Political Football: Regulation, Globalization and the Market

POLITICAL FOOTBALL

Regulation, Globalization and the Market

WYN GRANT

© Wyn Grant 2021

This book is copyright under the Berne Convention.

No reproduction without permission.

All rights reserved.

First published in 2021 by Agenda Publishing

Agenda Publishing Limited

The Core

Bath Lane

Newcastle Helix

Newcastle upon Tyne

NE4 5TF

www.agendapub.com

ISBN 978-1-78821-350-9 (hardcover)

ISBN 978-1-78821-351-6 (paperback)

British Library Cataloguing-in-Publication Data

A catalogue record for this book is available from the British Library

Typeset by JS Typesetting Ltd, Porthcawl, Mid Glamorgan

Printed and bound in the UK by TJ Books

CONTENTS

Preface

1.The political economy of football

2.Globalization

3.Not business as usual

4.The players

5.Football and gambling

6.Women’s football

7.Regulating football

8.Finding solutions: a new regulatory framework

References

Index

PREFACE

This book is dedicated to the memory of my grandmother, Lucy May (1872– 1956), who was its original inspiration. Until I undertook the research for this book, I was puzzled by this otherwise Victorian lady’s interest in football, but I did not realize how early women’s football developed in this country. She was particularly interested in questions of promotion and relegation, but considered one had to look beyond the manager and the teams, important though those were, to explore longer-term socioeconomic trends which is what I have done in this book.

I am a long-standing fan of Charlton Athletic where I am a regular contributor to the fanzine. At my local non-league club, Leamington, I am secretary of the Vice-Presidents’ Club and write an article in each home match programme. I have therefore been able to observe changes in football from two ends of the spectrum. Both Charlton and Leamington have had troubled histories, losing their grounds. Leamington disappeared altogether as a club for over a decade and was only revived due to the tireless efforts of fans. Hence, I have direct personal experience of the struggles faced by clubs and their fans to survive, let alone succeed.

Football is being transformed by forces outside the control of the ordinary fan. These may be summarized by one word that offers a central theme of this book: globalization. Clubs are increasingly controlled by foreign owners who usually have no personal or emotional link with the club. They have a variety of motives, ranging from prestige and political protection to making money. Not all foreign owners are bad, indeed the rogue owner problem often occurs domestically. However, as the owner of a football club you are a trustee for a community asset and many owners do not understand that.

While this book is written by a football fan, my working life has been as an academic with a broad interest in what has been termed political economy. In particular, one area of interest has been in the way in which the excesses of a capitalist market economy may be tempered by regulation. Indeed, regulation may be necessary to prevent a market economy destroying itself and its potential benefits.

Regulation is not a panacea for the problems besetting football, but it is part of the solution. However, good regulatory design is not easy. What is a good regulatory design? It is one that achieves the objectives of regulation in a transparent and comprehensible way. It must also be efficient in that it must not be unduly onerous and impose large transaction costs on the regulated. Above all, it must not create new problems that are worse than those it seeks to solve.

Devising an effective regulatory system that wins public confidence is never an easy task. This is particularly the case in relation to football. A variety of stakeholders is involved. This, of itself, is not unusual; it would apply, for example, to the energy industries. However, the interests and perspectives of owners, players, agents, leagues, governing bodies and fans can be particularly divergent. Yet the model of responsive regulation requires that they all be taken into account.

A particular problem arises in relation to the consumer of football: the fan. The term consumer is itself inappropriate because being a fan of a club is often an important part of personal identity. It is not just a question of the price and quality of a product. If nothing else, fans are characterized by excessive expectations. These could quickly be applied to a regulator. Hence, it is important to set boundaries to what a regulator of football can and cannot do.

There is a complex variety of tasks that needs to be undertaken. Apart from questions of club ownership and fan involvement, these include issues of racism and homophobia. It is also important to ensure that the development of women’s football is not held back

An independent regulator is clearly needed because the football authorities have fallen down on the job. Clubs with long histories have been acquired by rogue owners who are able to avoid tests of their suitability. At the international level, the governing body, FIFA, has been beset by problems of favouritism and corruption.

The state therefore needs to intervene to create an effective system of regulation for football. However, the general preference of governments has been for self-regulation. There have been interventions but they have been ad hoc and sporadic and they have certainly not been decisive. The European Union has come closest to making a difference, but it has been distracted by other issues on its agenda.

There needs to be a thorough overhaul of existing governance arrangements for football at the national and international levels. There is an increasing recognition of this urgent need. This book seeks to give further impetus to that welcome trend, but above all it seeks to provide a route map of how effective change could best be achieved.

For the chapter on women’s football I made substantial use of the digital British Newspaper Archive of the British Library (www.britishnewspaperarchive.co.uk). I would like to thank Rick Everitt, editor of Voice of the Valley, for giving me permission to quote from a number of articles that have appeared in the fanzine. My granddaughter Victoria Candelent helped me with some aspects of the book that touched on her discipline of psychology. I would like to thank Alison Howson at Agenda for being a very patient and helpful editor. Margaret Hitchcocks became my partner while I was writing this book and was very tolerant of the time I spent working on it in my study.

Wyn Grant

Leamington Spa

1

THE POLITICAL ECONOMY OF FOOTBALL

The excitement of attending a first football match is ingrained in the memory of many fans. They can recall the details of the journey to the ground, who they were with, the merchandise and food being sold outside and the feeling they had on entering the ground for the first time. They can remember the match itself, the emotional involvement of the other spectators around them, the singing and the chanting. I recall catching the number 53 bus from Plumstead Common at the age of six with my parents, walking with the crowds through Maryon Park and standing on the huge East Terrace at The Valley, the home of Charlton Athletic.

For many fans, that first experience begins a lifelong commitment that becomes an important part of their identity. Going to a match is not simply a release from the pressures of everyday life, important though that is, it also represents an opportunity to connect with an extended football family. This may include generations of the same family and old school friends. However, it may also involve football friends with whom the only contact is at the game, for a drink beforehand or afterwards. I frequently make the two-hour journey to attend Charlton home games to meet football friends in my birthplace of Greenwich for brunch and a pre-match pint.

Even if after moving away from the club’s location, a fan’s continuing support for their team can be a means of maintaining and reviving their connection with an area familiar to them. Topophilia, a love of place, and the cultural identity associated with a place, can be a powerful force. Of course, in some ways this is a nostalgic and sentimental interpretation, or at least a constructed version of the experience of football. Many fans never visit the ground of the team they support and simply follow their progress on television and social media. Football is now a global game with supporters of leading teams located all over the world. Inevitably this leads to a tension between a club as a global business, perhaps with foreign owners, and the idea of a club as an expression and embodiment of a particular community. Some fans have become alienated from football as a result, as the business and finances of the sport distance and diminish the importance of the local supporters to the team’s success. The need to temper and regulate the globalizing market forces at work in the beautiful game is a central theme of this book.

The challenge of global football

To help understand and explain the forces at work in global football, I draw on the analytical framework provided by the concept of political economy, which is all about the relationship between the market and the state and the governance of that relationship. Unrestrained market forces can damage the functioning of both economy and society so that competition cannot deliver its benefits, and the structure and cohesion of society is undermined. One response to prevent these harmful outcomes by governments has been the increase of regulation to ensure that the market operates within a framework of rules. Football has operated largely outside this regulatory state and has relied on self-regulation, which has often been found wanting. The absence of effective regulation has been criticized as football has been transformed by globalization, foreign investment and new technology. The need for regulation cannot, however, be satisfied simply by importing established forms of regulation from areas such as utility company competition and pricing. It requires a more responsive and innovative form of regulation that takes account of the variety of stakeholders in football, not least the fans.

There is widespread discontent about the state of football at a time when it is followed more extensively and intensively across the world than ever before, even making headway in the United States with its own long-established and distinctive sports. It is important to be cautious about falling into the trap of believing in a sepia-tinged golden age of football. There have always been dominant clubs with more resources than others. Players were ruthlessly exploited in the past by owners. Games were played in stadiums that were at best uncomfortable and at worst dangerous, leading to a number of incidents in which spectators were killed. The state of pitches certainly did not encourage the development of silky skills; training was often limited to physical fitness with a belief that keeping players away from the ball would make them hungry for it at the next match; and there was little understanding of diet and nutrition and its relationship with performance: Objectively, the football of the 1970s was markedly inferior to the tactics, fitness and skill levels of today (Everitt 2019: 19). In the twenty-first century players are athletes with much higher work rates and better technical skills.

Given that there have been improvements in the standard of player fitness and of playing tactics along with the facilities in which the game is watched, why is there so much discontent? There are many grievances, and some real cause for concern, but among the most prominent is a widely held opinion that players are paid too much, and agents extract too much from the game. Owners are often considered to have little emotional investment in their clubs and to be pursuing agendas that have little to do with football. A small number of top clubs dominate the game such as the big six in the Premier League (Arsenal, Chelsea, Liverpool, Manchester City, Manchester United and Tottenham Hotspur), Paris Saint-Germain (PSG) in France, Juventus in Italy and Barcelona and Real Madrid in Spain. This domination is regarded as anti-competitive with top clubs ruthlessly pursuing their own interests and evading rules designed to keep their conduct in check. There is also a troubling symbiotic relationship between football and gambling, which is a theme I explore in Chapter 5.

All these concerns can be summarized as the feeling of alienation that many fans experience from the game they love. Clubs are an important source of identity for fans and their communities. However, they feel powerless in the face of owners who may run a club into the ground and even destroy it, as exemplified by what happened at Bury in 2019. Players are tradeable commodities and may have little real loyalty to their clubs, however much they kiss the badge. The price of attending games has often soared beyond what can be afforded by those on below average or even median incomes. Of course, it should be acknowledged that fans often have unrealistic expectations and are one of the forces leading to overspending on players.

What is evident is that at a time when economic and political resistance to globalization is growing, it remains a strengthening force in football. Leading clubs often have foreign owners and they continued to be active in acquiring clubs during the Covid-19 pandemic. Overseas television revenue is becoming more important to the Premier League while domestic revenues actually diminished in the last settlement. Footballers migrate from Africa and Latin America to play in the European leagues. Football is celebrated as a global game, its appeal resting in part in its simplicity, which means that it can be played for fun with very basic equipment. Yet in many respects it remains highly conservative. This reluctance to embrace change can stand in the way of needed reforms.

Forces for change

Football is not dissimilar to any other economic sector or industry. In assessing what drives the evolution and development of an industry, important considerations would be the role of technology, patterns of ownership, market structure and consumer demand, and how these are changing. To understand what is going on in football, each of these aspects needs to be considered in turn in relation to what has become a global game.

Technology

The adoption of technology has always been mediated by culture, and this is particularly true of the subculture of the world of football. Football has not undergone many technological changes and those that have come along have often been strongly resisted. Floodlights were initially treated as a novelty with their own special competitions. They were met with resistance from administrators, and it took some time to realize their potential in terms of evening matches and later kick-off times in winter. The concern being that evening football would keep working men from the family home (The Away Section 2019). They were not, of course, the only spectators, but their presence at the match was seen as a potential social harm.

Laced leather balls, which were heavy and easily became waterlogged, were replaced with a resultant improvement in performance and a reduced risk of injury to players, in particular the long-run risk of developing dementia. Artificial pitches have been controversial in part because they are seen as giving an advantage to teams used to playing on them, but also because they offend traditionalists. Any non-league team with an artificial pitch promoted to the Football League would have to replace it, as happened to Harrogate Town in 2020. The introduction of video-assisted refereeing (VAR) has been opposed by many fans who believe it spoils the spontaneity of the game. Although some of the problems may have arisen from associated and subsequent rule changes, particularly on handball, and the way in which decisions have been communicated, VAR has also revealed that many refereeing decisions are genuinely borderline.

However, the technological changes that have had a profound impact on football have been external to the game itself. The really transformative technology has been satellite broadcasting. The competition between terrestrial television channels was insufficient to drive up the price paid for coverage to clubs. They were also not very innovative in the way in which they covered football, in terms of utilizing new technology to interpret the game, camera positions and angles, and the range and diversity of commentators used. The involvement of satellite broadcasting in televising matches all over the world has created a new financial dynamic and created a situation in which followers become more important than fans. Satellite broadcasters constantly need new and fresh content that attracts and retains subscribers, and football is ideal for that purpose. Live sport sells subscriptions, particularly to key demographics for advertisers, such as young males. In 1992, [f]earing stagnation from earlier losses of £14m a week, Sky needed to secure live Premier League football to survive (Bower 2003: 105). It is satellite broadcasting that has created the riches of the English Premier League. By the end of the second decade of the twenty-first century, however, there were signs that growth in the subscriber numbers was slowing or even going into reverse. In turn this meant that broadcasters were reluctant to increase their bids for exclusive coverage of league games.

The Covid-19 pandemic was an additional complicating factor. The Premier League, the Bundesliga, La Liga and the Champions League all granted rebates to the broadcasters to compensate for spring lockdowns. The Bundesliga was the first major league to conclude a television deal, and it had to take a €200 million – 5 per cent – reduction on a €4.4 billion deal over four years. In retrospect this could be seen as a good outcome. A warning of possible future trends came in the autumn of 2020 when Mediapro skipped one of its payments to France’s Ligue 1 and stated that it wanted to renegotiate the deal, arguing that the absence of fans from grounds changed what was on offer. They subsequently withdrew from the agreement and Ligue 1 had to replace it with a much less lucrative deal. The dispute was seen as the first indicator of a painful correction in the multibillion-euro market for European football’s media rights (Abboud & Ahmed 2020). There had already been indications that peak television revenues for football had been reached, but the pandemic was a final blow to the free-spending era for television executives and football clubs alike.

Patterns of ownership

From the mid-1990s a new breed of club owner has emerged in European football, members of the super rich with little or no connection to the club they had bought … By the end of 2016 foreign owners had bought, or held significant shares in, 15 of the 20 Premier League teams (Montague 2017: 6). The motivations for buying clubs range from the commercial to the political and the personal. As a consequence, there is considerable variation in ownership strategies and styles. On the whole, fans are not too concerned about the owner’s history, as long as they provide a substantial, steady stream of funding and don’t interfere in the affairs of the club in a way that damages the playing side.

This variation is illustrated by five of the big six Premier League clubs, all but one of which have foreign owners (see Table 1.1). The exception is Tottenham Hotspur where the majority shareholder is British billionaire Joe Lewis, who lives in the Bahamas.

Having built up his interest in Arsenal over a number of years, Stan Kroenke took full control of the club in 2018. He has extensive sports franchise interests in the United States in American football, basketball, hockey, football and even lacrosse. He is known as silent Stan to Arsenal fans because of his lack of communication with them. Unlike other owners, he has put no money into the club. His approach illustrates the limitations of a profit-driven franchise model, although it can be executed with greater skill than has been the case at Arsenal.

Table 1.1 English Premier League club owners 2020/21

Note: * Two bids from potential foreign owners were made for Burnley in the autumn of 2020.

Arsenal is financially successful, having coped with the financial consequences of the move from Highbury to the Emirates Stadium. They have reported profits for 16 consecutive years that total £393 million, averaging £25 million a year, but in 2019 they reported their first loss since 2002. Only four clubs in the Premier League had worse results in 2018/19 than their £32 million pre-tax loss. Even so, Arsenal had the highest cumulative profit of any of the top six clubs in the period since the formation of the Premier League in 1992 to 2020 (£480 million). Fans want to see profits reinvested in the club (Arsenal Supporters’ Trust 2020). Arsenal has spent money on new players: they haven’t always spent it very well. They became bolder in their spending in the summer of 2019, in part because of the consequences of their failure to qualify for the Champions League, which was hurting the club’s bottom line.

The purchase of Chelsea by Roman Abramovich in 2003 heralded the arrival of big-spending foreign owners in the Premier League. For Abramovich, Chelsea was an insurance policy that protected him and his assets from the long arm of Putin. Abramovich bought Chelsea for £60 million in 2003 and took on its £90 million of debts. He had lent the club a total of £1.17 billion by 2018. They made the biggest losses of any of the big six clubs, £797 million in the period from 1992 to 2020. However, the extent of Abramovich’s subsidy has been scaled down from the early years of his ownership. Beset by visa restrictions, plans to rebuild Stamford Bridge