Over-spending their way to success?
Longer term readers of this blog will know that occasionally my attention here turns to football (soccer); this is one such occasion, for which my apologies to those not interested. But the topic I am raising here may have implications beyond football, and may even be relevant to the management of universities, indirectly. Also, to declare my vested interest, I am as some here know a supporter of Newcastle United FC.
So what am I raising? Well, many people interested in English Premier League football will have been watching closely how one club, Manchester City Football Club, is faring. For those who have no idea why this should be so, let me explain briefly that a couple of years ago the club was bought by Abu Dhabi billionaire Sheikh Mansour bin Zayed al-Nahyan. At the time he did so, Manchester City had for some time mostly been in the lower half of the league. The Sheikh has very deep pockets indeed, and he immediately began to pour money into the club. The idea was that the club should be able to buy any player they wanted from anywhere in the world, whatever the transfer price and whatever the wages. The world’s best and most expensive players were in the club’s sights, and the intention was that it would climb to the top of the league.
Like many fans I suspect, I really really hoped that this wouldn’t work. I was already fed up with the apparent ability of Chelsea FC owner Roman Abramovich’s ability to buy success for his club, and to have an even bigger spender come in and do the same (or more) for Manchester City seemed just annoying and also wrong. I wouldn’t even like it as a fan: if Newcastle were to win competitions solely because it had a very very rich owner it would spoil it for me.
Well, Manchester City is now firmly established in the top 4 of the Premiership, and may even win it (Chelsea being number 1). There are occasional glitches for these big spenders, but the lesson appears to be that mega-millions talk, and most persuasively. Unless, that is, the new rules being introduced by European football governing body UEFA put an end to this. The consequence of the big big spending by Manchester City is that the club has a major annual deficit, as its revenues cannot match the expenditure. But now UEFA is about to exclude clubs running a deficit from European competitions, and because these competitions are vital for the big clubs and their players, this may have an immediate effect. Nor will it be that easy for the big spenders just to stop the purchases as the new rules kick in, as they will still have the accumulated wage bills and indeed the amortization of the transfer payments.
So it may be that the rules are about to get fairer. No bad thing. If I were writing the rules, I might actually ban private owners of football clubs altogether. After all, the big Spanish clubs do very well without them. And who would shed a tear if Silvio Berlusconi were no longer the owner of a major club…
In the meantime, I’m still hoping that Manchester City ends up outside the top 4 in the Premiership.
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University Blog 
October 27, 2010 at 2:37 am
I don’t understand why UEFA want to exclude clubs running deficits. If its because they are concerned about their financial stability, in the same that the European Commission is concerned about Ireland’s budget deficit, then Man City is not the problem. They got where they are precisely because they have deep pockets. Or is it some puritanical view that money must be allowed to talk? Sport is a business whether we like it or not, get over it.
As a life-long Manchester United supporter I dearly hope our “noisy neighbours” return to their usual mediocrity soon, but really if their owners want to spend gazillions then thats their business. United, indeed, is a good example of how money helps but is not sufficient: their success has to be largely due to management, the gaffer’s a genius.
And if the good Sheikh wanted to pour money into some other investment, horse-racing for example, would we turn up our noses at it? I doubt it.
October 27, 2010 at 2:28 pm
Kevin, while Alex Ferguson is indeed a great manager, to imply that money and financial prowess was/is largely incidental to their success is divorced from reality. The debt the Glazers’ have encumbered on United will soon prove my point.
Concerning UEFA’s plans, I fully support them, they will help preserve some of the remaining competitive integrity of what is both a sport and a business.
October 27, 2010 at 7:53 am
In a similar vein; I gave a cheer when Hull City made it up to the The Premiership a couple of years ago. They had a team of relative ‘Oldies’, no mega stars or big names – (they even had a few player from the home town) and managed to hang in there for 2 years.
I think it makes a mockery of the teams having any geographical /place names when hardly anyone in those teams is originally from the area. And you’re right it does all come down to who has the deepest pockets.
October 27, 2010 at 8:55 am
As an Inter Milan supporter I would certainly not shed a tear if Silvio Berlusconi were no longer the owner of AC MIlan(and of some Italian TV stations, a few newspapers, a publishing house etc. etc.) Actually, it is a worthy topic of academic enquiry the role that sport (and particularly football in modern days) plays in connection to political and economic power. By the way, I hear that the Spanish clubs are in big financial problems as well..
October 27, 2010 at 12:00 pm
“the Spanish clubs are in big financial problems”.
Indeed! Like Scotland, the big two in Spain have the lions share of the revenues, while everybody else has to be content with a pittance.
October 27, 2010 at 8:17 pm
Another private owner with some what deeper pocket has come forward to put the greens (dollars)on the table to buy Blackburn. Many ask, is there a business sense for these rich business men (not sheikhs as their money comes from us the fools who fill our car tanks with the liquid whatever its price is), as these clubs are notorious for sucking up more to buy more and more expensive” kickers of the windbag”. A friend who works in the City ( of London) in highfinance says that money laundering should not be discounted as well as the losses in some way helping to reduce certain taxes. Whatever it is, I cannot see the logic of an ex-colleague (I am retired) who is a technician struggling to buy a new replacement for his old bicycle to cut the expensive daily commuting he has to do in London whilst keeping his yearly subscription to Chlesea FC in tact. Where is the priority? Let us not say anything about these rich ” kickers of windbag” throwing money about.