold to rapaciously greedy foreign investors, and be thence transformed from organisations sustained by their communities into corporations that exist to maximise the returns on their shareholders’ capital at the expense of everything else.

Unlike the broader economy, football now has a second chance. The failure of the ESL offers us a chance to clip the wings of the superclubs and their rapacious owners. Central to any effort to reform football must be an understanding that the clubs serve their fans and communities, and that genuine competitiveness drives interest.

Moving to a German model, in which fans own a 50% and greater share of the clubs, might seem ideal, but it is difficult to see how that could happen given that clubs are all limited companies. Either the government would have to expropriate the present owners, or stump up big money to nationalise them. Neither is politically realistic. However, fan societies could and should be given seats on their clubs’ boards of directors.

We should return to the pre-1983 model in which 20% of gate receipts were shared, and television royalties were equitably shared between the four divisions. Champions League money must be rolled into this, too, given the riches involved.

If we returned to a state in which clubs were more closely connected to their communities than their shareholders, and any team had a strong chance of beating any other on any given Saturday, we might find we enjoyed it more.

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All Comments (14)

  • Very good summary of how it is and what needs to be done.

    Now make it happen people…its up to all football fans to tackle this now.

    • I think the first step is for people to realise the truth. At present, the defeat of the European Super League is being treated as a huge victory for fan power. However, it changes nothing. We still have a monstrously uncompetitive League that basically allows the big clubs to win everything by weight of transfer spending. The new Champions League rules for next season, for instance, aren’t too far away from the closed shop ESL proposal. Manchester United could finish sixth, yet qualify ahead of a league winner from a smaller TV market, or a more deserving English team.

    • Very kind words, tank you. And you’re right. Alas, I fear that what will happen is that the failure of the ESL will come to be seen as a great victory for fan power, and we’ll go on as we were before.

  • Excellent article, thank you. But while I find it persuasive, there are some difficult facts to deal with. While the game might’ve been financially equitable pre-1992, it had problems we don’t miss: low attendances, hooliganism, terrible pitches and stadiums. The greed has brought some good.

    • These are fair criticisms, and I would have dealt with them in the article, but it was long already.

      You are right that football had terrible problems in the 80s, and it was badly affecting the viability of the clubs. However, I do not believe that the EPL and UEFA CL greed solved those problems. First, policing and CCTV was and would have continued anyway to have an effect on hooliganism. Secondly, the Taylor Report meant that grounds were going to be redeveloped into all-seater, new stadia anyway. Thirdly, the popularity of the Italia 90 World Cup saw renewed interest in football, as did Sky’s involvement. All this would have brought more money in the game. The tragedy is that it was funneled to a few big clubs, rather than being spread around the game.

  • Persuasive and interesting – thanks. But what of the game pre-1992, with its small crowds, hooligans, terrible pitches and stadiums? The greed has brought much good

  • A good article, but what about Bosman which has given untold riches to players and their agents, it is the drive for success which has caused the clubs involved in the ESL to incur massive debt to buy players and pay their exorbitant wages (incidentally to transfer fees do trickle down). Now they want to protect their income and remain permanently on the gravy train, it is not unsurprising that three of the English clubs are owned by Americans whose major sports follow the franchise system with no promotion or relegation.

    No mention of the footballing authorities who singularly fail to move with the times and ignore many of the pleas of fans. These “Blazers” appear to be in the sport for their self in port, basking in the perceived glory the glory of finals and international tournaments, whilst ignoring the demands of the fans. When has anyone heard the FA talk about VAR problems, the International breaks that football supporters hate, when has anyone heard a referee explain their actions? I challenge you to ask a simple question of the FA , see how difficult that is, see if you ever get a response. What influence does a football fan have in the game they love, how are FA members elected?

    So yes ownership needs addressing, as does player power and the football governing bodies.

    • Regarding the Bosman ruling. Yes, it did give more money to players — although once clubs realised its implications and got themselves organised, they realised they had to sign players to extensions at least a year before the left (usually two) so they would avoid losing them in free-transfers. Furthermore, their accountancy practices now account for that. They book a signing as an asset (say, you buy a player for 20 million, you book that 20 million as an asset on your balance sheet) and then amortise the amount over the length of the contact (over a five year contract, the value of the asset falls by 4 million a year, in this example). That means that their accounts aren’t affected too much. Further, if there was less money among the big clubs, there’d just be less money for players and agents. That’s what people don’t get: a lot of the increased TV revenue doesn’t touch the clubs. It literally goes to players and agents, almost directly. The clubs therefore never have enough, because no matter how much more they get, an equal amount goes in signings, agets fees and wages. It’s unsustainable.

  • When will British clubs start being owned by it’s supporters like the German bundesliga clubs are, and why is bumbling Boris, chinless Dowden,and just William sticking their noses in get their own houses in order first

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