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It is a simple fact that football clubs are not primarily about football – they are about generating money from any source they can think of. The football-playing side of the business eats up multi-millions in transfer fees and general losses, but other sides of the business has to pay for it.
And the suspicion is that increasingly that they are not very good at doing it. Even when they pull the occasional illegal trick.
Leicester City are one of the clubs mentioned when the notion of dubious financing comes up, and indeed in the last couple of weeks Leicester have been found guilty of a non-footballing offence: that of restricting competition when it comes to seeling items of clothing.
It might seem a bit of a strange thing to be involved in, but when anything is in short supply prices go up, so if clubs can ensure that there is a limited number of places that branded items can be bought from, then they have a chance of price fixing.
In the Leicester City case the UK Competition and Markets Authority held an enquiry and found that the club worked with JD Sports to ensure that the price of their replica shirts were never discounted. And this wasn’t a one off, it went on for four years.
According to details published in Law in Sport and in the Guardian Leicester City FC were fined £880,000. JD Sports were not fined because they brought the matter to the attention of the authority – possibly because it was Leicester City who were insisting that JD Sports change its normal terms and conditions of trading. As a result, it is implied, anyone buying a Leicester City shirt would have spent more than might normally be expected.
This is not the first case of its type, in that according to the report Rangers in Scotland along with two suppliers were fined over £2m in relation to price fixing: there is more on that case here. article. And as Law in Sport acknowledges cases relating to price fixing on replica kits go back at least as far as 2003 when Manchester United and Umbro, were fined “nearly £19 million for artificially fixing the price of replica football strips.”
Now it could be thought that these fines are modest given the turnover of some clubs, and that therefore raises a much deeper question arises and that is why? Why should such internationally known companies such as Premier League football clubs openly engage in activity which can bring in massive fines (the authorities have certainly been very lenient so far but the fines can be much bigger) and which will obviously damage their branding?
In contemplating that we might also consider a different issue which has brought fines upon Crystal Palace FC: the issue of delays in taking to the pitch. For one would surely think that if any club could get anything right it would be entering the pitch on time. But no, apparently Palace have been fined twice in this regard.
Indeed according to such figures as are available, “In the 2021/22 season, there had been 136 fixtures delayed for more than a minute resulting in total fines to clubs of £858,375 fines.” A lot to you and I but not too much for clubs that can sell a player for £50m.
But there is a deeper question here and that is why would any club be engaged in price fixing on shirts when they can apparently throw out £50,000 for turning up on the pitch a minute late? The two issues seem to be out of balance.
The only answer I can think of is that the clubs are incredibly badly run. Successful businesses tend to have a great product or service that they can sell PLUS an attention to detail. But we know that in financial terms many clubs are not successful businesses: they are losing money hand over fist.
And I find this interesting if we go back to the issue of the vast amount of money clubs waste on players.
In 2022/23 Chelsea had a net expenditure on players of around half a billion pounds and yet came 12th in the league having come third the season before. That seems crazy and yet it happened. Maybe our starting point in looking at clubs should be that some of them are just plain incompetent. Indeed when the fans sing “You don’t know what you’re doing,” perhaps they are more correct than we realised. And given the error of the referee in the Palace game in giving a yellow card for taking eight seconds to take a throw in, maybe downright incompetence really is at the heart of all football.
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