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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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4.4. Comparisons

4.4.1. Important clubs vs. less important ones

Table 4.6. Important vs. less important clubs

2002 Premier League Attendance per match + 30,000 Income from fans / match (£) 21,4

Ligue 1 22,300 9

Division One 15,435 N.A.

Ligue 2 7,512 N.A.

Sources: Valence (2003) and Budimlija (2003).

Football clubs are all based on the same business model. They can be compared with their budget. For example, Liverpool F.C.'s one is 6.4 times higher than Stoke City F.C.'s one! The rate is almost the same concerning the French clubs. The main difference is in the notoriety of the second division (Ligue 2 and Division One). When media fight and invest millions to buy the Premier League television rights, nobody buys the Division One rights. ITV Digital did and bankrupted. The lower divisions do not attract many fans because they do not show the best players on the pitch, which is essential for a good game. The best players in lower divisions are shortly bought by important clubs. A vicious circle is in place: media do not develop less important divisions and so fans are not attracted. To face this lack, less important clubs develop their `own-produced' players. This solution offers a double advantage: clubs do not have to buy players and they make money when they transfer their players. Less important clubs also do not have resources enough to employ skilled employees who could fully exploit and develop the commercial potential of the club. It is also important to highlight that less important clubs are more pessimistic than important ones, so their management is more careful. In fact, when top clubs have financial difficulties, less important ones are usually not so affected.

4.4.2. English clubs vs. French ones

Differences between French and English clubs are numerous and major. First, the attendances are lower in France (cf. table 4.6.), almost half than English ones. This is not due to stadium capacity which are similar in both countries, but to the culture. Football was created in England and people there are ready to spend double money in football than French people. Many other factors also influence the attendance. French football clubs keep democratic pricing policy for their fans, so that stadium remains available to everyone, but still the attendance remains lower. It may be due to the schedule of the games. In England, games are played on sunday afternoons; when in France games happen on saturday night. Families and young people are readier to attend games on sunday afternoons. In France, problems due to violence in stadium are not solved, which does not encourage families to come to these places. Nowadays, French clubs are economically late compared with their European competitors, so they have few successes and do not attract fans. Laugier (2003) accuses French football clubs not to make needed efforts to attract people to the stadium. The efforts may also be required from the media industry. When BskyB invests double money than Canal + to buy the football television rights, clubs' retribution do not allow the French clubs to invest as much money as British ones in football. Moreover, French clubs do not exploit their commercial potential because of the lack of skills required to do so. French football clubs do not recruit any employee with MBA or MSc., they prefer to invest in players. When British clubs access to private capital and increase substantially their income, French clubs are ruled like associations by the government. The French government does not allow football clubs to access the Stock Exchange market, but it also limits its subventions from public institutions with the Buffet Law. This does not help French football clubs. The government also increased taxes paid by football clubs of fifty-six percent in the last four years! The French government also imposed the creation of the DNCG which is a powerful independent organisation that controls football clubs' finance. It is an important action (unique in Europe) which helps French clubs to recover from overextending and prevents them from bankruptcy. England is now working on the creation of this type of organization.

How stakeholders influence football clubs' strategy ? September 2003

French clubs also have a competitive advantage: they produce many players. As they arenot rich enough to buy the best players in Europe, they compensate by producing them.Although Liverpool F.C. seems to be an exception, British clubs do not have the requiredstructure to produce numerous good players.French football clubs can be considered as late compared with their British competitors,but the French system also inspires many national football organizations across Europe.

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