If a town's football club is in danger of going bust, should public money bail them out?
The images click across the mind's eye like slides on a carousel projector. Bradford's players building an impromptu egg-and-bacon coloured Jenga tower during their Capital One Cup semi-final. Luton's fans pogoing with punkish abandon after becoming the first non-league club to topple a top-flight side in the FA Cup since 1989. Millwall encouraging supporters to join Zampa the Lion and other staff on the 25,000-strong demonstration against the closure of Lewisham hospital's A&E department. No one likes us, we don't care? Not after this.
Bradford. Luton. Millwall. All have taken the accountancy equivalent of smelling salts over the past decade, yet all have survived and brought pride to their communities. Few would dispute that. But that begs a question: can we measure, in a way that goes beyond the mystical, how valuable a football club really is to a town? It is something worth posing given that so many lower league clubs exist on the border between being viable and non-viable businesses. According to Professor John Beech, of Coventry University who specialises in the business of sport, since 1991 there have been 70 "insolvency events" – a catch-all term for when a club face administration or liquidation – and 50 of these have come in League One or League Two. Only last week Portsmouth were warned by the Football League that they would be slung out if they were in administration in six months' time.
Which begs another question. If a league club were in significant danger of going bust, should public money bail them out? The rationale being that football's benefits to its local community, like art galleries and playing fields, go beyond what is reflected in ticket stubs? Finding answers is not as straightforward as you might expect. The research often has all the clarity of mud. Clubs stress their effect on the local economy through their revenue and employing staff but, as Dr David Forrest, professor of economics at Salford University points out: "A great deal of a club's expenditure goes on players who do not live or spend money in the area and the evidence they increase GDP or boost jobs is sketchy too."
But that does not mean clubs do not have an important role, as new research from Forrest and his colleague Andy Barlow shows. They found out how clubs are really valued by their communities by asking 1,200 residents in Bury and in Luton a simple question: if your club were under threat how much extra would you be willing to pay in council tax each month to help them survive? £2? £5? £10? £20? Nothing?
This research – using the contingent valuation method – which has assessed everything such as the willingness of residents in Pittsburgh to pay to stop their NHL team leaving – unearthed some interesting findings.
Of those who responded (just over 12% in both towns) the average people were willing to pay in extra council tax a month to save their club was £1.79 in Bury and £1.68 in Luton. All non-respondents were assumed to want to give zilch, which brought the average down to 22p a month in Bury. That does not sound like much. But 22p multiplied by a population of 74,335 is £16,033 a month or £192,396 a year. Luton's figure was similar.
"The research shows the additional community benefits produced by a club which is not captured by its revenue from ticket sales," Forrest says. "And it is statistically significant."
What is more, Barlow and Forrest also found that 39% of residents in Bury and 47% in Luton felt the quality of life in their town would reduce if professional football ceased. "This tells you the community has a stake in the club too," Forrest adds. "It doesn't just belong to the owners or the fans. It belongs to the town."
Still, it is a Beamonesque leap to suggest councils should step in if their local team are fighting for survival. After all, football clubs are like the patient who suffers a triple heart-attack yet refuses to stop smoking or drinking. Despite often coming close to flatlining, only three clubs that were members of the professional league structure in 1925 have ceased to exist.
It is especially hard to make the argument given the economy is heading for a triple-dip recession, and when their are more deserving cases, such as hospitals and education, around. Even so, it is worth pointing out that sometimes it is not the fans' fault that their club are in trouble. If an owner puts a club on a path to ruin why shouldn't a council step in, in exchange for ensuring the club is run by the community for the community?
You might also think it would be an improper use of council tax. But at the time of the research, Bury and Luton councils actually provided support for their local clubs – £50,000 to sponsor the team shirt in the case of Bury (£0.67 for each household) and an £87,000 discount in business rates for Luton (£1.12 for each household). A pound a month to possibly save your club? It's not a lot, is it.
Many institutions are subsidised because they are perceived to be in the public good. The English National Opera gets a £17m a year Arts Council grant, which accounts for about half its income, yet it still posted losses of almost £2.2m last year. Is football's case really that different?