What makes a successful football club?

In organisational theory, there are several schools of thought concerning how successful organisations arise. A successful organisation should have the following, to fulfil its goals and add value:

• Strong top management (board/owner)
• Strong strategy, mission and goals (will to win/compete for top trophies)
• Financial health (high revenues/brand value/financial stability)
• Empowered employees (top manager/players/coaches) 
• Healthy corporate culture (winning culture)
• Good products (a good team)
• Strong learning , growth, and innovation (youth development, new tactics, new facilities) 

All successful firms have these, such as Apple, BP, Microsoft, Coca-Cola, etc.

It’s no different with a football club.

Let’s examine successful clubs in the world over the past decade, to see if all of the pieces fit as mentioned:

CATEGORY	CHELSEA	MAN CITY	BAYERN	REAL MADRID	BARCA	JUVENTUS
Strong top management	YES	YES	YES	YES	YES	YES
Strong strategy, mission and goals	YES	YES	YES	YES	YES	YES
Financial health	YES	YES	YES	YES	YES	YES
Empowered employees (good players/managers/coaches)	YES	YES	YES	YES	YES	YES
Healthy corporate culture (winning culture)	YES	YES	YES	YES	YES	YES
Good products (good team)	YES	YES	YES	YES	YES	YES
Strong learning , growth, and innovation	YES	YES	YES	YES	YES	YES

CATEGORY	ARSENAL	MAN UTD	LIVERPOOL	PSG	TOTTENHAM	ATLETICO MADRID
Strong top management	NO	YES	YES	YES	YES	YES
Strong strategy, mission and goals	YES	YES	YES	YES	YES	YES
Financial health	YES	YES	YES	YES	YES	NO
Empowered employees (good players/managers/coaches)	YES	YES	YES	YES	YES	YES
Healthy corporate culture (winning culture)	NO	YES	NO	YES	NO	YES
Good products (good team)	YES	NO	NO	NO	YES	YES
Strong learning , growth, and innovation	YES	YES	YES	YES	YES	YES

 

There is a strong correlation between the clubs that scored the most “yesses” and their successes over recent years.

They all have won leagues, cups, European trophies, and earn top revenues. The clubs with multiple “Nos” have won trophies, but have stumbled at key points to sustained success. Man Utd have been poor, comparative with the heights under Sir Alex Ferguson. Arsenal has won three FA Cups in four years, however have failed to win the Premier League despite being in strong positions to do so at points. Liverpool, whilst growing financially, has only won one trophy (League Cup) in a decade.

So is there a lesson to note here?

The lesson is pretty simple. It’s that all parts of an organisation must be well-aligned, so that success can result from all parts being strong. All areas of an organisation exist towards a common end. Marketing departments need to ascertain and meet consumer needs. Production departments need to make products that are sturdy, safe, and meet consumers’ needs. Facilities management departments ensure strong buildings, ventilation, heating and related points.

Though they all must adhere to the overall mission, and enable this via their unique capacities. The same is true of any football club, and in any era. Liverpool was successful in the 70s/80s, due to having these pieces fit. This included a strong ownership, a clear mission, top managers and players, and the ability to learn, grow, and build. As Souness left, and Dalglish became player/manager, Barnes, Molby, McMahon, and Beardsley emerged as senior players. Arsenal between 1998-2005 were the same, as Wenger’s new techniques plus support from then vice-Chairman David Dein were key elements in the club’s successes.

Another facet to the lesson is that clubs should continually reassess their results, to see if they are attaining synergy. Part of the contention at Arsenal is rooted on Wenger’s perceived poor tactics and management, as well as a lack of direction from the board. Ivan Gazidis, Arsenal’s CEO, had stated need for a “catalyst for change” to correct these perceived problems.

Manchester United did not effectively plan for life post-Sir Alex, and only now is on the verge of becoming a top team again under Mourinho. Clubs such as Everton and Tottenham are seeking to gain synergy, via new revenues, transfers, stadia, and managers. Clubs have failed, and sometimes spectacularly, when they have lost synergy. Leeds United is a classic instance, with Aston Villa enduring relegation through holistic mismanagement.

It’s to clubs’ interests then that they look continually at how they are structured, and how they are best geared to align themselves for success.

What is tapping up, and should it matter?

The saga over Van Dijk has intrigued, and frankly amused, many.

Liverpool backtracked and apologised for a breach of stated FA/UEFA/FIFA rules, in seeking to sign Van Dijk from Southampton. Soton apparently complained to the authorities about an “illegal” approach to their defender. As of 21st July 2017, he had been reported to stop training at Soton, amidst the current transfer brew-ha-ha.

This excerpt from Sky Sports, featuring points from sports employment lawyer, Mr. Richard Berry, references some intriguing considerations:

“……It would be naive to assume that all transfers in 2017 are akin to a computer game, where the bid goes in, team accepts, team allows player to speak with bidding team, and all under safe surveillance of the FA.

“We’re talking about the grey here,” says Berry. “If your club sticks to the black and white letter of the law, there’s a serious chance that you may never sign anyone. It’s just so difficult. You certainly wouldn’t be getting every player that you wanted. It’s fantasy to think that the first contact between player and club with every single transfer happens within the strict regulatory framework.

“How would a club know if the player is even interested in coming to join them? Why would a club waste its time and put all its cards on the table, if it has no idea whether the player is interested in moving to the club? There might be 100 reasons why he doesn’t want to.”

However, the approach whilst technically “against the rules”, was pretty standard. Numerous managers, pundits, ex-players, and current players, state approaching a player or his agent whilst he is registered with another club is normal. Even if players are happy and successful at a club, they may receive numerous phone calls, SMSs, or Whatsapps, from rival clubs, in an effort to prize them away.

So whilst “wrong” and “against the rules”, Liverpool really did nothing wrong, and should not have been singled out, if all clubs do it.

So what then is tapping up, and why is there a rule against it?

Ashley Cole was “tapped up” by Chelsea prior to joining them from Arsenal in the mid-2000s

And should tapping up be “against the rules”?

Tapping up relates to approaching a player whilst he is under contract with another club, but without the prior permission of the club holding his registration. So Liverpool, supposedly, approached van Dijk without contacting Soton prior. This undermines the authority of a club to handle the player’s affairs, as it accordingly owns his transfer registration.

However, as there are super agents who control the affairs of numerous big name players, there is a single repository of players’ phone numbers or Whatsapps, in order for managers to call. And at any time, when a player is at home, or with his family, or on holiday, can a rival club contact him. Being a footballer is a job. In other professions, employees are free to seek out new avenues whenever they wish. They need to keep it secret from their current employers of course, however this is not something their present bosses can stop nor prevent. There is little reason why a footballer should be any different.

And what’s the point of a rule, if its enforcement is comically selective? It’s possible that Lacazette was tapped up by Arsenal multiple times. Manchester United may have tapped up Lukaku. Liverpool may have tapped up Salah. Bayern possibly tapped up James Rodriguez. And Man City may have done the same to Kyle Walker.

It could promote more thoughts that footballers are disloyal. However, tapping up is difficult to enforce, and possibly this is why it is not enforced despite its “illegality”.

A final point though is that players should be free to seek clubs where they are more comfortable. Comfort could range from a better manager, a more successful club, a bigger club, or the opportunity to play under a more supportive manager. And could the notion of player loyalty be overly sentimental, and not account for the financial and human realities of football?

Players are human beings, and they are thus subject to the same needs and wishes as all of us. They too are pretty much concerned with whether they get on with their manager, or their teammates, or they are respected by the fans, or if the club is successful or not. Maybe ending the “prohibition” of tapping up will ensure players can choose without sanction, or scorn, from the authorities and fans alike.

#footballfinance – Why is football these days so money-oriented?

There are several reasons why, in my mind, football has become more money-driven. It’s due to:

• Globalisation of media

With 24/7 TV access, and the Internet, there is far more scope for TV revenues from many countries. The BBC, CNN, NBC, Al Jazeera, Sky News, Canal +, etc. all possess 24/7 news networks. So any footballing, or sporting, event can be broadcast within seconds of it occurring.

Digital TV is now the norm in many countries, and is spreading rapidly. This affords more channels, and at better definitions (HD) than ever before, allowing for a superior viewing experience. More channels, and also more smartphones and Internet connectivity, mean greater scope for broadcasting games. This relates to a natural ability to spend more on TV rights.

• An already popular sport

Football has long been called the people’s game. Sports such as horse racing, cricket, rugby union, or tennis, have traditionally been upper/middle class pursuits. Football however has been the sport mostly followed by the working classes and the masses. Whilst boxing and darts are also within this category, they’ve seldom attracted the following nor attendances of football.

So if there is demand, supply will follow. BSkyB, BT Sport, Bein Sports, NBC, etc. will spend big money as they know people will watch.

• Clubs are increasingly commercial concerns with commercial interests

Many football clubs are owned by business people, with the stated goals of earning revenues. The community feel has been eroded, and clubs have recognised that with more revenues, they can sustain their own corporate goals and fiduciary positions.

Man United has the biggest turnover in the world, and is forged through commercial deals, TV revenue and match-day income (in order of value). This permits them to spend immense amounts on transfers, as they milk the huge global scope they have. Lukaku recently stated that they are the biggest club in the world. Real Madrid may contest that, though they certainly are pre-eminent in terms of their size and scope. The Man Utd board know this, hence the means for this.

• Consumer trends

Sport participation, whether spectating or playing, has always been high. However, media houses have sought opportunities to present sport as a consumer entertainment package. This is true of all sports, and transcends football.

20/20 cricket was invented as a user-friendly mode. It may not be to the purists’ liking, though it’s not meant to be. It’s about a shortened and exciting form of cricket, vis a vis Test cricket, or even one-day internationals. It’s designed to meet the needs of consumers, who want a shortened and compacted game, as opposed to five-day Tests.

Football is using similar rationale. This relates to the first point, in that football is popular, and there is already a huge demand for consumption.

• Rising economies

Much is made of the rise of China, India, and the shifting of economic power from the West. With growing economies come higher living standards, and thus more disposable incomes. Moreover, countries such as China and India are seen as the next frontier of football, and thus clubs are marketing themselves in these countries to gain commercial revenues.

Arsenal is undertaking a tour in China this summer. Real Madrid, Barca, Chelsea, Man United, Liverpool, Juventus, Bayern, etc. have all played major friendlies in foreign countries of late. This is to promote themselves and football in these emerging markets, and connect with fans and sponsors in these regions.

The TV deals for the biggest European leagues will thus have an increasing share from South America, Africa, the Middle East, India, China and Australia. Australia is not a poor country, though it is an emerging footballing country as cricket and Aussie Rules have been predominant sports in its history.

This video from Copa90 references geo-politics, and how China is using football to grow its soft power in the world today. Economics and politics are always inherently linked, and business activities often can reflect economic ends. It’s no surprise then that the Chinese government may be pursuing this avenue.

So as football is reinforcing itself all the time as a global game, the trend towards commercialisation will only heighten.

Will the bubble burst? At this point, it’s unlikely, though not impossible.

 

#footballfinance Marble Halls football finance – Why are summer window transfer window prices inflated?

We’re all reeling from the inflated prices. Lukaku, prior to his actual move, was quoted as worth £100m (and a world record no less). Mbappe of Monaco has been quoted at £150m in some sources, which would be way above the current world record for Paul Pogba (£89m).

 

So why is this happening? It’s because of general inflation.

The Premier League is not the only league with more money. It has the most money of any league in the world, but all of the major European leagues are awash with TV and commercial revenues.

So if clubs have more resources, clubs will charge higher fees accordingly. They also feel less inhibited to budget, due to their funds, and can essentially buy better quality players.

Everton is an example of this. Traditionally one of the bigger clubs in English football, they’ve spent much of the Premier League years in the wilderness. However, with the money provided by Mr. Moshiri, they are well-placed to compete at the highest level again.

So will this trend cease? Not any time soon. I’ll stick my neck out and say within 10 years, we will see a £500m player. Possibly, if the trend continues, we will see a player worth £1bn by the middle of this century.

It may seem crazy for some. But then there are some sound reasons why football is money-driven. A forthcoming blog post will reference why.

Football club analysis series – End of 16/17 season

We’re doing an analysis of football clubs, namely their recent corporate/financial histories.

We’re starting off with the two North London rivals, Arsenal and Tottenham Hotspur.

We’re focusing on many more clubs, in England, Spain, Italy, France, Germany, the USA and beyond! 🙂

 

https://www.youtube.com/watch?v=MloB9C88

https://www.youtube.com/watch?v=MloB9C88N0o

I cuss him a lot, but I DO respect him. He IS our best ever manager. 🙂