The Point

Last updated: 27 June 2022.

Football Under Capitalism - The Exploitation of a Working Class Sport

 

Introduction

England's top division, the Premier League, now has fifteen out of its twenty clubs owned by multi-millionaires who view their investment as nothing more than a business opportunity to increase their already sizeable Swiss bank accounts. Gratuitous sums of money spent on "world class talent" is done so in the knowledge that success on the fielding will ultimately pay dividends in returns of television rights, sponsorship, merchandise and the ability to fill stadiums to the brim with their clubs loyal supporters. In this however, is identified as the root of the substantially growing problem for club owners, what is football without the fans?

In October 2015, Bayern Munich fans travelled to London to watch their side play Arsenal in the premier European cup competition, the Champions League. Bayern fans, affronted at being charged £64 for a ticket to watch the game staged a protest in which they boycotted the first five minutes of the game before entering the stadium. Upon taking their seats in the stand the clubs supporters unravelled a banner which said "£64 a ticket, but without fans football is not worth a penny".

The following report will examine the neoliberalist nature of multimillionaire investment into "the beautiful game" across the Europe and examine whether the owners of football clubs establish forms of corporate social responsibility relating to perceived unethical organisational operations. Focused arguments will relate to the provision of match day experiences that are affordable for those living in working class communities where the most iconic football clubs gained their heritage or if the sole principle of football clubs are now to act as capitalist monopolies interested only in profit.

 

Club ownership: Evolution of the business model

Bourdieu (1998) identified that the economic expansion within football as a process which has been underpinned across Europe by the ascension of the free market, or neo liberalism political and economic policies. Neoliberalism follows the economic theories posed by Adam Smith, Friedrich von Hayek and most notably Milton Friedman (1970) that advocate for the creation of a global 'free market' which is realised by marginalising the role of the state intervention in relation to the economy. Furthermore, the privatisation of public assets, disregarding welfare programmes and establishing the transnational circulation of capital and investment underpin neoliberal objectives.

Briebarth and Harris (2008) stated that Europe has become epicentre of the global game, specifically identifying Germany and England as pivotal catalysts in the evolution of the sport. Deep roots within English and German culture and society provide specific insight into the complexity of relationships between owners and supporters of football clubs, furthermore differentiating between national conducts of corporate social responsibility.

Economic liberalisation can be seen through the changing of motives in relation to financial investment in football clubs. Giunlianotti & Robertson (2009) identified that during the 1980s the pursuit of profit became increasingly significant, specifically highlighting that in 1985 Tottenham Hotspur became the first English club to be floated on the stock market. In England, the national body the Football Association or FA, had previously implemented strict regulations that restricted the opportunities of directors to attain significant profits from ownership of clubs. However, Tottenham owner at the time Sir Alan Sugar devised a solution to outwit the FA and created a holding company within which the football club were an asset to, thus allowing a situation in which the club could be traded transnationally and ultimately enable football clubs to turn into a profitable business model for investors. This was a major turning point within the English game which recognised football clubs as multimillion pound businesses and established supporters as a captive market as stated by Cannon & Hamil (2000).

 

Cultural Differences and Political Involvement

England, is considered not only the home of 'the beautiful game' but also the creator of modern football as a business within the greater globalisation and neoliberal project. However, in a move to stabilise the professional games influx on multimillionaire owners, supporters trust were formed by local communities to raise awareness of supporter's grievances. Holt et al (2005) stated that creation of these have been essential in establishing beneficial relations between stakeholders and local communities. Sutcliffe (2000) stated that increased unrest within communities football fans have called for regulatory bodies to examine critical issues in the UK Parliament, such as the treatment of supporters in terms of ticket pricing, accessibility to matches and recognition by multimillionaire owners as stakeholders in the clubs success.

Germany, however have a footballing culture and organisational construct that follows a considerably different model. German football clubs are governed by a professional body, the Deutscher Fussball-Bund (DFB). Clubs are promoted as groups of interest, fostering environment where governing bodies and local communities work together to increase the development of societies across Germany through the game of football. Gerhard Mayer-Vorfelder, former DFB president stated that German parliament understand the role sport plays in democratic societies and politics, stating that football has an immense impact on culture providing support for disadvantaged people, public health issues and also can help re-integrate criminal offenders into society.

Giunlianotti & Robertson (2009) identified globalisation as extensively debated topic within social science, focusing on the question of determination and agency. Debate relates to the critical and empirical degrees of freedom that recognised how local cultures engage with the globalisation project. Cultural imperialism arguments focus on the determination and power of global culture manifested in Western civilisation, primarily Angelo-American, which restricts the critical agency of social actors within society.

 

Germany vs England

Wynn (2007) stated that football clubs from towns, cities and regions command the hearts and minds of their fans. Supporters believe that their club embodies local character, traditions and spirit that define their communities and cultures. Wynn (2007) further stated that football teams can be fashioned to reflect local and national ideologies, emphasising that they cannot remain uninfluenced by society.

Distinctive cultural contrasts within the day to day running of football clubs are primarily identified through examination of clubs within the German and English game respectively. Since the formation of the English Premier League in 1992, there have been 52 professional football clubs that have become insolvent, including former and current Premier League sides such as Leeds, Portsmouth, Bournemouth and Southampton. Compare this statement with Germany's top three divisions, Bundesliga, they have had none. This however is not to say that German clubs are not effected by financial irregularities, numerous high profile clubs have been severely in debt however, only to find themselves saved.

The perception of Germany culture towards their football clubs is distinctively different than that of England. German culture follows Wynn (2007) idea that football clubs embody local character and define communities. This belief is the reason that why in the case of financial hardships undertaken by German clubs, the government and rival teams have provided loans to bail out other teams. Examples of such are that of Hansa Rostock who in 2012 surmounted debts of £6.8m and faced bankruptcy, only to have their local council provide a waiver of tax, provision of a national grant and the purchasing of property such as their training complex. Furthermore, European powerhouse Borussia Dortmund came within days of liquidation only to be saved by their biggest league rivals, Bayern Munich with a £1.6m loan.

Compare this to English footballing culture, where clubs are still defined as pillars within local communities however their hardships go unrecognised by local government and rival clubs instead follow neoliberal ideologies. The English game stagnates under a "dog eat dog" mentality of governments and rival owners in which clubs who wish to escape their economic hardship must themselves find multinational financiers to clear debts and provide investment or face liquidation.

Godfrey (2009) states however that Germany's political history and national identity in comparison to the UK, must be taken into consideration. The German constitution devolved power away from centralised authorities following the rise of Nazism and Fascism. The constitution seeks consensus from all associated parties before the progression of substantial organisational or societal changes. The political landscape in the UK however differs greatly, as a patrician state governed from the centralised power of London. Wynn (2007) stated that football culture ultimately reflects wider societal culture, which poses significant difficulties in affecting change.

What are the corporate social responsibilities of football clubs?

Carroll (1979) identified corporate executives have previously struggled to grasp the issue of an organisations responsibility to society. Neoliberal arguments would state that that a corporation's sole responsibility is to provide maximum financial return to its shareholders. Social activist groups in the 1960s campaigned for a corporate responsibility and gained success through the creation of legislation in the 1970s which established numerous employment, consumer and equality commissions to implement corporate social responsibility practices. These new governmental bodies established that national public policy officially recognised consumers as significant stakeholders within businesses. Williams (2015) described corporate social responsibility solely as the actions which organisations take that contribute to social welfare, beyond what is required for profit maximization. Thus examination must be placed on the civic responsibilities football clubs have to their consumers, communities and furthermore, society as a whole.

 

CSR initiatives in action

Repercussions of supporter pressure on the UK parliament relating to multimillionaire owners using English clubs for maximising personal profit caused significant reactionary behaviour. In 2005, the FA alongside individual clubs decided to implement stakeholder driven corporate social responsibility initiatives within local communities to address the issue of football clubs moving away from traditional grassroots communities where clubs gain heritage and instead were focusing marketing football as a sport for middle to upper class only. Sandy, Sloan & Rosetraub (2004) further added that governments were now identifying professional clubs as becoming intrinsic to social development and growth regional economies.

Ackerman (1973) stated that the corporate social responsibilities programs undertaken by clubs within England were pre-emptive and preventative, primarily targeting the youth within society and their future development. The interaction between clubs and schools provide proactive educational programs, however have an underlying unethical philosophy. Ackerman (1973) stated that provision of opportunities to establish a better skilled and educated increase the potential for football fans with a "higher value", or even future footballers, which the club can utilise to maximise profits. Windsor (2001) states that the perception from fans of their local clubs as providing opportunities that help working class communities socially provides unwavering loyalty, therefore football clubs who decide to invest in society, are ultimately investing in their own club also.

The ideology of creating a "higher value" fan, is rooted within neoliberal philosophy that ultimately focuses on the creation of wealth and profit for organisations through the ignorance of what is deemed ethical or unethical business practice. However, football clubs are also unwittingly following a form of socialist philosophies when partaking in aforementioned corporate social responsibilities initiatives also. Socialist activist James Maclean stated that people from working class communities should follow the ideology of "rise with your class, not out of it". Football clubs who deliver educational initiatives that increase the prospects for the population stuck within lower social classes ultimately in turn provide opportunities to progress a societal classes as a whole.

 

Social activism for supporter ownership

The German Bundesliga have a substantially different business model in relation to the ownership of their nation's footballing sides. The basis of the German model follows the ownership legislature called the 50+1 rule, which enforces through national law a minimum of 51% must be owned by the association's clubs members or supporters trust. However, despite this law the remaining 49% is made available to multinational entrepreneurs or organisations for investment, ensuring that the teams acquire alternative investment streams. Bundesliga clubs boardrooms are decided democratically through the election of delegates by those within the 51% supporter's shareholders. Hamil et al (2000) states that the benefits of the supporter ownership model allows majority control of the club in the hands of the people who live and work in the communities surrounding the base of the club/organisation, promoting social development as well as campaigns or initiatives for healthier living and multicultural integration. However, numerous clubs within the German league have tried to remove regulations to adopt a neoliberalist model in relation to club ownership however the unrelenting passion of the German football fans to have their clubs control in their own hands has so far thus stopped them from doing so. The German model highlights the fan ownership is a viable model, however not one that comes without a fight.

An example of the struggles English supporters encounter can be seen through the formation of FC United of Manchester. During the 2005 takeover of Manchester United Football Club by Malcolm Glazer, American business tycoon, a group of supporters made their displeasure known at the news the club would fall into the hands of a multimillionaire who viewed the project as process to clear vast personal debts amounted across the pond. United supporters protested the takeover by showing up to home games in the green and yellow colours of their founding club Newton Heath LYR, who had been established in 1878 through the working class communities that ran the Lancashire to Yorkshire railway lines. Upon completion of the takeover of Manchester United FC, the supporter group decided to form their own protest club, FC United of Manchester, to provide football for working class supporters who were feeling forced away from Old Trafford through increased prices of match day tickets. Roy Keane, former Manchester United captain stated that the club had become more interested those eating "prawn sandwiches" in hospitality boxes than supporters paying their hard earned weekly wages to see the Red Devils play.

Ticket Prices

FC United of Manchester and Roy Keane were ultimately proven right. Published figures during the 2014/15 season, showed the prices for Premier League season tickets increased by 7%, leaving the average expense to watch all fourteen of your teams home games at the £800 mark. The Guardian (2014) newspaper stated that the cheapest ticket to see Manchester United play at home has risen in price, with adjusting for inflation, by 785% since 1990.

During the 2011-2012 season, the BBC conducted a survey regarding the 'price of football' highlighting a significant gulf between the English game and their German counterparts. The operating profits of the top leagues in respect countries were identified as the Premier League producing on average £68m, an average across all 20 clubs, with Bundesliga clubs producing more than double the profit margin, achieving an average of £154m profit across its 18 clubs. Furthermore identified in this study was the average attendances and ticket pricing across in the two respective leagues, with the Bundesliga producing cheaper tickets and unsurprisingly higher attendances. Oughton et al (2003) identified the direct correlation showing between ticket prices and attendances when examining how football clubs now operating as transnational organisations could facilitate profits and provide affordable ticketing for working class communities.

Bayern Munich, Bundesliga champions and Germany's most successful club, were identified as a primary example difference between the German and English models within the ownership of clubs and season ticket pricing. Uli Hoeness, Bayern president stated "We could charge more than £104. Let's say we charged £300. We'd get £2m more in income, but what is £2m to us? In a transfer discussion you argue that some for five minutes. But the difference between $104 and £300 is huge for the fan. We do not think the fans are like cows, who you milk. Football has got to be for everyone. That is the biggest difference between us and England"

 

Conclusion

Corporate social responsibility primarily focused within the contextual argument around football clubs has an intertwining relationship with cultural studies. The political landscape in the two investigated countries plays a significant role within the day to day operations of clubs and how they are viewed within the constructs of society. Germany views their premier footballing institutions as ones which possess the ability to promote healthy lifestyles, encourage multicultural integration and develop society as a whole. However, the evolution of football clubs within England have progressed to the stage of ignorance relating to the societal benefits clubs can bring to communities instead focusing on using them as organisations to provide substantial profits for multimillionaire investors at the expense of life long supporters being turned away at turnstiles through expensive ticket prices.

Trotsky (1974) suggested that "any future revolution in Britain will inevitably awaken in the working class through the most unusual passions" listing sport and specifically football, as a potential catalyst of societal change. With the aforementioned protesting against multimillionaire owner's introduction of extortionate ticket prices in the English game that is ultimately felt through by poorest supporters in stadiums across the country, the murmurings of revolt are formulating. Furthermore, the creation breakaway fan owned clubs such as FC United of Manchester further suggest that the backbone of support once provided by working class communities is becoming disenfranchised with evolution of football clubs and their ownership, specifically in England, from local based clubs with heritage in railway, factory and mining towns to transnational organisations interested specifically in marketability and profit margins. The likes of the Glazer family need to be reminded that "football without fans, is not worth a penny".

 

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