LIST OF TABLES AND FIGURES
Table 4.1. Clubs' portrait
p.26 Table 4.2. Clubs' most important stakeholders
p.27 Table 4.3. Football fans' power
p.29 Table 4.4. Television rights and football clubs
p.34 Table 4.5. Sponsors and football clubs p.38 Table 4.6.
Important vs. less important clubs p.51
Figure 2.1. Mendelow's model p.10 Figure 2.2. Archer's model
p.11 Figure 2.3. Polonsky's model p.13 Figure 4.1. Mendelow's model applied to
football clubs p.41 Figure 4.2. Archer's model applied to football clubs p.42
Figure 4.3. Polonsky's model adapted to football sector p.50
1. INTRODUCTION
1.1. The current context
There are so many football matches on television that people who
like this sport can watch a game almost every night. Football entertains
people, helps television channels to make large audiences, makes sportsmen
becoming pop idols and manages huge amounts of money. This looks as a very
lucrative business where every actor earns an important amount of money: clubs
selling players, players earning important wages, players' agents getting their
royalties...
The idea of this subject is very personal to the author. The
author aims at work in football clubs, so his interest for this activity sector
lasts since many years. This basic knowledge is essential to conduct an
efficient research, because football is a very specific business sector. Like
many other businesses, football clubs are owned by shareholders and run by
employees skilled in sales, marketing, communication, human resources and
finance... These departments exist in football clubs as well as in traditional
companies. Clubs also manage retailing of their products to the fans. But their
main activity is to produce a football game every weekend. According to that
specificity, to manage a football club can be compared with managing a
show-producing company. In fact, the most important element of the business is
what happens on the pitch every weekend. If the team wins, sales will increase
and sponsors will invest more money on the club but if the team looses, less
money will be available for the club. As players' price depends on their
performances, a team with little money should not be able to buy the good
players and so, could not compete with the richest ones. Apart some sportive
exceptions, clubs are engaged in an economic circle, whether vicious or
virtuous.
As football concerns and interests so many people, politics and
companies, communication about it is very careful: apart from the sport news
and players interviews, few people know how the crisis in football clubs is
important. Thanks to lower incomes (due to lower television rights), and to
increase expenses (especially players' wages), almost every clubs in Europe are
about to bankrupt. Shareholders have to invest always more money if they do not
want their football team to shut down. This concerns the most important clubs
How stakeholders influence football clubs' strategy ? September
2003
(Arsenal, Real Madrid...) as well as second division clubs.
French and English ones are not exceptions. We can notice that Manchester
United is THE exception and that this club makes profits every year and they
are successful on the pitch as well. Is there any link between profits and
sport success? One thing is sure it is that Manchester United is one of the
rare clubs who implemented a clear long-term strategy. Do the other clubs have
no strategy? Hopefully they must have one, but most of them bet on a short-term
and lucrative victory, rather than a long-term success. Football clubs'
managers have long-term view as well, but they have to cope and satisfy the
club's stakeholders. Fans and media want good and expensive players to `play
the show', shareholders want a return on investment, and institutions want the
club's commitment to develop and train young players... Unions (players,
employees, coaches) also have a certain control on this business. A club has to
take in account all those expectations when designing a strategy. The best
example of this critical situation is the transfer of the Brazilian player
named Ronaldhino from Paris Saint-Germain to F.C. Barcelona during summer 2003.
This player played for Paris and was so talented that the richest clubs of
Europe wanted to buy him. Paris SG's president did not want to sell him because
fans and the coach put pressure on him and to keep Ronaldhino would have
improve the team's efficiency for the following football season. This willing
may have been sincere but the transfer of the player happened anyway. The
reason of this event is the pressure put on the president by stakeholders to
sell the player. First, the player wanted to leave the club because of the
higher wages offered by clubs like F.C. Barcelona, Real Madrid or Manchester
United and his agent wanted him to move in order to improve his football
skills... or maybe to get enormous royalties on the new contract. Then, banks
and the Ligue de Football Professionel wanted PSG to decrease its financial
debt. PSG bought this player two years before and a sponsor (SportFive) helped
the club to pay the fees, charging it with a very high interest rate. So, this
sponsor was expecting its money back, as soon as the players' transfer would
have been signed. This case is a perfect example of how clubs can be influenced
by stakeholders and take decisions they did not wish to. This research analyses
this influence and tries to highlight some successful stakeholders managing
methods.
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