Objetivos Objetivo general

By the 1980s football in England was in deep difficulties and many were pessimistic about the possibilities for change, in particular some owners/club investors wanted the adoption of a more

‘business like’ approach to the development of ‘the game’. Spectator demand had reached a record high after the end of the second world war, with the peak years for attendance between 1948 and 1950 (Dobson & Goddard, 2011). From this period onwards, match attendance across the four divisions began to decline steadily, negatively affecting revenues made across all clubs.

By 1986, the aggregate match attendance across all four divisions had declined by 40.2% from a peak figure of 41 million in 1949 (Dobson & Goddard, 2011). The decline in match attendance was partly a result of growing real incomes. English football faced more competition as new leisure markets were opened-up to individuals who would have previously spectated at matches (Szymanski, 2006, Dobson & Goddard, 2011). The level of match attendance was also affected by the poor quality of facilities and the increasing level of fan violence. Match attendance was made up of the most fanatical supporters, who tended to be white, young men, many of whom were on low incomes (Szymanski, 2006). Attendance declined further because of the measures put in place by police and clubs to try and control the problem of football violence (Dobson &

Goddard, 2011).

At the time clubs were also facing rising costs due to the removal of the maximum wage, exacerbated by the introduction of freedom of contract in 1977/1978 (Meier, 2008). The adoption of freedom of contract gave players the right to choose whether they would move at the end of their contract, but player movements were still constrained due to the clubs being able to demand a transfer fee when a contract was offered to the player (Dobson & Goddard, 2011).

These financial problems created something of a vicious cycle, as the decline in match attendance also meant that clubs were unable to invest in improved stadia. This not only deterred spectators but fed into several stadium disasters where the facilities were not fit for purpose (Szymanski & Smith, 1997).

The decline in attendance created some pressures for change, but it needed the coming together of the stadium disasters to push English football to a new path. It was the biggest UK stadium disaster of the 1980’s which led to new government incentives to force a degree of change. The Hillsborough disaster in 1989, where ninety-six Liverpool supporters lost their lives, was a pivotal moment in the development of English football. The Taylor Report was

commissioned to investigate the causes of the disaster, and the report argued that the top two tiers of English football should adopt all-seater stadia by 1994. Not only would all-seater stadia enhance safety, but the new facilities would be beneficial in modernizing English football, making match attendance more attractive (Taylor Report, 1990). The appeal of better facilities allowed clubs to adopt a more free-market approach to ticketing as alternative spectator groups could be targeted other than males on low-incomes (Nash, 2000). While the positive benefits of reform were clear, a problem still existed in terms of financing the development. Although the government made some funding available (Meier, 2008), the clubs would have to raise a significant level of income themselves to fund the redevelopment (Banks, 2002).

A second factor, behind any change was the deregulation of television and the opening up of the TV market for sport, which transformed the financial situation in football and also created new marketing possibilities. A third element was the globalisation processes which created the possibility of projecting a national league onto the global stage.

Alongside the redevelopment of stadia and opening up of television markets, institutional change was also pushed by the aggrieved actors at club level. This resulted in the formation of the Premier League in 1992 as a twenty-two club breakaway league from the rest of the Football League. As part of the new league’s formation, the member clubs had control over the league’s affairs, and unlike the FA and Football League there were no standing committees or board of directors which could dilute the power of the clubs. Like the Football League, the Premier League operated on a one-member one-vote principle, with a two-thirds majority required in order to implement a major change. With this system, the member clubs also voted through the appointment of a league chief-executive, commercial director, and independent league chairman (Banks, 2002).

A feature of the formation of the Premier League was the role of the FA. The FA had published its own document on the structure of English football in 1991 where it argued for the creation of an eighteen team top division, which was independent of the Football League (Banks, 2002). The FA had seen the formation of a breakaway top division as a chance to re-assert itself in the governance of the English game, and it eventually legitimized the creation of the Premier League, which was initially known as the FA Premier League (Meier, 2008). However, the breakaway league with twenty-two teams neither eased the level of fixture congestion which the FA had specified as one of its objectives, nor did it create a unified approach. Furthermore, the Premier League did not operate as a subordinate to the FA. In-fact the league’s creation developed a third force in English football alongside the FA and the Football League (Banks, 2002). The FA did however hold a golden share in the Premier League, but it had little influence over the day-to-day running of the league

Change was also encouraged by new developments in television and the possibility of using

the level of competition in the UK broadcast market was growing with the adoption of pay television broadening the level of customer choice. Not only would this increase the level of competition in the broadcast market, but it would also increase the level of competition for football television rights. The deal would break-up the terrestrial duopoly of ITV and BBC which had dominated football rights in English football to this point (Szymanski & Smith, 1997).

Initially clubs were opposed to live televised matches in the belief that it would cause

attendances to decline. Indeed, this chapter has already shown the relative importance of gate receipts compared to television income. However, the increase in live television matches helped to rehabilitate football’s image and the opposition to televised matches quickly diminished (Szymanski, 2006). The Premier League was also free to negotiate their own television rights deals, and the Premier League clubs were able to keep around 80% of all revenues generated from television (Meier, 2008). This was a huge shift. In the previous four divisional Football League structure, the top division only received 50% of the revenues generated from television.

Moreover, in the Football League, revenues from television were not exploited to the same extent as in the Premier League (Buraimo et al, 2006).

Figure 2.2 shows how the result of these changes was the emergence of additional revenue streams and a changing balance in their relative importance.

Figure 2.2 Revenue Streams Post-1992

For some clubs, revenue streams were becoming increasingly dependent on television income.

The clubs who fitted this description were those who did not have a large local fan base or an attractive global profile. In addition, these clubs did not have the same commercial power as the larger clubs at the top of the Premier League who were attractive to sponsors. For them the sources of income not related to television were harder to generate. The larger clubs, on the other hand, viewed this as a ‘free-rider’ problem where smaller clubs took home the financial benefits which had been generated by the success and growth of larger clubs.

The changes also led to the adoption of new forms of organisation and patterns of behaviour in the Premier League, which were set out in Table 2.1. There was no longer the same dual

governance problem which existed prior to 1992. The formation of the Premier League gave the FA less control of English football (Conn, 2005). This enabled professional clubs, once the

aggrieved actors, to become the dominant group in English football. The removal of

redistribution mechanisms affected smaller clubs at the bottom of the pyramid, who now faced Revenue

Television

Sponsorship Ticket Sales

Merchandising Other

Commercial

even greater difficulties in generating revenues. Furthermore, it had become even more difficult for smaller clubs in the Premier League to compete with the larger dominant clubs.

The changes have also proved to be beneficial for players who now also had more influence. The creation of the Bosman ruling in 1995 enabled players at the end of their contract to move on a free transfer, even if they were offered a new contract by their existing club (Dobson & Goddard, 2011). This created a dilemma for football clubs as they would have to risk losing a player on a free transfer if the player did not wish to sign a new contract. Football players had increased opportunities to move for additional money as a result of this change.

The reduced dependence on ticket sales also allowed for the possibility of an increase in the importance of the business elements of a football club. But did this come at a cost to some?

There were fewer aggrieved actor constituencies compared to before 1990, but despite the reduced dependence on ticket sales, club supporters were now in a weaker position. They faced higher ticket costs, as well as expensive costs for replica shirts, and an additional cost in

purchasing television services to watch matches. The problem of aggrieved actors had moved away from those who felt their earning potential was being constrained to those who feel they are faced with an overpriced game.

A football supporter is not a customer in the normal sense. Higher prices do not often lead to a switch to a cheaper alternative. Instead they will no longer consume their club’s product (matches or merchandise) or as much of it. On a larger scale this can then lead to the erosion of supporter networks (Duke, 2002). Football’s commercialisation has, therefore, come at a cost to its ‘customer’ base, but it also affected club ownership. How has this altered following the formation of the Premier League?