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He’s a Stakeholder Jim, but not as we know it!

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This article examimnes the importance of fans as stakeholders in a football club.

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By: Trevor Warrs (Community)

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Wednesday or United?
I’d just been pounced on from behind. It was my first week at grammar school and I knew no one there. So began my lifelong association with Sheffield Wednesday and I’d also made a new friend.
Little did this eleven year old boy know that he had become a stakeholder and joined the rollercoaster of being a football fan? (If you don’t know or understand what a Stakeholder is this is most entertaining explanation I have seen on the subject.)
It was easy back then (1960/61) Wednesday were a power in the land and finished second only to the great Tottenham team of that era. In the following three seasons they finished sixth in the old Division 1 and then eighth before their long decline to relegation to the old Division 2 in 1970.
In the last twelve seasons -------- back from the end of the 2013/14 Wednesday have spent eight seasons in the Championship (old Division 2) and four in League 1 (old Division 3). Over these twelve seasons they have averaged an attendance of 22,072 (Source: The Football League). Many clubs would envy this support at this level of football and yet Wednesday came very close to going into administration and the club was only saved from this fate by Milan Mandaric’s purchase of the club in November 2010.
This, of course, defies commercial logic. An ordinary business that kept failing to achieve its targets and was effectively not a going concern would have been long gone. If the local butcher kept selling you poor cuts of meat you’d shop elsewhere, with a declining number of customers he would eventually go out of business. Often in football the team keeps losing but fans still turn out to watch albeit in smaller numbers. So football is different.
In theory the fans are external stakeholders with high interest but no power over the club’s fate but the emotional attachment of fans and the wider local community has saved many a club from extinction. As an example non-League Ebbsfleet United was saved by fans that became subscribers and owned the business. The experiment, however, did not last and it is now owned by a Kuwaiti organisation. Both Exeter and Portsmouth are owned by fans’ Trusts as a response to financial difficulties, those of Portsmouth being well documented. The implication seems to be that there needs to be a critical mass of support if this arrangement is to survive over time.
Fans can have an impact in other ways such as the failed attempt to rename Newcastle’s St James Park the Sport Direct stadium. Mike Ashley may have got away with it with a new stadium (Arsenal’s Emirates for example). But not with a stadium whose name is etched into the local identity of the community.
The problem for the smaller football clubs is maintaining this emotional connection with the local fan base. Larger clubs with a worldwide additional following of “virtual” fans may rely less on the local connection because of the scale of merchandising although some of these fans may react to the sale of an iconic player such as the transfer of David Beckham to Real Madrid by changing affinity. In my opinion the lower down the team is in the League pecking order the more vital this connection is. With the advent of foreign owners, be they individuals or corporations, this may become more difficult. The most recent example is Vincent Tan, the Malaysian owner of Cardiff City, who caused outrage by changing the team’s traditional blue strip to red. The short term effect on gates and merchandising may not have been great while they were playing in the Premiership but following relegation to the Championship it will be interesting to see how things develop at the club.

Johnson, G and Scholes. K (1999) Exploring Corporate Strategy, 5th edition, Prentice Hall Europe
Globalization of Sports - The Case of Professional Football and its International Management Challenges, Harald Dolles & Sten Söderman
The globalization of football: a study in the glocalization of the ‘serious life’, Richard Giulianotti and Roland Robertson