Football for love or money MONEY
NICHOLAS DAVENPORT
Just as any normal parent is amazed when no one stops to adniiire the size and complexion of his newly born child, so I was somewhat taken aback when the world did not stop to acclaim the size and complexion of the Report of the Committee on Football. I was only. one of its eleven parents and Mr Norman Chester, Warden of Nuffield College, who was chairman mother-and-midwife all in one, has more to complain about than I; but I suppose its publi- cation was pushed off the domestic scene by- the students' revolt and the victory of Man- chester United over Benfica of Portugal in the • European cup final. Yet if people want to hear less of students revolting and more of Britain. winning world cup competitions they should really read this report and see that its recom- mendations are carried out.
As soccer is our national game and provides a magnificent and exciting spectacle when played by our incredibly skilled professionals, I was surprised to find that it did not pay. We analysed the profit and loss accounts of ttte League clubs in the four divisions for the three seasons up to 1966 and found that over this period only the First Division made a profit (£1.3 million) and that the other divisions made a total loss of £3.7 million. Expenses continued to rise faster than match receipts in every division ,except the elite First. As so often happens,'the rich clubs got richer and the poor clubs got deeper into debt.
The clubs have, of 'COutse, other sources of revenue than the gate receipts. First, they receive contributions from both Football Association and Football League {mainly as levies on the gate receipts of all competition matches and partly out of the payments made by the Pool Promotdrs' Association); secondly, they receive gifts frOm their Supporters' Clubs. These are working men's clubs, whose organisers raise money from sweepstakes, bingo, raffles and other ingenious forms of gambling and from profits on the huge quantities of food and drink consumed. I was amazed to see the scale of this supporters' revenue. In the period 1963-1966 it totalled £4 million—the published accounts by no means tell the whole story—and accounted for 90 per cent of all the additional revenue flowing to the football clubs.
In fact, soccer could not exist without the support of the local working men's clubs. They provide not only cash—in the Third and Fourth Divisions they contribute £1 for every f2 taken a! the gate—but the local drive and excitement. It seemed to me odd that the workers should be content to let the clubs they support continue to be manager' by the local businessmen who draw plenty of expenses for their own enter- tainment. But it was generally assumed that football exists for the pleasure of every class of spectator. Soccer is an intensely democratic game.
Sometimes the fun and excitement boil over into rowdyism but no more than one v■ould expect. The professional players are naturally tense when they come on the ground; ti-. ey are highly paid; there is no ceiling on their earnings. One of them in a team might have been bought for f100,000. All this big money adds to the tension. Fortunately we were not asked to con- sider how far one's personality gets caught up and carried away into a crowd personality which may become hysterical, demented and brutal. Personally I could not help seeing the fighting-fit professionals as glorious gladiators and Wembley as the Roman Colosseum. Blood did not flow but the excitement was the same and the first-aid men were kept busy.
It seems absurd that a sport which provides such grand public entertainment should not be -rfinancially self-supporting. If its finances were properly managed it certainly could be. Each club (except Nottingham Forest) is a separate company registered under the Companies Acts. Each makes its profit or loss (mostly a loss) and there is no way of setting the losses against the profits for tax purposes. In 1965/66 in spite of an overall loss of f1.4 million the English -League clubs paid £258,000 net in income, now :corporation, tax. But there is a way out of this .BeCause the English and Scottish - Leagues provide group services for the clubs by meeting the cost of referees and linesmen and handling television contracts and because they pool part of the clubs' earnings for redestri- bution, they could Surely go a stage further and operate a group relief scheme as provided by the Finance Act of 1967. This is an arrangement whereby a company which is a member of a group can surrender the tax relief attributable to its _Own losses to another member of .the. same group which is making profits. The clubs would then have to be subsidiaries of one .holding company—the League—which would hold the equity shares of each local company.
• But the management of the clubs could remain in local hands.
My colleagues on the committee all felt that more money could be raised from television. At the moment neither League allows matches -to be televised live except the FA cup final. Not long ago the BBC made an offer approach- ing £3 million over a three year period for tele- vising one live match every Thursday evening during the football season. The offer was refused—unwisely in my opinion. I believe that televising good football would encourage public interest in the game and in the long run would raise gate receipts. If you want real excitement you will have to go on the stands and get caught up in the crowd hysteria.
We also thought that the pools should contri- bute more. At the moment the Pool Promoters'
Association are paying the Leagues and the FA under a fifteen-year agreement from August 1964 a royalty of 1 per cent on gross
stakes after deduction of the Pool Betting Duty. This brings in about £900,000 a year. We thought that another 1 per cent levy should be paid on the £122 million now staked annually in football pools. Unfortunately the Chancellor decided at this moment to increase the Pool Betting duty which will give the Pool Pro- moters' Association a specious argument for resisting our request.
Another levy we recommended was a variable one on transfer fees in addition to the existing 10 per cent. We suggested 5 per cent on fees between £25,000 to £50,000, 10 per cent on the next £25,000 and 15 per cent on the remainder. Thus a transfer fee of £100,000 would attract a special levy of £8,750 in addi- tion to the existing £10,000. It might act as a deterrent on the unwanted inflation of transfer fees. The purchase of players, although neces- sary for the commercial game, is largely a tax- saving expedient. A club with £100,000 profit would avoid paying tax if it were able to pay that amount for a star player who could per- haps raise the gate money. Incidentally, Scot- tish football lives off selling players to England. No one else benefits from the transfer system.
The extra money we could thus raise for football is urgently needed for improving the facilities for both players and ipectitors and for providing (in conjunction with local'authorities) a few multi-sports centres which would be worthy of our great fOotball name: It might also help to stave off the current world revolution.
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