Football Industry Management Report: Evolution and Governance

This report provides a comprehensive analysis of the football industry's management, drawing insights from the evolution of English football clubs from community-based entities to multi-million dollar businesses. The report examines the shift towards commercialization, the impact of investments, and the crucial role of stakeholder relationships. It highlights key aspects of financial management, governance policies, and the implications of different ownership models, including the mutual ownership approach. The analysis explores the influence of events like the BSkyB TV deal and the rise of foreign investors, as well as the effects of economic downturns. The report emphasizes the importance of stakeholder accountability, sustainable governance, and the need for strategic government interventions. Ultimately, it underscores how the football industry's growth is driven by fan demand, the adoption of new business models, and the evolving concept of ownership, offering insights into the financial strategies, stakeholder impact, and governance challenges within the sports industry.

Running head: FOOTBALL INDUSTRY MANAGEMENT
FOOTBALL INDUSTRY MANAGEMENT
Name of the Student
Name of the University
Author note

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Article Bibliography:
Kelly, K., Lewis, R., & Mortimer, T. R. (2012). In football we trust?. International Journal of
Business and Social Science, 3(8).

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Summary of the Article:
Evolution of English football clubs from a community body to a business of multi-
million dollar has been described in this article. Today English premier league has become a
global brand, where not only players from all around the world come for opportunities, but
also many businessmen venture in order to become the part of a successful ownership. Most
of the English football clubs are owned by private or public limited organisations.
Traditionally an increased rate of shareholder return is the primary objective of the
companies owned by investors which is hardly noticed in case of football industry.
Evolution of clubs into social company is the result of advancement of
commercialisation and this had been started roughly from the year of 1880. The role of the
director of a football club is to verify the objectives of a club and prepare strategies to
achieve them accordingly and also to maintain a good relationship with the stakeholders.
Interesting increase in revenue of football clubs has been noticed in 1992 during the
deal between BSkyB TV and Premier League which had become the main cause for rise of
ticket prices as it elevated the monetary investment in the sectors of players and
infrastructure. Tottenham Hotspur football club was the first club that had formed relations
with the stock market in 1983. Investors gathered due to the raising appeal of football
industry in the stock market but due profits were reduced by 60% to deliver the player wages
and there was a sudden fall in shares. Fulham club was the first club to have a foreign
investor in the year of 1997.
Knowledge Learned:
For a responsible financial approach a regulatory movement for choosing of directors
of football club was proposed in 2004 where different tests had been mentioned which could

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determine the efficiency of an owner or the requirement criteria of an owner. Mutual
ownership model had been proposed for future of the industry which can return the industry
to its community roots. FC Barcelona is the first successful implementation of this mutual
model, which is owned by approximately 173,071 members. Introduction of websites like
MyFootballClub.com were the foundations of fan ownership in this industry (Kelly, Lewis &
Mortimer, 2012).
Stakeholder accountability is clearly reflected by sports industry like football. Due to
the recent economic downturns, financial management system of football industries was
affected and many football clubs were demolished, like Portsmouth and some other clubs.
Effectiveness of traditional funding systems like billion dollar investments, listings in stock
markets had been diminished for football industry and requirement for other sustainable form
of governance had been increased.
The issues regarding ownership and financial management have been highlighted in
the article. It has been learned that the benefits of a stakeholder must be considered first than
the shareholder. The fundamentals of the business of football industry are somehow different
than the others as it prefers utility over profit. From the inquiry over football clubs in 2010,
importance of government interventions strategically in administrations of football clubs have
come forth. Failure of the model of mutual ownership has been notified at Notts County FC
where 60% o the stake had been owned by the fans and due to failure of management the
stakes had been sold to Munto Finance.
Application to Course Content:
This discussion applies much to the course content. It mainly focuses on the financial
sectors of the industry. The discussion clearly explains how football industry became a
largely grown commercial body from a community based body. It accounts all the major

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steps that have been taken to stabilize the industry and improve the relationships with
stakeholders. It also describes why the governance policies need to be changed for growth.
Conclusion:
Therefore, from the above discussion, a brief idea of the financial sector of sports
industry has been obtained. Base of evolution of sports industry is its fans. The growth of
football industry to a large commercial sector is the result of huge fan demand. Potential field
for high profit business led many profitable organisations to join with this industry. However,
following the trend, traditional ways of business has been replaced with new ways.
Ownership idea has been evolved to mutual ownership so that the fans can be more
associated with the industry.