There are four dimensions that a football club must take care of to be successful: performance, business, social and political
You have probably already heard, or said yourself, that football is simple. After all, football is a simple game with simple rules. You play a match and if you score more goals than the opposition, you win. If you win, you are doing a good job. If you lose, well, not so much. So you always try to win. Simple to play, simple to understand.
Therefore, running a club, at least in theory, should also be simple. No reason to dwell too much on it. Yet, when you actually find yourself running a club, you realize that things can get very complicated.
From consulting for, working at and talking to football clubs all over the world, I found out that perhaps one of the greatest challenges for a club director is to truly understand what is the main objective of the organization that they are running. Why does the club exist? What do fans, consumers and other stakeholders expect from it? How can you make everyone happy?
Despite all the simplicity in the game of football, the answers to these questions can be very intricate, and they have a profound impact on the way the club should be managed. Such is the complexity that perhaps the best way to understand what a club does is to split it in four different dimensions.
A football club is and will always be primarily a sport organization. As such, it exists to organize a team that will play and try to win competitions. Nothing should come before that. When you are running a club, your main concern is to be able to field the best possible team that has the highest probability of winning the trophy of whatever competition you are playing in.
You always aim to win, or, at least, hope to do so. If someone creates a club hoping to lose matches, it probably won’t exist for long. This applies to all football, at all levels. That’s the football club’s performance dimension. In this dimension, the club focuses on maximizing performance through whatever means necessary.
To secure the highest probability of winning, a club needs to have the best team. To do that, it has two options: (1) develop a unique groundbreaking training formula that will create a fantastic team with the players at your disposal—which is very difficult and rare, to say the least; or (2) sign the best possible players you can, hoping that they will improve the quality of the team—which is the alternative the vast majority of clubs usually choose.
However, as in any other competitive market, the more cash you have, the better the quality of the players you can sign. Therefore, to be able to field the best possible team, a club needs to have more cash at its disposal than other clubs, which then turns football clubs into financially-driven organizations. In a way, clubs are just like any other business: generating high income at low cost will provide you more profits. But, in the case of football, the profits are victories and trophies.
Suddenly, the initial idea of a club being a simple organization that only needs to organize a team to play and try to win matches starts to fade away. Yes, clubs are primarily football institutions, but because of the nature of the competitive market they are involved in, they also need to constantly act in order to maximize financial returns and reduce costs, which creates an entirely new interpretation of how a football club needs to be managed. This is the club’s business dimension.
In this dimension, the club focuses on establishing and maximizing commercial relationships with the largest possible number of stakeholders – individual or institutional – in order to constantly increase revenues at the same time it tries to keep costs as low as possible to sustain the operation. The profit resulting from the maximized income minus the minimized costs can then be redirected toward improving the quality of the squad.
But, for a football club, there are limitations to how much it can pursue profit maximization. Clubs tend to be historical community-based organizations, formed by people that share social connections, and represent the place where they are located.
The location and the community are the essence of a football organization. Usually, the closer a fan is to the stadium, the stronger is the relationship with the club. Clubs from a given neighborhood tend to be followed mainly by the people who live in that neighborhood. Clubs from a given city are likely to be supported the most by the individuals who live in that same city.
Clubs represent and are represented by members of these communities. The relationship with the community, then, cannot be managed solely through commercial transactions, but demands many types of other tangible and intangible interactions. That’s the club’s social dimension, which is based on non-commercial transactions with the members of the community.
In this dimension, clubs focus on maximizing benefits for fans, members and the overall community by generating positive impact and acting as a platform for social development. The club has a football team, but promotes different activities in favor of the local network of stakeholders.
The more involved the organization gets with the community, the more it will mirror the vision and principles of its people. Accordingly, as the club’s relevance for the community grows, so the club’s importance increases as a platform to promote this vision and principles.
Once the club starts progressing through the echelons of football, it starts generating interest from a diverse range of media outlets, other football fans and the public in general. Eventually, this new audience will recognize the club as one of the main symbols of a community and, at this point, it begins to play the role of a key representative of the values of the community for external audiences. This is the club’s political dimension.
In this dimension, the club’s popularity is used as a platform to maximize the promotion of the community’s vision and principles to the overall football world. At a more extreme level, the club may self-impose restrictions in the performance or the business dimensions in favor of promoting the community’s values. For example, the club may willingly choose not to sign players that have weak historical links with the region or choose not to sign a profitable sponsorship agreement with a company that does not comply with the club’s ideals.
So, these are the four dimensions of a football club: performance, business, social and political. Each has very distinct behavior and specific objectives that are not necessarily complementary to the others. In fact, they can often be contradictory, which greatly adds to the complexity of managing a football club.
For example, a focus on performance usually comes at the expense of the business dimension, as short-term success typically means a significant increase in costs on salaries and investments on player trading. Focusing on the business dimension, on the other hand, will result in the maximization of revenues, which will then result in increased prices of products such as match tickets and merchandising, which will in turn create a barrier between the club and the local and loyal fanbase, who will not want to put up with a surge in prices. This will jeopardize the impact the club has on the community and, eventually, on the perception of the club as a platform for local values.
Therefore, the real challenge for a football club executive is to grow the organization in a balanced and sustainable manner, so that the progress of one dimension does not result in the deterioration of another. It is always a risky strategy to obtain more short-term on-pitch performance by worsening the club’s financial situation. It is also controversial to improve the club’s funds by exploiting the loyalty of fans, pricing out the local community or bending historical values. At the moment the club starts prioritizing one or two dimensions over the others, it will inevitably create friction with different target groups and may deeply hinder the club’s development.
True evolution for a football club comes from meeting the needs of all stakeholders in the four dimensions at the same time. However, this is a far from simple task, because, as you can see now, a club is far from a simple organization.
In short, this is what a football club does: different things with completely different objectives for very different people. And if you don’t manage the balance between each dimension correctly, things can get very, very tricky.
The game of football may be simple. But running a football club couldn’t be more complicated.
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Oliver Seitz is the Academic Director of the Master in Football Business in partnership with FC Barcelona and Football Business Development at the Johan Cruyff Institute, where he leads the projects in consultancy for clubs and other organizations. Before joining the Institute, Dr Seitz worked as a consultant and as a lecturer in Football Business at the UCFB in London in partnership with the FA. Prior to moving to London, he lived in Brazil, working as the Head of Marketing of Jacquet Brossard, a French multinational consumer goods company, and previously as Head of Marketing of Coritiba Football Club, where, in 2012, he was awarded the Best Overseas Marketing Campaign by the FC Business Awards in London. Dr Seitz holds a PhD in Football Business from the University of Liverpool.