Stars and Strikes

Posted on February 2, 2010 by Comments Off

Football, or soccer to our North American cousins, is a religion in the UK. Try telling a dyed-in-the-wool football fan that “it’s only a game, pal” and you’ll be met with a response most likely quoting the great Bill Shankly of Liverpool: “Football is not a matter of life and death … it’s more important than that.” It is also big, big business.

It is a sign of the times that two of England’s most famous clubs, Shankly’s beloved Liverpool and the world’s most famous Red Devils, Manchester United, are now owned by American investors. What’s wrong with that, you might ask? Well, nothing at all, except that the initially fabled financial saviours of these clubs seem to be running out of greenbacks. Tom Hicks and George Gillett took over Liverpool in 2006, whilst moneybags Floridians the Glazers did likewise at United in 2005. Fans didn’t like it, with a preference for the traditional system of clubs being owned by many shareholders – likely to be fans themselves – rather than ownership by cold-blooded business tycoons.

Closer inspection of the deals revealed that both clubs had been saddled with enormous debts. A recent bond issue prospectus distributed by Malcolm Glazer underlines the severity of the situation. The Glazers had been drawing money out of the club to finance the crippling debt, as if slowly choking the club like financial bindweed. A few miles up the East Lancashire road and Gillett and Hicks are spilling each other’s blood on the boardroom carpet. Rumours abound that they loathe each other and that there is to be no money for the manager to spend on drafting in new, world-class players. A common thread with the Glazers, Gillett and Hicks is that their actions are having repercussions on the pitch. Liverpool’s form has dipped and although United are still leading the charge, there is a growing sense that all of the off-field debt problems are silently creeping up on the team, which needs investment.

By being furtive and always in the shadows, the Glazers have developed a Mr Burns-like image. They rarely engage the media and almost never give interviews. They live in an almost perpetual cycle of anonymity. Things don’t get much better for Gillett and Hicks either. Press stories about their fractious relationship and publicised fallings-out with manager Rafael Benitez fan the flames of speculation that the club is in crisis. Having a tighter rein on what is reported would certainly help.

These tycoons have treated both clubs strictly as a business and in turn their stock has fallen. By overlooking the deep-seated reverence that football fans hold for their club these financial mercenaries could be biting off the hand that feeds them. One shining example of a trans-Atlantic football match made in heaven is at Birmingham club Aston Villa. MBNA tycoon Randy Lerner has the respect of fans and a grateful manager. He has even invested his own personal fortune in a local hospice (who sponsor the team) and gifted cash to the National Gallery in London. Polishing his CSR credentials and being a hands-off operator have made him a success, something Hicks et al should take on board. The bullish approach may work for the Tampa Bay Buccaneers (the Glazers are owners) but business should not take a one-size-fits-all approach … it’s more important than that.

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