The main theme of this page is the transformation of football into a business. The genie is out of the bottle. There is no going back to a 'golden age' of crumbling terraces with local businessmen with correspondingly limited horizons in charge of the game. This doesn't mean that there are no problems with the new era either. This page seeks to present the relevant facts and some accompanying analysis. Football at all levels, from non-league to the premiership, needs money to survive. But fans are more than just 'consumers'. There need to be mechanisms to help them to shape the future of the game.

Football is a business, but it is a business like no other. First, there is tremedous fan loyalty to the 'brand', the club. There may be more 'floating' fans than keener supporters realise, but the depth of loyalty of many fans means that they are open to exploitation. For many practical purposes, their club is a monopoly supplier for them. Second, this is an industry in which very few 'exits' occur. If one was designing a football competition from scratch, one wouldn't have ninety-two league clubs in England, plus the conference where a number of sides are becoming full time. The normal mechanisms of 'rationalisation' do not work in football. There have been a number of successful mergers at non-league level, particularly where big money has been available to back them (Rushden and Diamonds is the prime example), but in general they are resisted. The prospect of a merger between the Sheffield or Edinburgh clubs is stoutly resisted by their fans, even if a stronger club would result. And, as a supporter of Charlton, which was nearly merged into Crystal Palace, I can understand their feelings.

When a club runs into trouble, it does not go out of business in the usual way. It usually goes into administration, the Inland Revenue and Customs and Excise get some of the money owing to them, and perhaps some 'football debts' (outstanding transfer fees and the like) are paid off. Then some new rich individual is found to come up with some more money. (Hull City is the latest example). As the old joke says, how do you make a small fortune? Begin with a large fortune and become an owner of a football club. Opinions differ on whether the recent television series The Men Who Changed Football was really about The Men Who Saved Football or The Men Who Destroyed Football . But there are those who fear that the day will arrive when television revenues will fall (or new revenue streams from pay television will disappoint) leading to a financial crisis in the game.

A correspondent to this page posed the question recently why most football shares have fallen so much since their launch. In part, this was a classic 'bubble' effect with analysts over estimating the growth prospects for football clubs. Fans were eager to help the club out by buying shares when they first went on sale, but subsequent interest from the key institutional investors was limited. Only clubs like Manchester United are to be found in the portfolios of unit trusts. Most clubs do not pay a dividend, or at most a very small one. Above all, the markets have increasingly become aware of what Alan Sugar called the 'prune juice' effect. Money poured into clubs comes out at the bottom in the form of higher wages and other payments for players. If anything, the recent European transfer deal is likely to reinforce this effect. One sense in which football is not a business like any other is that it does not have control of its costs, or more specifically its playing staff wage costs which often exceed the turnover of a club. In the long run, this cannot be viable. But it is not easy to see a way out.

Number of visitors is: