The New Commercialism
13.11.2000By David Conn
People experiencing football through going to Premiership matches, watching games on Sky TV or reading much of the newspaper and magazine coverage in recent years could be forgiven for assuming that the changed face of the game in the Nineties is the product of determined reform. The game is discussed as if it has undergone a fundamental rehabilitation from within, and is referred to approvingly as an "industry". The glamour of the game at the top end is held up as evidence of the benefit of the "free market", and much of the new interest in the business pages has always encouraged the further encroachment of the free market.
The reality is rather more complex, and difficult. In fact, the commercialisation of the game follows the Hillsborough Disaster, only 11 years ago, in which 96 people died. Then footballs negligence and poor management was exposed by a judge, Lord Justice Taylor, whose official report called for "the fullest reassessment of policy for the game." Instead, in 1992 the top clubs broke away from sharing with the others to form the Premier League, proceeded to do two, now three massive TV satellite TV deals worth 2.6bn, shared between only 20 clubs. Most of them floated on the Stock Market, their chairmen or major shareholders making huge personal gains, against the traditions, and even bypassing the rules of the governing body, the Football Association.
Footballs popularity has mushroomed, it has entered mainstream popular culture, it is still heavily watched on television and the grounds are full. Yet many people who used to support clubs all their lives now find they cannot afford the new escalated prices. They, and teenagers and younger people in particular, have been alienated from this brave new age. This paper sets out in detail how that process has happened.
I am a freelance journalist, have a weekly column "Inside Football" in The Independent newspaper and work for BBC Radio 5, The Daily Telegraph and other newspapers and magazines. I have also produced documentaries for BBC1 and BBC2, including a Panorama about the commercialisation of football.
In 1997 I wrote the book "The Football Business", which traces English football's recent history since the Hillsborough disaster, attacking the commercial processes which have taken it over. The book tapped something of a wellspring of popular support; it sold out in hardback and is now in its second paperback edition.
The book had some influence on the British Governments Football Task Force, which has now concluded having made some positive recommendations, which I outline in this paper.
In the paper I set out and explain the history of English football and how it has come to be financially exploited in the last decade.
A brief history of English football's structure
Football began and was developed in Britain. From very early on, when it came to be developed in English public schools, football was always regarded as having a sporting ethos, to help shape character and play a beneficial role in society. Even as it became professionalised in the lated 19th century, the game's governing bodies saw it as their duties to maintain the underlying sporting ethic. The Football League maintained sharing of money between big and small clubs. The clubs themselves were subject to FA regulations to keep them as clubs, protect their sporting character, and prevent them being treated purely as businesses to make profits for shareholders.
This structure lasted more or less successfully right up until 1992. Then, with the shameful backing of the Football Association, the First Division clubs organised a breakaway from sharing with the rest of the Football League. This constituted a betrayal of a century of the traditional structure, and was done on the threshold of an unprecedentedly huge TV deal for football. The Premier League did that deal with satellite newcomers BSkyB, and shared very little of the 305m which flowed from it. The FA allowed its own rules relating to clubs to be bypassed when the clubs floated. The major shareholders, chairmen and a few others, made a fortune on shares bought cheaply under the previous structure.
No other regulation was put in place, except the injunction from the post-Hillsborough Taylor Report to build all-seater stadia, for which the clubs were given 160m public money. The Taylor Report asked that the clubs should not use this as a catalyst for raising prices, but they all have. The top clubs have raised their prices more than 300 per cent since then and indulged in merchandising, corporate facilities and many more moneymaking activities. In 1997 a four year TV deal was done worth 670m, still to only 20 Premiership clubs. In 2001 they are due to start a 3 year package of deals worth 1.6bn.
The Football League clubs have done their own deals, and there is some redistribution from the Premier League, ring-fenced for ground improvements and for the setting up of academies. But it is insufficient. Generally the game suffers from huge inequality. Grass roots facilities public parks mostly are in the most dilapidated condition, half lacking changing rooms, and only now, partly in response to my raising the issue in my book, is some of the money being filtered down to make repairs. Despite the full houses which attend Premier League matches, many supporters who came to football in the previous era have been disenfranchised by the rising prices and exploitative culture at their clubs.
It is important to understand that this is not mere opinion, but that the current "free market" age is a departure from football's sense of itself throughout its previous history. We can trace that history in detail.
Football originated in England. It has ancient roots, being played to no rules in particular by large crowds from opposing villages, rampaging across fields and through the streets. These games were largely lost to the Industrial Revolution. The game continued in the nineteenth century in public schools for sons of the rich. Gradually a new generation of headmasters began to encourage it, seeing in it a "games ethic", and the social and moral benefits of "sportsmanship", alongside its obvious provision of organised physical exercise. The Football Association was formed in 1863, its original purpose to unify the games being played in the various schools and universities into a single set of rules. It had a firmly amateur, "gentlemanly" ethos; the game was "pure", to be played for the competition, for the sport.
Football was taken out of the upper class environment around the 1860s and 1870s, spread largely by university and public school graduates. It was promoted by churches and schools, who saw the game's potential for encouraging physical health and some moral values in still chaotic, rawly industrialised cities. The game caught on phenomenally. Clubs sprouted all over the country, in particular the North and Midlands, formed by people who wanted to play the game or teachers, vicars, businessmen, who wanted to encourage it. Most relevantly in terms of the development of the professional game, the more prominent clubs began to attract huge crowds, hungry for entertainment and passion in their cruel urban lives. From the beginning, crowds appear to have been fiercely partisan.
The FA insisted from the beginning on the amateur ethos, believing that payment of players would corrupt the purity of the game. But competition between clubs, particuarly in the North, led around the mid-1880s to regular illicit paying of players. In 1884 the big clubs threatened to break away from FA control if professionalism were not legalised. The following year the FA finally legitimised professionalism. It did so reluctantly, persuaded by the argument that it was now inevitable and if the FA persisted in the ban, professionalism would continue underground and become impossible to regulate or control. From the beginning, therefore, the governing body aimed to regulate commercialism, to protect what it believed to be the inherent sporting values of the game.
Early Professional Football
Problems sustaining regular fixtures for football clubs, which now had wage bills to maintain, led to a proposal from William McGregor, chairman of Aston Villa, to form a league. The Football League, the first professional football league in the world, came into existence in 1888, with 12 clubs competing.
The FA remained the "governing body" of football, responsible for every club and league in England and for upholding football's rules. It remained amateur in its ethos.
Football League Equality
From the beginning The Football League considered it important to maintain equality. The policy was that it would be bad for the game if the big city clubs were to dominate purely because they could make more money through the gate. For almost a century, the rule was maintained that clubs shared gate receipts equally. Later there was also an overall levy: every club paid four per cent of its season's gate money into a central pot and this was distributed equally to all clubs.
The Maximum Wage
The other measure aimed at maintaining equality between member clubs was the FA's imposition of a maximum wage on players at first 4, in 1900. This is generally accepted now to have been an unjust and unwelcome product of England's class system - a restriction by the upper class FA on the rights of the working class players - and it lasted an amazingly long time, until 1961.
Clubs, and the FA Rules
The first clubs were membership clubs, formed by friends, workmates or existing sporting associations, forming simply to enjoy playing the game. The vast majority of football clubs today are like this, purely amateur, playing the game for the love or the competition.
Following the onset of professionalism, and particularly when, soon after, the first enclosed football grounds began to be built, the larger professional clubs began to form limited companies.
Mostly they did so as a defensive measure, to protect the members from becoming personally liable for the expenses of the wage bill and the cost of building the grounds. Most football companies remained clubs in spirit for years, run by local burghers and businessmen, and were concerned purely with playing the game as successfully as possible.
However, it is a mistake to assume the culture was purely philanthropic. The popularity of the professional game always attracted entrepreneurs who were interested in football as a commercial, profit-making exercise, and looked to benefit personally from it. Three examples illustrate this: Liverpool FC, Chelsea FC and Portsmouth FC were all set up as professional football companies, having had no previous tradition as sporting clubs, purely as commercial ventures for their owners. Several other football clubs were set up in London in the early 20th century as speculative exercises.
It is crucial to understand this early era of football in order to throw light on our current era. Now, "market forces" are causing gross inequality; many lower division clubs are threatened with extinction while Premiership plcs are coveted by some of the biggest corporations in the world. In the City, analysts talk approvingly of the inevitable "consolidation" of the football "industry" of some smaller clubs ceasing to exist. This is discussed as if it is new, as if football has only now discovered the joy of becoming a free market business. But the FA and League saw this as a possibility from the very beginning, the 1880s. They moved to protect the game and clubs and supporters, from the effects of this, and to keep a wide population of clubs.
Had the authorities not had the conviction that football was a sport, and should be different from normal commercial industries, this consolidation, effectively the dominance of only a few large professional clubs, would have happened a century ago.
As noted above, the League was concerned to redistribute money between the large and small clubs. Last century, in fact as long ago as 1899, the FA imposed rules to protect the sporting character of the professional football clubs. The rules are still nominally in force until 1998, although they have been allowed to be widely bypassed by clubs floating:
The FA Rule 34
Briefly the FA's regulations, which were most recently in the handbook as Rule 34, were as follows:
1. Nobody could draw a salary for acting as a director of a football club.
(This has been changed twice: in 1981 a single full-time director could be paid. Most recently there was no restriction on the number of directors who could be paid, but they had to work at the club full-time.)
2. Nobody could derive major income from owning football company shares; the dividends were restricted to five per cent of the shares' nominal face value.
3. A football club company was protected against asset-stripping. If a club were wound up, any surplus assets had to be distributed to sporting benevolent funds or other local sporting institutions.
These rules were aimed at maintaining a spirit of public service, not profiteering, in the people who came to own shares and run the clubs. Rule 34 prevented a businessman from making money out of a football club either via salary or dividend. And he could not wind up a successful club because all surplus assets had to be distributed. These rules set the culture for the running of the clubs by local businessmen who, whatever personal benefits they derived from their involvement with the football club, could not treat it purely as a business endeavour.
The Development of Professional Football
Professional football thrived, exploded in popularity, and by 1921 there were four divisions. The clubs did make money, but mostly in amateurish way, through charging for admission and basic catering type commercial activities. Players wages were capped, yet still mostly the clubs did not make or spend enough money on their grounds, many of which remained basic.
The amateur FA and professional League had some practical administrative conflicts, but in general there was harmony between the two bodies for the decades until after the Second World War. Players unionised and had periodic conflicts with their stubborn governors.
With regard to the running of the clubs, broadly speaking, most were taken over by businessmen who presented their activity as a form of public service. Directors generally came to describe themselves as "custodians", "putting something back into the town", their job to hand the club in good health to the generations to come after them. This is still a common self-description at many lower division and non-league clubs.
In these days of football plcs, run as investments for shareholders, such a culture might seem ideal. However, the "custodianship" was often merely the public rationale for a self-serving group of businessmen, varying greatly in competence and concern for the game and its supporters. As clubs became communal focal points, directors enjoyed public profile, made contacts, received perks or even made money illegitimately out of them. It is arguable that the amateurishness, combined with the class system, created poorly run companies in which complacent owner-directors regarded supporters as a rabble and failed to provide for their safety, let alone comfort.
Yet it is worth making some general observations about the beneficial aspects of the "custodians" culture. It has become commonplace, largely because of the Hillsborough disaster, to dismiss the whole way in which football was run pre-1990s, as shambolic. Of course, the failures which led to the disaster were shameful and inexcusable. However, it is false to place the current arrangements in direct comparison with those in place at the time of the disaster, and to draw the conclusion that current arrangements must be better because a disaster on such a scale is mercifully unlikely in the modern rebuilt grounds. There were several benefits of the old regulated system which have to be acknowledged.
It is no accident that football clubs survived and became magnets of loyalty to generations of support. Football clubs' very survival spring from the fact that they were protected against being mere companies competing in a branch of the entertainment industry. The restrictions against profit-making helped keep the cost of watching football affordable to most working class pockets. Entry was informally free for children even at the great grounds. This accessibility and popularity meant that football became a great binding force in popular culture very quickly. Support came to be passed down the generations and became a family (or father and son) experience.
The redistributive nature of the League (and the maximum wage) ensured the survival of 92 clubs - very few professional football clubs have gone out of business in over a century, despite variable quality of management for most of their histories. The lack of professionalism and often petty provincialism of the clubs would not be acceptable today, but nevertheless there was a public service ethos and culture in the running of the clubs, league and FA, which contributed to the game's sucess and popularity and the survival of so huge a population of clubs.
The Arrival of Television and Sponsorship Revenue
Sponsorship and television made their first inroads into football in the Sixties. The big clubs were more attractive to the sponsors and TV companies, but the League's structure and system of governance ensured that all income was treated as the League's, and distributed equally throughout the 92 clubs. In 1965, the BBC paid 5,000 for the first regular highlights package on British television - Match of the Day. The money was redistributed equally, every club receiving little more than 50 each.
The money grew with the success of football on television, and with it came resentment from the big clubs at having to share it with the small. By the early Eighties, a new younger breed of chairmen began a drive to keep more of the money, particularly after 1981 when for the first time clubs were allowed to pay full-time directors. By 1983 threats were being made by the big clubs to form a breakaway league. Concessions were given by the small clubs, ceding more money and voting rights to the big clubs. First, the overall gate levy was reduced to three per cent, then the home clubs were allowed to keep the gate receipts.
In 1985 the so-called "Big Five", Manchester United, Liverpool, Tottenham, Everton and Arsenal made a serious threat to break away, which produced further concessions on the distribution of TV money. In 1988 the big clubs did what amounted to a private deal with ITV to see themselves shown almost exclusively on TV. Nevertheless the League held on to its four division, 92 club structure and a proportion of the TV money was distributed to all clubs. Fifty per cent was kept by the First Division clubs, 25 per cent went to the Second Division, 25 per cent shared equally between the Third and Fourth Division clubs.
The clubs, companies in structure, still did not charge high prices to watch football, which remained widely accessible as a live experience. People continued to invest their emotions and loyalties in these institutions, which were clubs in a more general cultural sense. Even now most people refer to them as clubs, very rarely as companies, or plcs, which most of the top clubs now are. The game was dubbed "the Peoples Game". It never really was, in the sense that "the people" never owned the clubs, but as huge crowds flocked to stand together on terraces and support their teams, often contributing financially to the clubs, the description seemed appropriate, and stuck.
Financial Exploitation of the Game: A Chronology
The development of English football into its current state of inequality, huge wealth at the top and poverty below, began with the breakaway talk of the early and mid-Eighties. The story of how the breakaway finally came about began at a terrible and sobering point: the Hillsborough Disaster.
The Hillsborough Disaster
At Sheffield Wednesdays Hillsborough ground in 1989, 96 Liverpool supporters were killed, crushed to death, at the FA Cup semi-final against Nottingham Forest.
The Taylor Report
Lord Justice Taylor was appointed to conduct an official inquiry into the disaster. He produced two reports. The first, the Interim Report, identified the particular causes of the disaster, which he found, in summary, to be: an appalling record of safety management by Sheffield Wednesday Football Club, a failure by the local council in its safety regulatory duties, mismanagement of the crowd on the day by the South Yorkshire Police.
Football was seen at its wretched worst in the failures which led to the disaster itself. The football industry now is seen in a barely improved light by the bereaved families. They perceive it to be still run out of similar self-interest, mostly by the same people who were in charge of football then. Sheffield Wednesday, for example, had no concerted change of staff, and failed for ten years to put up a memorial. The chairman who presided over this policy is now the chairman of the Premier League. There has been little or no spirit of recompense or even responsibility from the football industry to the families. The families, who have had to bear the enormous cost of protracted legal procedures themselves, have been given almost no financial assistance from football, despite clubs having been given around 160m of public money as a direct result of the disaster.
Lord Taylor's Final Report was concerned with the more general issue of safety at sports grounds. His report recommended legislation to make England's football grounds all-seater. Taylor commented more widely though, on football's general institutional failures. In summary his analysis was as follows:
the League and the FA had both failed to regulate member clubs effectively in terms of fulfilling their safety duties
the ethos of public service in the boardroom was being widely betrayed:
"As for the clubs, in some instances it is legitimate to wonder whether the directors are genuinely interested in the welfare of their grass-roots supporters. Boardroom struggles for power, wheeler-dealing in the buying and selling of shares, and indeed of whole clubs, sometimes suggest that those involved are more interested in the personal financial benefits or social status of being a director than of directing the club in the interests of its supporter customers." (Taylor's Final Report, paragraph 53)
Taylor concluded his indictment of football with an observation that the game remained phenomenally popular and he called for fundamental reform in order for it to serve its public in the future.
"The lesson is surely that now is the moment for the fullest reassessment of policy for the game." (Final Report para 58)
No such full reassessment ever took place. The Government only enacted the all-seater requirement. They did not insist on further reforms, either of the clubs or the increasingly troubled administrative structure. So the Government agreed to give public money, in the form of grants to fund the rebuilding, to the very directors who had been so criticised in the report.
The Post-Taylor Report Rebuilding of the Grounds
Taylor recommended that the Government reduce the tax levy on pools betting duty, and give the difference to the Football Trust who would award grants to the clubs to fund the rebuilding. The Football Trust awarded grants close to 160m to the football companies, in 2m maximum awards for each stand. Some examples are as follows: Manchester United received 3.4m public money; Chelsea 4m, Sheffield Wednesday themselves 3.6m.
Taylor noted the "communal culture" of football club support and the fact that much of the support was working class. He said that the rebuilding should not be an excuse for risen ticket prices: "It should be possible to plan a price structure which suits the cheapest seats to the pockets of those presently paying to stand. At Ibrox, for example, seating is 6, standing 4." (Final Report para 72.)
The League's 1990 proposal to the FA to unify
In 1990 the Football League produced a document One Game One Team One Voice. It was prompted by the horror of the Hillsborough disaster and also the forthcoming expiry, in 1992, of the 1988 TV deal. The League foresaw a yet bigger TV deal being done, and could see the potential for dissent and possible breakaway attempts by the big clubs.
The League's proposal was simple: unity. The FA and League would bury their differences. A new 12 man board would be formed, six from each organisation, to run the whole of football, professional and amateur, from top to bottom, for the good of all. Commercial and TV deals would be done for the whole of football and money distributed according to the needs of running a healthy game.
The Big Clubs Move to Break Away
Only one month after the publication of the document for unity, the League\'s Big Five clubs met in secret with Greg Dyke of LWT to see whether he would be prepared to buy the TV rights if they were to form a breakaway Premier League. He said he would. The purpose of the breakaway was simple: so that the top clubs would not longer have to share TV revenue with the other Football League clubs - or the rest of football. They also no longer wanted to share power ie voting rights on policy.
The FA's response: The 1991 Blueprint
The big clubs needed the backing of the FA if their breakaway was to be legitimate. David Dein of Arsenal and Noel White of Arsenal were deputed to go to the FA to ask for backing.
The FA was working on its own document, which it had begun as a response to the League's One Game One Team One Voice. They saw the proposal for unity merely as a threat to their own administrative pre-eminence, and so they saw the big clubs' desire to break away as an opportunity to deal a fatal blow to the Football League. The FA agreed to back the breakaway Premier League in the subsequent document: The Blueprint for the Future of Football.
Thus the traditionally amateur governing body of the game, which had always seen its role as a regulator of the commercialism of the professional game for the common good, betrayed its own history by backing a breakaway of the top clubs on the threshold of a huge influx of TV money. The Blueprint also contained the fateful advice that football should move upmarket to chase "more affluent middle class consumers". The Blueprint contained no provision that any of the new wealth should be shared with the rest of football. In an interview with me for my book, Graham Kelly, then chief executive of the FA, said it was not even considered. Redistribution, part of football throughout its history, ended substantially in 1992, with the blessing of the FA.
No coherent or convincing explanation has ever been produced by the FA for having so betrayed their governance traditions by backing the breakaway. The Blueprint envisages an 18-member Premier League tied into a system which promoted excellence, leading to success for the England team. But this was never structurally implemented, and indeed the top clubs refused to reduce in number from 22 to 18. In my interview with him, Graham Kelly admitted that the primary motivation of the FA was self-preservation, that they saw the League\'s proposals as a threat, and the Blueprint itself makes a call for the FA to be pre-eminent in football administration.
The Premier League Breakaway in 1992 and first Sky TV Deal
The 22 First Division clubs broke away from the rest of the Football League clubs to form the FA Carling Premiership in 1992. Litigation from the Football League produced an agreement by the FA to give the League around 3m per year as compensation.
In the event, Greg Dyke did not win the TV rights for ITV. Sky TV won the rights, in a deal with the BBC whose headline figure was 305m. This was shared almost completely by only 22, later 20 clubs.
The "new commercialism" in the Premier League
The purpose of the Premier League breakaway was simply to make more money for the big clubs, and their owners, and for them to have control of the voting power on policy issues. No internal regulations governed the relationship between the club and its supporters, and the clubs began to look to maximise income from all possible sources.
Contrary to the spirit and letter of the Taylor Report, the rebuilding programme itself, funded with public money, became a springboard for commercialism. The stands were almost all built to accommodate corporate entertainment, banqueting and conference facilities, which would be put to work on non-matchdays as well as matchdays. But neither this nor the TV money went to subsidise ticket prices. Quite the opposite, clubs were allowed to raise their ticket prices, which they have done dramatically and massively above the rate of inflation. Rises of over 300 per cent since 1989 would be a reasonably accurate average.
The price rises have led to a significant number of people being excluded from being able to watch football. Recent work has been carried out by Leicester University to assess this. Anecdotally, there is no question that many people who supported their clubs all their lives have found themselves priced out of going. It is increasingly difficult for people to afford to take their children to matches, and the prices are prohibitive to most teenagers. Football has barely begun to address the question of whether, in cashing in so heavily on the supporters built up in a previous, more communal culture, the next generation of football followers is being priced out.
In addition clubs entered a new era of merchandising, including the mass manufacture of replica kits, whose colours changed with increased regularity. Supporters have been ready consumers. The loyalty and culture of football support meant that demand for tickets was "inelastic" - people would continue to pay the increased prices, and they were "brand loyal" to the merchandise. A report in March 1997 by City analysts UBS described football supporters as a "captive marke".
Flotation of Football Clubs
Tottenham Hotspur were the first football club to float, doing so in 1983. In order to do so, they simply bypassed Rule 34. They formed a holding company, Tottenham Hotspur plc, making the football club, Tottenham Hotspur FC, merely a subsidiary of it. All the assets including the ground were transferred to the holding company. The holding company was expressly stated not to be subject to the FA's own rules.
I have not found a satisfactory answer from the FA about the process by which this was allowed to happen, and why the FA allowed it. It seems to be part of the general loss of any sense of direction or clear idea of the FA's purpose in the modern era. In an interview with the FA's current lawyer, he suggested simply that Rule 34 was outdated and that the market should be allowed to do its work - an extraordinary view from the governing body.
Tottenham's float was not a success, but the promise of the breakaway and Sky deal meant that other clubs floated in the '90s. Manchester United did so next, an initially lukewarm float which has become the most profitable of all the new football plcs, and was in 1998 the subject of a 625m bid from BSkyB itself.
All the football companies, in order to float, followed Tottenham's example, forming holding companies to bypass Rule 34. They all expressly admitted this in their prospectuses.
Most of the football companies floated in a busy period between mid 1996 and 1997. Some 20 football companies now listed on the full Stock Market or Alternative Investment Market. They are subject to no specific regulation by reason of being football companies, and have indulged in the relentless commercial exploitation of the "captive market" described above. It has been one of the lesser acknowledged aspects of the current transformation of football that one of the driving forces of this has been the prospect for major shareholder \\ chairmen making vast personal fortunes out of their football club shares.
Flotation as a Means of Personal Moneymaking
Flotation was presented to the public, and to the football club, as an unarguably beneficial process for a football club. It was also presented as a means for ordinary supporters to have a stake in their club. In any analysis of flotation, and amongst proposals for a different form of football club ownership, its benefits have to be acknowledged along with its disadvantages.
One clear potential benefit is that flotation presents a relatively easy way to raise new capital. New issues of shares are bought up by institutions, and their investments can be put to use by the football clubs. However, the record of football club flotations in this area is poor. Most of the flotations occured after the major capital expenditure of the grounds being rebuilt. Much of the money raised by the flotations was spent on transfers of players, which led to further inflation of the transfer market and players wages. Nevertheless, in any proposals to outlaw further flotations or to mutualise the clubs, thought has to be given to alternative ways to raise capital.
A close examination of the reasons for football club flotation leads to the inescapable conclusion that a central motivation was simply for the major shareholders to cash in on their shares. In my book I documented how much shares in various football clubs were bought for, and compared them with their values inflated by the "new commercialism" and flotation. Shares bought cheaply in the years when football was governed by a different culture, by rules of redistrubtion and Rule 34, are now worth huge sums, many millions of pounds, in the age when football has become a Stock Market activity.
Football was never intended to be a pure commercial endeavour, and the clubs were built up over a century in which they were preserved from being mere investment vehicles. The major shareholders, Martin Edwards, Sir John Hall, Doug Ellis, Ken Bates etc, have benfitted from the breakaway from the rest of football, exploiting a century of support and tradition to make very quick, enormous fortunes for themselves. Several football clubs major shareholders are resident offshore in order to be exiles from capital gains tax.
The opportunistic zeal with which such personal fortunes were made could hardly represent a more shameless flouting of the spirit and analysis of the Taylor Report. Ticket prices rose, scant attention was paid to the "communal culture", little if any concerted thought was paid to "the welfare of grass-roots supporters". The very directors so criticised by Taylor embarked on a drive to maximise revenue and their own fortunes, using as a springboard Taylor's own report and the grants which followed. It is a bitter irony that following the Taylor Report, and partly as a result of it, the same directors who had been so criticised for "boardroom struggles for power, wheeler-dealing in the buying and selling of shares, and indeed of whole clubs," were allowed to indulge in these things more than ever before. And for huge, unprecedented "personal financial benefits".
Wider Inequality in Football
The Premier League breakaway and the consequent huge fortunes made by a few individuals at the top has produced huge inequality in the game. Redistribution ended just as the money became big enough to restore the fortunes of the whole of football. In the lower divisions, many football clubs are struggling. Wage inflation has come down from the Premier League, but the revenue has not come down to keep pace with it. Many semi-professional clubs are in trouble, suffering from having to compete with Premier League hype and games being televised in midweek very much more often. At the grass roots of the game, the municipal playing fields where Premier League clubs find their talent and on which the vast majority of the football population play the game, local authority cuts have led to facilities deteriorating into a state of squalor and disrepair.
The Future: The Prospects for Reform
The Football Task Force
In 1997, the New Labour government recognised that commercialisation had had a damaging effect on football, and set up a Task Force to inquire into it. The Task Force was constituted of supporter groups, very well informed academics such as Dr Adam Brown of the Manchester Institute of Popular Culture, public figures and also the football authorities themselves. Consensus was very difficult to achieve and the process came close to breaking down a number of times.
However, a clear majority of the Task Force recognised the validity of the analysis above, and a need to regulate the games new commercialism, for the good of its supporters and "soul" was recognised. Only last month, the reforms of the Football Task Force were completed. In summary they are as follows:
March 30th 1998: Eliminating Racism from Football.
Racist chanting subsequently made a criminal offence, but more still to be done by clubs to implement recommendations.
July 29th 1998: Improving Facilities for Disabled Supporters
Disabled facilities now compulsory in all grant-aided ground developments.
January 11th 1999: Investing in the Community
Produced Supporters Direct an initiative, with 750,000 three-year budget, to encourage supporters to buy and hold football club shares mutually.
Produced the Football Foundation, which will administer the spending of five per cent of the Premier Leagues TV revenue - 80m over three years - matched by the Lottery - to grass roots football facilities.
December 22nd 1999: Two Reports on Commercial Issues
Produced Independent Football Commission, with brief to oversee running of football in commercial areas, including ticket prices, and "Name and Shame" bad practice.
Membership yet to be decided.
These are encouraging developments, in particular the investment in grass roots facilities, Supporters Direct although clubs are alas too expensive now to be realistically owned by supporters, and the Independent Football Commission, which could yet forge further reform.
At the same time, the whole language of the Task Force process, and the fact of Government involvement, has meant that the football authorities and clubs have been subject to strong pressure to reform. All Premier League clubs have now adopted Customer Charters, something which in the light of footballs history is quite a remarkable step forward.
Yet still only five per cent of the Premier Leagues next 1.6bn is to find its way outside the Premier League to the grass roots. A key challenge is to see more of this money filtering down. There is almost no will at all from the Premier League clubs to see this happen. Indeed there is the spectre of the opposite a European breakaway league by the big clubs, who have already formed an association, G14.
The current EC intervention on transfer fees could, if the will was there, produce greater equality. It would seem to be one of the grounds on which the EC will allow a practice it deems anti-competitive if it can be seen to have wider social benefits.
Of the personal greed and enormous moneymaking opportunism of the shareholders of the big clubs, little, it seems, can be done. In my book, I suggested they could be subjected to a personal windfall tax, but there is no prospect that that could happen, even if anybody attempted to investigate its legality. Much of the money is now made, the shares cashed in, much of it offshore in tax havens. It was a shameful process, which various agencies, including the Government in the form of the Football Trust, should never have allowedl. But it has happened, and all that remains is to expose it.
One of this conferences themes is the journalists role in the world of sport as big business. Do we continue to plug it, celebrate the beauty and pace and competition of the game. Or are we duty bound to investigate, scrutinise, reveal the culture change moneymaking has brought, and expose hypocrisy of corruption.
I say we do both. The public wants to read and see its sport, its game. But there is a great duty to inform that, and to pass on understanding of the realities of the game, its economics, politics, the shortcomings of the people who run it. The history of sports journalism, at least in Britain, is that there have been many brilliant exponents of the former describers of the games themselves, the action, and too few of the latter. Previously, this had fatal consequences few journalists before Hillsborough had ever bothered to expose the appalling facilities on the terraces and in grounds. Even after the disaster, a great many journalists followed the easy, and false police line that the disaster was caused by hooliganism, then failed to read the Taylor Report when it came out.
In the new era, despite the game being covered by a family of journalists at every newspaper, many were caught short by a lack of business knowledge or, to be fair, interest. Rule 34, footballs historic sporting culture, the effect of flotation, the fact that price rises were contrary to the Taylor Report, the personal moneymaking all of this was missed. Now, stories about Premier League players, the England team and manager, rightly dominate still. There is some growing awareness of other issues, but few newspapers have a commitment to rooting them out. Many of the political or economic issues struggle for coverage beyond a superficial or purely news agenda.
The brilliance of many sports journalists in turning a phrase, or delivering match reports, or analysing the mood and feel of the game is perhaps as strong as it has ever been. Many new writers cover the game with style and perceptiveness. But in my view football journalism needs to follow the game, into the worlds of business and politics, and not be mesmerised by it. There are many strong news reporters and excellent story-getters, and some investigative sports journalists but not that many. More are needed with the interest, backed by their employers, to peer into the dark and financial corners of sport. That way the structure of the sport, its integrity and character will be a more mainstream concern, and exploitation of it will be made more difficult.