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 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 £500 million in 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,  something 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 pay rates and taxes. Yes, they do employ hundreds of people. Yes, even 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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Salut! Sunderland is written, illustrated and edited by - and principally for - supporters of Sunderland AFC. The site aims to be sufficiently literate and entertaining to appeal to people who do not follow SAFC but enjoy good football writing.

3 Responses to “Man United, Man City, Liverpool and Everton: European Big Business or local small fry?” Subscribe

  1. Neil November 15, 2014 at 9:04 am #

    Interesting piece. Of course you can’t compare the apple of cultural impact with the pears of economic impact. Culture quite rightly has a large impact as it informs us and tells the world who we are and what we value. Think of music, Glastonbury was recently ranked the 5th ‘coolest’ brand in the UK and yet it’s core company is tiny. The 150000 festival goers get a lot out of it. The ticket price is half that of a Safc season ticket…..for a single weekend….the food/drink is even more expensive than at football grounds. The organisers have little input into the local community year round…..unlike Safc. …and yet Glastonbury sells out in minutes. Not many football clubs sell out.

    For me musicians and artists are hugely important and yet the average salary for a creative is just under £10k. The UK is one of only 3 countries who are a net exporter of music. The creative industries generate billions for the UK economy….where does it go? Clearly not to the bulk of the artists. Football rewards it’s ‘creatives’ much better and yet it is the owners who really clean up…..or take a bath if it’s Leeds. When the Glazers sell ManU they’ll make a billion dollars on the deal.

    Finally think of applying the argument of economics to charities. All the huffing and puffing of Children in Need and yet the amount raised is trifling. Say £40 million. The next Government will almost certainly retain Trident at a cost of £25 Billion. Some argue that charity is immoral. Certainly we are a fabulously wealthy country and it’s time Osborne et al stopped peddling this austerity bullshit. It hurts those at the bottom disproportionately.

    The North is long overdue a substantial investment in infrastructure which will act as an economic multiplier. But when it comes to culture and creativity the South could learn a few lessons from us.

  2. John Mac November 15, 2014 at 9:40 am #

    You say “Culture quite rightly has a large impact as it informs us and tells the world who we are and what we value”

    Quite true, but culture comes in many forms and is not necessarily creative. Football is one aspect of culture and it could be argued it has been as destructive as creative. It has given the world one picture of Brits abroad. (Booze cruises are another but don’t get me started…)

    You also say “… think of applying the argument of economics to charities…” The SAFC website contains some material about the foundation of light. It claims it has has helped a lot of people (I’m not sure how much) on a tiny budget). There’s an argument that well run charities are force multipliers when it comes to change. I’m not sure that applies to the big ones, some of which strike me as self-serving bureaucracies.

  3. Neil November 15, 2014 at 3:11 pm #

    Agree that culture is not necessarily creative however it often is. Apropos football’s perceptions I would argue it has many more pros than cons. This site alone is an exemplar of cultural contributions largely inspired by football. It would be facile to say all culture is benign and/or positive. That’s culture for you.

    Even if Safc’s Foundation makes a small difference that’s more than many businesses. The cultural impact of football will continue to be disproportionate as is witnessed with Sheffield United’s travails.

    Not a fan of Churchill but when cuts were proposed for Arts and culture in WWII he refused. Not sure current bunch would be so principled.

    The role of charities is complex. For example I think the Air Ambulance should not be funded by charitable donations. Charities often let the Government off the hook…then again think of hospices who do work that is immeasurably good. Not everything that can be counted counts and not everything that counts can be counted

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