The benefactor model is destructive. Not just because it inflates football prices all over the globe, but also because it kills clubs.
The mighty Glasgow Rangers have been reduced to wreckage despite Sir David Murray “investing” £100m in the club. Portsmouth, owned by the Gaydamak family, were left at the mercy of the cruel football industry after “enjoying” thoughtless investment in everything but infrastructure and a youth academy.
Successful benefactors such as Roman Abramovich, Sheikh Mansour, Silvio Berlusconi and Massimo Moratti are the exceptions – most ”benefactors” all over the world enjoy the football’s spotlight for a few years, and then leave their clubs an inflated wage budget + debt and no infrastructure or tangible assets. This leads straight to bankruptcy.
Between 2010 and 2012 alone, more than 20 English clubs have been left insolvent. In Spain, more than 22 clubs have entered bankruptcy in the last few years. Romanian club FC Unirea Urziceni went from the high of playing in the Champions League group stage to the low of being dissolved in less than three years.
Usually, insolvent clubs are victims of the benefactor model: A rich individual buys a club and runs it any way he feels right. He might be looking for trophy glory, political capital, or the fulfillment of childhood dreams. It’s basically all about ego, and this short-term methods for success endanger clubs and leagues.
There are sensible owners out there but most of them leave the crazy world of football after a few years. Those who stay are long term investors who found a niche (Giampaolo Pozzo, owner of Udinese for example) or almost non-involved/silent investors, who let the club run professionally and live within its means (Like Tottenham’s Joe Lewis). However, the current economic system in football encourages over-investment and extreme risk-taking in order to win games, far beyond economic sense. It is the “benefactors” fault.
The antidote to the benefactor model is the community / co-operative model – one that is based on club members as owners or major shareholders (20% to 50% of the club).
This model leads to more stability, because the team is in the hands of shareholders who care about their club, instead of one man who cares mostly about himself.
This model also leads to a more responsible handling of the club’s finances and to the pursuit of larger natural income, while keeping ticket prices reasonable. Marketing in community-owned clubs must be creative, but the planning must be meticulous and conservative.
That is because there is no “Sugar Daddy” to cover up losses.
Speaking of which – if losses are made (a natural affair in today’s football world) , then the community can chip in and help – another thing that requires the club to have a good relationship with the community around it. The community model strives for balance and harmony, while the benefactor model strives to fulfill a rich man’s childhood dreams.
For years, a fan’s “dream” was that a “multi-millionaire” will take over the club and lead it to glory, but this fantasy leads to Rangers-esque nightmares.
More and more people are coming to realise that now.