Like it or not, football has to be more aligned to finance

SINCE THE launch of both the FA Premier League and UEFA Champions League, the football industry has undergone significant change, characterised by unprecedented revenue growth, bloated competitions, globalisation and expanded franchises. Football has become a business that attracts new owners and new sponsors as the world’s most popular sport becomes a compelling proposition for investors and finance providers. The top level clubs have never been richer than they are at present.

And from a spectator perspective, football has never been more popular. In the English Premier League, attendances are at their highest level since the late-1940s. Major clubs have waiting lists for season tickets and stadium utilisation is close to 100%. While this is a headline story, it should also be remembered that the modern game has also created a class structure that is even more divided than it was in the past, hence for every Manchester City, there is a Bury or Bolton story waiting to break the hearts of loyal fans.

While developed football markets continue to attract more spectators and business partners, other countries, such as China, India and the United States, are experiencing growing interest, both domestically and internationally.

Europe’s top clubs are now capable of generating huge levels of income compared to the past. The business community, realising the opportunity to align itself to high-profile clubs with a strong media presence and growing social media audience, has changed its perception of football and sees it as a sector offering multiple benefits. Banks and other financial institutions also acknowledge the stable revenue streams and the positive trajectory of the major industry players.

This environment has attracted a wide range of investors, many of whom are taking over clubs outside their home countries. Hence, new wealthy owners have emerged from Asia, the United States, the Middle East and Russia. The global game has benefactors with diverse business interests, another key reason why financial institutions now find football an attractive asset class. This has effectively moved clubs that once represented the neighbourhood into stateless teams of multi-national hired hands. Tottenham, for example, is no longer a North London club, but a corporation with a team that happens to be domiciled in that part of the UK capital. The same can be applied to many clubs.

At the same time, the sport’s governing bodies, FIFA and UEFA among others, are increasing regulation, trying to bring greater credibility to football. A good example of this is UEFA’s Financial Fair Play, which has not only improved clubs’ financial discipline, but has proved to be the catalyst for greater profitability in European football.


Financial requirements have changed in the past 10 years. Income has certainly increased substantially, but so too have players’ wages and transfer fees, which are at an all-time high. Stadium development is also prevalent across the game, with new football grounds being designed and built and existing facilities being expanded and improved.


Bigger, more versatile grounds can generate higher matchday and commercial revenues, but one of the main drivers of football’s startling growth story has been rising broadcasting fees, notably in Europe’s top five leagues – England, Germany, Spain, Italy and France.


Ultimately, for most clubs, the biggest outlay of cash is connected to player transfers and wages, and with the figures growing almost annually, football is starting to embrace capital market instruments and corporate finance expertise in order to further professionalise the industry. As revenue streams have increased and diversified, alternative sources of financing have also started to be introduced to the football market.

The need for sophisticated financing creates opportunities for the financial industry, particularly in providing structured solutions. For the banking sector, its reawakened interest in football is firm recognition the sport has matured into a global industry with a high degree of creditworthiness among its major players.

In the past, banks have lent relatively small amounts on an ad-hoc basis, but the changing football landscape demands clubs have more certainty about the availability of funding. At the same time, banks – especially since the global financial crisis of a decade ago – have to ensure their reputation is kept intact, so football clubs must be clear they can meet the requirements of finance providers.

As football finance becomes more complex and innovative and clubs explore ways to benefit from the value of their assets – players, stadium, intangible value of their brands and intellectual property – the prospect of securitising the value of the playing squad becomes a possibility. Football has a history of using securitisation to generate cash, but mostly these programmes have anticipated income and often produced disappointing results. Squad valuation, for example, could be one way to leverage the value of a club’s key assets.

Like it or not – and many purists and fans from football’s traditional client base despise it – the game has become big business. But it’s all relative –  the esteemed historian and academic David Goldblatt noted in his book, The Game of our Lives, that most clubs only generate the turnover of a local supermarket chain. However, the game can no longer be run on a cap-in-hand approach that asks benefactors to stump-up cash. At the top level, financial management and clarity and strict controls around money, ownership and reporting, have to be front and centre. Sometimes, this may reveal information that supporters, for one, won’t like to hear, but if it’s a big, global business that keeps evolving, it has to managed like any other major sector.


Photo: PA

Commentary Box: Corporate football, footballing corporates

OVER the past few years, there’s been a reaction to the increasingly polarised state of top-class football, an industry that continues to grow and detach itself from grassroots. There’s arguably no turning back, the football world now revolves around a dozen or so clubs that are bigger, wealthier, more influential and more interconnected than the rest of the game’s constituents. We might not like it, and may hanker for the days of wooden grandstands, muddy pitches and players who might jump on the bus to get to the stadium, but it is here to stay – you embrace it, or reject it.

When the so-called “C-suite” moved into football clubs, rather than boards comprising local businessmen with chains of butcher’s shops, bingo halls or pubs, the signs were very clear the sport had moved up a gear. In the past, high finance didn’t really want to know football, the City of London viewed the game as “played and watched by oiks”. Rugby was the sport of gentlemen, the game that financial institutions were more likely to lend their backing. The Premier League changed that, but the first signs were visible with the stock market floating of Manchester United and Tottenham Hotspur. In the case of the latter, the arrival of Alan Sugar, a big client of City banks, brought the concept of “a market” to football. Later on, Southampton had a City Veteran, Rupert Lowe, as chairman, but it is often overlooked that Arsenal, for many years, had the Hill-Woods in the marble halls of Highbury, a family connected with Hambros Bank. Generally, football supporters see the involvement of bankers, hedge fund managers and private equity as something to be avoided in a sport that has such an emotional pull. Lower down the food chain, non-league clubs are often vulnerable to the opportunist property developer.

Football, in the 1990s, with its new found wealth provided by broadcasting and global ambition, suddenly became attractive to corporate financiers and speculators. Certainly, post-1990 finance professionals were discovering football as a corporate hospitality winner, partly due to the globalisation of markets and the attempted removal of the class barrier attached to the sport. As football became more gentrified, much to the disgust of many segments of the game’s traditional audience, the more financial institutions and large corporates were willing to attach themselves to it. Executive boxes echoed to the sound of top business people who had just become experts in a sport they had recently discovered. They had the money to meet the cost of an expensive night-out in London watching Chelsea take-on Barcelona.

In some ways, corporate life and football, indeed any top level sport, mirror each other. While initially the idea that City of London business process and creativity was something football needed to “professionalise” itself, the demand for instant gratification that so typifies the current ethos of football also became prevalent in the corporate world. Recently, a top European financial institution, now cast in the role of a faded giant struggling to recapture past glories (the script could be football-related), sacked its CEO after a relatively short stint in charge. This knee-jerk reaction seemed especially harsh given the size of the task in hand, which was, effectively, to steer the company away from “relegation”. Some accused the people in the boardroom of managing the institution like a football club. CEOs at that particular firm are being hired and fired in a manner normally associated with former Atlético Madrid president Jesús Gil. It was no coincidence that one executive used Bayern Munich to describe the firm’s ambition: “Nobody particularly likes Bayern, but they respect and admire them…that’s what we want to be.”

Financial institutions now line-up to be in bed with football. Barclays had its moment of backing the  Premier League, but the crisis of 2008 put paid to many banks directing cash towards something as unimportant as football. Standard Chartered have stayed loyal to Liverpool and Allianz are still linked with Bayern Munich. Today, ambitious rising stars in the financial world are just as likely to be providing sponsorship, such as the AIA Group from Asia, who sponsor Tottenham. More can be expected from places like China and South Korea in the future.

The changing dynamic in the global economy also reflects upon club ownership. Of the world’s leading clubs, only one, Tottenham, has a significant UK backing. Of the widely acknowledged top dozen, the US, Middle East, Asia and Russia all have a big say in club ownership. As clubs have become more global, building customer bases outside their own domestic markets, they have become increasingly attractive to the financial world, evidenced by the number of consultancies, agencies and number-crunchers who are analysing the industry. League tables have moved beyond football results and extend to revenues, brand value, debt, wage-bills and sponsorship deals.

But it is not just in the boardroom that football clubs and corporates converge. There is common ground in the way people are managed. A club will always accommodate a maverick if that player produces on the field of play. Likewise, a difficult and single-minded individual in a financial institution will be tolerated if that person creates money for the firm. Business life is certainly changing, however, with upcoming generations adopting a different style from traditional “City types”, but too often people are aware of those who do not adhere to “team values”. Like football clubs, banks will hire star performers who are over-aware of their personal brand rather than any desire to become part of a team.

And of course, there’s one very important element that links football and bankers – the accumulation of wealth and conspicuous consumerism. Footballers illustrate their wealth in the form of big tattoos, saucepan-sized watches, bling, big cars, trophy wives and, with some, a little bit of surgery. Bankers, perhaps not so obviously today, flex their wallet with property, watches, cars, yachts and so on. After footballers, bankers are the most envied and, and equally despised, breed of people.

That’s maybe why an association with charity is seen as a good career move for both footballers and bankers. Corporates and financial institutions are quick to publicise their Corporate Social Responsibility activities to let the broader world know that “we’re not a money-making machine, we care”, but obviously not the type of people who sit in a London restaurant and tell a waiter, after ordering a £200 bottle of wine, “I bet you’ve never seen a bottle so expensive in your country”. Similarly, upper echelon footballers establish “foundations” to put something back into the community. There are some genuinely decent players who are aware of their privileged position in society – for example, Juan Mata of Manchester United and the veteran Jermain Defoe.

I’ve interviewed star bankers, CEOs and “rainmakers” and I have also met leading footballers and managers. In most cases, there’s been very little difference. Some of the qualities that define sharp-suited corporate financiers – overwhelming self-confidence, passive and active aggression and incredible perception can almost certainly be found in football folk. At the same time, successful people in any avenue of life have an aura, a certain ingredient that allows them to rise above the rest. I’ve met some wonderfully creative and talented people from both worlds, some worthy individuals who actually want to help others, share their good fortune and pass on some of the secrets of their success. In that context, football and big business can certainly – and should – learn from each other.


When commerce had a heart and soul

Bank of England FC, winners of the AFA Senior Cup 1923-24
Bank of England FC, winners of the AFA Senior Cup 1923-24

THIS WEEK, I ended 41 years in the City, the last 26 of which have been as a writer and journalist. I started my career at NatWest, in the days when banks were certainly more respected institutions than they are today. They were also great sporting entities that provided non-league football with a few decent players.

When I was a teenager, turning out for NatWest, the name everyone used to mention was Ian Cooke, who played for Southern League Wimbledon. NatWest was more a rugby company and football was really seen as the game of the proletariat. Westminster Bank (one half of the merger that began NatWest) initially wouldn’t allow Cooke to play in the Southern League, but eventually, he was permitted to sign for Wimbledon.

The City was awash with part-time footballers, however, as well as the odd former professional player. One day, when I was talking to our head messenger in Threadneedle Street, a rather urgent little man came dashing into our lobby, asked for a signature and said he had to run. “Ex-Spurs man is Tommy,” said old George, our tyrannical head porter. He was referring to Tommy Harmer, who played for Spurs, Watford and Chelsea. I once tried to engage in conversation with him when he returned to 41 Threadneedle Street – to ask him if he had in fact scored Chelsea;’s vital goal in a promotion clash with Sunderland in 1963 with his groin –  and he just smiled and made his excuses to leave.

In later years, Terry Robbins, who played over 300 games for Welling United and was player manager at Bishop’s Stortford in a long career, worked for Lazard Brothers, an investment bank based in the City’s Moorgate area.

Anyone who has worked for an old City institution will be aware of the sports facilities that these organisations used to provide. If you flew across South London, Kent and Surrey in the mid-1970s, you would have looked down on acres of sports grounds comprising rugby, football and hockey pitches.

Sometimes, if you playing branch games or specially-arranged fixtures, you might come up against some really gnarled old campaigners. I once played a game against a military team, at Bromley’s Hayes Lane and scored in the very first minute. The gigantic defender whom I’d skipped past to score was not happy and said, “young ‘un, that’s the last time you do that…and it’s the last time you’ll try it.” At 18, I was scared witless and barely touched the ball again. In fact, I was subbed at half-time. But even today, if I go to Bromley, I remember that goal at what is now the Norman Park End. And the plunge bath!

After two years or so of playing for NatWest, I had some offers to play at a higher level. For me, the problem was that they were all south of the River Thames clubs and that was not easy for me to get to, so there was no future in it. I also didn’t feel I had the physical strength to play at a more serious level.

But corporate sport was quite popular in those days and companies liked to encourage fresh air and exercise. The banks might not have been as paternal as the likes of Cadbury’s or Lever Brothers, but there was a feeling that sport made people more rounded individuals.

Some of the corporate teams played in the Southern Amateur League and included half decent non-leaguers, but the further down the pecking order you went, the teams would be a rag-bag collection, most wearing variations on the NatWest colours that resembled a continental outfit.

Since those days, when if you were a football fan, people looked at you as if you had two heads, or – even worse – a hooligan, the City has become a hotbed of football patronage. Barclays Bank sponsored the Premier, as we all know and the age of the corporate box sees multitudes of bankers and other financial professionals profess a love of the beautiful game.

Not many of these people will be aware that the City of London does have a football team – called simply City of London FC. They play in the Amateur Football Combination Intermediate South Division and their home ground is in Catford, not a million miles away from where I once played. I may have to check them out!

Most banks sold off their sports grounds to cash in on property prices over the past 30 years. And with that, some of the heart and soul of these organisations was transferred to the balance sheet. Times change, but is all a far cry from today’s City of London, I’m afraid.

This article first appeared in the Non-League Paper on Sunday November 6, 2016