URSABLOG: The Beautiful Game

I was deeply shocked and sad last Sunday, as soon as I was told the news. How had it come to this? After all these years of sharing the joy and the pain, offering unlimited loyalty, unconditional support, only for it to end, suddenly, in a betrayal? We obviously wanted different things, but to be disregarded just because there were a bunch of newer, richer, and let’s be serious, crasser, more vulgar, grabby friends, with no sense of tradition and community, no sense of duty, this rejection not only left me feeling broken, but embarrassed and stupid too.

I speak of course of Liverpool Football Club’s owners announcing that they had signed up, together with eleven other clubs, to be part of a European Super League. It was the first I’d heard. Had I been missing something? Did everybody else know, and I was the last to find out? Well no. And it soon became apparent that no-one – managers, teams, fans – had been consulted. And so the backlash began. By Monday the edifice was teetering, by Tuesday the British teams were climbing over each other to get out of the door as quickly as possible, and by Wednesday it was all over. Apologies, sincere or otherwise, were posted online by the contrite owners. They were sorry to have let the fans down. Apparently. And today even JPMorgan Chase, the investment bank bankrolling the whole project, underwriting a grant of US$ 3.25 billion felt compelled to apologise:

"We clearly misjudged how this deal would be viewed by the wider football community and how it might impact them in the future,” the bank said in a statement on Friday. “We will learn from this.”

Why they felt compelled to apologise was a mystery to me until I learnt that they were opening a digital only retail bank in the UK later this year. Or not.

Football fans are an emotive lot, and fiercely, stubbornly, stupidly, loyal. Teams that were supported from childhood, for whatever reasons, continue to be supported, through the wind and the rain. This does not necessarily mean constant attendance at every home game, or following the scores online in meetings, but I don’t know of many people that change teams, dropping one for another as success comes and goes, as it surely does.

What amazes me is that the clubs involved in the super league project thought that the fans would embrace the idea. Perhaps they didn’t consider the fans at all. Perhaps they were so wound up in their desire to take control of their businesses, away from the teams, and the coaches, and impose wage caps, and spending limits, and restrict the teams able to compete to a lucky band of brothers, a happy few, bound together with dreams of a dominating market model, and sponsorship deals, and television rights, that the fans didn’t really figure in their calculations. After all, they have squeezed all they can out of matchday income, and COVID has proven that they can survive without fans anyway.

But it shows that they cannot. Football players come from the same communities that support football, and club identity is embedded with a sense of community, and belonging, and an idea of sport where teams win and lose, because that what happens. There are big, rich clubs, and small, poorer clubs, but every once in a while – Greece in 2004, Leicester in 2015-2016, Liverpool 2005 – the unreal happens, magic is created, and it’s not just money, or power, or history that happens, it’s the game that is played.

One of the most interesting comments I read over the last few days was from Pep Guardiola, manager of Manchester City:

It is not a sport where the relation between effort and success does not exist. It is not a sport where success is already guaranteed, it is not a sport where it doesn't matter when you lose.

I often wondered in my early days why shipping wasn’t a big deal in the United States. They have the world’s biggest economy, they are everywhere multi-nationally, and nothing moves with the greenback being involved one way or the other. I – rather naively perhaps – put it down to the US having most of the resources it needs, and trade internally between the states is as important as outside the United States. I have changed my mind recently.

Maybe ‘normal’ big business models do not really fit into international shipping. Shipping, tramp shipping in particular, works in the world of perfect competition. Let’s reconsider the conditions for perfect competition:

·        All firms sell an identical product (the product is a "commodity" or "homogeneous").

·        All firms are price takers (they cannot influence the market price of their product).

·        Market share has no influence on prices.

·        Buyers have complete or "perfect" information—in the past, present and future—about the product being sold and the prices charged by each firm.

·        Resources for such a labor are perfectly mobile.

·        Firms can enter or exit the market without cost.

No shipowner can corner a controlling share of the market, or have more than a passing influence on prices. Information, thanks to shipbrokers mostly, is available to everyone. Sheer size, either of fleet or bank balance, is not the key to success in a market with brutal cycles, and where the demand for the product, the employment of ships, is derived from other demands, driven by other factors alien to the supply and demand of ships themselves.

No football team can dominate without actually winning. To do this over time is expensive and for ‘normal’ businesses that expect a profit annually, and is ultimately unsustainable. The bigger teams, with higher player wages, and a ceiling on future income, were finding it hard to make sense of it as a business. But rather than change their business model, they tried to change the business itself by making it a cartel, a closed shop, so that the big teams could lock in income, and control expenses, to secure the sustainability of the business. They would dilute the importance of success on the pitch, by lessening the penalties of losing. By using financial power to create a monopoly on packaged success, they locked themselves out of the world of perfect competition, because they were afraid of losing. The new plan they dreamt up was in effect trying to sell football as a product to the highest bidder, without understanding what the product was and who was the customer. It was an ignorant, greedy and arrogant act of self harm.

No shipping company can grow without realising that sometimes they will not be able to make a profit – that is the nature of the business – but if they concentrate on their teams, and the structures, and think of the long term as well as winning when they can in the short term, as long as they can compete on a level playing field, and take advantage of history, and knowledge, and experience, and identity, as well as innovate, take advantage of economies of scale as well as individual brilliance, then they may well grow a sustainable business in the long term. Could football learn from shipping?

In a competitive environment, it is competing that brings success. The more and varied the competition the better. Closing off the competition so it is restricted to a chosen few in exchange for a stable environment means that the quality of the game, football or shipping, will be downgraded. It is every football fans’ dream that one day, somehow, they will win the league, or lift the cup. It is every shipbrokers’ dream that they will do the deal that will secure their future, and their legacy amongst their peers. I suspect that shipowners feel the same way too, however much they may deny it. Everyone has something to prove. If the game is worth playing, play it well.

I remember a former colleague remarking to me once that anyone who said that it wasn’t winning but playing the game that counted was obviously a loser. I would argue that losing is part of the game, and working out how to improve from the experience will make you a better player and a better person. Losing is part of life, and not being able to accept that basic fact leads to all sorts of problems. I am glad that football will carry on as it is, for now, and that I have also found another way to be philosophical about failure in shipbroking. In the meantime I hope that Liverpool win tomorrow and I get a deal done next week. Both are by no means certain, but it’s playing the game that counts. 

Simon Ward

www.ursashipbrokers.gr