KSE OUT!! – spending misconceptions

This item is from Transfermarkt.com and shows the spending of PL clubs since 2011.

2011 is the year KSE became the majority shareholder of Arsenal.

I think we need to expose some myths regarding KSE’s ownership if we’re to unite to get him out.

We need a clear narrative in place, in order to formulate ways to get him to change or to get him to sell up.

 

One can see here that since 2011, we’ve spent 5th highest figure. The far-right column shows net-spend, though gross spend is in the far left column.

Man City and Chelsea for much of this period were financially doped by their owners. Due to their successes, such as multiple leagues, cups, and European trophies, they’ve also brought in much prize monies, TV revenues, and commercial deals. So it’s no surprise they’ve signed over £2bn worth of players since 2011.

Man United is a bigger club than Arsenal – and whilst we’re a global brand, they are arguably THE global brand. Only Real Madrid and Barcelona rival or surpass their commercial revenues or overall income. So they can spend more than us at will, given this base.

Liverpool’s income has been similar to ours in the period – though, with their contemporary rise and re-birth under owners FSG and Klopp and their CL and potential PL successes, they have overtaken us in revenue terms lately. Even still, until the CL win in 2019 (against our “good friends” no less) they only won the League Cup in 2012 under club legend Sir “King” Kenny Dalglish. They also had made numerous transfer market gaffes in this period, such as Andy Carroll, Mahamdou Sakho, Cristian Benteke, and Charlie Adam.

Spurs’ absolute spending has been £100m under our own. Though whilst hilariously not winning anything since 2008, their increased match-day incomes will see their transfer budgets rise accordingly.

If looking at overall revenues in the period, as well as financial sources, being 5th in this capacity since 2011 makes sense.  One can expect to see Everton creep up the table in the coming years, and if Newcastle gets taken over then perhaps it too will ascend.

The fact remains that we are spending to our limit, and have done, and thus it’s a myth to suggest that we don’t spend money at all.

Or more to the point that KSE doesn’t let us spend.

The past few transfer windows have shattered that myth alone. The 2018 and 2019 summer windows saw us spend nearly £200m in fee totals. Since 2017, we’ve broken our transfer record three times, namely via Lacazette, Aubameyang, and Pepe.

If compared on a Europe-wide basis, we were 13th in the same period.

Considering the clubs in the top ten, and their relative successes and revenues, Arsenal is doing well to be in 13th place. All of the other clubs above it, bar Roma and Inter, have won their respective national league or a European trophy since 2011.

 

So, has KSE underspent? No.

It’s foolish to say he has.

The issue isn’t that he hasn’t got us to spend.

It’s that he hasn’t got those under him – namely Wenger, Gazidis, Sanhelli or Edu – to spend it wisely.

 

KSE needs to fix up – or get out.

It’s his choice. 

Bolton and Bury – time for a footballing New Deal?

The demise of Bury and its expulsion from the EFL was a very sad case indeed. Bolton Wanderers, one-time Premier League regulars, too hold significant issues which are placing the club in peril. However, these have abated somewhat since Bolton has been bought by Football Ventures Ltd.

However, the principal issue in this was the mismanagement of the club by its owners.

The EFL, whilst having controls via ownership tests, didn’t have strong enough oversight on this matter. And a club in existence for many decades now has to work its way up to the higher levels of the game.

What then can change, to stop this from happening again?

Is there time for a “New Deal” in football, in that the corporate governance must change?

The format as it stands now is that British football clubs are registered companies like all others. They have to register with the state, pay appropriate taxes, and follow all state regulations and corporate legislation.

So they are prone to be bought like other firms in other industries, via means of standard mergers and acquisitions (M&A) measures. The model football clubs employ is akin to BP, Shell, BA/Iberia, Glaxo Smithkline, HSBC, or any other noted British firm. Whilst football clubs don’t provide the exact monetary returns of these firms, they all have shareholders and owners who appoint executives with the day-to-day running in mind.

In this capacity, fans hold no legal right to a say in governance, and are viewed as customers and not shared custodians. Supporter groups can lobby and petition owners, but seldom hold a direct say in the club’s governance and strategy.

This has lead to Bury’s issues – as the owners were not schooled in footballing matters. Or they didn’t appreciate nor care for the wider obligations in this context.

If owners hold both legal and practical charge, and without challenge outside of the footballing and legal authorities, it lends to heightened effects of poor ownership.

The need for a footballing New Deal is based on football being a unique industry, requiring a defined and tailored club business model.

 

I’m a business studies graduate but by no means a corporate lawyer or business restructuring expert. These are my views all the same on this matter though:

 

Organisational structure

 

Clubs could be companies limited by guarantee. This is a business model used by charity groups, with no share capital nor need for dividends. It emphasises the voluntary nature of such organisations, and could ensure that all monies are used sustainably and in a club’s interests.

 

Fully public accounts

 

This would ensure transparency and is something done by clubs registered in Stock Exchanges. However, this should apply for all clubs privately held too.
Fan representation at board level – Fan groups should have board decision-making powers. This could be by proposing motions, or in voting for them at the highest levels.
Public engagement meetings for all club members – Clubs should meet regularly with fans to discuss methods and strategies.
Fan profit-sharing – If a club succeeds, then club members could then receive a reward whether monetary or otherwise.

 

Ownership structure

 

 

Owners only can hold 51% of the shares. The rest must be between fan groups and other bodies. Fans and/or fan groups to hold a minimum of 35% of the total equity. Bundesliga clubs have more inclusive and collectively-rooted models. And Real Madrid and Barcelona hold numerous socios who hold the right to elect club Presidents and influence club strategies. If this can work for the two biggest clubs on Earth, it can happen in England also.

 

Football is a unique industry – and needs a unique platform

 

The issue here is that there isn’t accounting for different industrial models and practices.

All industries have different needs and thus structure themselves accordingly.

The oil and gas industries can utilise fully the standard corporate governance model, as they need capital to explore and exploit energy sites and to build and maintain pipelines and associated infrastructures.

The same is true of any large global sector, such as financial services, retailing, food production, ICT, etc.

However, customers of these firms don’t hold the same emotive attachments as football fans do to their clubs.

And the competitive dynamics are different. Clubs do compete with each other, but not in the same capacity as banks or retailers. Manchester United fans, if they’re unhappy with the running of their club, wouldn’t support Man City or Liverpool in consequence.
Football clubs also are community vessels, and were founded as such in the mid to late 19th century. It’s why even up until this day that many value supporting their local club – or always sticking with a club once chosen.

Football support is as much about an emotive connection more than anything else.
Collective ownership may lessen bad ownership cases.

 

Football owner profiles

 

Most people who buy football clubs do so as playthings or holdings. They often are wealthy from other ventures, and hold ownership to grow their overall portfolio, or to use it as leverage in acquiring loans.

They also may use it to accrue soft power, or to enhance their PR.

Not many though have ever become rich from owning football clubs alone.

So with the financial rewards being far smaller, club owners are more incentivised to be accommodating with their fans in governance.

There is less at stake, and generally speaking, their fortunes aren’t on the line.

If looking at wealthy owners in PL history:

• Lord Sugar made his money before he bought Spurs

 

• Jack Walker at Blackburn was a steel magnate

 

• Abramovich at Chelsea held a share in Gazprom

 

• Kroenke at Arsenal’s holding group owns teams in all of the US major sporting leagues. And his wife is part of the Walmart-owning family

 

• Mike Ashley at Newcastle United is a noted retailer owner, with the Shiekh at Man City being a prominent part of the UAE Royal Family

 

This prospective model won’t solve all issues but would provide transparency and greater fan input.

It would also lessen the scope for unchecked oversight, and further, reinforce the community feel of clubs.

A New Deal for football must acknowledge the unique and distinctive structures of the football industry. Perhaps this has been missing over the years, leading to some noted points of club mismanagement.

Arsenal finance facts, truths, and myths

Much is known of the club’s financial state, and factors surrounding its revenue generation and spending.

But what are the facts involved here? And are all of the key points in the public domain actually true?

Below is a listing of the key points involved, surrounding revenues, and the club’s ownership:

 

We’ve paid off the stadium

 

This is false.

It would be better to state that the debts we have, at this point, are not significant enough to hamper our spending and other commitments. This does not mean however that all stadium financing obligations have been met.
Around 2013, at the time we signed Mesut Ozil, we were in a position to loosen our belts due to several years of income accrued. We had CL football, bigger PL TV money, and larger commercial deals. We simply earned more money to ensure that our liabilities had a lesser burden.

To use an analogy, it’s like a person has a mortgage for their home, but gets a better paying job, and thus can spend more on other items as well as mortgage repayments. It doesn’t mean that one has no debts, but the debts can be better accommodated.

The initial years were tough somewhat, in that we had to ensure we gained as much revenue as possible. This is why Wenger – perhaps – said that the first trophy is the top four. In some ways, in fairness to him, it was. The stadium debts needed to be balanced with consistently high income – and the best way to do this was via consistent CL football.
But we have a structured debt package which acts as a mortgage, lasting 25 years when taken in 2006. This will thus end in 2031, with another 12 years to go at the time of writing. This roughly equates with £20m a year, and about 5% or more of our stated income.

There seemingly is no facility to pay it off early or in a lump-sum, so we’re stuck with it in the meantime.

 

Stan Kroenke/KSE drain money from the club

 

True, in part.

Stan Kroenke did publicly take two £3m payments for advice, which was noted in two AGMs. However, this hasn’t been repeated since.
But now that the club is fully owned by KSE, this could happen at will and without disclosure in the public domain.
So we won’t know if this will resume, or at higher rates than previously stated.

The amounts taken though were small and were within his rights as an owner to do. And we don’t know the nature of the advice given, and thus cannot comment fully if the payments were justified or not.

 

KSE withheld money for signings

 

False, as far as we know.

This was a common claim in Wenger’s tenure.
But neither Arsene Wenger nor KSE has ever corroborated this.
Wenger controlled transfers and when asked by the media or fans, he continually said that money was available.
He did though never say that no money was at hand for spending.
And if this was true, then it won’t be disclosed given the fallout that will happen. Questions would inevitably be asked about how the club could have no transfer funds if revenues were consistently amongst the highest in world football.
Even in the last two years, Arsenal has broken its record on Lacazette, Aubemayang and Pepe, in totals reaching £180m or more.

This point ultimately is very moot – and only Arsene Wenger, Ivan Gazidis or KSE would know the full truth.

 

KSE doesn’t pump money in like it should

 

False.

Arsenal has never been a bankrolled club.
It has always operated within a model of sustainability and the self-sustaining paradigm.
KSE bought the club with this premise in mind, as it required only due stewardship and not excessive cash injections.

Stan Kroenke, along with his wife who owns a large part of the US retailer Walmart, is a billionaire. Fans assume that he will act in the manner of the Man City owners due to his wealth alone. His intention though was never to “splash the cash” and be our sugar daddy, and billionaires like Mike Ashley at Newcastle United hasn’t “splurged” either.
When analysing the actions of other wealthy owners, it’s a misconception is that they have only spent on transfers. In many cases, infrastructure improvements, new stadiums, debt repayments and even civil infrastructure have been financed by them.
The Man City owners have spent a lot on buildings and homes in Manchester itself. Part of this is the gaining of community support, as an essential part of the City of Manchester. It may be cynically perceived, as it could be seen as buying favour. Either way, such works don’t come cheap, and the City Campus and Etihad Stadium expansions have contributed to their high owner inputs.

At Arsenal, we’ve built housing too. The Highbury Square project demonstrates this amongst other lots the club has procured and constructed. But this has been paid for in large part from the ground’s running. City’s spending is more on social housing, whilst Highbury Square is marketed as a mid to high-end development. The social aspect then leads to more money and the concept of community buy-in, which KSE didn’t really need to do once they gained a majority shareholding.
Moreover, the ground and training ground are being upgraded continually to ensure they’re state of the art and fit for purpose. The club doesn’t need this level of input and this most likely is what makes it attractive to KSE.
It’s like being a 6-bed house in a good area, and which requires little maintenance and upkeep. It’s just about ensuring changes are made where required, and nothing is broken or goes mouldy.

Many clubs are run sustainably. Manchester United is, since the Glazers have leveraged debt on the club, but don’t input money for transfers or other infrastructures. Their massive commercial income, as well as high match-day revenue, all account for their transfer spend capability.

Additionally, Liverpool isn’t bankrolled by FSG, and neither is Spurs by ENIC.

Money is a key factor in footballing success. But it can never be the sole factor. Good ownership and sound decision-making are also important, and Arsenal needs more of this to compete at the level we should.

 

Arsenal’s commercial deals show poor management

 

Neutral.

It is true that the other top six clubs gain more commercial income.
But I think, with speculation admitted here, that this is deliberate. Match-day income is very high in both PL and world terms, and the club relies on this to a large extent. It’s only due to weak on the field performances that have cost revenue in relative terms. City, Liverpool, and even Spurs have caught the club up, and it’s due to them being better teams of late. City’s treble, Liverpool’s Champions League win, and even Tottenham’s consistent top-four finishes have ensured they’ve gained more TV and prize monies than us.

The club could do more to resolve this, as every little bit helps. But it may not be due to bad management, but relying on more stable revenue streams. TV money is often based on performance, as whilst PL clubs gain a base level, there also are incentives rooted on league placements. And the CL pays out far more in prize money than the EL does.

There are also cases in which Arsenal’s high match-day revenue has beaten off more successful clubs financially. Even when Chelsea won the league in 2015 and 2017, Arsenal posted higher revenues, albeit Chelsea scored greater commercial income. So it’s moot really, and a composite of factors lend to relative and absolute financial performance.

 

Arsenal’s wage bill is too high

 

True – somewhat.

This was a concern, though the departures of Jenkinson, Welbeck, Cech, Ramsey, Koscielny, etc. have led to savings in this capacity.
Though Tierney, Pepe, Luiz, Saliba, and fees related to Ceballos, have all eaten into savings made from the aforementioned departures.

The club’s hierarchy has said that wage planning has not been efficient, though the Ozil deal was more about securing a prime asset during a difficult period. The new regime has said they will reconsider wage packages, so it remains to be seen how this unfolds.

One has to also assume that Aubameyang, Lacazette, Pepe, and Luiz aren’t on small salaries either. So the wage bill has been a legitimate concern of late, and the club will be judged on how it handles this in the near future.

 

The club only had £45m to spend in the summer

 

False.

According to the club’s MD – Venai Venkatesham, the club has never stated the exact total of its transfer budget.

It’s something that is pretty much concocted by the media, without any real backing by the club itself.

It is true, due to a lack of Champions League football, the club’s revenue generation has fallen. But it would be ill-advised in any capacity to state the nature of one’s transfer spend. It would mean unbalanced dealings with agents and clubs, and not getting full value for players.

 

Wenger never had much money to spend

 

False – as far as can be noted.

Our current structure has, to a large extent, separated Wenger’s job spec.

Wenger was the head coach (Emery), controlled recruitment and headed football operations (Sanhelli), and facilitated the long-term footballing strategy (Edu). Ivan Gazidis, as Venkataesham does today, headed the commercial and administrative operations and was the club’s representative at Europe-wide bodies (UEFA, G14, etc.)

Wenger had to report to the Kroenkes of course, and whilst having control of all footballing matters at the club, had a stronghold on transfers.

The summer of 2015 was noted for us not spending at all, bar Petr Cech of course.

But there is no evidence at all that we lacked money (which by 2015 would have been a travesty given the stadium build and revenues we were accruing) or that KSE was telling Wenger not to spend. Wenger himself continually said that there was money – why he didn’t spend to the level required or desired is just unknown.

There is no evidence that KSE ever told Wenger not to spend as required, or that there was a deliberate push to contain transfer spending.

 

KSE don’t spend big on players – transfer spending is minimal

 

 

False.

Since 2017, we’ve broken our transfer record three times.

Lacazette, Aubameyang and Pepe all have been record fee signings.

In terms of absolute spend, perhaps only City, Liverpool, Chelsea and Man United have outdone us. And considering United’s revenues exceed our own by some distance, and Chelsea and City have been bankrolled, this is the best we can do.

Since KSE first bought a majority share in the club, we’ve signed Alexis, Ozil, Cech, Giroud, Koscielny, and Mertesacker, who all were in some form were/are key players in our side. They also had achieved big at international level or with other clubs, and were considered world-class in some cases. So none can say they have been slouches, as they all have won domestic leagues/cups, Champions Leagues, Copa Americas, and World Cups between them.

So nobody can deny that we haven’t bought quality – it’s more about not spending money when required or on the right players desired at the time.

 

The #WeCareDoYou movement caused KSE to spend big this summer

 

Neutral.

I think it made KSE aware of fan discontent with their ownership.

And the manner in which it was worded and crafted was not just emotive, but constructive.

But the Pepe, Ceballos, Luiz, and Tierney deals were probably in the offing for a while before the window started. And it just was opportune for KSE to continue working on them, as this online movement commenced.

As fans, we don’t and cannot know about the dealings behind the scenes. Speculating as to actions or inactions is moot since it’s just that – speculation. It’s seldom good, ever, to base firm actions on unsubstantiated points.

#WeCareDoYou is highly welcome indeed. But we just cannot gauge how much it triggered KSE into action, or what the actual response or effects of it were.

 

Some may say the points above try to defend KSE in their ownership of Arsenal.

This isn’t KSE apologism here.

But there are some cases which are true or false, and others that we just don’t know about.

Most Gooners may have heard the above points aired, and may even believe them. There is a difference though between speculation and fact, and fans on many occasions often allow their judgements of clubs to be rooted in conjectural matters. This not only confuses perceptions but also creates an unduly negative vibe between fans and the club.

 

 

 

 

17/18 Football finance projections

The 17/18 season has ended. But which clubs will be the most revenue-earning in the world?

1.  Real Madrid – Champions League win. Resulting commercial deals may enhance revenues, to regain top spot
2. Man United – Higher league placing in England compared to 16/17, and higher tv revenues
3. Barca – La Liga champions
4. Bayern – Bundesliga champions
5. Man City – Record-breaking English champions
6. PSG – CL revenues, plus being French champions, and commercial ties from the Neymar transfer, would boost income
7. Arsenal – New sponsorship deals, though lowest league finish since 1995. Match-day income may be lower due to Europa League football
8. Liverpool – CL runners-up and fourth in England. New stadium stand would enhance match-day income
9. Chelsea – FA Cup winners, but R/16 in CL and 5th in the league. New stadium plans being delayed greatly retard future abilities to earn more
10. Juventus – Italian champions, but need CL win and/or better Serie A deals to earn more and move higher in the table

2016/17 figures for contrast.

Some trends in the short-term (3-5 years) include:

• Tottenham moving up the table due to the higher revenues from its new stadium
• Juventus moving higher if they win the Champions League
• PSG moving up if they attain CL success
• Potential growth for Arsenal, due to the Club Level expansion, and possible improvement under Emery
• Should Man City improve under Pep, and gain sustained Premier Leagues and European successes, they could potentially rival Man United’s income, due to prize money, TV revenues, and heightened commercial income.

It would be interesting to note. However, I expect English clubs to dominate, considering the higher TV deals that the Premier League accrues. This has been enhanced lately via the Amazon Prime agreement, facilitating live streaming of games.

 

Deloitte Money League 2018

Deloitte has released its annual Money League today.

It highlights the world’s top clubs, concerning revenues and turnover.

It’s a key tool in understanding the big clubs’ motivations and income sources, and just how much contemporary football is money-oriented.

Deloitte Football Money League 2018 from victoriawilliamson

The infographic and slideshow denote each club’s ranking this year, further specified below:

– Manchester United

 – Real Madrid

– Barcelona

– Bayern Munich

– Manchester City

– Arsenal

– PSG

– Chelsea

– Liverpool

– Juventus

– Tottenham Hotspur

– Borussia Dortmund

– Atletico Madrid

– Leicester City

– Internazionale

– Schalke 04

– West Ham United

– Southampton

– Napoli

– Everton

Overall, there are few surprises.

English clubs dominate due to the extended TV rights deal.

Manchester United is still top, though winning the Europa League ensured it just pipped Real Madrid, which of course won the Champions League.

In the top ten, Arsenal has moved from seventh to sixth, whilst Chelsea due to a lack of European football has fallen to eighth place.

Everton is a new entrant to the top twenty, as is Napoli.

PSG’s revenues have fallen, though this may change in 17/18 if they attain major Champions League success. The record signing of Neymar may also boost commercial deals, and merchandise sales.

In coming posts, I shall take time to analyse clubs’ performances, as well as trends apparent between countries.

 

Van Dijk IS worth it – #footballfinance

I’m a great fan of The Football Terrace, hosted by Terry Flewers, a Man United fan. His channel is a general football channel, and not just focused on Man U, however, he continually makes a sound point vis a vis football transfers.

Football transfers are prices, and prices are subject to inflation.

It’s that simple.

If people have more money to spend, then product prices can rise.

Worth is always subjective and based on what buyers and sellers are willing to agree with.

Van Dijk will cost £75m, which is a world record for a defender. However, this is why I believe he is worth it:

 

• Inflationary effects

 

One of the causes of inflation in an economy is money supply factors. Without using too much economic jargon, this just means that if there is more money in an economy, then people may be more willing to spend, and thus prices go up to take advantage of this. It’s like if a new high-end apartment block opens up in a poorer area of town. There may be more goods and services to take advantage of this, like new shops, stores, or other amenities. It’s the same principle here. More money means higher rates and more opportunities.

Another example, and perhaps a peculiar one, is “tourist prices”. If a Westerner visits a third world country, s/he may be charged at higher rates even if the individual isn’t wealthy. It’s the perception, (whether accurate or not) of wealth that ensures things from taxi rides, to bar drinks, or souvenirs, are more highly-priced. The principle is still the same. More spending power relates to a higher price.

 

• More income streams

 

As the world’s most popular sport, football is riding the wave of increased global sports commercialism. This is not exclusive to football, but all sports in recent decades have caught this bug. The Mayweather/McGregor fight is an example since it got big box office and billing.

So with bigger TV rights deals, sponsorships, prize money, and wealthy owners inputting funds, it’s a no-brainer where this inflationary pressure is coming from.

 

• Worth is subjective

 

When Dele Alli joined Spurs from MK Dons, he cost £5m. Maradona, when he was the world record transfer signing, cost the same. Now, Alli is talented, and few would question that. But Maradona patently is an all-time footballing legend. Alli may never reach Maradona’s level, and only Ronaldo and Messi can make claim to that of current players.

But what is that? Maradona joined Napoli many years ago, and times, prices, and the transfer market have changed since then? Well, this is why transfer prices have increased since factors have altered. We’ve seen that the world record fee has grown over time, and if anything the massive leap within a year from Pogba to Neymar highlights the level of money and purchasing power in contemporary football. More money does command higher prices.

I firmly believe we will see a £1 billion player in the near future. He may currently be a schoolboy, playing grassroots football somewhere for all we know. But present trends do not look like abating any time soon, and as value changes, the world’s first £1 billion could result.

 

• False weighting

 

I believe this notion that players are not “worth it” comes from a false weighting of prices. All prices, for virtually all products, are set by demand and supply factors, or the acceptable profits/losses that a firm will accrue. A can of Coke in 1995 cost less than it does today. The reasons are as aforecited.

A price only reflects the present realities of the market or the buyer and seller’s needs. That’s it. Transfer registrations are products, and as items for sale thus have associated prices. A price is just a label to identify how much to transfer something from party A to party B. Again, that’s it. It may seem formulaic, but then it’s pretty much the principal facet at play.

Both Soton and Liverpool, of course, play in the Premier League and understand the footballing market. They are subject to the prevailing TV firms, media, agents, and footballing authorities, and have agreed on a fee based on the current circumstances in this market. This is the only thing that makes van Dijk “worth the fee”.

Rio Ferdinand cost £35 million in the early 2000s, and yes, van Dijk may not have reached his level yet. But then had van Dijk been playing in the early 2000s, he may have cost the same. Or slightly more, or less. Rio was cost at the factors pertaining to the early 2000s. Sir Alex knew that, as did Leeds United. Liverpool, Klopp, FSG, van Dijk, Pellegrino, and the owners of Southampton, all know this now. To cite conditions, markets, and retired managers’ effects from long ago is to raise a fallacy.

Fans, media, and pundits alike perpetuate this thinking by not seeing every transfer in its current context. All markets are fluid, and this is why it’s said economics is not an exact science. It really is not. There are so many variables that can affect how ANY market functions. Take Brexit. In May 2016, the pound sterling was doing fine versus the US dollar. Yet from June 2016 onwards, due to the Leave vote, it fell by a large margin. Only now has “the Cable” started to recover and restabilise. Football markets should be seen in a similar manner, as dynamic entities reacting to new, emerging, and present realities.

I admit this piece may read like an essay. I’m not an economist, nor a financial analyst. However, as a football fan, and long-time student of economics and business topics, it makes perfect sense why transfer reg. prices are rising at the rate we’re witnessing now.

So yes, in summation, Virgil van Dijk is worth it. This is an astute signing by Liverpool since it will surely aid their defensive set-up. He may even wax lyrical, like his Roman poet namesake.

Why are footballers’ salaries so high?

This is a very old comment. Footballers, whilst role models in some sense, are not as societally critical as doctors, nurses, teachers, or firefighters. So do they warrant their high salaries?

The basis of a salary is the responsibility, qualifications, and affects one’s work has in an organisation and/or community. This is why the CEO of an organisation gets more money than the office cleaner.

A similar rationale applies for footballers. Footballers are the chief employees of any football club. All other employees, it can be argued, in a club are geared towards their success. Take Real Madrid. Ronaldo, Modric, Marcelo, or Kroos, win games, leagues, and Champions Leagues leading to more commercial revenue, TV rights, and match-day income for Los Blancos. This, in turn, provides medical staff, ground staff, or even HR and ICT staff, with continued employment.

With this scope, footballers as prime assets bring in big bucks so they can get the big bucks. Moreover, their talents are pretty much unique. Not many, ever, can be as good as Messi or Ronaldo.  Their talents bring in great revenues for numerous factors, namely FIFA, UEFA, La Liga, Real Madrid and Barca, Adidas, Nike, and various other firms/organisations.

So using the principle of responsibility and impact/effects, there is a sound reason why footballers get paid so much. They are prime entertainers.

It’s odd that few people question why Hollywood actors receive equivalent remuneration to footballers. Their roles are not strictly societally critical, yet like sportspeople generally, they do drive industries from top to bottom. Film executives and producers, right down to camera, video, make-up, etc. all rely on their continuance.

Similarly is true of musicians, or top people in other sports. What about Serena Williams, Usain Bolt, Conor MacGregor, or Lewis Hamilton? Tennis, track and field, or MMA, are not core social functions, are they?

So it’s pretty much natural that they get paid highly.

Is this ethical? Well, we accept readily the notion that, as aforecited, responsibility and scope are key factors in remuneration.

I would support the increased pay of doctors, nurses, firefighters, teachers, or other more societally critical fields.

However, what is societally critical as a point? Football and other sports provide a lot of employment to various sectors and are key entertainment vessels in the world. People need entertainment, and thus possibly Ronaldo and Messi are societally critical.

Will official online streaming of domestic league football happen?

 

I say yes, it will.

 

It is a natural step/evolution of football consumption.

When BskyB first started broadcasting live Premier League football, the picture of consumption was different. There was no Internet then, at least none that were widely available. Satellite TV, unlike today, was an emergent trend, and the two aligned well.

In 2017, many people own Internet-capable devices, and have broadband connections. They also consume entertainment via the Web, and increasingly more so than traditional media. So it’s no surprise that this notion is being mooted.

Will this “kill” football?

Possibly not. Bubbles generally end when the demand for products cease ubruptly. Football is the world’s most popular sport, and in some regions (such as North America and Asia) the fastest growing sport. So this lends to Facebook, Yahoo, Amazon, and Google, all seeking to bid for Premier League rights. It could mean far more revenues for clubs, though possibly more resentment amongst fans. I believe if anything will kill this trend, it will fans demanding a return to more wholesome/community-oriented football.

This could also limit illegal streaming, and possibly expand existent online streaming services such as Sky’s NOW TV.

A major facet of marketing and business administration in general, is providing products that ensure utility. This also includes providing products in ways that people demand, expect, or otherwise meets their needs. As streaming is commonplace, it stands to reason why the big firms may look to capitalise on it.

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.