Football And Voodoo Economics

ShanklyGates.co.uk

It’s a big world, and a big world with a lot of sports. For the last ten years or so, I’ve been a full-time sports fan, spending almost every waking moment biting my nails, forlornly scouring the teletext, surfing the ‘net or cowering in the corner as my team(s) inflicted copious amounts of misery on me. It’s really quite disturbing, the amount of teams I’ve picked up over the years. Walking along Paradise Street towards my place of employment the other day, I saw a woman wearing an Essendon scarf. They’re an Australian Rules football team, and I had to suppress the temptation to yell out “Come on Hawthorn!”, Hawthorn being the team that I support, nominally at least. The San Francisco 49er’s, the Boston Red Sox, the West Indies, Munster, Waterford, Liverpool…name the sport and I’ve got a team for it, although the degrees of intensity do vary.

(If you haven’t noticed my habit of peppering my observations with Liverpool place names, then either you’ve not being paying attention or haven’t read much of my stuff – probably the latter. It’s a very useful tool against the Evertonians, as they assume I’m from Liverpool, rather than merely living here. I’ll stop doing it if I get a job somewhere else other than Hanover Street or move from Wavertree. Honest.)

This work can be a drag at times though. You need something to fill the idle hours between reading about sport, talking about sport, thinking about sport, watching sport, listening to sport or (God forbid) playing sport. Recently I have been going to a place of employment where they pay me legal tender to erode the keyboards with repetitive taps. And once upon a time I went to college, where I studied Geography and Economics.

If you throw enough mud, some of it is bound to stick. The ultimate proof of this came recently, when the Phoenix League was first mooted by the greedy chairman of middle of the road football clubs, eager to stick their snouts into the trough currently being hogged by the even greedier chairmen – no woman; quelle surprise – of the top football clubs. Listening to the apologists for this exercise in whinging, I noticed some of the mud, which the lecturers in college had hurled in the direction of the students in the hope that it might land somewhere, had actually stuck to me. And unbelievably, contained within that mud was a small, glistening pearl of knowledge.

Efforts to make money out of football are predicated on the most insidious of concepts: the addiction of the consumer. The market economy is based on the assumption that the consumer is “rational”. This means that a consumer will spend his/her money in such a way as to maximise satisfaction. If Bouncy Soap Flakes don’t give you the gleaming white laundry that you demand, you can switch to Sudso Soap Flakes with BrilwhiteÔ. Football fans, on the other hand, have only one team. They will ‘consume’ that team to the point of impoverishing themselves, even if they are getting absolutely no satisfaction. Clubs can continue whacking up the price of tickets, replace replica kits with impunity and flog all sorts of tat in the megastore, confident that the fan will get the dosh together, even if the kids have to squeeze another year out of their school uniform.

I remember listening to a season ticket holder on a football phone-in. He had received a catalogue from the club to commemorate the centenary back in 1992. It gave him the ‘opportunity’ to buy, amongst other things, a Bill Shankly Toby jug. You couldn’t make it up.

It truly is pure evil when you put it in those terms. Clubs are like drug dealers, getting their victims hooked on heroin then charging extortionate prices so they can feed their addiction. The difference is that it’s the parents, family and friends of the fan who get them hooked. Meanwhile the clubs rake in the dough, chairman/drug barons cackling maniacally as people give more and more of their income in pursuit of that ultimate hit, even though true contentment can never be achieved because next season will come along and reset everything to zero. With a scenario like that, how can clubs lose?

Happily – if you’re of a vindictive bent – they can lose big because of the nature of competition in football. The market economy, contrary to the guff of various anarchic types opposed to globalisation, is not a zero sum game. Each interaction between people that involves payment gives added value to the relevant goods or services, thereby enriching everyone involved in the transaction. That doesn’t mean they are getting adequately paid for their services, but you are better off than if you did nothing. Football, on the other hand, is entirely a zero sum game. If every club were to spend £100 million in one season, there would still be only one champion and three clubs would have to be relegated. This may make sense from an accounting point of view – the return on capital invested by Manchester United is astronomic – but an economist would have an aneurysm at the image of increasing amounts of money being spent on chasing a fixed amount of success.

The point was best encapsulated a few years ago by Gordon Taylor. He was on Newsnight with some poncy fund manager/investment portfolio/high-stakes gambler type who was demanding the break-up of the cartel that was the Premiership’s contract with Sly Sports. The ponce was arguing that if each club had its own television station that they could each charge monopolistic prices to the fans for each game, as if fans of Charlton or Derby – or even Liverpool – were all going to mortgage the house to see their team pay Wimbledon. Gordon correctly pointed out that the nature of business is towards monopoly. If there are too many companies chasing too small an amount of business, then the companies making the greatest losses go bust, with their customers transferring their business to the remaining companies until sufficiently few companies for everyone to make a profit. But this formula is anathema to sport, which abhors a monopoly. Sadly Gordon lacked the wit to drive this point home, but it wasn’t lost on a few of us.

The Americans have found a way around this problem by funding each team from the centre. All money produced from television is paid direct to the NFL (for example) who divide the loot equally between the franchises. Salary caps ensure that top teams can’t steal away the best players. And the weakest teams also get the pick of the best new players, ensuring that failure doesn’t become the vicious circle that it is in football. This system creates its own difficulties though. For a start, the NFL is a closed system. It would be impossible to apply this to the organised chaos that is European football. Can you imagine trying to apply a salary cap to the Real Madrid’s and the Haka’s of this world? Worse still, note the use of the word “franchise”. I once supported an ice hockey team called the Quebec Nordiques, but the bastards moved to Colorado, and I was buggered if I was going to support a team representing the citizens of South Park – even if they did go on to win the Stanley Cup. Americans tolerate this system because they have absolutely no sense of history, but Europeans have memories longer than God and lack the utilitarian spirit of the Yanks which allows them to change products (teams) with impunity. Even the thought of a ground move is enough to send many Reds into hysterics, so the idea of Liverpool moving out of Liverpool would be less popular than the Tories.

The bottom line is this: the economics of football don’t stack up. Internet start-ups thought they could spend money like it was going out of fashion indefinitely, but they soon found out that they couldn’t. The same applies to football. Chelsea seem to think they can continue to haemorrhage cash at a rate that means they can’t even service their debts, but they can’t. Either they win the Champions League, stop living beyond their means – each of which is about as likely as the other – or the crunch comes and they wind up entirely owned by the banks. Liverpool FC, bankrolled by multi-millionaire sugar daddies and yielding an indestructible brand name, should be okay whatever happens. But for nearly all the rest of them, as the song says, there may be trouble ahead.

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