Today we present the second in a multipart series of articles focused on some of the financial problems facing football leagues across the world- especially those in smaller countries. By the end of the series it will become clear that many of these financial problems are the result of a century and a half old organizational model that simply cannot cope with the realities of the modern football and the modern financial world. Having highlighted the ways in which this model has increasingly come up short when faced with the unique problems presented by the sporting and financial landscape of the twenty-first century, we will offer a number of possible solutions which will help to ensure the future stability of the game, both on and off the pitch. As always, we here at Avoiding the Drop look forward to your comments, questions, and criticisms.
Part One of the series can be found here.
UPDATE: Stirling Albion F.C. were able to pay the £48,000 in back taxes owed to HM Revenue and Customs by the Friday deadline, thereby avoiding the possibility of legal actions which could have led to the club being shut down.
UPDATE: Clachnacuddin F.C. (Inverness) of the Highland League have gone into administration after receiving a letter from the Highland Council informing them that their monthly payments to the Inverness Common Good Fund for the rental of Grant Street Park will be rising form £400/month to £3,800/month, a small increase of 850%.
In the first installment of this series we looked at the overall financial landscape of Scottish football and suggested that the financial problems facing the Scottish game were not only the result of poor economic decision-making (overspending on players, becoming overly dependent on money from television rights, etc.), but also of an outdated organizational model which has proven unable to cope with the financial, demographic, and indeed, sporting realities of football in the 21st century. In this, the second installment in the series, we shall take a more detailed look at these “realities” as well as what changes might be made to address them. It is, after all, one thing to identify problems, but it is quite another thing to put forward solutions to those problems.
SCOTTISH FOOTBALL: PROBLEMS AND SOLUTIONS
Problem 1. There is not enough revenue to support the game in Scotland as it currently exists.
I detailed the reasons for this in the first installment, but suffice it to say, in a country as small as Scotland- its population is roughly equal to that of metropolitan Madrid (which supports only two top flight teams, not twelve)- and with only Rangers and Celtic having any appeal outside of the country, the money just isn’t there to support the Scottish game in a way which will ensure a viable future. Among the reasons why this is so are that television rights cannot be sold for a high enough price (the population is too small and the teams are not marketable enough globally), there is a limited market for merchandising outside of Scotland (the exception being the market for Celtic merchandise in the Republic of Ireland and some parts of the United States), selling players to bigger leagues, while lucrative, ultimately damages the game at home, and with so many clubs competing for the discretionary income of so few people, gate receipts alone cannot support any team at any level of Scottish football- especially in the current economic climate.
Solution 1. Reduce the number of professional and semi-professional clubs in Scotland.
This would be achieved by the merging of clubs (the details will be provided in the third installment in this series)- especially smaller ones in close geographic proximity- to create more, larger clubs in the newly reorganized top three tiers (referred to as leagues A,B, & C in the remainder of this series) of Scottish football. While this will be unpopular with many supporters, there are numerous benefits to having fewer “league” teams in Scottish football. First, this could potentially create more clubs that could challenge the hegemony of the “Old Firm.” Second, more, stronger teams, would mean a stronger league, and increased strength could result in getting more Scottish teams into Europe by increasing the quality- top to bottom- of the SPL. These teams would also be more likely to do well in Europe as a result of not only being inherently better as clubs, but also because they would benefit from facing better domestic competition on a match-to-match basis. Third, these teams would have larger fan bases, which would improve their financial stability by increasing gate receipts (larger, newer stadiums would seem to be a necessity created by merging clubs) and increased marketing opportunities for things like kit deals, kit sponsorships, ad revenue, etc. . Finally, increased relegation and promotion as well as a true pyramid structure from the very top to the very bottom of Scottish football (something that is lacking at the moment) would also cause the best clubs to rise to the top of the pyramid by putting pressure to succeed on the top teams- lest they be relegated- and by providing incentive to those teams outside of “league football” to improve and move up the pyramid.
Problem 2. There are too many administrative bodies involved in Scottish football.
Football, like so many other things in Scotland, is incredibly territorial, if not downright provincial, in its outlook. Thus it should shock nobody that there exists a “too many chefs ruining the broth” situation in the Scottish game. This glut of administrative bodies puts a financial drain on the game, muddies jurisdictional waters when problems arise, and limits the bargaining power of all entities when negotiating sponsorship deals, television contracts, etc. As an example, in 2007 the accounting firm Pannell Kerr Foster found that the SFL was three times more expensive to administer than similar leagues in England. Specifically, that there are 68 teams in England’s Nationwide Conference, and it is run by four people- four. The SFL, which has 30 teams, “requires” 14 people to administer it. This is money that could be saved or put to any number of better uses- youth development, increased marketing, improvement of stadia, etc.
Solution 2. Eliminate all but three governing bodies.
Scottish football is a veritable “alphabet soup” of leagues and associations but we are only going to concern ourselves with the three major ones (the SFA, SPL, and SFL) and take it as a “given” that the lesser ones would be absorbed into the remaining administrative bodies once we have trimmed the dead weight. There is only one governing body whose existence should not be questioned, and that is the Scottish Football Association. The association is not without its own problems (there are enough of them that it is probably worthy of its own multipart series), but it must exist just as football associations exist in all other footballing countries. Next, while I would prefer that the Scottish Premier League did not have its own administrative body, this seems unavoidable at present, and thus it must continue to exist for the time being. One would hope, however, that as the financial health of the Scottish game improves (as a result of the changes I am proposing), the SPL and the SFL could be reintegrated. It was, after all, the desire for more money that created the SPL in the first place. The Scottish Football League would obviously remain as the governing and organizational administrator of “league football” in Scotland. However, under the new structural model outlined in the next installment, the SFL would also oversee the “Scottish Football Conferences.” Everything else would be put under the direct control of the S.F.A.- junior football, amateur football, etc.
Problem 3. There is no true “pyramid” system in Scotland.
Due to the territorial and provincial nature of football in Scotland, promotion and relegation is not the simple process it should be. At present there is relegation and promotion between the SPL and the SFL, and within the SFL- until you reach the bottom of the league system- at present there is no automatic relegation from the Third Division (and from the SFL overall). The relegation “process” from the Third Division and “league football” overall does not even begin unless the same team finishes last in the Third Division three times in a row. At that point, the club is suspended from “full membership” in the SFL and becomes a “non-voting associate member”- but they are not automatically relegated. The club must finish last for two more consecutive seasons, and then member clubs vote on the fate of the side in question. In short, it takes five consecutive last place finishes for a team to be put up for a relegation vote. Obviously, even at this juncture, the league could vote not to relegate the team. If, however, the team is relegated, the league then invites applications from non-league teams wishing to replace the relegated side and join the SFL. These teams need not be from a specific league or even be the best team in those leagues. More important to the SFL are the size of the club, the quality of its facilities, its financial health, etc. All of these are important in their own ways, but it does little to ensure that the “promoted” club will improve the overall quality of the SFL in footballing terms. The most recent club to join the league was Annan Athletic in 2008- following a 4th place finish in the East of Scotland League the previous season. Annan finished 7th (of 10) clubs in their first season in the league and are currently in 6th place.
In addition to creating stagnation at the bottom of the SFL because relegation from the league is only a remote possibility, the lack of a true pyramid system also frustrates teams outside of the league structure because no matter how successful they are, there is no guarantee of automatic promotion into the SFL. Additionally, it allows poor teams at the bottom of Division Three to survive in the league as long as they do not enter administration (and even then one assumes that they could be docked points rather than dropped out of league football) or avoid finishing last often enough to have their future reviewed by the league. Many of these teams- in the long term- might benefit from a few years out of the league to improve the quality of the club on the pitch and to get their financial houses in better order, allowing them to potentially be more competitive upon a return to the league.
Solution 3. Create a true pyramid system in Scotland.
This is how business is conducted in every sane footballing country and it works in all of them- some of which have over a dozen levels of competition. I’ll detail how many teams should be relegated/promoted from each level below, but basically, a pyramid should be created that reaches all the way down to amateur football and that ensures automatic relegation and promotion with one exception- that a promoted club must meet stringent safety standards for its grounds and facilities, and be able to pass a financial audit by an independent agency.
These are the three biggest problems in the Scottish game at present (I’ll save the identifying and nurturing of home-grown talent for another time) and my proposed solutions to them. Here, then, are the details I’ve alluded to in just about every one of the above paragraphs. Please note that as all of these solutions are “of a piece,” there will be some overlapping between the various topics.
REORGANIZATION, REGIONALIZATION, AND RELEGATION
League and Conference Football
REORGANIZATION
At present there are 42 professional* and semi-professional teams spread across the four divisions (the SPL and the three SFL divisions) of league football in Scotland. My reorganization would reduce this to three divisions (here named “A,” “B,” and “C,” for the sake of simplicity) with 36 total teams. Each league having 12 teams which play each other “home and away” for a total of 24 matches, plus and additional eight matches against other teams in the league on a rotating basis, for a total of 32 matches a year. This reduction in the number of teams would not be achieved through the outright elimination of clubs or the demotion of additional clubs from the league levels, but rather, through the consolidation/merger of smaller clubs into larger, more competitive sides. More on this below.
*Queen’s Park F.C. are an exception- they are the only fully amateur side in league football.
REGIONALIZATION
Below league football “proper,” all leagues would be regionalized. This would be practical in terms of the day-to-day operations of the leagues (lower travel expenses, for example), as well as making automatic relegation and promotion an easily organizable task. Currently the three “non-league” leagues in Scotland are the Highland League, the East of Scotland League, and the South of Scotland League. After reorganization, these three “senior regional leagues” would become the “Northern Conference” (essentially a slightly smaller version of the Highland League), the Central Conference (teams in Scotland’s “Central Belt”), and the Southern Conference (teams below the Central Belt and north of the English Border). Below the new senior regional conferences would be three new “junior regional conferences” (replacing the current Scottish Junior Football leagues) and Scottish amateur football, which would also be organized regionally. With all three of these non-league “tiers” organized in the same way (Northern, Central, Southern), promotion and relegation can reach the very bottom of the organized game in Scotland. The bottom two tiers would, obviously, contain “mini-tiers” within the conferences as needed.
Note: While it would appear, based on this reorganization, that the new Central Conference(s) would be by far the strongest, this is not likely to be the case. While this is where the bulk of Scotland’s population resides (70% by some estimates), it is also the area where the most professional and semi-professional teams are based, providing ample footballing opportunities to aspiring players. Traditionally, it is actually the Highland League has been the most successful of the regional leagues. With the lack of professional and semi-professional teams in the North, talent has naturally gravitated to the Highland League and, in fact, it has provided league football with more current clubs (Ross County, Inverness CT, Peterhead, and Elgin City) than the other two regional leagues combined- only Annan Athletic and Gretna have come out of these leagues in the recent past, and only Annan remains in the league at present.
RELEGATION
Relegation and promotion within the new pyramid would take place as follows:
-League A would see its worst team automatically relegated each year, and its second worst team potentially relegated through a “home and home” playoff with the second place team in League B.
-League B would see its champion automatically promoted to League A and its second place team enter into a playoff with the second lowest team in the League A table. The worst team in League B would be automatically relegated and the second worst team would enter a relegation playoff with the second place team in League C.
-League C would see its champion automatically promoted and its second place team in a playoff with the second worst team in League B. The three worst teams from League C would be pitted against the champions from the Northern, Central, and Southern Senior Conferences in “home and home” playoffs. League teams relegated to the regional leagues could be place geographically, to make up the numbers in smaller leagues, etc.- whatever would make the most sense organizationally.
-Relegation and promotion between the Senior Leagues, Junior Leagues, and Amateur leagues would be on a “two up, two down” basis within each geographical region (Northern, Central, and Southern) with one place being automatic and the other involving a playoff.
A true pyramid structure, regionalization, and proper promotion and relegation also means that any time a team is created, disbanded, or merged, it is easily replaced or accommodated. If, for example, a League C side goes into administration, it can be dropped to the appropriate regional league and then replaced with the best “non-champion” from that regional league. No more of the overly secretive “audition” process that now takes place in Scottish football. Additionally, with a real pyramid system in place, the leagues will not be thrown into chaos if a team cannot be promoted for any reason- financial, safety, ground size, etc.- as the next “eligible” team could be promoted, or in exceptional circumstances, no team would be promoted.
The number of clubs in any league (other than League A) could also be adjusted to included reserve sides for League A (or any other league, for that matter), much in the way that some continental teams have reserve sides which play in the lower divisions. I have also added a new (as far as I know) wrinkle to the idea of a reserve team by allowing for the possibility that two (or more) teams could field a “combined reserves” team in a lower league much as some “major league” teams in North American sports field “minor league” teams with a shared player pool. Not only would this help to strengthen the sides involved, it would also cut down on what seems to be an epidemic of loan spells in Scotland. It would also help to provide spaces for players to offset those spaces that might be lost due to the mergers I have proposed below. The only obvious rule here being that a reserve side can never be promoted into the league where its parent club plays. Finally, it would go a long way towards adding stability to the reserve team set-up in Scotland. At present some clubs have a reserve team every year, others only sporadically, other clubs use (abuse?) the loan system in place of having a reserve team, etc.
One final note on reorganization: Berwick Rangers F.C., which is actually based in the English town of Berwick-Upon-Tweed, would return to play in English regional football.
END PART TWO
In the next installment on Wednesday, November 11th:
- Mergers
- The new leagues
- The new conferences
Great stuff.