A Football League SWOT Analysis: The Opportunities
As organisations with unconventional governance structures and aims and crucially, minus shareholders, sports leagues don’t really conform to the model of a typical company, so a SWOT analysis, while a useful exercise, is relevant in a slightly more limited way when it comes to the opportunities section.
For instance, your average firm looking to grow and develop would generally obsess with increased revenues and profitability and a prime way of achieving this might be to enter into mergers with or acquisitions of other companies as well as engagement with emerging markets.
Purchasing a stake in – say – the Norwegian Tippeligaen, especially after England’s young stars were so embarrassed by their Nordic counterparts at the weekend – isn’t really an option for Greg Clarke and his colleagues even if the experience of interfirm alliances and partnerships at the club level has started to produce encouraging results:
As far as nascent markets are concerned, it didn’t work out for Sheffield United when they got into bed with Ferencváros and Chengdu Blades, but Watford’s tie in with Udinese and Granada, as chronicled exhaustively in these pages, has, it’s fair to say, been a simply stunning success, defeat to Crystal Palace at Wembley notwithstanding.
New regulations look likely to restrict the model, although not appreciably – clubs will still be able to stack players from foreign climes – so who’s to say that Anton Zingarevich isn’t casting his eye towards the Russian League or Milan Mandarić to Major League Soccer?
As Watford have proved, the benefits to playing style have heartened their fans, initially sceptical, but now united in admiration of the entertainment on offer of a Saturday – it is very unlikely that the experiment won’t be repeated, albeit probably not quite so adroitly.
Any SWOT analysis has as its basis a measure of an organisation’s worth vis a vis the competition and it’s in comparison to the lumbering oil tanker hulk of the Premier League that the Football League can perhaps best measure itself.
While the slow pace of changes to regulation and policy would have tested the patience of Job as far as the upper echelons of the game are concerned, the dimmer spotlight of the second to fourth tiers might provide an opportunity to experiment a little more.
Hence, goal-line technology could be introduced sooner (albeit perhaps only in the Championship) where costs may be more easily swallowed, two referees could be appointed each match and – please, please, please – refraining from yellow cards when players have the temerity to take off their shirts to celebrate might be welcome.
Financial Fair Play
But it’s needless to say in the murky world of football finance that the real opportunity for root and branch reform lies. Cleaning up clubs’ financial act will allow the Football League to prosper in the medium to long term future and Clarke himself has acknowledged that this is the major challenge.
In a post on Soccer, Sustainability and Degrowth that we ran last year, we highlighted the a report from Paul Marshall and Sam Tomlin on Football and the Big Society that listed four recommendations and these bear repeating:
- a consistent licensing regime across the professional game to include financial fair play rules encompassing income statement and balance sheet measures of financial sustainability
- rights of supporter representation on football club boards and extension of the Fit and Proper Persons Test
- community ‘Right to Buy’ rules, where fans are offered a chance to buy back their club when a change of ownership occurs
- reform of the FA such that its regulatory and management responsibilities are separated.
Steps have already been taken and a level of financial fair play has now been instituted across the leagues – the Salary Cost Management Protocol restricts the wages to turnover ratio of League 2 clubs to 55% and League 1 members to 65%. Swindon Town have been one of the first to suffer due to the new restrictions.
But this should be a start only of course. The terms for Championship clubs are softer of course – the 24 adopted a break even approach whereby accounts have to be submitted every December 1 and there is no rule on that crucial wages/turnover metric.
In addition, there are loopholes – not only the kinds of fuzzy ones that saw Manchester City rename their stadium, nor those pertaining to the largesse of sugar daddies, but also the exclusion of specific investment in club infrastructure and or losses gained in ‘extraordinary’ circumstances such as the sudden loss of a sponsorship deal.
It would make sense, therefore to extend the FPP rules to the League as a whole as well as to consider a salary cap – if as market-oriented a country as the United States can see the need for it, then surely it needs to come in.
Your typical investor analyst might see such restrictions as harmful to the League’s prosperity moving forward but the opposite might in fact turn out to be the case – fans are already disillusioned with the circus of the Premier League and the knowledge that they can watch a responsible, sustainable competition with a creed of equality and fairness should attract new fans.
This will only be if prices are lowered of course and again, this element can help the Football League distinguish itself from its brash elder brother.
We are not naïve enough to believe that the market for football support is elastic – and reducing prices wholesale would inevitably leave clubs in a financial pickle – but some quarter needs to be given and I’ll return to this in the threats section.
Additionally, safe standing is a veritable cause célèbre of the footballing blogosphere and the example of Germany on this issue, as well as prices and the 50+1 ownership structure are often cited when assessing how we can learn from the Bundesliga.
Given that German clubs are as much like our own non-profit organisations in character as they are public limited firms and even there, loopholes have allowed the likes of Hoffenheim to benefit, the possibility of a different type of shareholder democracy is a probable pipe dream although the example of supporters trusts shows how fan ownership can be marvellously positive – the encouragement of Supporters Direct provides a clear opportunity.
But prices for sure and safe standing for definite can help the Football League in every way. With hooliganism now by and large a distant memory, the excuse for the retention of all seater stadia has faded and the lovely thing about the initiative, currently being given serious consideration, is it may allow more fans into the ground.
Overall, while there is much to be positive about as far as the Football League is concerned, problems continue to linger – we’ll be surveying the threats tomorrow.