Football and the party manifestos

What does the figure one billion, nine hundred and twenty-two million, nine hundred and forty-one thousand pounds mean in terms of football and politics? (and before you ask, is isn’t Diane Abbott’s answer to the question, “If I buy two pints of lager and a packet of crisps, how much change will I get from a twenty-pound note”).

This is in fact the money generated by Premier League football clubs in 2015/16 from broadcast income. (see breakdown in Appendix 1).

The Labour Party has generated publicity with a proposal in its manifesto that the Premier League should commit 5% of this sum to grassroots football.

We have therefore looked at the manifestos of all the major parties (and UKIP) to assess their views on our national game, and sport overall.

Labour

The Labour party has a full page dedicated to sport, summarised as follows

  • Accredited supporters’ clubs to appoint and remove at least two club directors
  • Improvements to access provision for fans with disabilities
  • Invest 5% of Premier League TV money into grassroots game to help develop next generation of players and coaches.
  • Implement the Waterson Review into secondary ticketing to reduce ticket touting.

https://www.gov.uk/government/news/independent-secondary-ticketing-review-published-today

These proposals initially appear laudable, but upon further inspection seem more populist than pragmatic.

  • Many clubs have foreign ownership, so board meetings could be held overseas, and so difficult to attend in person. There is a further issue of many clubs have many supporters’ clubs. There could be squabbling between them, or the football club could deliberately choose a ‘tame’ supporters’ club, that is unlikely to rock the boat, as the one that has board representation.

It seems anomalous to have board representation for customers at football clubs, but not other businesses. Whilst fans don’t see themselves as customers, and football plays a unique part of our culture, singling out football from other sports again seems unusual.

  • Whilst the Premier League generates a lot of income, income is not the same as profit. The Premier League lost money overall in 2015/16, both on a club level (Appendix 2) and, due to the fall in sterling following Brexit, at an entity level (Appendix 3).

It is therefore difficult to see how the 5% funding for grassroots could be made. The Premier League have committed to paying out significant sums to grassroots football, and whilst this may not reach 5%, it still amounts to many millions of pounds.

https://www.premierleague.com/communities/programmes/facilities/pl-fa-facilities-fund

Richard Scudamore, the Premier League’s £3m a year chief executive, points out that other industries do not help smaller businesses to the same extent as football, so feels the game is being singled out because of its success in negotiating lucrative broadcasting deals.

It seems odd that small clubs such as Crystal Palace, for example, should lose out on TV revenue simply because the Premier League has successfully sold its rights to a broadcaster.

Part of the reason why so many clubs make losses each year is that they pay out large sums in wages. This is turn generates large sums of income tax for the Treasury, as the average Premier League salary now exceeds £2.2 million, so 45% of a large chunk of this will be handed over by clubs.

If money is diverted to grass roots, then presumably less will be paid in wages (and thus taxes) so the proposals will result in the government taking with one hand and giving with the other.

Conservative

Type in the search word ‘football’ into the 88-page Conservative Party Manifesto for 2017, and you get no responses.

Perhaps Theresa May thinks that our national game, a bit like putting the bins out, is a ‘boys job’ and so she has no interest in it.

Typing in ‘sport’ gives 10 answers, 8 of which are in relation to the word ‘transport’. The others merely say that the government will support schools sport.

Liberal Democrats

The LD’s only mention of football mentions a move towards safe standing at stadia, and that’s about it.

UKIP

Neither football or sport get a mention, although leader Paul Nuttall seems keen to introduce waterboarding, which you could consider to be a sport, although it wasn’t on the list of Olympic medal events when we last checked.

Greens

Again, no mention of football or sport, although they seem keen on cycling.

SNP

No mention of football. The only mention of sport is in giving the Scottish Parliament the right to choose which sporting events are shown free to air. This presumably will be of little interest to Scottish football fans, given their national team’s failure to qualify for the World Cup since 1998.

Conclusion

The almost complete disregard of our national game in the 2017 manifestos suggests that football (and sport in general) is closer to the public than the politicians who lead us.

Labour appear to be the only party to have given the game much thought, but its suggestions don’t make sense financially, and seem to be targeting a successful industry for the sake of things.

Having three guardians of the game, in the form of the Football Association, Premier League and Football League, with different aims and ambitions is a contributory factor to the lack of success of the national team. Perhaps the politicians should realise this and stop using the Premier League’s success in selling TV rights as a political football.

Broader issues of a school curriculum that places sport as a secondary issue to learning irrelevant facts, a national obesity crisis, prohibitive pricing for those who want to qualify as coaches, restricted access to facilities and reductions in local and national funding for sport, have far more impact than trying to extract more money from the Premier League.


Appendix 1: Premier League Clubs TV money 2015/16

Appendix 2: Premier League Clubs Net Profit/(Loss) 2015/16

Appendix 3: FA Premier League Losses 2016

Deloitte Football Money League: Manchester United now the biggest earning club.

The business consultants Deloitte have just produced their annual football money league table, which reveals that Manchester United generated $635 million in 2015/16, the highest in the world. Real Madrid, who topped this table in 2014/15, dropped to third place with $572 million, but they did win the UEFA Champions League.

Whilst the monetary success will no doubt delight the Glazer family who own the club, and the shareholders who have bought United on New York’s NASDAQ market, Uniteds fans are likely to be less impressed.

The last time Manchester United won the Premier League was in 2012-13, when Sir Alex Ferguson was manager. Since then they have finished 7th, 4th and 5th, and have had ignominious exits from domestic cup competitions at the likes of MK Dons, as well as failing to qualify from a Champions League group in 2015-16.

One of the reasons why United have generated so much extra money (up an incredible 63% since they last won the Premier League) is the contribution made by United’s commercial deals.

Revenue sources

Football clubs make their money from three sources, Matchday (ticket sales), Broadcasting (TV and media deals), and Commercial (Kit manufacturing, shirt and other sponsorship).

United are limited in terms of matchday income as Old Trafford has sold out every ticket of the 76,000 available for many years, and the club has not raised ticket prices significantly during that period.

So the only way to increase matchday revenue is to have more games at home through good cup and European campaigns. This was true to a degree in 2015/16 as Champions League qualification and winning the FA Cup helped boost matchday income by 18%.

Broadcasting income is determined by the collective deals signed by the Premier League rather than clubs themselves in England. Whilst this has produced some bumper contracts, these are usually for three year periods.

Where United have the most flexibility is therefore in terms of commercial deals. The club’s business strategy is to exploit the huge fanbase (estimated at 659 million by United), and negotiate some global deals. This includes the $925 million ten-year kit sponsorship with adidas, and a $559 million seven-year short sponsorship deal with Chevrolet.

In addition to this United’s commercial whizzkids have signed a number of local partnership deals with companies in individual countries. It therefore has seven separate mobile phone partners (Azerbaijan, Belgium, Caribbean, Hong Kong, Korea, West Africa and China), four alcohol partners, and so on. Last week it signed a deal with Uber, to offer a variety of fan benefits, including a dedicated pick up point at Old Trafford.

Trophies or partners?

All of this has resulted in United’s commercial income increasing by 116% since the reign of Sir Alex Ferguson ended, but has this impacted upon the club’s performance on the pitch?

With an increasing number of commercial partners (now over 70), come an increasing number of demands. Players and management are required for TV and new media commercials, photo shoots, and exhibition matches all over the world.

This means that the opportunity to train, bond and develop, both individually and as a team, especially prior to the start of a season, is compromised. At a time when the sole focus should be on starting the season in peak physical and mental condition, United have been lacking in this regard in recent seasons.

Sir Alex used to run United as a personal fiefdom from top to bottom, and always put the interests of the team ahead of the money men wherever possible.

His successors at Old Trafford, David Moyes, Louis Van Gaal and Jose Mourinho, have not had the same iron control over the activities of the club. Having their stars jet off to appear in photographs and adverts is great for United’s bank balance, but does appear to have affected the club’s early season form.

The distractions caused by the demands of the commercial department pre-season have given United a disadvantage compared to their peers in the Premier League. This has meant that they have been playing catch up during the rest of the season.

So despite United spending big in the transfer market, breaking the English transfer record with the likes of Angel di Maria and Paul Pogba, United have struggled at the start of each season since Ferguson left.

The average points of Premier League champions since it commenced in 1992/93 is 86, or 2.26 points per game. In the last four seasons United have earned a total of 31 points in the first five games of the season, or 1.55 per game.

In the current season, despite a long unbeaten run, United lie in sixth position, twelve points behind leaders Chelsea and four off a Champions League spot.

Real Madrid fans wouldn’t swap a Champions League trophy for being top of the money league. It appears that fans at United may have to settle for a less impressive title, that of the highest money earners, unless the club’s top brass give Mourinho’s men fewer distractions from winning games.