FROM THE ARCHIVES – Why you can’t make a fortune out of football

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Updated: December 22, 2013

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This article was first published in the August 1959 edition of Charles Buchan’s Football Monthly. In it, Clifford Webb explains why financial gain cannot be made out of football.

Will the take-over procedure, which has been so marked a feature in industry this year, ever spread to professional football clubs? Will any of the gigantic industrial concerns, with seemingly endless financial resources for speculation, make an all-out bid for control of one or other of the leading teams – Arsenal, Aston Vila or Manchester United, for instance?

Would it pay one of the vast business organisations to attempt to gain control of a club, spend thousands of pounds on rebuilding grandstands, offices and dressing-rooms, on super-stadium lines in the hope of reaping big profits later on?

These are questions I have been asked many times. Frankly, they are questions not easy to answer without going into intricate detail. On the face of it, there would seem to be quite a case for the take-over in football. Everybody agrees there is ample scope for improved accommodation for players and spectators. There is room for social clubs, restaurants and other amenities, which would make soccer-going so much more a please and so much less an ordeal.

So you may ask, why don’t the big shots of commerce move in on Soccer?

Well, to begin with, the rules are so framed as to prevent anybody making much personal profit out of the game. No directors’ fees are allowed – and in big business, directors’ fees are often quite substantial. Dividends in football are limited to seven-and-a-half per cent., which, after tax deduction doesn’t amount to very much.

Practically all the Football League clubs are under-values from the point of view of shares available. And any shares that are available are never quoted on the Stock Exchange because the clubs are private companies.

Before you start writing to me, however, let me point out that a notable exception is the Glasgow Rangers Club, whose shares do, in fact, have a daily quotation in Scotland. But Rangers are unique. As an example, take Tottenham Hotspur, reputedly one of the wealthiest clubs in the country with assets of more than a quarter of a million pounds.

To pay all their shareholders seven and a half per cent. costs Spurs less than £300 a year, so that if my arithmetic is correct the total capital of Tottenham Hotspur F.C. Ltd. is not more than £4,500. No further issue of shares can be made without permission from the Football Association. No bonus shares may be given.

It is, obviously, extremely difficult under existing regulations for personal fortunes to be made out of professional football in this country.

It is, of course, possible for a bidder offering a really high price per share to get hold of enough to gain a controlling interest in a club. Possible, but highly unlikely. Most football club shares are held by families and handed down from one generation to another.

They carry such privileges as cheap season tickets, first chance of Cup Final tickets and other items which enable the holders to resist the temptation to sell, even at a high figure. Directorship of a successful club also carries a tremendous amount of local prestige – and it would be difficult to deny that many business men find it helps to trade to become a football club director.

Nevertheless, there still seems to remain one way to a football fortune. Suppose that by a really substantial offer to shareholders and some other means of persuasion, a financier did manage to gain control of a club.

What is there to prevent him from pulling out of the League, selling all the players, closing down the club and disposing of the ground to speculative building interests? The answer is that regulations take care of this, also.

On the winding up of a club company, no shareholder is allowed to take out more than he originally put into the club.

Any surplus (says the relevant F.A. regulation) …’Shall be given to the Football Association Benevolent Fund, or to some other club, or institution in the city (or county) having objects similar to those contained in the Memorandum of Association, or to any local charity, or charitable, or benevolent institution situate within the said city (or county)…’

See how neatly everything has been tied up. Professional Soccer is about as wide open to the financial speculator as a reluctant oyster. Every financial aspect of the game is controlled – except, strangely enough, transfer fess. These have been allowed to soar to unlimited heights, the argument being, presumably, that the money goes around inside the game and that no individual gains any benefit.

Sports administrators in many other countries are baffled – but sometimes a little envious – by the spectacle of directors devoting much of their time to the running of football clubs without prospect of personal profit. American baseball, for instance, thrives on take-over activities. Big firms like Wrigley’s, the chewing-gum manufacturers, can buy and sell baseball clubs at will, enormous sums being involved.

t of our grounds are woefully out-of-date. If restriction on dividends was removed and financiers allowed to take unrestricted profits from earnings, as in other businesses, there might be a rush of new money, with keen competition to modernise grounds and attract more customers.

But even here there’s a snag. No matter how much money is poured into a club, playing success cannot be assured. British football history is full of examples which bear this out.

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