By David Butler
On Monday the 27th of April Channel 4 aired a documentary called The Secrets of Sports Direct. The show cast Mike Ashley, the owner of Sports Direct and Newcastle United, in a less than flattering light. Amongst other claims, it was implied that Ashley cared less about the on-field performance of the club and was more interested in using Newcastle United as a vehicle to showcase the Sports Direct brand. This is an argument many Newcastle United fans agree with.
Unfortunately for Newcastle United, like other EPL clubs, the scale of investment required to improve on-field performance and to ultimately break into the top 2 to 4 places - the wish of the fans, is extremely great. For me (and maybe Mike Ashley), the logical strategy would be to spend the minimum amount required to keep the club in the EPL and benefit from the extravagant T.V revenues. The investment needed to compete with the billions of Roman Abramovich and Sheikh Mansour would be immense. What's more, there is no guarantee of success even if an EPL club invests millions into their squad. Naturally, this is something any football fan would not like to consider.
There’s an underlying economic principle in operation here – the law of diminishing returns. This is a property that comes about when Economists consider how much of a good is produced and how this production is reliant on a variable factor used to make it. In general, we say that when certain factors of production are fixed, greater and greater amounts of a variable factor are required to produce more of that good. This property applies to many economic relationships – investment at the start often produces greater returns than the same investment at a later date. Newcastle would likely require hundreds of millions of investment to probably gain 10-15 places in the EPL, if their current budget was available to a smaller club in a lower league however the returns would be far greater.
This brings me to Fleetwood Town – the Lancashire club’s rise to prominence has been swift. They have been promoted four times over the last eight seasons, finishing 10th in League 1 this year. The table below charts their rise since the 2007-2008 season when they played in Northern Premier League. It could be argued that Fleetwood Town are benefiting from those low hanging fruits of catch-up growth, football style! I don't know the exact amount of investment their owner, Andrew Pilley, is providing the club but the last 10 years have been a remarkable time to be a Fleetwood fan. The club has climbed hundreds of league places. Will this ascent continue? Perhaps - but one thing is for sure, it will require increasingly greater investment to climb even fewer league places.
For better or worse, the meteoric rise to the elite division and success stories of clubs like Derby County under Brian Clough in the 1960's and 1970's are a thing of the past.
On Monday the 27th of April Channel 4 aired a documentary called The Secrets of Sports Direct. The show cast Mike Ashley, the owner of Sports Direct and Newcastle United, in a less than flattering light. Amongst other claims, it was implied that Ashley cared less about the on-field performance of the club and was more interested in using Newcastle United as a vehicle to showcase the Sports Direct brand. This is an argument many Newcastle United fans agree with.
Unfortunately for Newcastle United, like other EPL clubs, the scale of investment required to improve on-field performance and to ultimately break into the top 2 to 4 places - the wish of the fans, is extremely great. For me (and maybe Mike Ashley), the logical strategy would be to spend the minimum amount required to keep the club in the EPL and benefit from the extravagant T.V revenues. The investment needed to compete with the billions of Roman Abramovich and Sheikh Mansour would be immense. What's more, there is no guarantee of success even if an EPL club invests millions into their squad. Naturally, this is something any football fan would not like to consider.
There’s an underlying economic principle in operation here – the law of diminishing returns. This is a property that comes about when Economists consider how much of a good is produced and how this production is reliant on a variable factor used to make it. In general, we say that when certain factors of production are fixed, greater and greater amounts of a variable factor are required to produce more of that good. This property applies to many economic relationships – investment at the start often produces greater returns than the same investment at a later date. Newcastle would likely require hundreds of millions of investment to probably gain 10-15 places in the EPL, if their current budget was available to a smaller club in a lower league however the returns would be far greater.
This brings me to Fleetwood Town – the Lancashire club’s rise to prominence has been swift. They have been promoted four times over the last eight seasons, finishing 10th in League 1 this year. The table below charts their rise since the 2007-2008 season when they played in Northern Premier League. It could be argued that Fleetwood Town are benefiting from those low hanging fruits of catch-up growth, football style! I don't know the exact amount of investment their owner, Andrew Pilley, is providing the club but the last 10 years have been a remarkable time to be a Fleetwood fan. The club has climbed hundreds of league places. Will this ascent continue? Perhaps - but one thing is for sure, it will require increasingly greater investment to climb even fewer league places.
For better or worse, the meteoric rise to the elite division and success stories of clubs like Derby County under Brian Clough in the 1960's and 1970's are a thing of the past.
The Rise of Fleetwood Town 2007-2015
RSS Feed