Should Councils Invest In Their Football Clubs?

Rickler wrote:

How many people or institutions have invested in Argyle and ever made a profit?
In fact, how many people or institutions have invested in a football club and made a profit?

Mike Ashley.

In fact most premier football clubs turned over a profit last year [You must be registered and logged in to see this link.]

Some seem to be missing a point here. If the council invests money in the stadium and that stadium is of a sufficient size to help the football club grow,then that is a sound investment. The council own the stadium and receive rent from the football club. The better the club does and the higher up the football ladder the club rises, the higher the rent the council receives. The council in the medium to long term will get it's money back with much better interest than it would get by putting it's money in a bank. The council is investing in the stadium not the football club itself. Add on the benefits the city receives from more visiting fans and greater publicity and the reasoning makes sound economic sense.

It's no different to a private landlord renting out his house. If the house is maintained badly, with poor fixtures and fittings; he will find it difficult to charge a high rent compared to a house that is of a high quality.

A stadium for 17,000 will attract a much smaller rent than a stadium for 22,000.

The challenge for Plymouth is finding the right balance between how much to invest and how much the club will be able to pay in rent, over how long a time scale. Also allowing for the ambitions of the football club and the ambition the council has for the cities football league club. The City of Plymouth has three good advertisements for itself. It's location. The Royal Navy and Plymouth Argyle.

The Council deserve credit for bailing the club out and loaning the club 800k to reduce the overall debt. But again, it is pure fantasy to expect PCC to throw millions at PAFC in the hope of investment bearing fruit eventually - especially with the recent Brent/PCC relationship state.

Sir Francis Drake wrote:

Angry wrote:

Sir Francis Drake wrote:

Why not?

If a council can invest £100 and get £1000 back what is the problem?

Isn't it a case that they'd be negligent not to invest in such circumstances?

because as a council tax payer i want would my contribution in taxes to go on improving the city/county rather than have it used to pay a sports clubs bills.

But if your £100 pays for, say, 10 lollipop men and investing the same £100 could pay for 30 lollipop men why not do that? You wouldn't want to pay the £300 needed instead, would you?

Why would anybody want that?

I broadly agree with you, but I guess the issue is that there is no guarantee the council would get any of its money back, let alone make a 300% return.  I wouldn't want to be the council leader that had to explain why x million pounds disappeared down the swanee thanks to Bogsville Borough FC.

Look at it as money spent advertising the city. A football league club attracts more publicity than almost any other enterprise and as stated elsewhere could be used a a venue for concerts etc.

Richard Blight wrote:

Some seem to be missing a point here. If the council invests money in the stadium and that stadium is of a sufficient size to help the football club grow,then that is a sound investment. The council own the stadium and receive rent from the football club. The better the club does and the higher up the football ladder the club rises, the higher the rent the council receives.  The council in the medium to long term will get it's money back with much better interest than it would get by putting it's money in a bank. The council is investing in the stadium not the football club itself. Add on the benefits the city receives from more visiting fans and greater publicity and the reasoning makes sound economic sense.

It's no different to a private landlord renting out his house. If the house is maintained badly, with poor fixtures and fittings; he will find it difficult to charge a high rent compared to a house that is of a high quality.  

A stadium for 17,000 will attract a much smaller rent than a stadium for 22,000.

The challenge for Plymouth is finding the right balance between how much to invest and how much the club will be able to pay in rent, over how long a time scale. Also allowing for the ambitions of the football club and the ambition the council has for the cities football league club. The City of Plymouth has three good advertisements for itself.  It's location. The Royal Navy and Plymouth Argyle.

The council own the ground for now. Brent has a clause to buy it back.

Czarcasm wrote:

The Council deserve credit for bailing the club out and loaning the club 800k to reduce the overall debt. But again, it is pure fantasy to expect PCC to throw millions at PAFC in the hope of investment bearing fruit eventually - especially with the recent Brent/PCC relationship state.

Agree.

For the council to do such a thing, it would be better off having an owner who had equally lofty ambitions for the club, an owner who wanted to invest in the club, not harvest from the club!!!!

speecy has shown his hand, lied many times over about what he would do, retracted previous statements and shown us that his little piggy bank is rather empty like his promises and just wants to use other peoples money.
Not a marriage made in heaven for PCC!

speccys ownership was a stitch up from the beginning with PCC, nobody else had a chance to be owner, not when brents bitches were orchestrating all and sundry against anyone remotely interested. i wonder if PCC now regrets this!!!!

Steveinspain's point is the crucial one. No PCC development or investment can really take place while that clause remains, that'd have to be removed regardless of who's in charge or certainly the terms of it at the very least would have to be altered. 

Lets say that clause was removed however and that the PCC was ready to build a 7,000 seater Grandstand - taking us to just about a 21,000 capacity (?) - then its fairly likely that prospective football club owners would certainly show an interest in Argyle. Brent's already stated that his sell on plan was always going to be easier with a new stand, than the current dilapidated Mayflower. Though his vision was uninspiring and any potential owner coming in would have been just as uninspiring. If the PCC showed ambition then its more likely that a more ambitious party would consider forming a relationship with them to finance the footballing side of things. 

I highly doubt that if the respective councils of Hull and Swansea hadn't invest in their club's facilities that those clubs would have received anywhere near the level of investment that they have. Their success is as much down to the council's vision, which has delivered a very beneficial pay out, as it is to their owner's investment. The PCC has been brilliant so far, but truly investing in Argyle and helping the club source a proper football club owner wouldn't be a bad move for the city and its economy - in fact, evidence suggests it could be a fuckin excellent move.

Agreed that clause needs to be removed. A recent survey by the Trust of it's members ( or was it the end of season one?) showed a very big majority ( was it as high as 80%) of fans wanted the ground to remain in the ownership of the council. The Trust needs to keep on asking the question about that. The Trust also needs to get on with application to register the ground as an ACV ( Asset of Community Value).

Czarcasm wrote:

I think the Council investing in Argyle, who then 'naturally' make it the The Premier League ( where the investment bears fruit) is a bit of a fairytale.

For teams like Argyle, the more likely (albeit still hugely unlikely) scenario for us ever getting there is to replicate the Bournemouth story - Land a top manager in conjunction with acquiring a wealthy backer.

thats the best way not handouts from council payers.

I can see why it's happened, but I think this very useful debate is bogged down in people thinking about the Argyle (and PCC?) we've got now rather than working back from the Argyle we want.

It's barmy to think that a council can only invest in the things its council tax payers want (for one thing council tax only makes up about 20% of what a council spends).

It's also disingenuous to put every penny together. Support for Argyle would fall into capital spend on developing a best-in-west stadium. That would mean borrowing (at historically low interest rates), not robbing Peter the lollipop man to pay Paul the Argyle fan.

Then there's the principle of "should the council support a broadly private sector endeavour"? Well, with the caveats that there was a return on the investment in the short, medium or long term, absolutely yes.

PCC already subsidises the Theatre Royal to the tune of £1m a year (going on 2011/12 figures from memory). That investment brings people into the city centre and makes sure they have something to see when they're there. It puts bums on seats in bars and restaurants and bodies in hotel beds.

A capital investment in Home Park doesn't do that immediately, but in terms of what Swansea council did, it put a cultural asset into the centre of town. It gave a venue for events, conferences, opportunities to bring people in to the city for more than just a game of football. Having it shared with a top flight rugby side (although Osprey's attendances are paltry) brings people into the stadium weekly rather than fortnightly.

The bit where luck (and good planning) comes in is that we bring a couple of hundred people in to Plymouth once a fortnight. Swansea bring in anything from 3-6 thousand at a push. 19x4000 is an extra 76,000 people coming into the city every 6 months with more for rugby, concerts, events etc. And the Liberty also pays back by providing a space for charities to hold events at good rates.

As a cultural asset, I can't see a downside. The problem with HHP wasn't the outcome sought by the plan, it was that the plan itself was crap and amateurishly executed.

Agreed Gareth, and like you say the interest rates on borrowings are at a historical low. Despite the austerity mantra trotted out by this Tory government, and the other main party's pandering to rather than questioning of it, now really does make economic sense for the council to borrow and build. The Guardian link I post yesterday on the previous page explains the situation excellently.

SwimWithTheTide wrote:

Agreed Gareth, and like you say the interest rates on borrowings are at a historical low. Despite the austerity mantra trotted out by this Tory government, and the other main party's pandering to rather than questioning of it, now really does make economic sense for the council to borrow and build. The Guardian link I post yesterday on the previous page explains the situation excellently.

Guardian is worse than the mail for blinded bias

Angry wrote:

SwimWithTheTide wrote:

Agreed Gareth, and like you say the interest rates on borrowings are at a historical low. Despite the austerity mantra trotted out by this Tory government, and the other main party's pandering to rather than questioning of it, now really does make economic sense for the council to borrow and build. The Guardian link I post yesterday on the previous page explains the situation excellently.

Guardian is worse than the mail for blinded bias

Its written by economist Paul Krugman and published by The Guardian as part of their long read series. It is four chapters, but they're not that long really. Its certainly a more well rounded and well informed piece than most articles released by news publications from all over the political spectrum. Give it a read, and if you still think its blinded bias then very well, come back and debate that. Otherwise, you're criticising narrow mindedness by being narrow minded, Angry... I think even you will be able to see you're being a bit of an ostrich there.

Tringreen wrote:

This is what happened at clubs of comparable support potential such as Hull & Swansea.

Blackpool and now Bournemouth have climbed up to the peak in recent years with temporary stands and capacities less than Gnome Park, why should the local tax payers of Muff divvy up to help the likes of Brent pad their pension pots?

Gareth Nicholson wrote:

The bit where luck (and good planning) comes in is that we bring a couple of hundred people in to Plymouth once a fortnight. Swansea bring in anything from 3-6 thousand at a push. 19x4000 is an extra 76,000 people coming into the city every 6 months with more for rugby, concerts, events etc. And the Liberty also pays back by providing a space for charities to hold events at good rates.

You Gargs have never been much for numbers have you?

Maximum away allocation at the Liberty is just over two thousand for league games, most visitors do not sell out.

All this return on investment blocks is put about by the likes of Krugman and Picketty, nobel prizes but feck all experience of working in the real world.

SwimWithTheTide wrote:

Angry wrote:

SwimWithTheTide wrote:

Agreed Gareth, and like you say the interest rates on borrowings are at a historical low. Despite the austerity mantra trotted out by this Tory government, and the other main party's pandering to rather than questioning of it, now really does make economic sense for the council to borrow and build. The Guardian link I post yesterday on the previous page explains the situation excellently.

Guardian is worse than the mail for blinded bias

Its written by economist Paul Krugman and published by The Guardian as part of their long read series. It is four chapters, but they're not that long really. Its certainly a more well rounded and well informed piece than most articles released by news publications from all over the political spectrum. Give it a read, and if you still think its blinded bias then very well, come back and debate that. Otherwise, you're criticising narrow mindedness by being narrow minded, Angry... I think even you will be able to see you're being a bit of an ostrich there.

So its not an extremely bias left wing paper then?

If PCC's Council Chamber was occupied pretty much by real Plymouth Argyle fans, I'm sure investing in Argyle would be a very real possibility. But sadly, it pretty much isn't.

Angry wrote:

SwimWithTheTide wrote:

Angry wrote:

SwimWithTheTide wrote:

Agreed Gareth, and like you say the interest rates on borrowings are at a historical low. Despite the austerity mantra trotted out by this Tory government, and the other main party's pandering to rather than questioning of it, now really does make economic sense for the council to borrow and build. The Guardian link I post yesterday on the previous page explains the situation excellently.

Guardian is worse than the mail for blinded bias

Its written by economist Paul Krugman and published by The Guardian as part of their long read series. It is four chapters, but they're not that long really. Its certainly a more well rounded and well informed piece than most articles released by news publications from all over the political spectrum. Give it a read, and if you still think its blinded bias then very well, come back and debate that. Otherwise, you're criticising narrow mindedness by being narrow minded, Angry... I think even you will be able to see you're being a bit of an ostrich there.

So its not an extremely bias left wing paper then?

I don't think its an extremely bias left wing paper no. Its a left leaning paper for sure, but that's not the point I was making. To be honest I think you've entirely misunderstood my point Angry, I'm not surprised. Paul Krugman isn't a regular contributor for The Guardian, but he is a very highly respected economist. Although Lord Tis (the father of all knowledge  ) wants to disregard the Nobel prize he was award on the subject, I think you'd be foolish to sniff at his words without any thought. Read the article and judge the opinion on the basis of the words that are written, not the publication its contain in.

Lord Tisdale wrote:

Tringreen wrote:

This is what happened at clubs of comparable support potential such as Hull & Swansea.

Blackpool and now Bournemouth have climbed up to the peak in recent years with temporary stands and capacities less than Gnome Park, why should the local tax payers of Muff divvy up to help the likes of Brent pad their pension pots?

exactly

As the owner and landlord of Home Park, i believe that PCC should help with the funding and building of a new stand, whenever that happens.

If as stated, there is  clause where JB can buy Home Park back, surly he would pay a more reasonable price to PCC should a new stand be in place, rather than a knock-down sum with a stand that looks and feels its age [a bye-gone era relic]..

Having done that, JB would then sell on the club to whoever is interested in owning a football club. I would expect there to be one or two who would be. They are out there.

The sooner JB sells the club, the better. That is why i feel that PCC should throw caution to the wind and help Argyle get a new stand as soon as possible.

The tax paying public of Plymouth will get their money back [as the saying goes] and PCC will get a fair price for a fair stadium. Brent will get what he gets for selling the club and we the fans, well, we would see new ownership at last and hopefully the beginning of good fortunes..

If things remain as they currently are, then Argyle as a sizeable football club are not looking great.

VillageGreen wrote:

As the owner and landlord of Home Park, i believe that PCC should help with the funding and building of a new stand, whenever that happens.

If as stated, there is  clause where JB can buy Home Park back, surly he would pay a more reasonable price to PCC should a new stand be in place, rather than a knock-down sum with a stand that looks and feels its age [a bye-gone era relic]..

Having done that, JB would then sell on the club to whoever is interested in owning a football club. I would expect there to be one or two who would be. They are out there.

The sooner JB sells the club, the better. That is why i feel that PCC should throw caution to the wind and help Argyle get a new stand as soon as possible.

The tax paying public of Plymouth will get their money back [as the saying goes] and PCC will get a fair price for a fair stadium. Brent will get what he gets for selling the club and we the fans, well, we would see new ownership at last and hopefully the beginning of good fortunes..

If things remain as they currently are, then Argyle as a sizeable football club are not looking great.

Do they do though i highly doubt the people of plymouth will see any benefit from their elected council pissing away their money on a club that most dont care about in the vain hope they might see their taxes go down or something decent gets invested in that really benefits the city and not just on false advertising campaigns like britains ocean city..

VillageGreen wrote:

As the owner and landlord of Home Park, i believe that PCC should help with the funding and building of a new stand, whenever that happens.

If as stated, there is  clause where JB can buy Home Park back, surly he would pay a more reasonable price to PCC should a new stand be in place, rather than a knock-down sum with a stand that looks and feels its age [a bye-gone era relic]..

Having done that, JB would then sell on the club to whoever is interested in owning a football club. I would expect there to be one or two who would be. They are out there.

The sooner JB sells the club, the better. That is why i feel that PCC should throw caution to the wind and help Argyle get a new stand as soon as possible.

The tax paying public of Plymouth will get their money back [as the saying goes] and PCC will get a fair price for a fair stadium. Brent will get what he gets for selling the club and we the fans, well, we would see new ownership at last and hopefully the beginning of good fortunes..

If things remain as they currently are, then Argyle as a sizeable football club are not looking great.

No they won't, Brent gets it for a fraction of it's true value. PCC need to revoke the buyback clause ASAP IMO FCOL !!!

As an aside I think it's time for the return of the town centre football grounds, for years councils and clubs have gone out of the way to keep fans ( customers ) away from our centres but with retail in the state it's in they're really missing a trick here. The high street is dead as we've known it due to recession, spending habits and not least the Internet. Councils have deliberately turned away thousands of footfall fans from our towns because they were previously deemed undesirable sorts but without a radical reinvention of what our town and city centres are used for they will become nothing more than expensive back drops for fly posters. Food, live entertainment and (others) are the only way forward as they are not so easily downloaded so why continue to divert all these leisure seekers and their wallets?
This might not be particularly relevant to argyle but I think we're going to see a reversal of the last 30 years or so obsession with funnelling all this potential trade away from city centres. The pay off for a council who has the grapes to try it could be huge.

Angry, I don't understand why you think the council would be wasting their money on Argyle? The council has a duty to get the best value for tax payers money.

Why would investing money in Argyle's stadium where the council would get a fair rent in return be wasting money. The rent they would receive is highly likely to be much higher than the interest rate they would receive from any bank. PCC invests money in Home Park and gets it's money back plus interest over the medium to long term. A perfectly normal commercial deal.

That is no different to the council building an out of town shopping centre and receiving rent from the businesses that occupy the units in the centre. No different to me buying a house, converting it into flats and renting them out.