There is no shame in investing

I’m a Manchester City fan, and as a Manchester City fan, I inevitably run into legions of Manchester United fans who insist that City’s achievements are somehow worthless or illegitimate. After all, according to their rhetoric, we have wealthy owners, and according to them, we don’t deserve our titles since we “bought” them.

Of course, even casual fans can see that almost every successful team throws their financial muscle around to keep up their winning ways. Clubs like Real Madrid and Bayern Munich throw their massive financial weight around every transfer window to strengthen their squad (and as some cynical fans would say, weaken their opponents). Ahh, but you see, according to the fans of these big clubs, they “deserve” their success. After all, these famous clubs sell out every game, end up on TV every week, and bring in hordes of sponsors. Their fans insist that since these clubs are self-sustaining businesses, it is OK to spend massive sums, while clubs who run at a loss relying on their rich owners don’t deserve this success. Even Arsene Wenger shares this viewpoint, as he claims it is OK for Manchester United to spend vast sums since they “earned it”, while he routinely criticizes clubs like Chelsea and Manchester City for throwing money around. But if we were to think about the finances of football carefully, this sort of sentiment is unbelievably hypocritical, and it’s not hard to see why.

I’m sure everyone agrees with the idea that you have to spend money to make money. In a sport that is so financially deterministic, any owner who wishes to improve their club has to be willing to take a loss and spend some money on players. One can even argue that taking a loss to improve the club’s stature in the long run is a smart investment. For instances, after years of running a loss and needing bailouts, Chelsea is now running at a profit. More importantly, by becoming a title contending world famous club, Chelsea’s value has shot through the roof, and is currently one of the most valuable professional sports teams in the world.

If it was any other industry, taking a loss today for the potential of future profit is called investing, and is usually a commendable activity. Let’s admit it, in an era where there is a very strong correlation between wages and success, spending is the only way to get ahead in football. Lower table clubs who wish to surpass their competition simply have no alternative to taking a loss and letting the owners pick up the bill. If a club is unwilling to spend, even if they were able to make a surprising run like Atletico Madrid did in 2013-2014, other richer clubs will simply come and pick them apart.

Let’s be honest here, most fans who complain about sugar daddies are fans of wealthy and historically successful clubs like Manchester United and Real Madrid. They use the excuse of “you have rich owners” to downplay the achievements of relatively “upstart” clubs like Manchester City. I hate to use a lazy appeal to motive, but let’s be honest here, when fans of traditional “big clubs” criticize “upstart” clubs with outside investment, they’re just angry that outside investment allows upstart clubs to challenge the hegemony. Outside investment is pretty much the only way for clubs to grow in success and stature in the current footballing environment. Criticizing outside investment is anticompetitive, fans of big clubs criticize and whine about outside investment, because let’s be honest here they just don’t want to see formerly “small clubs” challenge their beloved hegemony, and so they criticize the only way that the status quo could be fundamentally changed.

An even bigger problem that I have with criticizing outside investment is that well, almost every successful club had some form of outside help during some point of their history. It isn’t the 19th century anymore, big clubs are “big” because they were good at some point in their history. Odds are, they were good because during some point of their history, they had outside help.

Manchester United fans love to point out City’s outside investment, conveniently forgetting that it was the fabulously wealthy John Henry Davies who injected his money into the club that made them “big” in the first place. Davies used his wealth from the beer businesses to pay off United’s debt and he funded the construction of Old Trafford. Manchester United’s chairman built them one of the biggest stadiums in England out of his own personal wealth, and back in the days before TV deals, match day revenue was the biggest source of a club’s income. Davies pretty much used his personal wealth to build United into a rich club, and if you really think about it, it really isn’t that much different than what is happening with Chelsea or Manchester City in recent years.

Almost all the big successful clubs at least partially owe their success to outside support of some kind. Besides the already mentioned Manchester United, Real Madrid had the support of Francisco Franco and the Spanish government. Arsenal had Sir Henry Norris inject massive amounts of money into the club to build Arsenal Stadium and they were even known as the “Bank of England” club for a period of their history. In the long run how a club funds its initial success doesn’t really matter if it can keep it up. After all, nobody still uses Arsenal’s former outside investment to disparage their achievements, despite the fact that they created a foundation that allowed to club to make massive revenue and outpace their opponents in the coming years. If Manchester City can successfully build upon their outside investment and become a major force for the next 20 years, their fans would probably chant “10 league titles”, or “3 Champions Leagues” and their outside investment will probably be forgotten.

In an era when football is more financially deterministic than ever, outside investment has become pretty much the only way for a club to climb the hierarchy into the elite. Fans of rich clubs like Manchester United love to attack clubs like Manchester City because they hate to see formerly insignificant clubs knock them off their perch. Besides, its barely a valid argument. Most of the big clubs nowadays all had investment at some point in their history.