Football clubs being run like a business? Rubbish!

Football clubs being run like a business? Rubbish!

Football clubs are forever being referred to as a business. Board level decisions are referred to as key business decisions and the board are heralded as heroes if they get results. In essence that is indeed what they are, but yet do they co-exist with businesses that operate in the real world? I'm not sure Larry Page will be watching intently for the next vacancy to arise at a premier league football club.

In the realms of actual businesses, the key elements of their plans are to become sustainable, sensible and cost-effective. Obviously this does not account for all businesses however it is the general consensus as a reaction to the financial state of the country.  I hasten to add that football clubs hold none of those attributes in their current state. How many businesses would secure investment when their net spend year on year outweighed their income, with their purchase of assets draining cash through wages each week. Also, how many businesses would accept a change of management every few months as is the way with most football clubs these days.

Football clubs and business are never going to gel. One of the major reasons for this is customer base. Football clubs are very restricted, with the exception of the elite clubs, to their customer base. Their target market will only be where they are located. The elite clubs are those who have mass followings over multiple continents and can expand their merchandise, advertising and products worldwide and generate a respectable level of income for their spending, however smaller clubs rely on creditors who have an emotional investment in the club, for example Simon Jordan owning Crystal Palace. It wasn't an investment he was likely to see any return from, he was the main person responsible for pumping cash into Palace to maintain their Cash flow purely because he wanted them to do well.

This brings another major reason into play, emotion. One bit of advice I always hear in regards to important business decisions is to eliminate any emotion. Football clubs are the antithesis of this. Emotion is the sole reason these entities exist. Fans pay their money because they love their club, it gives them something to stand for and something to believe in. A tangible entity that they can believe in and use to express themselves. The fans are the lifeblood of all clubs and without them they couldn't survive, therefore emotion plays a big part in any decision made.

Businesses can start up with the intention of targeting a local market, but their success can depend on their scalability. Being able to expand and grow are some of the key attributes to a successful business. Using Norwich City as an example, they cannot expand and grow into an elite worldwide club whilst becoming a sustainable, cost-effective business. If they were going to become an elite club, they would need a new stadium, world-class players, success on the field and marketable foreign players that would extract interest from overseas. How would they primarily raise the finances for this? and secondly how would they see a return on the investment?

Perhaps the people involved in football should face up to the reality that they operate in an industry which is separate to any other. They should admit that they are not in touch with the real world and that they are all financially safe in one of the most cut-throat industries in the world. They are not quite up to speed with business and they have a lot of catching up to do.