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How stakeholders influence football clubs' strategy?

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par Eric Bailly
Staffordshire University (UK) - M.Sc. in European Management Strategy 2003

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4.2.6. Institutions

Football is an entertainment for people, and institutions are aware of that. Institutions' expectations are far higher than football entertaining people. Institutions expect football clubs to be part of the community support. Institutions expect that football remains accessible to everyone in the community, especially to poor people. Institutions want football clubs and their players to be example for the youth; they want clubs to train some locals and to help them to become professional players / coaches, to help amateur football clubs. To become concrete examples for everyone, institutions wish that football clubs help the local charities. Institutions control that football clubs take decision agreeing with their stakeholders. Morality apart, institutions hope that football clubs help to develop the local economy by working with local suppliers, by developing tourism... Everton and Liverpool F.C. are considered as major economic actors in the City of Liverpool, according to Johnstone (2002). The most important economic benefit for the community is employment and institutions expect that football clubs hire as numerous staff as possible.

How stakeholders influence football clubs' strategy ? September 2003

Institutions also hope that football clubs' performance will increase the region's notoriety. Maillard (2003) explains that it is the case at Lens where eighty-three percent of people associate the city with its football club, according to a study.

Public institutions have direct influence on football clubs' strategy. First, although a French law limits these subventions to £2.5 million-a-year; they often give some money to local football clubs. Public institutions represent sixteen percent of Amiens S.C. total income, as much as the club's fans! Even if they do not give this money, they can help the club buy buying some advertising around the stadium. It is what the city of Lens does: it buys advertising for £155,812 every year, according to Maillard (2003). Another delicate chapter of relations between institutions and football clubs is the exploitation of the stadium. Stadiums usually belong to cities and football clubs exploits it. In the case of Amiens S.C., Amiens rents it for free to the club. In Lens, the city council ask for £190,090 per year; it is more than what this institution gives to the club... Football clubs are kept apart from political questions. Mayors from any political party support football clubs because of their popularity. So, political changes do not have much influence on the clubs. Institutions also have an indirect power on football clubs: they can prevent clubs from some actions. As institutions rule their region, in case of conflict with the club (it may happen), institution can disturb it. For example, the R.C. Lens organises annually a carnival with its fans in the city and it requires agreement from the institutions, which is not always easy to obtain.

4.2.7. Organizations

First, it is essential to define which organizations deal with football clubs. At a worldwide level, the FIFA set up the rules of the game, control transfers and judge conflicts between clubs. Then, the UEFA is the represent of the FIFA at the European level; it manages the European competitions. At a national level, the LFP manages all the professional French football clubs (Ligue 1 and Ligue 2). For the same function we have two organizations in England: the Premier League cares about League 1 clubs, when the Football Association manages the professional football clubs of Divisions 1, 2, 3 and 4.

How stakeholders influence football clubs' strategy ? September 2003

These organizations' expectation is that football clubs become popular ambassadors of this sport so that it becomes attractive to ever more people. They expect clubs to respect the rules set up to avoid any conflict, negative for football's image.

Theses organizations have power and influence on every club. They set up the rules of the game clubs have to admit. They also impose football clubs to have certain structures to welcome spectators; otherwise clubs are not able to enter competitions. Most of these structure improvements deal with fans' security. Football clubs can also be reprimanded at a sportive level by those organizations: they can affect their rank by withdrawing some points the clubs won. In England the Premier League also imposes some commercial rules. For example, clubs are not allowed to change their replica shirt every year, but only every two years for fans to be able to buy their favourite club shirt. According to Scudamore (2002), even the price fixing of replica shirts respects rules enacted by the Premier League. In France, the LFP created an independent commission to analyse the clubs' financial accounts, the DNCG. Clubs must have a guarantee for any of their debt; otherwise they will be relegated to the inferior division. As football clubs often have `weak' finances, this commission aims at improving football clubs' situation. But this commission is unique in France and other European clubs do not have to follow such strict rules. In a close future, the UEFA may set up the same type of commission at a European level. But who would prevent Real Madrid, the best team in the world, from playing the Champions League because it has about £100 million debt? The last, and not the least, element of national football organizations' power is money. They are in charge to negotiate and reallocate the television rights paid by media. As explained in part 4.2.5., this income is a need for football clubs' survival.

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