A widely-publicised report published this week by accountancy group BDO claimed that up to one third of football clubs in the Championship and League One will be put up for sale over the next 12-18 months.
The report painted a particularly bleak picture of life in English football’s second tier: a staggering 94% of finance directors at Championship clubs acknowledged that, when examined as commercial entities, they’re massively over-reliant on their principal shareholders to finance operating losses.
If true, it’s a situation that cannot continue indefinitely; even the most devoted owners have to call time on pumping funds into struggling businesses simply to keep them afloat. This raises another question: where are the buyers going to come from? In most instances, football supporter trusts are the only organisations both capable and willing to acquire what, in many cases, are rapidly depreciating assets.
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A couple of days after the BDO research was published, UEFA General Secretary Gianni Infantino, interviewed by the BBC, said that although football clubs understandably seek to improve profitability (in most cases, reducing losses would represent significant progress), they must not alienate fans by over-charging them.
“Fans are the only ones who remain loyal throughout their life to the club,” said Mr Infantino. “Everybody else sooner or later changes – players, managers, even owners – so a dialogue with fans to find the right balance is a good thing.”
Mr Infantino makes a valid point, but the problem is, it’s been made on umpteen occasions before and next to nothing has happened as a consequence. This, as clubs know, has everything to do with the elasticity of (in this case, football supporter) demand, a potent feature of everyday life.
For example, when the Chancellor next raises taxes on motorists, or smokers, or drinkers, he knows that while everyone agrees that lowering carbon emissions, reducing the number of smokers, or getting people to drink fewer pints of beer is deemed “a good thing”, he’d be in quite a financial pickle if citizens decided to drive, smoke or drink less.
This is because the elasticity of motorist, smoker and drinker demand is significant, ie people will pay whatever it takes to drive, smoke or enjoy a drink and the Chancellor knows that demand will remain constantly high, almost irrespective of the imposition of his taxes.
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And so it is with football. Or rather, and so it has been with football, as there is increasing evidence that younger fans in particular are becoming more alienated from the game.
According to figures published by the Premier League last year, the average age of those attending matches is falling. The league maintains that 39% of those who attend games are aged 18-39, though no detailed breakdown of these figures are available. The last comparable survey was completed in 2004/05 when the average age of the Premier League supporter was 44. By last year, it had fallen to 41.
In the absence of any alternative data, these figures must be taken at face value, but a near 7% reduction in the average age of spectators over a seven year period, four of which were during a time of extreme economic hardship and rising unemployment amongst people aged under 25 appears highly unlikely.
Going to a football match was something youngsters used to do on their own. In the mid-70s, a survey undertaken by Manchester United found that the average age of those standing on the Stretford End terraces was 17; nowadays, the official average age at top-flight grounds is almost two-and-a-half times that. Given the cost of attending a match and the ready availability of live, televised football, this is hardly surprising.
Perhaps Brian Clough was right when he noted that “television is killing the game”. Ironically, it appears to be assisted by clubs that insist on raising their entry prices, particularly for youngsters.
Earlier this week, supporters groups from half the clubs in the top flight said that more needs to be done to make match day tickets cheaper for 16-24 year-olds.
Duncan Drasdo, of the Manchester United Supporters’ Trust, said: “You still get kids being brought to games by their parents, but once they hit 18 they can’t turn up on their own with their mates because they can’t afford it.
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Lorcan O’Connor, a 22-year-old Fulham supporter, said: “For our first home game this season I can only get a ticket for £49. That’s just too much for me. I don’t earn the salary that many other adults in the stadium do but I don’t qualify for any discount schemes.”
However, one club encouraging younger people to attend matches is newly-promoted Crystal Palace by offering discounts to 18 to 21-year-olds at every home game.
Palace’s co-chairman Steve Browett said: “We have to compete financially, but we need to be fair to our fans. If you don’t offer them a deal they won’t be able to afford it.”
It would serve fans well were Mr Browett to share his thoughts with others in the top flight’s boardrooms this season and urge other directors to listen to Gianni Infantino’s thoughts on customer loyalty.
Saying ‘thank you’ to loyal or prospective customers by offering discounts or additional benefits to them is the way in which businesses in other sectors operate, but the football industry appears to be burdened with too many poor business managers and a sense that supporters’ elasticity of demand is exponential. It isn’t.
In fairness, while most businesses are capable of comparing gross sales year-on-year, few have any reliable measure of client loyalty: if turnover has grown over the last 12 months, it’s considered good news even if a business has attracted ten new clients but lost nine others through neglect.
A sizeable number of football clubs have increased their turnover over the past decade, but an upturn in sales has failed to correspond with an increase in profitability.
While the costs of overseas tours continues to rise as clubs seek to attract new supporters, next to nothing is done to foster the loyalty of the existing supporter base. Little wonder that most clubs fail to improve their profitability.
Perhaps many have yet to realise that turnover is not the critical measure of business success. While clubs will tell you how many supporters they have worldwide and can quote their number of followers on the hateful Twitter, they forget that it’s impossible to bank market share – you can only bank profits.