Wednesday 28 August 2019

Financial Troubles at Football Clubs: York Festival of Ideas, and the cases of Middlesbrough, Bury and Bolton



Back in June it was our great privilege to present our research at York festival of Ideas.

We were involved with two sessions - the first, Chaired by Kevin, was a highly insightful presentation by Daniel Geey - a legal/business expert with significant experience in the football industry and has worked on a variety of club takeovers, high profile transfers, commercial endorsement deals and disputes. His talk centered around his book and was entitled 'Done Deal: Premier League Big Business' and generated much discussion from the audience about players, their agents, and tax issues - and some were also interested by the ethical implications that can arise. Thanks Daniel for a truly insightful presentation.






Next, we were both in conversation with best-selling investigative journalist and author, David Conn.


The event was notable for several reasons.

Firstly it was a first public appearence by Alex after experiencing serious illness earlier this year. Although he sat down for most of the event, getting out and in front of an audience was a big step forward in his recovery.

Secondly, sharing the 'stage' with David Conn was a real accomplishment.  On a personal level it was great to talk to him about our research, which has drawn on some of the facts an  ideas outlined in his books, particularly 'The Beautiful Game: Searching for the Soul of Football'.  Coincidently we were also undertaking our own research of the World Cup (and related to that, the history of FIFA) at around the same time as David was doing his own research, albeit more concerned with criticisms of the organization in its more recent form, and ultimately published in his 2017 book ''The Fall of the House of FIFA'.  



The talk began by Kevin outlining the work we have published, particularly the ideas of Shadow Hybridity and the Institutional Logic of Professional Sport, as outlined in our recent paper featured in Journal of Management History: 

Final published version (look it up via your university library): click here 

Accepted penultimate draft (unformatted document, freely available with no paywall): click here

Alex and Kevin then made links between our theories and the ideas presented in David's books about finance in football, and contrasting cash-strapped lower league teams, such as Middlesbrough in the mid-1980s with, premiership today's giants such as Manchester City and the concentration of wealth resulting in ever widening gaps between them and many teams of the lower leagues.

David responded passionately with detailed answers - he really cares about the subject matter - and has researched it thoroughly.

The things that we talked about that day struck a chord with the audience, many of whom had question and insightful comments to make about their own perceptions and experiences as fans.  

As some of you reading the will know, David Conn is a former student of University of York, the venue and a main organizer for the festival of Ideas.  After the event we took David for a walk around his old campus and enjoyed talking about the place.  Thanks David and also thanks to everyone at the Festival of Ideas team and the University of York for hosting our event, and to everyone who attended on the day for being a brilliant audience. Both of the football talks were free to attend but fully booked, so see you again next year, we hope, but book early!


David Conn revisits University of York (photo credit: Alex Gillett)

   

                                                                           ******


Reflections on Today's News

The last couple of days have brought these issues back into focus and our ideas about the institutional logic of professional sport have never seemed more pertinent, with Bury today being expelled from the league and Bolton Wanderers hanging on by a thread.  Two clubs with much history, including famous FA Cup wins.  

As Bury and Bolton, once proud Lancashire towns, have been consumed Pac-Man like by the 'Greater Manchester' metropolitan area, their economies as well as their football clubs appear to have declined financially, if not always so on the pitch (Bury were only just promoted this summer and Bolton have for many years been a bit of a 'yo yo' team but tend to pivot around the second tier)- whilst those of the dominant geography (ie the city of Manchester) have experienced what seems to the outsider to be a concentration of inward investment, and glory (United and City are both now globally recognized brands- and City won a clean sweep of domestic honors last year). 

Even Salford, a former dockland area (in the shadow of Old Trafford in one direction and the National football Museum in another) but newly revived by the arrival of the BBC at 'Media City' in 2011, now have a team competing professionally in the English Football League.  

Salford City FC is  buoyed financially by a consortium ex-Manchester United players' who seemingly preferred to 'start from scratch' and begin a new generation by taking a non-league club (as it was when they invested) into the league (where it is now), rather than take on the baggage of an established local league club with an existing fan base, but also the weight of history and the albatross of debt.  

For example the Neville brothers (Phil and Gary) have a combined ownership stake in the Salford Club of 20% according to Wikipedia - whilst by way of contrast their mother Judy worked as Bury FCs club secretary until recently, and their late father was at one time on the Bury FC Board of Directors (according to the BBC).  

As we outline in our paper, fans want to win and professional football clubs demand more and more money in order to retain their professional status.  Without constant investment and the promise of 'being in with a chance of promotion/winning the cup' will eventually lead to many paying fans deserting in their droves, and also lead to extra expense from 'sacking' managers, player wages and fees etc, to attract talent in the hope of turning things around. Maintaining professional status in order to be narrow the odds of achieving glory, creating a 'buzz' and attracting sponsors and television money, to re-invest in more players and stadiums seems to be the cycle of events time and again - only for some clubs that cycle becomes a death spiral, particularly if owners' laden more debts onto the club, for example by diversifying into sports halls/public gyms, hotels, or to subsidize some of their other business interests. 

We wish Bury and Bolton the very best of luck for the future, and hope that the precedents set by others such as Middlesbrough (which escaped by the skin of their teeth in 1986), and Accrington Stanley (which reformed after leaving the league in the 1960s - eventually returning in 2006 and now comfortably placed in League 1.)  

More closely to home we also hope that York City can capitalize on their strong start to the season and climb back up the pyramid soon.  It has been a turbulent few years for York and it would be great to eventually have League football at the new stadium when it is eventually opened.



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