Q: Set out the main stakeholders of football clubs.

Describe their stake in the organization

and assess the legitimacy of their interests.
The main stakeholders are as follows:
1.
2.
3.
4.
5.
6.
7.
8.

Fans
Shareholders
Employees/Members
Players and coaches
Sponsors
Government
Bank
Media

1. Fans:
If we have an approach of utilitarianism, fans are what make the football organization. The
emotional investment is their stake in the organization. They bring trust to the table. Their stake
is important because they are the reason the club is there for. They buy the merchandising
products and support their favorite players in the game. Entertainment of the fans should be the
main reason for the game in this context and making money. Moneymaking should be there but it
should not be the primary reason. Therefore their interest is legitimate.
2. Shareholders:
Shareholders are the ones who invest their money in the organization and expect return on
investment. But again their involvement has to be a little more considerate and not just see the
game as just another way of making money. They must have a utilitarian approach in this
context. If they actually believe in the organization and its vision and mission the returns will
come along. Just self-interest may not be a correct approach for this organization. Their stake is
investment and ownership. So their interests are legitimate because after all they own the
organization.
3. Employees/Members
Employees are the first customers of any organization. Their stake here in this organization is
their work and commitment towards organization. Again even they have to believe in the
organization and its vision and mission. Their interest is legitimate because a satisfied employee
is an asset of the organization. Human capital is equally important as the monitory capital.
4. Players and coaches:
Players and coaches are the products of this organization. Their stake is the most important
because these players and coaches define the organization. They are the ones who deliver the end
product, which is entertainment. For merchandising products to sell players and coaches have to
perform well. Therefore their interest is legitimate.

5. Sponsors:
The stake of sponsors is their investment and brand association they bring to the table. In return
they expect brand reach in terms of visibility of their products among the fans. Their interest is
legitimate because they are responsible for smooth running of the business because of investment
and fans do associate with these sponsors. They are directly responsible for revenue generation.
6. Government:
Government is also an important stakeholder. Wherever huge number of people are involved in
any activity government is representing their interest as a stake in the organization. Another form
of government stake is the income tax. Therefore their interests are legitimate.
7. Bank:
Banks provide loans to the clubs and expect interest. Their stake is a in terms of investment and
not in terms of emotional involvement like fans. Therefore their interest is not that legitimate as
compared to the other stakeholders.
8. Media:
Media is responsible to connect the fans to the game so their stake is the actual delivery of the
product. The broadcasting of the football game is another way of connecting fans to the game.
Their interest is legitimate because they are the reason to increase and expand fan base for the
organization.
Q: What are the key governance issues each of these stakeholders might have?
The key governance issues of each of the stakeholder groups might have been the following:
1) Fans The football fans expect a good quality from the match they buy a ticket for. They
want to appreciate the stadium atmosphere and their experience that is offered by the
clubs. The fans have an emotional connection with their teams, they identify themselves
with the clubs and dont really care much about the profits that their clubs make. The fans
want their clubs to play with full commitment and dedication.
The fans pay for the tickets to attend games, merchandise that they buy as well as visit to
clubs museum or stadiums tour. The corporatization and commercialization of football
over the past decade has led to stagnation of average attendances at English Premier
League matches and particularly the younger people have been priced out of the game.
High cost of tickets and increased players wages have alienated the fans.
Another issue is the changes in kick-off times due to TV stations programming
demands. Fans
feel that football is no longer the fans game, it is a business
focused at generating revenues for their owners.
2) Shareholders Shareholders, when invest their money, seek a return on investment. It
goes the same way for football but no completely. The shareholders of football clubs
invest in various clubs in order to attain benefits from the media exposition of the game
or other advantages such as meeting with players, access to games etc. But the business

angle of the sport also caused concerns and issues in a way that it struggled to enter the
world of professional business. The dwindling fan base threatened the basis of business
success. Since, supporters were shifting from the attendance in the stadium to spectators
at TV, the issue arose due to the fact that limited number of people would like to view the
match with empty seats in the stadium. It was evident from the fact that the English Clubs
made huge loss between 1996 and 2006.
3) Employees/Members The key governance issue for the members is to ensure on-field
success. The members of a club play a vital role in the running and functioning of a club.
They expect to get paid at the end of the month, to get recognition and work satisfaction
as well as training and healthy working conditions. There is also a sportive aspect of their
employer as they expect their team to win and make them feel as a part of the success.
They are responsible for running the day-to-day business of the clubs and if their
expectations are not met, it will lead to decrease in their productivity which will in turn
lead to lack in motivation and less efficient working on their part which will affect the
players as well as the merchandise sales.
4) Players and Coaches They have various stakes in the organization that is the football
club. Their stake is Team/Personal success which has linked with it the governance issue
of ensuring on-field success. Another stake is the financial dependence which has linked
to it the issue of managing the escalating costs. The third one is increasing the quality of
their life which has in turn link to the governance issue of maximizing the revenue. They
are also like the clubs employees and hence have certain similar expectations i.e. getting
paid and having good working conditions and training, sportive success being the most
important one. The players expect to play for the best club under best coaches. The same
rule applies to the coaches as they wish to coach the best clubs with best players in them.
This leads to rise in the prices and incomes of certain players as there are a few players
that stand above the rest and the need to have them in their clubs makes them pay more
and more for those players.
5) Sponsors The key governing issue for the sponsors is National exposure that links with
ensuring on-field success as well as their reputation which is linked with maximizing
revenues. The sponsors have an important commitment in the game of football as they
associate their names with the football clubs to seek benefits from their popularity while
expecting brand recognition which increases with the teams performance with which
they are associated. The success of a team attracts more fans to the stadium and
spectators on television which leads to obvious benefits for the sponsors of a successful
team. The image of the sponsors is also associated with the image of the football club
they are sponsoring. Hence they expect the clubs to maintain a respectful and clean
image. They invest in these clubs also to seek new business opportunities and expect
those clubs to play a role in letting them develop special commercial programs.
6) Government Issues like Bankruptcy and several corruption scandals pose a huge issue
and challenge in the developments toward commercialization of football industry and

high level capital investment. The expectations of government from the football clubs are
like from any other institution, such as getting involved in charity programs as well as
various community programs in order to develop their region economically as it works in
improving the image of football since those clubs represent the country at international
competitions. The government also encourages the clubs financially in order to develop
and foster education centers, community projects as well as employment programs.

7) Banks The banks are more concerned with the solvency of the clubs. They expect the
football clubs to make their payments timely of the loans and encourage the players
associated with that club to open their accounts in those banks. A huge amount of money
is managed by the football clubs which increases their attractiveness to the banks.
8) Media The major governance issue on the part of the media are the circulation while
minimizing negative press as well as to get re-elected. The media which we talk about is
also divided into two parts: the press and newspapers, magazines etc. which are
responsible for circulation and the media industry which invest money in showing the
football games. Their major expectation from this industry is to generate important
audiences when the games are being shown, that would lead to making financial profits.
The clubs are expected to make efforts to produce pleasant games to watch as well as at a
certain level of competitiveness with competitive teams so that the show becomes
attractive enough for the people to pay and watch those games (pay-per-view system).
The clubs are expected to develop and foster an easy-to-sell and positive image. The
number of papers that will sell out will be directly linked to the popularity of the club.
The information has to be original, not the clubs official information but the one that
would lead to increase in the sales.

Q: This case describes a number of approaches that offer potential solutions to the
governance issues raised. Set out these approaches and evaluate their likely
effectiveness in dealing with governance challenges in football clubs.

A Fit and proper persons test for the management and ownerships of clubs

-conducted in the hope that it prevents corrupt or untrustworthy businessmen from

buying them.
-It reflects the concerns around owners.

-Currently the test is retrospective only but it should be made prospective too,
so that anyone with the criminal hanging over them should not be allowed to take over a football
club until their name has been cleared.
-In general, a businessmen will fail the test if:1.

They have power or influence over another football league club.

2.

They are filing for bankruptcy.

3.

They become prohibited by law from being a director.

4.
They have been a director of two or more clubs of which, while they have been director,
has suffered an event of insolvency.

Supporter-led governance
-More representatives from the supporter on the board of football clubs

As they dont have any financial interest in the club .They should be appointed for
a limited period in order to prevent them from getting too close to the company. They should be
appointed independently and must be competent to judge the business of the football club.
For example, members of Barcelona can vote on the election of the clubs president and the
governing board, and have a right to participate in key decisions.
-Affordable ticket prices
As supporters feel alienated by player wages and by the high cost of the tickets for
games. For example, club German Bundesliga which is primarily owned by fans made an
operating profit in 2006/07 mainly through higher attendance of supporters at lower ticket prices.
-More facilities and access for disabled supporters
These supporters still face problems in both accessing the stadiums
themselves and then viewing and enjoying the game once inside. Audio described commentary
should be available to all blind and visually impaired supporters. Many disabled people are
denied an opportunity to purchase or join a waiting list for season ticket. Many clubs are not
taking action because of the fear of expense involved, with unrealistic and inflated estimates.

Nurturing the domestic talent

-It reflects a belief that football clubs should represent the local communities in which
they operate and therefore should support young players from the local community.
At international level, supporters are becoming increasingly disillusioned with the national
teams continuing lack of success in the final stages of competitive tournaments. One reason in
this case is that, increasingly, experienced players from abroad are being favored by the young
domestic talent. Reality is that workers migrate to places where they are paid better. If we are
going to pay for them at the cost of producing home-grown players, we will have a problem. We

have to examine ways of improving domestic talent and ensuring that players are given
opportunities to participate at the top level.

Q: Ultimately who should own the football clubs and what should their priorities be in
managing the enterprise?
According to the case, football has moved from a community sport to a multi-million pound
international industry. One of the factor responsible for this is the involvement and growth of
commercial television in the game. Due to this, most football clubs had attracted wealthy
individuals and were sold to them. They treated it more as an investment and made it a business
rather than a game. With these high level capital investments and development towards
commercialization, there were significant challenges arise in football industry.
Over the past decade the number of audiences in English Premier League Matches had been
stagnated and it was affected mostly due to young people in particular under 24 years of age has
been reduced to 7% in 2009 for 25% in 1980. Clubs depend upon their fans for their livelihood,
as either spectators, TV audiences, or consumers of merchandise. With the expensive tickets of
watching the match and frequent changes in traditional kick off times due to programming
demands from TV stations has fueled the feeling that football is no longer fans game rather a
business oriented to generate revenues for their owners. Because of this some of the clubs had
experienced huge loses.
There is a government-funded initiative which created the supporters trust. The aim of these trust
is to bring about responsibilities and promote high standards of governance and accountability. In
fact there are clubs such as Real Madrid and FC Barcelona which are member owned,
democratic, non-profit organizations. The primary rationale is to play football and the club
leadership is accountable to the people who watch and play. The best part is, members can vote
on the election of the clubs president and the governing board, and have a right to participate in
the key decisions. These saw a steady surge in the membership of these clubs.
As football is a community sport, and the clubs depend upon their fans for livelihood as
described above, the owners of the clubs should be members of that club and it should have
democratic orientation i.e. members should be able to choose president and have right to
participate in key decisions. Apart from this the owners can be government, trusted owners and
investors, they should take good care of growing the club and follow the solutions that
mentioned so that they wont face any problems.
The priorities in managing the enterprise should be
Leadership: The club should be headed by a responsible and effective board, which could have
the vision of long term development of the club, taking the views of members and fans into
consideration.

Accountability: The board should be able to present clear view of balanced and understandable
assessments of clubs position and prospects.
Supporter-led Governance: Suggestions here included, affordable prices to watch live matches,
more facilities and access for disabled supporters, more supporters and representatives on the
board of club.