We’re frequently reminded that “football isn’t like any other business.” And, judging how some football clubs seem to operate, you could easily be forgiven for thinking that their respective owners, or CEOs, seem to take leave of any business sense they’ve acquired over the years.
Of course, as fans, we don’t often get to choose who owns or runs our particular team and, if we’re honest, most do not care who’s in overall control as long as the team is at least competitive where it matters most, on the pitch.
Having been under the same custodians for well over 20 years, City fans have become somewhat distanced from the typical turmoil often associated with ownership changes, which, more often than not, only tend to occur following some sort of financial meltdown off the pitch.
That’s not to say that City haven’t had their own “near misses” during the recent past. The collapse of ITV Digital in the early 2000s necessitated a public share offering to overcome cash shortfalls, while demotion to League One, only a decade ago in 2009, required some pretty cute negotiations with the banks by Messers Bowkett and McNally to fend off the pending appointment of administrators.
Even as recently as the summer of 2018, Stuart Webber was uttering words about the apparent precarious financial position the club was in and the need to raise significant funds through player sales to keep everything on an even keel.
Fast forward just twelve months and the prospects are somewhat rosier, caused by the imminent arrival of huge dollops of revenues from the Premier League’s mega domestic and overseas TV deals. Total revenues will literally rocket from less than £30m a season in the Championship, to north of £120m a year while in the Premier League.
Of course, a significant proportion of this cash influx is already effectively spent through existing contractual obligations. Beyond the obvious one-off promotion bonuses to players, there’s increased wages, new contracts, not forgetting additional transfers instalments now due to other clubs as a result of promotion.
The club has already stated that they’re not going to ‘do a Fulham’ – the brutal reality is we couldn’t, even if we wanted to. There simply isn’t the ability to write a blank cheque to cover financial shortfalls in the event of demotion next May.
And, while there’s undoubtedly an element of self-satisfaction to be had from having the club run properly as a self-funding business, there’s always a nagging question mark in my mind over what’s next.
The crux of the issue is that self-funding can mean completely different things and that’s wholly dependent upon which league City find themselves in. The problem isn’t therefore self-funding itself, but it’s the huge differences in TV revenues between the Premier League and the Championship.
Or, to look at it another way, if you drop £90m from the top line over a couple of seasons, relegation clauses in players contracts are unlikely to be sufficient in isolation – significant player sales will be required to cover the loss of revenues. Which highlights just how precarious football can be and just how quickly a position of apparent comfort can revert to something far less favourable.
All this may seem rather odd in the context of a club just about to commence on a Premier League campaign, but is it? The nub of the issue really isn’t whether self-funding puts the club at a significant disadvantage to its competitors, it’s whether the recruitment and the coaching set-up, which worked so well last season, can step up a level and take the club forward again.
The financial playing field has never been level, especially in the Premier League, for a whole variety of reasons; ranging from individual clubs’ locations, their levels of support, both domestic and overseas, their attractiveness to TV audiences, again both at home and abroad, individual commercial sponsorship deals and many other reasons.
Which rather begs the question; whether, or not, the respective owners of each club are really that important in the context of the Premier League survival?
Personally, I believe that in most instances, ownership is of relatively minimal importance in the greater scheme of things. Which, in turn, then begs a further question – whether using our club’s self-funding status to, for example, make changes to the membership scheme, really has a significant impact on our overall revenues to justify the changes in the first instance?
I suspect not.
But there’s perhaps more nuanced reason why, if the club continually uses self-funding as a reason to justify making difficult financial decisions, it may cause something of an unwelcome, at least from their perspective, backlash – it’s perfectly possible that City, with the benefit of a sustained period within the Premier League, and with the associated benefit of being debt-free, may actually appear far more attractive to potential overseas investors.
From a fan’s perspective, having been repeatedly beaten with the self-funding stick, they may actually decide that a potential change may be well worth a completely speculative punt.
No one is suggesting that running a football club is easy, but just be mindful of what may be around the next corner.