26th March 2018
In Focus: Football finances – ‘A square peg in a round hole’
By Ian Tomlinson, programme leader for BA (Hons) Football Business & Finance at UCFB Etihad Campus
Earlier this year I had the privilege of being invited to the EFL Finance Directors meeting, hosted by Wolverhampton Wanderers at their Molineux stadium. Following on from a presentation delivered by the EFL at UCFB Etihad Campus to BA (Hons) Football Business & Finance students last year, I was given the opportunity to not only attend the event, but to also present to attendees.
Armed with a short presentation and UCFB’s inaugural Future Sport magazine, I set off wondering what I could find out at such a meeting and also how I could use some of the information to develop the BA (Hons) Football Business and Finance programme in the future to ensure that I was enabling UCFB graduates to be in the best situation possible when entering the world of football finance.
The presentations were varied and ranged from HMRC football compliance through to Corporate Criminal Acts and General Data Protection Reporting (GDPR) from Ernst and Young. These started to confirm my understanding with regards to the integration but more importantly to differentiations between the world of football and the corporate world.
The aim of my presentation was to give both an insight into the provision delivered by the undergraduate programme at UCFB, and also allow me to explain my desire to develop its delivery through a triangular framework between students, academia and the reality of employability and the shortening of the distance between the three, allowing the football clubs in attendance to advise me of what they desire in terms of a graduate, and this was recognised by the clubs that had employed them.
It was clear that my presentation had sparked interest with the number of questions it generated and some real desire from clubs to be more engaging. These included but were not limited to Lincoln City director Kevin Cooke and Millwall’s finance and operations director Steve Exley, who during his time with Manchester City was someone with whom I had previously had conversations about UCFB. They have both since been in touch looking at ways they can help.
Two things became apparent through the day. One was that EFL clubs are on a totally different playing field with regards to financial pressure and concerns than Premier League clubs. The second was that football finances face a completely different set of pressures and concerns than that of any other business within the corporate world. So much so that football finances and the accounting framework started to appear to be like trying to fit a square peg into a round hole. With the concerns over the apportionment of agency fees and the concerns over minimum wage impacts when it comes to travel and training, both are different to traditional corporate businesses.
This follows the change of auditing for the football world with an approach to going concern, where it states that as long as the levels of investment continue then it would continue. This is in stark comparison to the standard approach that a company has to show the ability to sustain itself into the future. Investors in football are not looking for the same information as traditional investors, however accounts still focus on the profit figure being generated as a sign of stability and strength into the future.
There have been attempts to address the focus away from just the bottom line (profit figure), a figure which is clearly only showing one of the many aspects of what is actually occurring at a given football club. The triple bottom line (3BL) introduced by Eklington in 1994 moved the emphasis to a more balanced approach to the reading of financial information, examining not only the financial bottom line but also the social and environmental impacts, with the focus moving to a more balanced approach to business. Football may need to develop this framework in order to both protect and attract the stakeholders within football clubs.