UK: NET LOSS - FOOTBALL CLUB CHAIRMEN. - With only three top domestic prizes, failure in football is all too common. So what makes usually rational, hard-headed businessmen go soft over seeming lost causes?

by Colin Cameron.
Last Updated: 31 Aug 2010

With only three top domestic prizes, failure in football is all too common. So what makes usually rational, hard-headed businessmen go soft over seeming lost causes?

Fans with fat cheque books are to be found in the directors' boxes of England's 92 professional football clubs. In fact, they may even have paid for the very grandstand they sit in. These fans are better known as club chairmen. Usually tough and rational in pursuit of profit, where football is concerned these successful, often self-made businessmen are, commercially speaking, mad.

Mad, because for the individual clubs they follow, chairmen truly are 'supporters' - bank-rolling the club in pursuit of some far-off footballing Xanadu or personal Holy Grail. Some, such as former Oxford United owner Robert Maxwell, argue their addiction makes good business sense. 'I am not a member of the Salvation Army,' he pronounced on his decision to speculate in football. 'Football clubs can be a commercial proposition, yielding 10% a year.' But, as with many of his assertions, the balance sheet usually tells a different story. The secrecy surrounding soccer's finances conceals the true extent of deficits. Debts are underestimated to protect a club's image and transfers are inflated in the media to boost a player's reputation. But don't be fooled by the promise of riches suggested by million-pound signings. There are more holes in football club accounts than in the net.

Typical of football's munificent backers are chairmen Sir Jack Hayward (personal wealth £70 million) and Jack Walker (£400 million), whose financial support of Wolverhampton Wanderers and Blackburn Rovers respectively dwarfs anything the game has ever seen. Walker admits to spending more than £30 million on Blackburn's players and ground. Sir Jack's largesse is yet greater for it is his gift of some £20 million that has refurbished Wolves' now model Molineux Stadium.

Other hard-headed businessmen to open their wallets are legion. Lionel Pickering (estimated fortune £20 million, after selling his free-newspaper business to Thomson in 1989 for £25 million) lent Derby County more than £10 million at favourable terms in an effort to restore the club to its championship-winning days of the 1970s; Francis Lee (estimated wealth £30 million) returned to Manchester City earlier this year as head of a consortium aimed at rescuing his former club; and Amstrad's chairman Alan Sugar (estimated wealth £157 million) bought Tottenham Hotspur for a reputed £7.5 million in 1991.

Like Maxwell, Sugar viewed his seduction as commercially sound. 'I've not invested in a football club,' he said. 'I've invested in a company that just happens to own one.' Football, he believed, offered market outlets for his computer hardware and the game's relationship with satellite television suggested even greater potential. Spurs, in dire financial trouble, looked on Sugar as a saviour; he, in turn, confidently expected to gain enough business from the club boardroom to compensate for his initial outlay.

But adequate compensation, at least in monetary terms, is rarely achieved. Jack Walker hopes that Blackburn, which smashed the British transfer record this summer by paying out £5 million for Chris Sutton, will break even by 1995. No one really believes it and further buys are expected. Certainly Walker still has funds available. The £330 million he received for his steel stockholding business from British Steel in 1989 has, if anything, grown from subsequent investment in Jersey European Air and associated ventures.

Sugar, too, has adopted the open cheque-book approach to his football interests. On purchasing an interest in Spurs, he recalled vague childhood memories of supporting them as a boy but couldn't remember the names of his side's famous FA Cup and League winning team of the '60s. Now he stands on the touchline and talks of 'throwing money at the problem and seeing what happens'. No one doubts his sense of purpose, which has been amply demonstrated by the acrimonious courtroom battle to secure ownership of the club from his original partner in the venture, former manager and now England coach Terry Venables. In fact, the strength of Sugar's commitment and the size of his investment have grown to the point where business associates say his moods are affected by the bounce of the ball at the weekend.

Why do football's chairmen support operations that a receiver would pass on to the liquidator quicker than it takes to execute a one-two? Other passions, it seems, such as cricket, can be observed from the relative financial comfort of a corporate box. Football's smitten entrepreneurs pursue the obsession with an involvement that is as big as their personal wealth will allow.

The game's benefactors fall into two camps. In one stand men such as Maxwell, who want involvement in a viable business venture. They have no allegiance to a particular club; any will do as long as it makes them feel welcome. Pickering, perhaps, sits most comfortably in that camp. The £10 million he has made available to Derby County reflects both the size of his personal fortune and some self control. He pledged to buy back glory days to the Baseball Ground but refused to 'do a Blackburn'. His investment has thus been relatively restrained and, he insists, a loan. Success with style is the brief he has given his latest manager, former Derby inspiration, Roy McFarland. However, there is doubt over Pickering's staying power after his team failed to win the final first-division play-off against Leicester City for promotion last season.

In the second camp are those whose interest was forged in childhood. For them, the recipient of their investment has to be the club they cheered in their youth, however rundown it may be. Pryce Griffiths, chairman of Wrexham started buying shares in the club in the 1970s and now owns 80% of the club. As a young man he helped resurface the Racecourse Ground's 'Kop' terrace. 'I make decisions here that I wouldn't dream of in my own business,' says the successful local businessman. 'But I've always been proud of saying I'm chairman of Wrexham Football club - because when I was wheeling cement around the pitch out there, I never dreamed I'd be able to afford to sit in the stands, let alone own the club. It's pride.' Hayward was rebuffed when trying to secure Wolves in 1982. Nine years on he returned successfully to the negotiating table to buy the club from its owners, the local council. During talks he realised this was one deal not to bluff on. 'I don't need this, I'm not on an ego trip,' he protested. 'We know you're not. You're on a sentimental trip. Now sit down,' replied the council's representative. He did.

Hayward's interest in Wolves is best described as an obsession; his team's success is the only return he requires. Born within earshot of the ground, he will, he says, 'burst' if Wolves win the FA Cup. He sees his involvement as a mission. He has spent £5 million on players but has concentrated on building the church. His philosophy of making the stadium a higher priority than the team is based on the Field of Dreams belief that 'if you build it, they will come'.

Walker's obsession is driven by the greater urgency to succeed. He vigorously pursues goal-scoring saviours for the team he adored as a child. England international Geoff Thomas was watched by both Wolves and Blackburn as a potential signing last season but that he ended up at Wolves does not necessarily mean that Hayward is the more determined of the pair. Walker was the more aggressive suitor initially, but the deal fell through, due to the player's indecision. Hayward was the more forgiving of this failure and later signed him for much lower than Crystal Palace's initial asking price of £3 million.

Still in the sentimental camp is former Derby County star Francis Lee. When playing for Manchester City in the early '70s, he was transferred against his wishes to Derby by the local businessman and chairman Peter Swales. On Lee's return to City's Maine Road ground, this time in a Derby shirt, he scored the last-minute winner. He returned to Manchester City 20 years later, a millionaire, to dethrone Swales as chairman. His hands-on business style is already apparent - he is a regular figure in the dressing-room before home games. He protests: 'I don't interfere. I don't offer an opinion unless the manager (Brian Horton) asks for one.' Some businessmen, such as Lee, Sugar and Crystal Palace's Ron Noades, run their clubs in the same style as their other commercial ventures. Others, like Walker and Hayward, prefer to stand back. Walker's appearance at Wembley in August leading out his team for their Charity Shield fixture with Manchester United was unusually brash. Although the major shareholder, he is not even listed as a director of Blackburn. Nor has Hayward sought the limelight. His presence on the pitch for the pre-season friendly also against Manchester United was equally uncharacteristic. The toughness required to succeed in business does not, of course, completely disappear. Hayward claims he found it difficult to sack his last manager, Graham Turner, after Wolves' FA Cup defeat last season. But as in business, failure cannot be tolerated.

And therein lies the rub. Failure is all too common in football. Success is measured by three trophies - the Premier League, FA and Coca-Cola Cup - and European silverware is accessible only through domestic success. Manchester United won two out of the three domestic competitions last season, condemning all but Aston Villa, who beat them in the final of the Coca-Cola Cup, to the status of also-rans. There are simply too few opportunities to succeed. As Ken Bates, the Chelsea chairman says: 'If you have 24 plumbing businesses and run them all well, you have 24 successes. But if you had 24 well-run football clubs, you'd have a half-a-dozen successes, half-a-dozen disasters and a dozen so-sos.' Robert Maxwell tried to find his own solution to the problem of limited opportunity. First he attempted to improve his chances by merging two clubs, Reading and Oxford, failing when both clubs objected to becoming Thames Valley Royals. Then he tried to buy into more than one club, only to be blocked by the league. Finally he resorted to more direct means; he tried to buy Manchester United in 1987 for £10 million. That the club now has a stock-market valuation of more than £80 million will only serve to entice more fans with large cheque books to sacrifice commercial sense in the pursuit of football glory.

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