Football goes to market

The modernisation of English football in the 1990s has produced winners and losers, echoing the market revolution of the 1980s. The gentrification of the game has alienated a minority within football's heartlands, but that New Football is still better than Old Football
June 19, 1998

The condition of football in Britain has changed beyond recognition during the 1990s. Nowhere provides a better illustration of this than Sunderland Football Club. At the beginning of the 1990s the Wearside club was in a similar position to many others in the country's industrial and sporting heartland: it was playing dour football in front of dwindling crowds in a dilapidated stadium. With the northeast in recession and football still struggling to overcome the traumas of the late 1980s-culminating in the death of 96 Liverpool fans at Hillsborough in 1989-there was little hope that things would get any better for the club or its fans. (Sunderland was not alone in its misery-just a short drive up the A184, its great rival, Newcastle United, was in an equally sorry state, facing bankruptcy and a seemingly unstoppable slide down the divisions.)

Yet today, Sunderland is a football club remade. It has all the trappings of a modern successful club: a big new stadium, a stock market quotation, a thriving merchandising business and an apparently secure financial future. Most important of all, Sunderland's renaissance has sparked a revival in the popularity of football on Wearside. The area had been a football stronghold until the erosion of people's belief in the game during the 1980s. That process has now been reversed. Where four years ago the club was drawing average crowds of fewer than 17,000 to games at decaying Roker Park, at the end of the 1997-98 season the ostentatiously named Stadium of Light was full to its 40,000-capacity for almost every home game as the first division team strove to regain its place in the Premier League.

In almost every respect, the new Sunderland embodies what a spin doctor might call New Football-reformed, modern, forward-looking. The club recently even earned that most contemporary of media accolades, its own television "docu-soap." Viewers fell in love with the likeable but foul-mouthed manager, the irrepressibly optimistic groundsman, the cheerfully defeatist fishmonger and the bright-eyed schoolgirl who agonised over every result. It was the football club that wore its heart on its sleeve-what could be more 1990s than that?

Yet throughout the five-part BBC series, it was evident that Sunderland fans were not entirely happy about what was happening to their club off the pitch. An undercurrent of anxiety was detectable, a fear that the modernisation of Sunderland came at a price: a loosening of the previously close bond between club and community. This bond can be exaggerated, but for some people at certain stages in their lives, football can take on a quasi- religious significance. In a secular age the local football club is often the most significant thing in a person's life beyond the private sphere-witness the number of people who arrange to have their ashes scattered on the playing turf at Sunderland FC.

Such people sensed that something essential was being lost in the rush to embrace football's brave new world. Instead of still being their club, the new Sunderland now seemed to belong to the City investors who had bought the shares on flotation; to the corporate interests that built the stadium, filled the hospitality boxes and signed the sponsorship cheques; and to football's ultimate paymasters, the television companies whose millions have underwritten the sport's transformation in the 1990s.

These concerns are not unique to Wearside. At almost every other large club in the UK there are similar fears over the widening divide between clubs and supporters, fears of which the clubs themselves seem largely unaware. Football believes that it deserves enormous credit for smartening up its act: rebuilding its stadiums, developing new commercial activities, striking lucrative broadcasting deals and attracting exciting foreign talent to British football. Yet an increasingly vocal element in the football community is beginning to express its unhappiness with what has been done to their sport. In their eyes, commercialisation of the game has gone too far. With the clubs' pursuit of greater profits, exploitation of the fans has increased. The influence of television has become too powerful, with the broadcasters, rather than the league, often deciding when and where clubs play their games, irrespective of inconvenience for the fans. The conversion of clubs from private companies into publicly-owned, stock market-quoted leisure businesses has forced clubs to put the interests of shareholders and their dividends before the interests of supporters.

Perhaps the biggest concern is that the sport's core constituency-working-class communities of the big industrial cities of the Midlands, the northwest, the northeast and south Yorkshire, which have provided the bedrock of support for the professional clubs-is being slowly marginalised as the rising cost of tickets, team merchandise and television channel subscriptions price football beyond the reach of ordinary fans.

Disillusionment has manifested itself in different ways. Several earnest books have been written on the subject, most notably David Conn's detailed critique of football's commercialisation, The Football Business: Fair Game in the '90s? (Mainstream, 1997), and Ed Horton's attack on greed in the game, Moving the Goalposts (Mainstream, 1997).The hundreds of club fanzines throughout the country have also given voice to the fans' sense of frustration, while activism, in the form of the growing influence of national and local supporters' organisations, is on the rise.

Even the Football Association (FA) and the Labour government have been forced to take notice. The sport's governing body is considering establishing a code of best practice for clubs to adopt in their treatment of fans. The government has set up the Football Task Force, led by David Mellor, to investigate issues of concern to fans such as the pricing of tickets and replica kits.

In some respects, the sense of alienation among many football fans only mirrors broader social and political trends within Britain, and especially England. The modernisation of Britain, begun under the Conservative governments of the 1980s and 1990s and continued under New Labour, has created large numbers of disaffected and disenfranchised people who feel sidelined by the changes which have happened around them. They may be in a minority, but it is a substantial one. The same process can be said to have occurred in football, although change has come to the sport at a much faster pace over a much shorter period.

It is no coincidence that the people and communities who appear to feel most ill at ease with the values of modern Britain are to be found in regions where unhappiness with the football revolution is at its most acute. In a recent survey of fans conducted by the Premier League, greatest disquiet about football's new direction was registered in the north west and the north east. Nowhere are the locals more passionate about football than on Merseyside and Tyneside, two areas where the economic renaissance of Britain has had limited impact.

It is also no coincidence that one of the main criticisms of the modern Labour party-that it has sold out its core working-class supporters in a rush to embrace "middle England"-is a charge commonly levelled at football. The young home-owning professionals with company cars and share portfolios are as coveted by New Labour as by the new breed of football club chairmen, for whom they represent the ideal modern fan: well-behaved and sufficiently wealthy to afford a ?500 season ticket, each of three different ?40 replica club shirts and the annual subscription to Sky Sports.

yet, temptingly though New Football presents itself as a target, it would be wrong to suggest that the changes which have altered the game during the past decade have inflicted more harm than good. If you were to conduct (for want of a better phrase) a cost-benefit analysis of the key areas in which modernisation has left its mark on the sport-the stadiums, television coverage, ownership and flotations, the merchandising revolution and the league structure-the results would suggest the opposite: on balance, New Football is a better version of football than Old Football.

There is no better place to start any evaluation of the changes which have occurred within football than with the physical infrastructure-the stadiums of England. Since the 1990 Taylor Report, commissioned in the wake of the Hillsborough disaster, called for a huge modernisation programme and mandated the replacement of standing-only terraces with all-seater stands at most big clubs, more than ?600m has been spent on improving existing football grounds and building new ones. Few would contest that this process of physical renewal-funded by government grants, the Football Trust (with money from the football pools companies), bank loans, the proceeds of share sales and income from clubs' growing businesses-has been anything but positive. The stadiums are cleaner, more comfortable and safer than ever before. Those in the top divisions now rank among the best of their kind in Europe.

Take Stamford Bridge, Chelsea's London home. Anyone who last visited the ground during the 1970s or 1980s would not recognise it today. Decrepit stands, uncomfortable seats, inedible food, poor sight lines and a desultory club shop, have been replaced by three gleaming new stands, modern food concessions, a giant video screen for replays, clean toilets (for men and women), a fancy club shop and five restaurants and a hotel in the adjoining Chelsea Village complex.

These improvements have, of course, come at a cost. Chelsea charges the highest ticket prices in all football (a season ticket can cost as much as ?800 or a single match-day ticket ?50), and everywhere else seat prices have climbed sharply since the mid-1990s-in direct contravention of the Taylor Report's advice that the rebuilding of grounds be accompanied by the adoption of a pricing system ensuring that football was accessible to all.

There has also been a loss of atmosphere at many modernised grounds. The songs and chants that used to make the English football match an intensely passionate experience are more subdued. Old Trafford, home to Manchester United and once one of the most intimidating arenas in modern sport, is a shadow of its former self on most match days, as are many of the most famous stadiums in English football.

Yet the loss of atmosphere was an inevitable-and probably acceptable-price to pay for the improvements in safety which necessitated the removal of stadium terracing. It is a simple fact that football fans make much more noise standing up than sitting down. Moreover, stadium capacities have fallen significantly since the introduction of all-seater stands-one seat takes up the space previously occupied by two standing fans-and fewer spectators means less singing and chanting.

Football's critics would also argue that the stadiums have lost much of their atmosphere because the hard-core fans who used to make so much of the noise have been priced out of the market in a deliberate policy to exclude potential troublemakers. There is no evidence of this, even if the decline of hooliganism at football matches in England (although not always among fans travelling abroad) during the 1990s has coincided rather neatly with the period in which the sport's stadiums were rebuilt. At the very least, improvements to stadiums have made it easier to police the hooligans. However, the near-eradication from top-flight English football of the violent incidents which used to scar the game is explained by a range of much more complex social factors than simply the price of match-day tickets or the removal of terracing. (One general factor is the gradual decline of a manual working-class culture which required young men to prove themselves through fighting. Another, more specific, factor is the evidence that many young urban males who might once have been football hooligans now get their collective kick from clubbing and Ecstasy.)

Although the live football experience in England may not be what it once was, its appeal to a televised audience is as strong as ever. The vibrant colours and sounds of an English football crowd have always been a big draw for television viewers; the success of the game in selling itself to broadcasting companies hungry for the quick and easy ratings fix offered by live sport has provided the foundations for top-flight football's current prosperity.

The numbers are staggering. Fifteen years ago the BBC and ITV jointly paid ?2.6m a year to broadcast English football; the money was shared among 92 clubs. Ten years ago the television pot had risen to almost ?14m a year, again divided 92 ways. This year, BSkyB and the BBC are jointly paying ?152m for the rights to broadcast live and recorded Premiership football-money which will be shared between just 20 elite clubs.

Some of the extra income from television has been used by the clubs to invest in further development of their stadiums and commercial businesses such as merchandising, catering and hospitality. However, the bulk of it has gone to the players, the ultimate "rights holders" in transfer fees and wages. Whether this is regarded as money well spent depends on how you regard the modern game. Either you applaud the investment in top quality players, especially those from overseas whose skills have added bright colours to English football's muted palette. Or you condemn the clubs for agreeing to the extortionate demands of players for salaries as high as ?20,000-?40,000 per week, and for participating in a transfer market where an average Premiership player costs ?5m and the asking price of a superstar starts at ?15m. As much as anything, it is the transfer fees, and particularly the wages, of today's top footballers which have fuelled the perception among some fans that their game has broken free of its once sturdy moorings.

Fans have other reasons for believing that they have been betrayed by football's greedy embrace of television's riches. They feel particularly let down by the sport's decision to sell the rights to live football to Sky Sports, the satellite pay-television channel. With subscriptions to Sky costing as much as ?29.99 per month, critics say that yet more people have been priced out of the game. Not only is it too expensive for many supporters to attend matches in person; it is also too dear for them even to follow the game on television. The excessive hyping of Premiership football by Sky, and its influence in rearranging fixtures and kick-off times-almost all games were once played at 3pm on Saturdays, now some games kick off at midday on a Sunday or at 8pm on Monday evenings-has also angered many.

In their defence, the broadcasters point to the huge sums they are investing in football-money that is ploughed back into the stadiums and teams-and to the big improvements in the coverage of the game. (Sky Sports football coverage certainly looks increasingly impressive.) Moreover, the broadcasters point out that terrestrial viewers still have access to the BBC's weekly highlights on Match of the Day; and that until relatively recently there was no live coverage of league football in England at all, so ordinary fans have not been deprived of a great deal.

Supporters might grudgingly accept that last point, but what really worries them is the prospect of pay-per-view television-which might arrive as early as next season. A supporter who already subscribes to Sky Sports and who wants to watch every one of his team's games during the season could, having subscribed to the new pay-per-view service and paid for the extra equipment needed to accept the digitalised signals, end up spending as much as ?900 in the first year in pursuit of his passion.

There are other, broader, concerns about the impact of the introduction of pay-per-view. As the idea behind pay-per-view is that each fan can choose to pay to watch his club's every game, most of the money generated will gravitate towards the most popular clubs. If 1m people are willing to pay to watch Manchester United, the country's most popular club, and only 20,000 pay to watch Southampton, the huge income gap between two clubs that ostensibly compete in the same division will stretch to Grand Canyon proportions-United's annual income is already ten times Southampton's.

As the basis of professional sport requires that a degree of parity be maintained between participants, this development is disturbing. While Southampton has been able to beat Manchester United on a few recent occasions, there is almost no chance that the south-coast club will ever win the Premiership title. United, however, has won the championship in four of the past six seasons, and finished second twice.

If the prospect of pay-per-view television worries many fans, it should delight those who have invested in football club shares. The arrival of football on the stock exchange in the past three years has perhaps been the most remarkable development in the modern game. When Tottenham Hotspur became the first club to float on the stock market in 1983, the City viewed it as an eccentric, one-off move. When Manchester United joined it in 1991, the City remained unconvinced by the case for investing in football, and the flotation was a flop. When lowly Millwall, the southeast London club with the most notorious hooligan following sought a listing, the City thought football had taken leave of its senses.

Yet in the space of three years between 1994 and 1997, another 18 clubs joined the stock market, some of them achieving early and spectacular gains in the value of their shares. The change in the City's attitude to football was prompted by the realisation that as owners (either collectively or individually) of valuable television "content"-namely, the broadcasting rights to live coverage of top league games-football clubs were potentially profitable businesses. Amid a barrage of hype and a near-complete absence of well-informed analysis, investors large and small piled into football club shares in a two-year binge which saw the football sector emerge as one of the brightest stars of a buoyant stock market.

Inevitably, it could not last. In early 1997, investors turned against football as quickly as they had embraced it, with investors reassessing their bullish forecasts of pay-per-view revenues. Football club shares began a long decline that has only just begun to show signs of bottoming out. But for the clubs, the impact of the shift in the market's sentiment has not been very serious. The priority for most clubs when they came to the City was to complete their flotations as smoothly as possible and use the money raised from the sale of shares to invest in their businesses and playing squads. None of the alternative sources of financing-from bonds to bank loans to the deep pockets of multi-millionaire owners-could provide such a ready supply of inexpensive cash. This, plus the much-needed financial discipline imposed upon clubs that went public, has given many of them the opportunity to establish themselves as securely-funded, well-managed sports businesses.

This has been of no comfort to those disenchanted fans who believe that football has no place on the stock market. Aside from having to watch a few wealthy owners further enrich themselves on what were often modest initial investments, fans fear for the day when quoted clubs, faced with the decision of whether to use some of their profits to pay a bigger dividend or to invest in new players for the improvement of the team squad, will opt to put the interests of shareholders first. That day has already come-a few of the quoted clubs are paying dividends, and Manchester United has managed to increase the size of its payout to shareholders every year since its flotation.

However, fans would be wrong to believe that publicly-owned football clubs are only run for the benefit of shareholders. In football, the most reliable means of achieving the profits needed to pay dividends is generating success on the pitch. Winning trophies and qualifying for lucrative European club competition is what makes the good clubs profitable. So if a club ignores the need for investment in the playing squad and pays bigger dividends instead, it would be pursuing a policy of short-term gain which would harm its chances of long-term prosperity.

Moreover, if fans do not like the idea of investor-owned clubs, what is their alternative? History has shown that football clubs are no more secure, better managed, or more likely to be run in the interests of the supporters if they are owned by rich individuals or groups of local businessmen-an ownership structure which has been the norm for most of professional football's 110-year history.

If anything, it can be argued that clubs with a multitude of institutional and private shareholders-Manchester United has more than 27,000 shareholders-are more stable enterprises than those controlled by individuals with the temptation to operate them as personal fiefdoms. Which would fans prefer: Robert Maxwell as their club owner, or a group of City institutions, each owning some of the shares, and several thousand individuals owning the rest? Nor is the continental European model of clubs as collectives owned by their supporters necessarily more attractive. Political factionalism often prevents the membership-based sporting club from being run along proper lines. Benfica, the great Lisbon club, ended this season in such a precarious financial state that it was unable to pay a ?3m transfer fee to an English club for a player acquired months earlier.

One of the reasons why Benfica is teetering close to the edge of bankruptcy is that, like most continental European clubs, it has failed to emulate its English counterparts in developing alternative sources of income to its revenue mainstays of gate receipts and television fees. With wages and transfer spending rising inexorably, many foreign clubs have no means of generating the additional earnings to meet their rising costs. In contrast, the big English clubs have been much more resourceful; growth in the sale of team merchandise to fans has played a crucial role in enabling the most ambitious clubs to cope with spiralling wage and transfer inflation.

An estimated ?300m of football merchandising is sold in England each season, from shirts and shorts to branded leisure wear and customised motorbikes. Manchester United sells more than 1,000 different items through its shops and mail order business, generating revenues of ?30m a year.

Although the clubs point out that the money earned from merchandising is ploughed back into the business, including the playing squad, merchandising has become a sore point for many fans. The high price of replica kits in particular, and the frequency with which they are changed (Manchester United is on its 13th kit design in five years), has become a source of division between clubs and fans.

Certainly, clubs deserve criticism for the number of times they change their kit designs, a policy which has only one aim-to maximise revenues for the club and the sportswear supplier. The issue of pricing is less straightforward. It remains puzzling why fashion-conscious football supporters are happy to spend ?40 on a high-quality, branded sports shirt made by Nike or Adidas, but complain at having to pay the same price for an almost identical garment that bears the colours and crest of their club. Fans feel aggrieved about the issue of merchandising because, they say, they have no choice but to buy the expensive replica shirts-devotion to their club leaves them with no option but to wear its colours in public. Yet 10 or 15 years ago hardly any fans owned replicas of their teams' shirts. Why do they feel they have to now?

The final area where change has altered the fortunes of English football has been in the matter of organisational structure. For more than 100 years after the birth of league football in the late 19th century, the basic shape of the game in England remained unchanged. The Football Association administered the national team and the FA Cup, and oversaw the rules and the amateur game; the Football League ran the professional club competition. The system was broadly based on the cooperative principle-most of the Football League's revenues were shared among the 92 professional clubs.

However, six years ago the top 20 clubs in the first division broke away from the rest, frustrated at having to share with 72 smaller clubs the income that they felt was largely generated by their own popularity. With the backing of the FA, the Premier League was formed and football in England was changed forever. Within a few years, television's multi-million pound contracts and the accompanying merchandising and sponsorship deals provided the elite clubs with riches beyond anything they could have dreamed of when they chose in 1992 to sever links with the three lower divisions of the Football League.

Defending the establishment of the Premier League is not easy. In its favour, the new league can be said to have raised playing standards at the summit of the sport. This has not only given the top clubs the opportunity to compete more effectively in European competitions (an opportunity yet to be properly grasped), but also provided a solid platform from which to build a competitive national team.

Yet it is undeniable that the Premier League has created a deep schism in English football. With almost all of the hype and the money concentrated on the exploits of the top 20 clubs, the polarisation of wealth within football has become acute. When just one club, Manchester United, earns as much in a single season as almost all the combined 72 clubs of the First, Second and Third Divisions manage in a year, something is wrong with the structure of the game. (The three clubs relegated from the Premier League in the 1997-98 season were the three clubs that had just won promotion-Bolton, Barnsley and Crystal Palace. Gaining a foothold in the top league without the financial benefit that it provides is becoming increasingly difficult, and the gulf in players' pay is widening between the top and bottom clubs.)

What is more worrying is that the rich are only going to get richer and the poor poorer. The creation of a new midweek European Super League for the biggest 20 or 30 clubs in Europe is probably no more than two or three years away. When it arrives, the three or four English clubs allowed to participate in what could become the most lucrative football competition outside the World Cup will receive an enormous boost to their earnings. The Premiership clubs which are unlikely ever to be invited to join the Super League party, not to mention the scores of other, smaller, clubs in the lower divisions, will fall further and further behind in the money race.

David Conn made this prediction in The Football Business: "If a European Super League is formed with room for only three or four English clubs, all the rest will then be by definition second rate, as the Nationwide League [the First, Second and Third Divisions] has been since the formation of the Premier League. A new generation of football consumers will not see the deeper point in supporting a team which has no hope at all of ever winning a trophy." It is not a prospect to warm any football supporter's heart. But Conn's vision may be unduly pessimistic. A European Super League, however super, is unlikely to supplant in popularity the centuries-old rivalries of domestic league football, in England or elsewhere. An Arsenal fan will always be more enthused by his team's two regular season games against north London rivals Tottenham Hotspur than by an occasional game against AC Milan or Borussia Dortmund. Even further down football's food chain, a match between Bristol City and Bristol Rovers will mean much more to the clubs' fans than a battle of Euro behemoths.

Even if worried fans could be convinced that the changes to the structure of English football have been good for the game, and that the benefits have outweighed the costs, this would still not end their sense of loss. Football's disaffected minority wants a return to what they believe was a better, earlier age. They demand terraces in their stadiums, so they can stand up and sing. They want Sky's stranglehold on television football ended and a revival of the old BBC-ITV duopoly. They want clubs to delist from the stock market and return ownership to the old structures. And they would love to see the Premier League abolished, the Super League strangled at birth, and a return to the old four divisions, each sharing football's wealth equally.

Football's Luddites should stop dreaming. The game's modernisation is an irreversible process dictated by the forces of change beyond the fans' control. That does not, however, mean that football must be subject to the laws of the market, without qualification. Football is different in certain respects. As a result of intense local loyalties the clubs could be said to operate natural monopolies. If you are born an Everton supporter you do not transfer your allegiance to Liverpool because they win more trophies. This provides a justification for some public intervention: to ensure, for example, that important games remain available on terrestrial television or that clubs offer at least some tickets at affordable prices. The clubs will resist such pressures but a vote-seeking government could see some advantage in facing them down. New Labour v New Football?