A friend of mine once tried to do business with a revered institution of English football. “I can do business with stupid people,” he said afterwards, “and I can do business with crooks. But I can’t do business with stupid people who think they are crooks.”

Anyone reviewing the events of this English summer will be struck by the incompetence of the football industry. There is Leeds United, debt-ridden in the third tier of English football after blowing fortunes chasing global domination. There is the new Wembley stadium, finished years late and well over budget. There was Carlos Tévez, the player who appeared to be “owned” by his agent rather than his club, in breach of football regulations. I could go on, but similar things happen every summer. The foreign businessmen now buying English clubs should be warned: as surely as oil is part of the oil industry, incompetence is part of the football industry. This is why:

A tradition of incompetence
Many clubs deliberately hire bad office staff. Years ago I requested an interview with the chairman of an English club quoted on the stock market. The press officer asked me to send a fax (a 1980s technology revered by football clubs). I sent it. She said she never got it. On request I sent three more faxes to different officials. She said none arrived. It was a familiar experience in the football industry. A month later I was granted permission to e-mail the request. When I arrived for the interview, I met the press officer. She was beautiful. I had known she would be. Many clubs recruit the women on their office staff for their looks, the men because they played professional football or are somebody’s mate.

Because people in television are more intelligent than people in football, TV bought football rights cheaply for years.

Fear of trained executives
This incompetence is football’s choice. If the clubs wanted, they could recruit the excellent executives who yearn to work in football. A professor at a leading business school told me many of his students offer to work free for sports companies as summer interns. The companies seldom want them. If you work for a football club, your goal is to keep working there, not to be shown up by some overeducated young thing who actually knows about business. Partly this is because the traditionally working-class football industry distrusts education. Partly, says Emmanuel Hembert, head of the sports practice at AT Kearney, the management consultancy, it’s because many clubs are dominated by a vain owner-manager. Hembert says these owners “often have a pretty big ego. They prefer not to have strong people around them, except the coach. They really pay low salaries.”

Historically only Manchester United recruited respected executives from normal industries, though a few other big clubs like Barcelona are starting to.

The top people on the business side of football clubs are usually novices. This is because staff turnover is rapid. Each new owner generally brings in his cronies. The departing staff rarely join a new club, because that is considered disloyal, even though footballers frequently move. So football executives keep reinventing the wheel.

Many clubs are in the news every day so fixate on the short term. An executive at a large entertainment company told me about his long-arranged business meeting with Real Madrid. On the day, Real sacked their manager, a club ritual. The usual chaos ensued. Two club officials scheduled to attend the meeting with the executive did not show up.

Short-termism reigns. Hembert says: “As soon as you sign a player for £10m, you blow up your business plan.”

Moral hazard
No big football club ever disappears under its debts. No matter how much money Leeds or Real waste, someone will always bail them out. So they waste money.

Bad handling of the media
Football clubs get publicity without trying and treat journalists as supplicants, rather than as unpaid marketeers of the club’s brand. The journalists often retaliate with meanness. The clubs are being foolish, because almost all their fans follow them through the media rather than by going to the stadium.

Lack of self-knowledge
Football clubs rarely understand what they are. Many believe they are businesses but, apart from Manchester United, few make regular profits. Clubs are not businesses because they exist to win matches rather than make money. To win matches, you need good players. Since some club owners will happily pay over the odds for players, everybody who wants to win has to do likewise. If you do make a profit, you should spend it on more good players, because that is the point of being a football club. Clubs should therefore model themselves on not-for-profit organisations like museums. Financially, all they should aspire to do is remain reasonably solvent. Few even manage that.

Any new club owner thinking he will change all this should note generations of new club owners thought the same before.


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