Football needs to change now

TOWN OWNER SAYS THE SPORT IS ‘UNSUSTAINABLE’

GRIMSBY Town majority shareholder Jason Stockwood sees the current financial state of football as “unsustainable” and believes communities are at risk if the game continues down the same path.

Stockwood was a panellist on a webinar on Thursday, discussing the newly-proposed Sustainability Index led by Fair Game, a 34-club coalition, of which Grimsby are a founding member, striving for sustainability in football.

The Sustainability Index is designed to work as a league table with clubs earning points based on four criteria: financial sustainability, good governance, equality standards, and fan and community engagement.

The club’s index rating would then decide how much of the overall broadcast revenue and solidarity payments they are entitled to, rather than rewarding the clubs who spend more than their revenue to finish higher in the league table.

Stockwood said that although he is fresh to the football world, his investing experiences have taught him that the way football is run needs to change and touched on the danger of viewing historical institutions such as football clubs as “venture capitals”.

“I am new to the world of football club ownership,” said Stockwood.

“The last 12 months have been a massive learning curve for me. However, I am not new to the world of investing and building businesses; the biggest thing for me over the last 20 years has been how you build businesses with sustainability at their core.

“Football is a good metaphor for what is unbalanced about capitalism.

“We have had this profit motive that has neglected so many other constituents. Venture capital is a way of investing in early-stage businesses that have a high probability of failure, and most do not end up amounting to anything.

“The thing about venture capitals is that they are early stage, so the losses are primarily to shareholders, customers and society don’t lose, so the risks and rewards are proportionately balanced.

“That’s the model we are applying to football, a game that has been around in its league stage for over 140 years and has so many different constituents.”

Quoting statistics from Fair Game’s research into football club accounts, Stockwood continued to say that most of the top clubs in the country cannot live within their own means without financial bailouts from wealthy owners.

“It’s a game with the community at its heart,” continued Stockwood.

“I think it has been decoupled from the real purpose of football clubs which is to create memories and solidarity within the community.

“I think we have a category error with thinking football is a financial instrument for creating returns for shareholders, and that also applies to business more broadly.

“Even more importantly with football, we have seen that it is entirely unsustainable, when eight of the original 22 Premier League clubs have been into administration.

“In the Championship, wage bills made up 129 per cent of turnover, and you don’t have to be a very keen investor to know that is not a very good investment.

“So many clubs are technically insolvent without the support of a rich benefactor, and it is too great a risk to our communities to continue allowing football to operate this way.”