PLAYED OFF THE PARK
The World Cup is a huge money-making machine but professional sport in Scotland requires a radical overhaul to survive, writes Ginny Clark
THESE are difficult times for football fans in Scotland. No matter where we stand on the issue of who to support in the World Cup – though few are shoulder to shoulder with Gordon Brown – one bare fact diminishes the whole experience. We aren’t there.
If sporting achievement has the power to unite a country, to raise spirits and boost confidence, to encourage a strong sense of cultural identity, then the opposite must also be true.
In which case, Scotland is suffering. If it wasn’t for the achievements of our swimmers at the Commonwealth Games, and the meteoric rise of tennis star Andy Murray, we would have little to cheer.
However, despite this success in so-called minority sports, the professional arenas which are the focus for the majority of Scots – football, in particular, and rugby – are a cause of frustration.
Inevitably, as disappointed followers mutter into pints and wine glasses, the whole issue of sports funding and political will comes under the spotlight.
“Professional sport is big business,” says David Graham, head of sports business at law firm Shepherd+ Wedderburn, sponsor of the Scottish Business in Sport awards.
“Sponsorship is a significant income base for clubs, and these sponsoring investors demand a return on their investment. For smaller teams, the amount of sponsorship often means the clubs are run on a hand-tomouth basis. In such a climate, paying for the development of grassroots level talent is difficult to justify. We can see this in larger football clubs having looked outside of Scotland to populate their teams.
“However, it is important not to take too simplistic a view. There are problems in the filtering of sponsorship down to the people who need it in some minority sports, just as there are professional teams where sponsorship money is applied effectively from f irst team player through to community initiatives. The key is to ensure investments are managed so sports are given adequate support and encouragement to develop.
“The linchpin of effective management is good corporate governance. This has become increasingly relevant in sport, where organisations and the social, economic and political environments in which they operate are more complex than ever before.
“The important thing to remember is that governance is not a separate entity. Good structures should underpin everything an organisation does. In sport, they offer guidance, and help parties deal with the challenges ahead – both on and off the field.“
Professional and semi-pro sports must not only survive, but flourish as businesses in their own right. If they fail to do so, one consequence is they may also fail to nourish the next generation of players necessary for national achievement.
It’s a message Scottish football and rugby now seems to have absorbed.
However, while Lottery and other funding may help support individual elite athletes, and their sport’s governing bodies, the major professional sports are operating on a different level of the playing f ield, despite strong sponsorship relationships, such as that between the Royal Bank of Scotland and the Six Nations rugby tournament.
Gordon McKie, nine months in the job as chief executive of the Scottish Rugby Union, has the task of dealing with a £23m debt. However, management of this problem goes beyond pure finance.
“This is a rugby business, not a charity,” he says. “The organisation must be run properly while also ensuring the development of the game. The two are linked, but historically, I think there has been more emphasis on the latter, not the former.
“We’re now trying to put the SRU on a credible business footing, with a more joinedup and integrated approach. We need to look at issues such as succession planning, looking at who will be a coach or a full-back in five years’ time.
“This also requires us to grow the game of rugby, by encouraging more people to play, and integrating all levels from mini rugby in schools, ensuring this feeds through to underage rugby, and then into the professional clubs, and on to the national team.
“We’re a small country with a shallow pool of players. If we want to extend the gap now narrowing between us and the emerging rugby countries, growing the game is essential.
“To do this, we need to establish partnerships with local authorities and organisations such as SportScotland. We’re not asking for handouts, just co-operation. Kids playing rugby in school is good for the country’s health, and it provides us with more players.”
In football, meanwhile, clubs are also determined to curb costs. Indeed, a more realistic approach was reflected in reduced transfer activity at the January window earlier this year. However, it was a different story at Hearts, where supremo Vladimir Romanov is looking at an estimated £5m rise in wages.
Yet champions Celtic, three years into a fiveyear financial turnaround plan, and despite making annual losses of around £45m in recent years, could be moving into the black next summer. The £9m lift into the Champions League group stages at the end of this summer provides an excellent platform.
However, achieving a strong business
focus at club level isn’t always straightforward.
Blair Nimmo, head of restructuring for KPMG in Scotland, and destined never to win any popularity polls with Airdrie supporters following his decision to call time on the thentroubled club four years ago, explains.
“It is hard to commercially support a sporting business such as football, and there aren’t many that can stand alone,” he says.
“You might think it’s not complex. After all, staff wages are known, so you can predict this and other costs, and from crowd statistics you generally know income. But this isn’t how it works.
“How can you expect football clubs that turn over less than £1m annually to build a 10,000 seater stadium? And what other business only operates 20 days a year, using only 30% of its asset base?
“The fact is, part of the value of a football club is its passion, but that is also its problem. People don’t tend to run clubs on normal business principles, and to a certain extent it’s not actually possible. But a degree of business focus is vital.
“There have been some high-prof ile casualties, and equally there are some wellminded people such as Eddie Thompson at Dundee United and John Boyle at Motherwell who have personally invested in clubs. What Brooks Mileson has done at Gretna is fantastic, but this kind of investment is simply not sustainable.
“The perception there is a never-ending queue of rich people waiting in the wings is misguided. Football has to stand on its own two feet. Clubs must get smarter and take a more strategic view.
“Having said that, I believe there could be more support from the government. It can’t just come from the private sector.
“The people who are generally involved in football, and all sports in Scotland, are not in it to line their pockets, quite the opposite usually. Their efforts in terms of time, energy and money often go unrecognised.
“Sport has to be raised up the political agenda. Although football has always stood outside public funding, it can still benefit from a heightened cultural support and awareness. And that includes Scotland taking advantage of the opportunities that do come our way, such as making the most of the Olympics in London in six years time.”
The Scottish Football Association, through its regional structuring of youth football, has already embraced the ‘joined-up’ approach to development now planned by the SRU.
However, wider public support for a strong sporting Scotland would clearly be welcomed, not only by these two governing bodies, but all organisations, including football’s Scottish Premier League.
Chairman Lex Gold, somewhat tired of gloomy headlines, says the business end of the revolution is already well underway - and argues fans will soon be seeing the benefits.
“The formation of the SPL in 1998 was a response to the previous lack of a business
approach,” he says. “There have been difficult times, but I think the clubs had a wake-up call when we lost the BSkyB television deal.
“Now, we are looking at a brighter future. We don’t have debt, we’ve just completed a £54.5m television deal with Setanta Sports, and we’re well advanced in the hunt for a sponsor.
“When the SPL was first formed, we knew we needed to work harder at developing our young players. Eight years ago, there were 27 teenagers playing in our league, and last season there were 54. And we’ve just had the highest crowds in our top division since the 1950s, so something is going right.
“But we can’t be complacent. And while we don’t want handouts, we would like to see better resources, particularly for those youngsters not in the elite system. That means better facilities, such as indoor arenas, being offered through local authorities.”
The business of professional sport does appear to be changing for the better.
However, with more than just hope for Scottish sporting excellence, the way forward, it seems, is greater collaboration by the private and public sectors.
Level playing field: Football makes little economic sense without rich benefactors such as those at Hearts and Gretna
Making waves: Euan Dale (left) and David Carry of the successful Melbourne swimming team
Happy days: Scotland’s rugby players celebrate clinching the Calcutta Cup