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Football Factories - The worrying future of “works” football clubs, and how PSV Eindhoven are bucking the trend

PSV Eindhoven are a factory team who learned to stand on their own two feet, but Andy Mitten learns there’s concern about the state of Europe’s other factory teams.

Philips Sport Verening – usually known as PSV Eindhoven – visit Old Trafford on Wedneday night in good shape, yet for the first time in their recent history they’ll not have Philips as a main shirt sponsor next season.

The Dutch champions are looking for a new name on their red and white stripes, though they’ve agreed to not to court rival electronics companies.

Philips have also signed a ten-year deal for €3 million a season to have their name on the arm of the shirt, a firm commitment to the club which carries their name.

The Philips Stadium will remain just that too, but PSV are now a stand alone club and far from a Philips works team. It used to be different.

By the late 1980s, of the 200,000 people in Eindhoven, 35,000 worked for the Philips Electrical Company and 17,000 held season tickets.

Now, Philips employ far fewer in Eindhoven and they’ve switched their head office to Amsterdam, but the links between club and company remain strong.

Fans are also proud that Philips manufactured the first light bulb just a few streets away from their home ground in Eindhoven city centre. Naturally, PSV have always boasted the best floodlights…and a current coach called Phillip.

Company money helped PSV grow to become one of Holland’s big three and to buy the best players, but they’ve been self-sustained for 20 years and don’t rely on company largesse.

They helped put a town on the map for football and not just electronics, while one of the most iconic images shows Marc van Bommel running into the stand to hand a title medal to the son of the Philips founder - a diehard fan - in 2002. But it’s no longer correct to call PSV a works team.

Works teams are not popular with football fans and it’s become a big issue in Germany. Wolfsburg, who are also in the same Champions League group, are bankrolled by Volkswagen to the tune of €100 million per year.

The new city in northern Germany is famous for making cars, the entire infrastructure built in the last 70 years. There’s a VW museum, a giant showroom, a football team and not a lot else in the richest city in Germany where 122,000 souls are largely dependent on the vast car plant. Wolfsburg is also twinned with Luton, with a similar infrastructure.

Currently not a single hotel room lies empty around the Manchester United game there in two weeks. If you know of one, contact this writer.

“The most heated debate around works teams - ‘Werksverein’ - in Germany right now,” said Florian Haupt, a football writer from the Die Welt broadsheet, “is around Red Bull Leipzig. They’re a second tier club who everyone expects to go up because they’re investing heavily.

“The Red Bull investment in football which started in Salzburg, Austria, has shifted to other clubs. They’ve targeted the market because there’s no old East German club in the first division. Leipzig is a big city with a football tradition, but fans are fed up. They feel more and more of these works teams are taking away places in the league from traditional clubs who are playing in the second division.”

Kaiserslautern, St. Pauli or 1860 Munich now play in the second tier while Wolfsburg, Leverkusen and Hoffenheim are all established in the first division, with the latter funded by the software riches of the owner.

“Hoffenheim is the most absurd case,” explains Haupt. “It’s a tiny village of 3,200. Then there’s Ingolstadt who’ve gone up and who belong to Audi. They recorded a record crowd of 15,000 in a promotion game last season. On the same day in Munich, 1980 played Nuremburg - another big club from a big city - in a relegation game and 65,000 were there.”

The work teams have several advantages over more established giants and these are not only structural and financial.

“Because there are no expectations, there’s no criticism,” says Haupt. “Coaches can work in peace because there are few critics if things go badly.”

Potential conflicts of interest could leave a bad taste. Ingolstadt are owned by Audi, part of the VW empire. VW also own 10% of the shares at Bayern Munich. What happens if one of the three VW influenced teams play each other in a crucial game, the German Cup perhaps, which is also sponsored by VW?

Rules in German football forbid investors from owning more than 50% of a club, yet the clubs with longstanding links to a company are exempt. The three Bundesliga company teams fall into that category.

“It’s easy to get around the rules,” explains Haupt. “Sponsors can pay for a stadium or a youth academy for example. Maybe it’s comparable with Man City selling their sponsorship above the market price.”

As might be expected of a club with a corporate background, the works teams can be very well run. Wolfsburg make money from developing and selling players like Kevin de Bruyne.

“To do that they had to invest first,” says Haupt. “Leverkusen also do things cleverly and have long scouted the Brazilian market. They can get to a point where there are self-sustainable.”

There are still demographic twists. Big cities - for many years Berlin - like Dusseldorf have teams in in the second division, with two of the six places for European competition going to works teams.

Yet fans of those teams are proud of their links with local industries and point out that many of the more established teams were also started by companies a century ago.

Big British clubs have their links in industry too. Newton Heath, later Manchester United, were formed by railway workers, but they were never considered a works team.

Germany has the most works teams but industry has always forged links with sport. In Italy, the most famous example is Juventus and Fiat, who’ve long provided the majority of the football teams.

“Fiat is a public enterprise, so people in Italy joke that everyone supports Juventus because they receive tax payers’ money,” said Antonio Moschella, an Italian football writer. “Their current sponsor Jeep is part of Fiat.”

They’re not the only club associated with cars. “Inter have long links with Pirelli,” explains Moschella. “And you have teams who’ve risen because of close ties to other companies – Mapei (an adhesives company) and Sassuolo, a tiny club now fifth in Serie A.”

Food giant Parmalat funded Parma’s 1990s rise before going bust. A food company also bankrolled Lazio’s turn of the century extravagance, but they weren’t a company team like PSV or Wolfsburg.

In Spain, the works team idea doesn’t really exist, though Villarreal rose from the regional third division to being Champions League semi-finalists on the back of the ceramics fortune of Fernando Roig.

In junior football, Damm (a beer company in Barcelona) fund one of the best youth teams in Spain, one which competes with Barcelona and Espanyol in Catalonia.

In France, PSG’s funding by Qatari owners sees them benefit from the largesse of a sovereign wealth fund. Marseille enjoyed a very close relationship with the later disgraced Bernard Tapie of adidas which led to them winning the 1993 European Cup.

In England, clubs are funded in many ways. Wealthy benefactors have long been associated with their local teams, but as the Premier League has become more global and profitable, so has the reach of the owners, from Americans using highly leveraged buy outs to takeover, to Russian oligarchs.

Benefactors helped Wigan Athletic, Fleetwood Town and Forest Green climb the leagues. AFC Fylde are building a new multi-million pound stadium in a Lancashire village while fans of Rushden & Diamonds and Colne Dynamos have mixed feelings about their rise under a benefactor…and subsequent crash when funding was cut.

Blackburn Rovers couldn’t sustain their Premier League status without Jack Walker’s money, while their neighbours Bolton Wanderers are finding out how tough life is now that Eddie Davies (kettles and thermostats) wants to sell the club he’s supported all his life – even being prepared to write off £185 million of loans.

Football didn’t used to be a way to make money, but was an outlet for benevolence. Now, the top clubs make money – and the fact that investing in them will no longer be merely a loss leader will only attract more companies.