Soccer Magazine

Man United, Man City, Liverpool and Everton: European Big Business Or Local Small Fry?

By Colin Randall @salutsunderland
John McCormick:

John McCormick:
a well-travelled man

I suppose the referendum on Scottish independence was the starting point for this post, that and my trip up for the Arsenal game. The Scottish referendum was followed by calls for more independence for the north. Fundamental to this is improvement to the transport infrastructure so as to enable the emergence of a “super-city” comprising Manchester and Leeds and, depending on what you read, Liverpool, Hull, Newcastle and Sheffield.

And, let’s face it, there is a need for improved transport. The first section of the M1 opened in 1959. Fifty five years later, in which time we’ve built a tunnel to France (and I have both passed the 11+ and collected a pension), the M1 still hasn’t connected Newcastle with Leeds. Cross-Pennine it’s a little better; there is a motorway. However, the M62 includes 20 miles of roadworks around Manchester, scheduled for completion in 2017, and the 125 miles between Liverpool and Hull is likely to take three hours

Or we could consider railways. Liverpool to Newcastle is about 170 miles. The so-called Transpennine express covers this in three hours fifteen minutes – thankfully a direct train is running this season – and a return costs over £55, even with a railcard. Coming home on Sunday after Arsenal it went through Hebden Bridge and Rochdale and there was standing room only for the full hour it took to cover the 38 miles between Leeds and Manchester. In contrast, I can travel to London, two hundred miles away, in two hours thirty five minutes and if I time my journey  I can get a return for well under forty quid.

So as it stands Manchester, Leeds, Liverpool, Hull and Newcastle are likely to remain apart, looking for something else to help their regeneration.

Might football be an answer? After all, these cities contain a half dozen Premiership clubs and there’s no doubt involvement in the premiership is a money spinner. Promotion from the Championship is reckoned to have benefited the Swansea region by at least £50 million.  Furthermore,  four  of these clubs have also qualified for European football, something which brings even more benefits.   Liverpool University found each Champions League home match resulted in an additional £2.5 million being spent by fans on flights, hotels, food and drink, taxis and so on. That’s without  the revenue earned by the club(s) in question and the effect on the profile of the region.  (Profile isn’t always directly related to games. It’s reckoned concerts at the Stadium of Light have attracted 130,000 visitors from outside the region and generated £42 million for the local economy).

£50 million might sound a lot; even £15 million from Champions League games is nothing to sniff at, and £42 million from concerts is something we can be proud of. Yet, in the context of city and regional budgets, such sums are trivial. In fact, the whole revenues of even the biggest football clubs in the world, and we in this “super city” have five or six of them, pale into significance in comparison with the businesses around them.  Hype about football and its TV millions has inflated clubs’ sense of worth and blinded fans to the truth.

Take, for example, Manchester. It’s home to two of the World’s richest clubs; one is consistently in the top four of Deloitte’s Money League and the other is currently number 6. The former, Man Utd, generated revenues of almost £400 million in 2012-13 and as of June 30, 2013, the company employed 793 full-time employees. Tidy numbers, you probably think. But Manchester Airport Group’s revenue was more or less the same for the same period, and it provides 19,000 jobs in and around Manchester.

It’s similar in Liverpool. Liverpool FC, holding 12th place in Deloitte’s League, have 557 employees. After years of indecision they recently announced plans to redevelop  not just their stadium but also the area around Anfield, at a cost of £260 million. That’s a lot, but Jaguar Land Rover have invested in £500 million their Halewood plant in the past few years (with 250 new jobs coming from the latest round of investment) while £300 million is being spent to double the size of Liverpool’s container port,  which will create up to 5,000 jobs.  Doubling the port is only one part of owner Peel Group’s plans for a “Mersey Gateway” and the new container facility will be open within a year. When will we see a new Anfield?

Perhaps I’m being too North-West focused, so let’s look at SAFC. I couldn’t find how many people the club employs but we move in and out of Deloitte’s top thirty with a turnover of around  £80 million. That’s about 2/3 of the turnover of Sunderland University, which employs 2,000 staff and has many more international links than the football club. Sunderland University, by the way, is dwarfed by Nissan UK, which directly or indirectly supports 18,000 jobs in the North East alone.

£33. How much  goes into the local economy?

£33. How much goes into the local economy?

My point is that football, even if all of the revenue of even the biggest clubs stays in the locality, doesn’t make much difference to the big picture. Yes, clubs turn over millions of pounds. Yes, they do employ hundreds of people. Yes, more jobs depend on games taking place, and on big crowds. All of these are important to the local community, as is the positive profile a football club can generate, so it’s very much a yes to the proposition that high performing clubs are good for a city and its region. Overall, however, especially in the context of regional regeneration, the economics are relatively small.

Football clubs are not as big as we’re led to think.


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