We’ve all known it for some time of course, but this was the week that the man best placed to comment went public on the relative merits of the various ownership structures of professional soccer clubs.
Peter Kenyon, who as CEO of Manchester United oversaw a publicly quoted company, is now the CEO of Chelsea, the London club that is held privately in the wallet of Roman Abramovich.
At the Soccerex Forum in London, Kenyon was asked which of the two he preferred and, unsurprisingly, he plumped for the private route that, he said, made it easier to get things done.
Public companies, he pointed out, are always likely to be a take-over target for one group or another and that simply has to be disruptive to the business as a whole. Being a director of a publicly quoted soccer club has to be one of the toughest gigs in town if you actually happen to care about the club at a level beyond the balance sheet.
In his autobiography, former BBC Director General and Manchester United director, Greg Dyke, deals at length with the issues he faced when Rupert Murdoch made a bid for the club. Dyke may have been raised in West London but he became engrossed by Manchester United early doors, and has been a passionate fan ever since. Becoming a director of the club he loved was clearly one of the highlights of an eventful, high profile and rewarding life but the take-over bid was not an easy time for him. In essence the issue then was the same as that which has faced the United board since. As a director it is your duty to look after the interests of the shareholders, but the interests of the shareholders may not be those of the long-term interests of the club and its fans.
Dyke, it appears, found himself emotionally aligned to supporters who were fiercely opposed to a sale - but he was also aware of his duties as a director. In this case, he believed deeply that the two were ultimately linked but he had to demonstrate tremendous independence of thought and spirit and action in the boardroom as fellow directors – who stood to make considerable sums – made it clear they would be happy to sell.
Unsurprisingly, Dyke was among the first people the media turned to when Malcolm Glazer began to turn up the heat on his latest attempt to acquire United. His comments reflected his take on the real issues. Should a board of directors ever take, or feel obliged to take, a decision which potentially imperils the future of the organisation; in this case by taking on significant debt?
The private side is significantly different. One funder, three decision makers, no lengthy chain of command or communication and the ability to act swiftly and decisively. That’s corporate heaven and works so long as the key individuals share the same ambitions and maintain good working relationships. If either of those things gets out of step the problems are exacerbated.
But for all that, private ownership is not a panacea.
As Kenyon pointed out, it’s all very well buying a soccer club, but if you can’t afford to make significant investments thereafter, you’ve simply bought a bunch of problems. The Ferrari is no good if you can’t afford the petrol.
Fans can be unrealistically demanding and there’s many a club owner who has been hailed as a saviour only to be vilified further down the line for an inability or unwillingness to continue to part with great chunks of cash in the cause. Turn the clock back a few years ago and these were exactly the kind of instances in which a move to market – whether as a full or secondary listing – seemed a good move. Acquiring the club and then raising money for development of facilities or players through a flotation, seemed a wonderful idea during that all-too-brief period when the market seemed hot for soccer. But that was then…
Today the pressures on listed clubs are all too obvious right across Europe, while Chelsea’s fantastic journey to the heights of European soccer are a clear indication that Kenyon and Abramovich have got it right.
Their declared intent is to invest in the team because a winning team is the best way of building a brand which will enable them to fully develop their club’s potential in clearly defined markets: London, Russia and China. This will, they believe, allow the club to be profitable in five years.
With the FA Premier League more or less in the bag and a Champions League semi-final to come, Chelsea are well on course.
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Moscow’s bid to host the 2012 Olympic Games came in for some stick during the SportAccord convention in Berlin, at which each of the bidding cities made presentations and manned exhibition stands.
Moscow’s ‘crime’ was to employ a posse of glamorous girls to draw attention to their plans.
An entirely unscientific and informal poll of SportAccord delegates concluded that the IOC have got this one completely wrong and that rather than clamping down on this type of thing it should actually be made compulsory.
But they would, wouldn’t they. Seeing SportAccord delegates en masse simply underscored the largely one-dimensional demographic of sports administration - male and looking back on 40.
