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The Man Who Started It All

By James Flynn :  14/07/2010 :  Comments (21) :
I was thinking yesterday about the passing of the most influential individual in professional sports history, George Steinbrenner; owner of the New York Yankees. What does soccer in England have to do with baseball? Well, the game itself, nothing. But finance?s effect on competition is mentioned on ToffeeWeb often, usually taking a blistering for ?ruining? the game.

I have to go back decades but I can remember baseball taking the same blistering when the ?free agent? era came in. Keep in mind, they?re two different sports, but baseball was America?s ?ancient? sport, steeped in the ?tradition? of players staying with one team and playing strictly for the love of the game; never money.

Then the baseball players' union won a federal arbitration case, which led to a new contract with the owners. Which led to George Steinbrenner, President of his recently-purchased Yankees back in 1976...

He was the one who began out-bidding everyone for the best players and signing away other teams' great players in their primes once they became free agents. When I read all the damning references to finance and reckless money-bagged ownership in the EPL, all I have to do is substitute the word 'baseball' for 'football' and roll back the years to the mid-1970s. And there stands Steinbrenner.

So, RIP to you Uncle George; the Kaiser. What you started in baseball all those years ago in New York City changed the entire professional sports landscape in America and has now, for better or worse, reached professional club football in Europe. And just like back then, those benefiting have no problem with it and those with their pockets to let are damning the system root and branch.

Reader Comments

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David Hallwood
1   Posted 14/07/2010 at 22:08:27

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Interesting post, James; one question: what's the state of baseball finances now, and has there ever been an implosion, because football fans are split whether that would be a good or a bad thing.
Fran Mitchell
2   Posted 14/07/2010 at 23:11:28

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An implosion of Football finances is inevitable; however, it is not as simple as either (a) it will be a good thing or (b) a bad thing. It all depends on how it is dealt with.

If a financial implosion occurred, the powers that be would make it damn important to save the big boys, and this does include Everton. We may be small fish compared to Man U and City in financial terms, but compare us to the actual footballing minnows.

If the reaction of any crises is to maintain the status quo then it will be a bad thing. This will simply lead to a the dissolution of many a great club (non-Premier League... of course), further distruction of the grass roots game, continued falling standards of youth development and ever increasing costs for us, the consumer.

If the reaction is to change the system (fat chance) in which football is ran, if football is moved away from business models, then it could be great.

However, like the economic crises we see now, the problems are generally caused by those at the top and they will make those at the bottom pay for it. They will take the agony and pain while those at the top (this includes Everton by the way) will do their best to ensure the status quo is not affected.
Derek Thomas
3   Posted 14/07/2010 at 23:29:36

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Always good to get a 'foreign' or should that be 'different' perspective on things... Those of us actually IN the forest can't and sometimes won't see the wood for the trees.

As to implosions, I think that there is a great inertia in life as we know it and, to mix the metaphor, the water has to be really really high up the dam before it breaks.

If and when it does, if it ever does ? coz there is that inertia and we most times seem to muddle on in Macawber-like expectation ? then I feel that it will be so overwhelming and all-encompassing that the least of our worries will be the state or lack of the EPL.

Jeez, what a little ray of sunshine I am to day, must be the jet lag as I have just got into Brisbane for the game, see you all on Sat.
Charles King
4   Posted 14/07/2010 at 23:04:14

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I was speaking to an old boy who played for West Brom and briefly a stint at Arsenal in the 50s. He maintains that, even before breaking of the maximum wage barrier in the 60s, players were always well off compared to ordinary working stiffs.

With freebies from the clubs, supporters etc, any sensible player could salt away most of his wages; it wouldn't be enough for the rest of his days but certainly enough to buy a pub or start a business of some kind.

Today, anyone involved in the Prem has that luxury after their first season, who in their position would jeopardise that?

Coaches see creative football as suicide, the easiest way to lose their job, so the game is festooned with management clones justifying the crap we see with tired cliches and the amount of decent games diminshing.

Their protection lies in each new generation ? they haven't seen anything different so people like me are just moaning old gits, however, the surfeit of entertainment from other sources means every new generation is spoilt for choice and I fear the dire football at this World Cup is the climax of this development, and if it's come to this, who would blame the next generation for turning their back on the once beautiful game?

Then where will the money come from?

James Flynn
5   Posted 14/07/2010 at 23:16:15

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David - Baseball finances haven't changed beyond the dollar amounts being so much larger. Go back as far as you like in American sport (or English) and well-run organizations did well and poorly-run ones did poorly.

As far as imploding? No. You have in England a relegation system that has nothing comparable in American sport. Yet, relegated teams don't implode, I feel, because sports franchise ownership is so different from franchise ownership in most any other business. THAT'S comparable to the States

Big money, though, does create a Have/Have-not separation. Just like in every business, with the singular exception being that Have-not sports club teams go out of business at a dramatically-lower rate than their equivalent in other businesses.

The thing stands out about Steinbrenner is he's living proof of the value of money in sports. When he first bought the Yankees (then as now the most famous, successful sports franchise in American history), they had been down for a decade or so and baseball still ran under the old "Plantation" rules, which federal law supported.

He brought with him a fellow, Gabe Paul, who ran the talent-side operations and within a year or two had the Yankees challenging for and winning championships. OK?

Then came Free Agency and players at a certain point had control over where they went. Which, if you were top talent, meant teams would bid for you. Steinbrenner was the first (and right up until a year ago, continued) to out-bid anyone for someone he wanted.

Now read any diatribe here or any publication regarding over-paid, me-first, selfish, cuntish, etc EPL athletes. I read all that 30-35 years ago. All because of George.

But there's a twist. George began to think he and his money were the reasons the Yankees were great. He knew shit about baseball, but he owned the team. So as he continued to throw money at players and firing anyone who disagreed, that Yankees settled into being a solid team, but nothing more.

Once he had to let go of control (you can look it up) in the 1990s and actual baseball people took over the reins, lo and behold, back up the ladder the Yankees went and remain. Still far out-spending everyone, but now combining big money with big brains.

EFC doesn't have the money bags. Not by Russian Gangster/Middle-East oil standards, but enough. For all the expressed EFC fan frustration, only Chelsea had big money appear and change a franchise's fortunes very fast. What players have been brought in since their ?Chosen One? left? Not many, right?

DM hasn't had those big bucks, but has built a team ready to go this season. Finally, the "Other Guy" has the problem when playing Everton. Modern this or that, finance or no, he built the team the way teams always have been built; with a shrewd eye for talent and patience.

DM or Steinbrenner, that hasn't changed and never will. Which the Blues will prove this season coming.

P.S. Steinbrenner would have been SO perfect owning EFC.
James Flynn
6   Posted 14/07/2010 at 23:55:23

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Fran (2) - "If a financial implosion occurred, the powers at be would make it damn important to save the big boys".

Nah, Fran, come on already. There'll be no implosion. Especially not in England. You have the Relegation System. What would implode? Teams going up and down is part of the system. It might suck for Crystal Palace followers, but they can still go see the team play, right?

For all the rest, the game is as always. Those assembling the best, do best. Money has it's place for sure. But it's not the be-all end-all.
Fran Mitchell
7   Posted 15/07/2010 at 00:28:13

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What about Chester City?
Fran Mitchell
8   Posted 15/07/2010 at 00:29:05

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What would implode? That's exactly what Gordon Brown said when he declared the end of boom and bust.

The current system requires clubs to get into more and more debt, eventually they wont be able to service that debt. Then what?
Fran Mitchell
9   Posted 15/07/2010 at 00:32:20

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Football is no longer a sport, it's money, nothing to do with coaching, tactics etc, but money.

The great Davey Moyes is seen as the man who disproves this... well what has he achieved? 4th once and 5th twice... hardly sporting excellence.

You only suceed in this game if you got the money to achieve it... that is not sport, that is capitalism.

And capitalism is a duff system... unless you're the cream at the top.
Jamie Crowley
10   Posted 15/07/2010 at 03:43:22

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James's article is superlative when seen through American eyes. The baseball system that did occur actually is occurring in the EPL and will absolutely create a top 4-6 teams on top of the stack while all the rest fight for honor, not silverware. It's clearly in place, although more in it's infancy than US baseball.

The one point made that is very important, and James and I have seen it here in the States: when the stars align and everything is set up perfectly, Everton can climb the table and win it all.

What I mean by that, and we've seen it in baseball, is occasionally for the odd "second tier" team financially (Everton) they can win it all when they are, as James says one of the "well-run organizations". And despite some flaws I truly believe Everton is very well run.

When one of these not-so-fortunate-financially teams like Everton has locked everyone down, youngsters and veterans alike for multiple year contracts, before those contracts run out, and you have all the chemistry, players, et al together for that one year ? with really knowledgeable people running the sports end of it (Moyes), then you can take that once-in-a-lifetime, one-year shot at a title. (My God, what a run-on sentence!)

Some of it still comes down to management and football nuance. It isn't all money ? just 90% of it. But you DO have to have that footballing knowledge running the show to take the team on that magical season's journey.

After that the bigger teams / clubs poach your players by paying them more and you "re-build".

This is happening in soccer / has happened for a bit. It's much more pronounced in baseball here in the states.

The business model / economic model the EPL is following is very, very similar to baseball.

Money talks and builds dynasties. Pray the planets align as we hold on to our players so they can make that one year magical run.

BTW - this is the year that needs to happen if Pienaar and Arteta stay at home. This is the chance, the window of opportunity. This season.

Excellent piece, James. From the eyes of an American who can see the similarities crystal clear ? best piece I've possibly read here. Kudos. And btw, as much as I hate to admit it as a Red Sox fan, Steinbrenner would be perfect for Everton.

Ron Marr
11   Posted 15/07/2010 at 06:47:50

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Everton had John Moores as chairman a long time before Steinbrenner. In the pre-EU days, Moores purchased the most expensive British midfielder, Tony Kay; the most expensive goalkeeper, Gordon West; the England striker, Fred Pickering; and the most expensive player in the country and World Cup Final MVP, Alan Ball.

He did fire manager Johnny Carey in the back of a taxi cab. Hence the expression "Taxi for ..."
Ray Roche
12   Posted 16/07/2010 at 08:00:51

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Ron Marr.
I thought Pickering only became an England player AFTER we'd bought him. He started out as a full back with Blackburn and only played centre forward due to injuries to their regular forwards. He played well against us so we bought him.

And, someone will correct me if I'm wrong, but didn't Moores only stand as guarantor for Everton's loans, with which we bought these players, and not actually hand over great wads of cash?

Mike Allison
13   Posted 15/07/2010 at 10:54:06

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Individual clubs have gone under because of being badly run, but football as a whole won't implode because it is self-limiting.

A club like Portsmouth pay John Utaka £80,000 a week so he signs for them instead of somebody else. Eventually, with this policy having failed and Portsmouth in financial trouble, John Utaka leaves Portsmouth and goes elsewhere. He will only earn what somebody offers him, or he will be without a club, earning nothing.

Now imagine all (or most) clubs have financial troubles brought about by their reckless spending and huge debts; some of the very worst run with the biggest debts might go under, or lose their grounds, but most will simply have to release players or pay them less ? hardly an implosion.

The one serious threat is if all clubs get into so much debt that they lose their grounds and have nowhere to play; otherwise, it's a case of player wages going down, maybe the best talent going to a foreign league if their clubs are healthier/better run, and not a right lot else changing.

David Hallwood
14   Posted 15/07/2010 at 10:25:13

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Sorry to labour the point (or should that be labor), but a quick look at football finances in this country reveals an economic basket case; increased turnover being outstripped by increased expenditure, with little or no will to curtail the alarming and unsustainable rise in wages and transfer fees (Platini plan excepted).

Jamie's point (#19) that money talks and that it builds dynasties is a good one; however, in the Premier League, it has mired Man U and the RS in debt (admittedly because of leveraged buyouts) and, without the support of the sheiks and Abramovich, Man C and Chelski could not function as conventional businesses.

Since James posted, Moyes has announced that there will be no more signings this season (so it?s official ? we haven?t got a pot to piss in), but it?s been a long time since we?ve been able to splash the cash; however, the traditional big spenders, the Sky Four that you rightly pointed to (it is their spending power that made them the most successful clubs), have kept their hands in their collective pockets (so far) despite the fact that they all need to buy quality players to overhaul and freshen up their squads.

Nevertheless, your post appears to point out that, the bigger they are, the less likely they are to fail... and that they will keep absorbing ever increasing costs. I look to Lehman Bros, Northern Rock et al and that, sooner or later, living on a deficit is unsustainable.
James Flynn
15   Posted 15/07/2010 at 15:33:52

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Fran (8) - Going to debt how is the thing to consider. Anyone who starts a business knows and will tell you the first few years is more going out than coming in. That's business. It's how well they run their business that determines if they begin to turn a profit or go under.

So EFC is in debt? OK. But DM has been stacking talent year after year and here we are with a team that can match talent with any in the EPL. So far so good.

Now EFC can run at the League Trophy. Worth big money. Entrance to the CL. Big, big money. More people at Goodison, buying EFC merch, etc. Yet more money still.

So we can say it's been years of mostly frustration since DM arrived. But he IS the guy with a shrewd eye for talent and assembling a team that plays together. Which will always be the linch-pins in successful team play. Always. Not money.

Steinbrenner was the perfect example of this. For about 14 years he had it in his head he was a baseball genius. Resulting in the longest championship drought in Yankee history. And the whole while him, God rest his soul, throwing cash at players like he had his own printing press. Absolutely money has its place in success. But it's never the be-all, end-all. Never.

It still comes down to a club being well-run and EFC is one of the few teams have the guy to do it. We jump up in the League, the money will come. And I think this is the year.
Fran Mitchell
16   Posted 15/07/2010 at 16:16:31

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But what about football as a whole, James? Not just Everton, but the whole sport?

"Now EFC can run at the League Trophy. Worth big money. Entrance to the CL. Big, big money. More people at Goodison, buying EFC merch, etc. Yet more money still" Bollocks.

If we ever did manage a sustainable league challenge and CL footy, we would have to increase our wage budget by at least 50%, along with stadium requirements and such the bigger we become the more debt we develop. Yes, the Chairman, Chief Executive and Co will make loads of money, but Everton as an institution will be in more debt than ever.

If we then fall below CL standard, what then? No income to pay debts, we lose players and replace them with what we can afford etc etc. This is not sport.

Yes, of course you can't just throw money to win a title, of course you need management skills, but the problem is you can't win a title without money.

But beyond Everton, what good is money doing for football?

It's interesting how situations like Pompey get used to say... 'well it was bad management, there is no structural problem'... same excuses used for the economic crises... yet, 2 years on, the crisis continues. Then situations like Greece happen. We are then told this is part of Greek culture that caused the problems, not the failures of the capitalist system that controls it.

In 10-20 years the Football League will probaly drop to 3 or even 2 divisions, with a host of clubs either going bankrupt or semi-pro (the Premier League will be very happy about this, btw).

What sums it up for me is "Anyone who starts a business knows and will tell you the first few years is more going out than coming in. That's business." Yet you still think this is the correct way to live our lives, to become slaves to credit... Marx talks about this 150 years ago and it's still true.

Football is like a hyped-up version of our economic system. The premise of this system is fucked and cannot sustain itself, but it will try.
James Flynn
17   Posted 15/07/2010 at 16:59:33

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Fran (16) - You're assuming debt follows success. It seems to me ManU made money before the Glazers purchased it. That was from SAF building it up and sustaining it at the highest level, no?

Besides, since when is pro sports a "for profit" business? If owners make enough to live well and have a successful team, that seems to be enough. Let's face it, owning a successful big-time sports franchise gives the team owner entre almost anywhere. "Oh, there's so and so, he owns that championship team".

Not much more to it than that for most of them. Sure, if they're hemmoraging cash and the team's not winning, they might look to get out. But, in cases like that, they need to get out because they ran a shitty organization; deep pockets or not.

I don't see sports teams in the same business-sense as IT companies, insurance companies, etc. You take the biggest (value-wise) teams on earth:
1. ManU
2. Dallas Cowboys
3. NY Yankees

All valued between $1.5 and 1.9. Massively successful sports franchises; the envy of their particular sport. In the "real" business world? Chump change. There's what, like a 1,000 INDIVIDUALS worth more than that in the business world?

You know, the sports world is a crazy one in the normal business sense. And none more crazy than European soccer. The way things are run today in Europe, it's every man for himself. OK, Europe does have the relegation system for those at the bottom.

But at the top I just see man eats man and who can chew the fastest wins. As long as this is the system, I want EFC to jump up into the top and sink her teeth in. The financial system changes to an American-style one, good. But as it is now, I just want my team up there. And if we win this year, a ton of that money comes to EFC.

By the way, if the players get a Trophy or 2, shouldn't they be paid more? Won't bother me.
Matt Traynor
18   Posted 16/07/2010 at 01:18:48

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Jamie (10), you're forgetting the curse upon our club. Every time we stand at the pinnacle, something happens to stop us sustaining it: world wars, European bans etc. etc.

That's why most of us at some point asked our mothers, "Did you swear when I was born?"
Ron Marr
19   Posted 16/07/2010 at 04:54:00

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Ray Roche, you're right: Pickering didn't play for England until he joined Everton. According to the Everton site, he scored 70 goals in 115 games for Everton
http://www.evertonfc.com/history/fred-pickering.html and is still Everton's top scorer in Europe. From what I recall he was never the same after he injured his knee.

Moores, like Steinbrenner, brought top players to his team.
Jamie Crowley
20   Posted 16/07/2010 at 23:02:47

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Matt T (18) - I hear ya.

But you need to know that while I am in my 4th year of supporting Everton, I am a life-long, cradle born Boston Red Sox fan. There's simply no more pain a human being could endure that being a Red Sox fan prior to 2004.

The Yankees sold their soul to the Devil, and God punished us. We were convinced God was quite pissed at all the Boston Catholics (there's a absolute ton of them) for praying entire rosaries for the Sox to win - He thought there might be a few more pressing matters like war, famine, poverty, et al. So we went from 1918 to 2004 living in Hell for failing to see a bigger picture. :0)

Everton has absolutely nothing on the Red Sox. Your Mothers swore? Hell, we were asking if ours were swearing, tagging other men, doing drugs and worshiping Satan.

I get a kick out of Evertonians complaining they haven't seen the glory days in 30 odd years. Try near 80 years, then I'll listen. But for the record, I do empathize, and hate it for even my 4 years. And I absolutely pity some of the older posters here that have lived through a long, long dry spell. I almost want to see glory more for them than anything else. To use a really fruity term, it would be damn near precious.

If you're like me though, I think this upcoming season might be one where we exorcize some demons for Liverpool Moms talking trash at birth.....
James Flynn
21   Posted 18/07/2010 at 02:17:44

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Jamie (20) - Do me a favor and go into the Mailbag "What More Could Everton Do?" discussion and mention how Fenway was turned into a cash cow 10 years ago.

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