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Business lessons from history: the football league

What the football industry can teach us about business. By Derek Harbinson
Banding together does make money, but mostly for the players
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The quickest way to become a millionaire is to start as a billionaire and buy a football club

Back in 1888, football had a problem. With players having become professional in 1885, wage bills were outstripping income (sound familiar?) because there weren't enough games to bring in the crowds.

Then William McGregor, a director at Aston Villa, had an idea that ten or 12 teams should join forces and play regular fixtures. And so began the Football League and 125 years of games of two halves and managers being as sick as parrots.

But what has business learned from football in all these years? Well, it's not that banding together can create a business that makes more sense. People had been doing that for years. No, what the birth of the Football League teaches us is that there will always be people in business who confuse things they like, or that give them status, with things that make money.

As the old joke goes, the quickest way to become a millionaire is to start as a billionaire and buy a football club. Which is not to say it can't be fun. Thousands of schoolboys learn the skills of negotiation through trading football cards as youngsters. And some of them become so rich they end up buying clubs and trading the actual players later in life. But whether it's stickers or players, there's often not much profit to be made at the end of it. Club owners can't even do what the sticker collectors can, and save a complete pristine collection for 25 years and then take it to Antiques Roadshow (although it would be great to see Roman Abramovich turn up in 2038 with the entire 2012/13 Chelsea squad, asking for a valuation...).

In the end, banding together did make money, but mostly for the people who actually put on the entertainment — the players. Proof, if any were needed, that no man is an island. But that lots of footballers can now afford to own one.

Derek Harbinson

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