Furlough furore shows Premier League clubs need to focus more on reputation
Posted on April 8, 2020
SOME FOOTBALL clubs claim to be closely aligned to their community and understand the state of the nation. Indeed, some pride themselves on being representative of their city or town. Sometimes, though, it is hard to believe clubs really know what they are doing and why they think they can make insensitive decisions and avoid severe criticism.
The situation at the moment is an unprecedented one, nobody has experience of a country being locked-down, of the economy coming to an absolute standstill. It’s like a general strike or being placed on a war footing. We can, surely, forgive clubs for making foolish decisions in this uncertain environment, but they have been clumsy at interpreting the state of mind of the people for decades.
It’s risky business
In the corporate world, reputation has become an important part of the risk management process. In the past, risk was based around counterparty and credit. Then came operational risk, macroeconomic and finally, reputation. Maintaining good reputational risk has become more vital than ever in the post financial crisis world, and with social media crucifying any company stepping out of line, risk management has become a huge discipline that can cause significant damage if treated lightly. Many corporates have become very adept at managing their image and reputation, but some, to use the football lexicon, still score own goals.
Do football clubs do the same? Some have their hands on the tiller when it comes to looking good, sending players into the community to help the sick, the needy and those that come off the rails. They’ve become very smart at virtue signalling. Clubs are also diverse, they have no choice given the demographic of football, and they are embracing all segments of the community, including once taboo areas such as sexual bias.
Sometimes, clubs let themselves down by the stance they take, too often supporting players whose behaviour is sub-standard and on occasion, refusing to admonish player that may have brought the club and the game into disrepute. Perhaps the power of agents has something do with this.
With Britain’s employers coming under severe pressure during the Coronavirus crisis, the practice of “furloughing” staff has swept the corporate world. The term originates in America and involves sending employees home in extraordinary circumstances and paying them 80% of their wages through a government scheme. It avoids severance and also means a company can find relief from the scheme. In some ways, the angst is transferred to the employees.
Some Premier League clubs, notably Liverpool and Tottenham, “furloughed” their non-essential and non-playing staff. This naturally incensed a lot of people as the industry, aside from the sums paid to players, is characterised by modest wages. Given the wage bills of Liverpool and Tottenham for the 2018-19 season were £ 310 million and £ 178 million respectively, it is arguable the employees sent home under the scheme represented a relatively small percentage of overall costs. However, these workers are easier to deal with as players will be on contracts that have to be fulfilled. Liverpool’s wage bill went up by 18% and Spurs’ climbed by more than 20% in 2018-19, and let’s not forget these were the two UEFA Champions League finalists. The action taken by these clubs should prompt questions about the financial health of the top flight. If a club like Liverpool is cash-strapped, we should ask why.
A week after making the announcement, Liverpool reversed their decision, admitting they had made a mistake. Tottenham, meanwhile, are being urged by their fans to do likewise. Many clubs’ players across Europe are now taking pay cuts to try and stave off a major collapse. The UK government has suggested a 30% cut, but that’s not necessarily to help football, it is to demonstrate “we’re all in it together”. Nobody is going to weep for Premier League footballers claiming they have been harshly treated, but we should all be clear that lower down, many professionals earn far, far less. Football is by no means the only sector where the rewards often appear to be out of step with reality.
Did these clubs think their ill-advised move would avoid a backlash from fans and media alike? Footballers are among the highest paid in the country and one of the most visible examples of conspicuous consumerism. They are also “of the masses” and therefore gestures such as taking a drop in wages will send the right type of signal.
For a long time, it has been obvious that in the football food chain, players have priority over other staff, hence managers come and go with regularity and when a coach has “lost the dressing room”, he is the one that has to pack his bag.
The current mood of the public in the UK comes down on the side of “those who serve”. This manifests itself in rising affection for the NHS, the emergency services and will extend to the military if the crisis becomes prolonged. From football’s perspective, the people that “serve” who never get close to the limelight are considered to be unsung heroes doing almost vocational jobs. They are ordinary working folk, “salt of the earth” characters following some sort of vocation and, ultimately, closer to the role of “loyal servants” than players will ever be.
Therefore, in a period where so many are facing hardship, possible unemployment and certainly lower income, making decisions that seem to be preserving the wealthy, will never be popular. Football has never been a conventional democracy, but did Liverpool and Tottenham but was this really overlooked by clubs run by owners steeped in business culture?
It’s interesting that the possible fallout doesn’t seem to have been considered yet clubs work with their players and management to ensure they say a few hundred words of nothing when they are interviewed on TV or by the newspapers. Yet these incidents show clubs are really not tuned-in to the zeitgeist – until prompted.
Unprecedented times, certainly. An unusual industry, for sure, but clubs have to realise that when all this is over, they will need their employees and their fans more than ever. As Bob Dylan sang all those years ago, “the times they are a changing” and as a result, the rain that falls may be very hard.