In this first part of this feature John Dewhirst argues that not only does the debate about the origins of football need a better understanding of local circumstances, but that consideration should also be given to the origins of football clubs as businesses. He discusses the themes relating to the transition of the two senior Bradford clubs from being recreational bodies to businesses in the final quarter of the nineteenth century. He continues by offering a framework for academics to analyse the characteristics of early football businesses, again based on his findings of the Bradford experience.

Assessing the characteristics of football clubs as businesses

The evolution of clubs as businesses differed as is evident from the experience in Bradford where Manningham FC emerged as a challenger to Bradford FC. A number of themes can be identified as the basis of assessment and I offer the following framework by which the maturity, sophistication and viability of clubs as business organisations could be measured. Whilst this has been derived from the study of the senior and junior rugby clubs in Bradford I believe it is equally relevant to soccer and for that matter could be applied as a generic template to study other industries. I have adopted similar methodologies to undertake financial due diligence of businesses in my professional career as an accountant.

A framework assessment paints the personality of the (football) business and offers criteria with which to compare against others elsewhere. That personality is also linked to the environment in which the business operates as a means of coping with, or exploiting, local circumstances.

A. What the club stands for

  • Purpose & vision
  • Rituals & myths – underpinning loyalty to a club as an institution. In Bradford, the respective grounds at Park Avenue and Valley Parade were a big component of their self-identity
  • Organisational culture – in Bradford, Bradford FC represented the cathedral whereas Manningham FC was the non-conformist chapel
  • Differentiators that gave a club particular appeal and loyalties

B. Civic Endorsement

  • Status – Bradford FC derived status from being the de facto town club and a civic institution
  • Civic patriotism – the identification of the club with the honour of the town

C. Public engagement

  • How the club marketed itself – in Bradford, the competition between the two senior sides made this a critical issue as the respective clubs targeted floating support
  • Community links – Manningham FC targeted the surrounding population for support (although not exclusively so)
  • Price v non-price factors – for example the cost of admission and the attractiveness of fixtures; Bradford FC was also a fashionable venue for those seeking a complete entertainment package, for example including refreshments (the supply of food and drink was outsourced to a caterer).

D. Viability of business model

  • Size / scale – in the case of Bradford FC, the parent umbrella club also incorporated cricket, athletics and later, bowling sections
  • Capability of generating sufficient income to ensure a surplus – the need to be profitable and solvent
  • Ultimately the viability of the business model was derived from sporting success

E. Resources & infrastructure

  • Facilities – the superior facilities at Park Avenue were also a basis for marketing and differentiation
  • Ground capacity
  • Other attractions / diversification – for example cricket and athletics at Park Avenue

F. Competency & capabilities

  • Leadership
  • Management committee
  • Dedicated resources – weaknesses in financial management handicapped operations
  • Technical skills – lawyers were the most influential profession in the leadership of Manningham FC and Bradford FC and provided critical input on a number of occasions

G. Succession

  • Replacement players – capability to provide a stream of new players to renew the team
  • New administrators – critical to ensure ongoing organisation and compliance

H. Decision-making

  • Power within the organisation – Bradford FC was considered a political organisation that impacted on decision-making
  • How decisions were made – structures of democracy in a member organisation
  • Capacity for learning, adaptation and renewal

I. Capital structure

  • Member organisation – one person, one vote with income derived from annual membership renewals which was the structure of the Bradford rugby clubs (and which later proved unsuitable for professional soccer in the Football League)
  • Limited liability company – issuance of shares to provide a capital base capable of funding investments and/or losses
  • Debt funding – the burden and commitment of debt. Bradford FC became heavily indebted for the purpose of funding the purchase of Park Avenue whereas Manningham FC was debt averse.

 

Business life cycles

It is possible to discern a business life cycle in any industry from start-up, through growth and maturity to either renewal or failure. The same is true of sport and in the case of Bradford, the life cycle of sports clubs as businesses or member organisations helps explain how Bradford sport was dominated first by cricket, then rugby and finally by soccer in the seven decades leading up to World War One. Specifically, with regards to my framework above, the constituent elements will be fluid and display different characteristics during different stages of the cycle.

The graph below shows how Bradford FC revenues were impacted by competition from Manningham FC and demonstrates that the club had to cope with a phase of retrenchment and restructuring.

Illustrated below, the subsequent rate of growth in revenues generated by soccer is notable and compares to that of rugby twenty years before. The preceding stagnation of interest in rugby in the 1890s hints that sport is vulnerable to the vagaries of fashion.

By abandoning rugby in favour of soccer, both Manningham FC and Bradford FC demonstrated the critical success factor required of any business – the need and willingness to adapt to changing circumstances.

POST SCRIPT

Another classification of nascent football businesses would be that of pioneers vs followers. A pioneering club such as Bradford FC would have progressed through the three stages of becoming a business as outlined – from monetising through one-off commercial activity to repeat commercial activity as a business. A follower club, most likely in geographical proximity such as Manningham FC in Bradford, would have leapfrogged the early stages and derived benefit from the example set by the nearby pioneer, in this case Bradford FC who defined a business model.

The conversion of Bradford FC to being a business can be dated to 1880 when it occupied its Park Avenue ground. I argue in my book, ROOM AT THE TOP that this was a milestone for Yorkshire rugby by transforming the competitive (for which read economic) advantage of Bradford FC. Other clubs in the county responded by embracing commercialism or, as was the case with Bradford Rangers FC – a former rival of Bradford FC – by rejecting commercialism altogether. By the mid 1880’s there was a mushrooming of junior clubs in the district enthused by the success of Bradford FC and Manningham FC, all of whom were convinced that they could be viable gate-taking concerns. The subsequent failure of those clubs as businesses by the end of the following decade is equally fascinating as their birth.

 

Link to Part 1 of this series – https://goo.gl/B7uTDY