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Co-operatives in Football

September 3, 2010

Co-operatives in Football

FC Barcelona, one of the world’s most successful football clubs, is famously run on a co-operative basis – in short it is a private non-profit making sports association. The Club is owned and run by its 175,000 members who each pay an annual membership fee of approximately £150 bringing in around £25 million. Members have voting rights similar to that of a Co-operative Community Benefit Society in the UK and as a body they are able to dictate the future direction of their club. Fan ownership has led to FC Barcelona being placed at the very heart of the fiercely independent Catalonian region which has a population of over 7.5 million. Barcelona supplemented their income by a staggering €110 million in commercial revenue alone in 2008/09 which provides greater funding for youth development programmes and subsidised ticket prices.

The club is fully democratic, electing a President every six years. A delegate assembly is picked at random from the membership and is responsible for approving the accounts and authorising all financial decisions which will cause the club to incur debt. FC Barcelona is a fully fledged multi-sports club with the football side supporting the many other sports teams which fall under the same co-operative umbrella.

In theory long term security, youth development and fan welfare are put above short term success and financial gain by a co-operative model. This is best represented by the average cost of an adult season ticket at Barcelona costing just £75 and the club paying a charity, UNICEF, €1.5 million annually to sponsor their own shirts. By comparison, here in the English Premier League Manchester United receive £20 million a year in shirt sponsorship whilst Arsenal charge upwards of nearly £900 for a season ticket.

In Spain only Barcelona, Real Madrid, Athletic Bilbao and Osasuna have been successful in maintaining their co-operative status beyond the 1990s. By contrast the majority of Spanish clubs were forced to revert to private companies for the non-payment of taxes. In England there are several lower league clubs now operating on a co-operative model including – Stockport County, Exeter City and AFC Wimbledon. Whilst it can be effective on a small scale at clubs with low running costs and at internationally renowned clubs, such as Barcelona, it is harder to apply this model to the average club who routinely spend 90% or more of their turnover on player wages and are heavily reliant on their ticket sales as opposed to commercial revenue.

It is easy to imgaine how clubs like Manchester United with a worldwide fan base might attract a large membership beyond their catchment area. Significant income is raised from committed fans who do not regularly attend matches. In contrast, the typical Championship club (ie second tier) has between 6,000 and 12,000 season ticket holders and a brand with little national and no international appeal. It would not be surprising if supporters were reluctant to pay a membership fee on top of the cost of their pricey season ticket. The potential impact on a club’s revenue is confounded by the general expectation that an institution owned by the fans would reduce ticket prices. Under a co-operative model private cash injections are not an option. Instead clubs are reliant only on increasing their membership and commercial income to raise funds.

Over the years the Premier League has been characterised by otherwise small teams being bankrolled by a wealthy benefactor which is at odds with the organic growth the co-operative model promotes. Premier League football at clubs such as Blackburn Rovers, Wigan Athletic and Fulham (to name but three) would have been unlikely had they solely been reliant on their relatively small fan-bases for their income.

In order for the Barcelona model to work player wage expectations outside those at the very pinnacle of the sport must fall substantially. The structure and running of the English game is in desperate need of reform but until there is a revenue-linked cap on overall expenditure, a football club run on a co-operative basis, outside the elite few, would almost certainly find it impossibly tough as it sought to climb the football pyramid.