Should Councils Invest In Their Football Clubs?

I've just seen this thread on Twitter: [You must be registered and logged in to see this link.] (you might need to expand it to see all of the comments).

Basically it is a conversation comparing the support given to Swansea and Bournemouth by their respective councils.

It would appear that Swansea spent £35m on the new stadium but Swansea in the PL is worth £60m (not sure over what time period but it is referenced in a report published somewhere) to the area. (I'm taking the Twitter thread at face value for this info and have no idea how accurate it is).

This seems to me to ample justification for the "difficult decision" made by the council to spend the money in the first instance in the face of the orthodox "why should councils spend money on their football team when schools/roads/old people etc need it so badly?"

Just as long as it is an investment, which means that the council recoups money in the end, and not a grant (i.e. gift) I can't see why this should be controversial at all. Even if the cash concerned was turned into a grant it could be justified in terms of being a gamble on the future income that success might bring - if we had an owner likely to be able to fund such success.

Interesting stuff - and it seems like councils all over the place invest heavily in their football clubs. PCC has certainly done plenty for PAFC but maybe it hasn't actually done enough?

That said these are difficult times: austerity; more for less; cut public spending and all that so what form could future council support take? An extended rent/rate rebate period, perhaps? A further interest-free loan, maybe?

Does anybody know if there is currently any on-going support for Argyle from PCC?

Sir Francis Drake wrote:

That said these are difficult times: austerity; more for less; cut public spending and all that so what form could future council support take? An extended rent/rate rebate period, perhaps? A further interest-free loan, maybe?

Well, according to this: [You must be registered and logged in to see this link.] now is probably a cracking time to invest in such a business and development.

no

No

Why not?

If a council can invest £100 and get £1000 back what is the problem?

Isn't it a case that they'd be negligent not to invest in such circumstances?

Sir Francis Drake wrote:

Why not?

If a council can invest £100 and get £1000 back what is the problem?

Isn't it a case that they'd be negligent not to invest in such circumstances?

I don't think the return is ten fold, but I do agree.

Sir Francis Drake wrote:

Why not?

If a council can invest £100 and get £1000 back what is the problem?

Isn't it a case that they'd be negligent not to invest in such circumstances?

because as a council tax payer i want would my contribution in taxes to go on improving the city/county rather than have it used to pay a sports clubs bills.

Wasn't there some sort of deal where Argyle didn't have to pay business rates for a short period of time? Does that count as "investment" by PCC?

Angry wrote:

Sir Francis Drake wrote:

Why not?

If a council can invest £100 and get £1000 back what is the problem?

Isn't it a case that they'd be negligent not to invest in such circumstances?

because as a council tax payer i want would my contribution in taxes to go on improving the city/county rather than have it used to pay a sports clubs bills.

But if your £100 pays for, say, 10 lollipop men and investing the same £100 could pay for 30 lollipop men why not do that? You wouldn't want to pay the £300 needed instead, would you?

Why would anybody want that?

Sir Francis Drake wrote:

Angry wrote:

Sir Francis Drake wrote:

Why not?

If a council can invest £100 and get £1000 back what is the problem?

Isn't it a case that they'd be negligent not to invest in such circumstances?

because as a council tax payer i want would my contribution in taxes to go on improving the city/county rather than have it used to pay a sports clubs bills.

But if your £100 pays for, say, 10 lollipop men and investing the same £100 could pay for 30 lollipop men why not do that? You wouldn't want to pay the £300 needed instead, would you?

Why would anybody want that?

Because why should my money go into a club when ts owner doesnt do it themselves? there are far more important things in life that require funding from the council instead over bailing out a football club.

Just forget about it being Brent or Argyle for a moment. Surely the council's duty is to spend the money it has as wisely as possible and to get as much for the expenditure as it can?

If that is so then it has a moral duty to invest some of its money somewhere because the extra return on that investment pays for more binmen/lollipop ladies/football pitches/schools/social care/libraries/whatever.

Surely the only sensible constraints to how that money is invested is that some sort of ethical standard should be maintained? And the more it can invest in that is locally beneficial the better?

I really don't get the objection here. Why is it wrong?

Like I said earlier wouldn't it be more wrong not to invest its money?

"Swansea City's first season in the Premier League has generated £58m for the Welsh economy"

[You must be registered and logged in to see this link.]

And presumably another £58m in the following year.

By investing in Swansea City and the Liberty Stadium they have brought nearly £116m (the club would have generated something no matter what division it was in so it isn't all gravy) into their local economy.

Sir Francis Drake wrote:

Just forget about it being Brent or Argyle for a moment. Surely the council's duty is to spend the money it has as wisely as possible and to get as much for the expenditure as it can?

If that is so then it has a moral duty to invest some of its money somewhere because the extra return on that investment pays for more binmen/lollipop ladies/football pitches/schools/social care/libraries/whatever.

Surely the only sensible constraints to how that money is invested is that some sort of ethical standard should be maintained? And the more it can invest in that is locally beneficial the better?

I really don't get the objection here. Why is it wrong?

Like I said earlier wouldn't it be more wrong not to invest its money?

not every tax payer living in plymouth either supports argyle or cares about football. Why should their money go towards a club whether they want to or not. Any investment no matter what the venture should be voluntary not mandatory and as i say its not a council purpose to fund football clubs its the clubs owner(s) job to do that.

I don't suppose any of the tax payers care about, um, Nat West Bank, for example, overmuch. Certainly nobody would "support" them as such, might own some shares I suppose, and only a small proportion would ever bank with Nat West. Is that a valid reason not to take advantage of a Nat West investment vehicle?

Didn't lots of councils have money invested in Iceland a while back before their economy went South? I seem to recall reading at the time that it's common practice for Councils to invest sometimes millions of pounds from their warchests in supposed 'safe bet' money making schemes.

PCC certainly did have money invested in Iceland when it went belly up. The figure of £13m springs to mind. I could be wrong though.

Sir Francis Drake wrote:

I don't suppose any of the tax payers care about, um, Nat West Bank, for example, overmuch. Certainly nobody would "support" them as such, might own some shares I suppose, and only a small proportion would ever bank with Nat West. Is that a valid reason not to take advantage of a Nat West investment vehicle?

difference being if nat west falls millions are affected and the snowball effect would be chaos hence why government will step in. whether people want it or not.

if argyle falls many fans are heartbroken few made unemployed but ultimately its not going to affect millions around the world at the end of the day,

Can you imagine the outcry if PCC had invested in Stapleton, Kagami, Todd and Gardner? They might as well have burnt the notes in the winter to keep the elderly warm. Brent's just the same, he'd just keep it and deliver nothing.

There is clearly a judgement to be made concerning the viability of the business plan of the target for the investment. As you say Stapleton/Kagami/Gardner/Todd were clearly a proposition best avoided. It is possible that the same applies to Brent.

Would it necessarily apply to every owner? I don't think so but there would always be an element of risk whoever it was. It's a matter of managing the risk and weighing the costs against the benefits.

The point I'm getting at here is that "investment" is one thing and "subsidy" another. The first, properly arranged complete with safeguards and terms and conditions is perfectly acceptable to me; the second much less so. They are not the same thing.

It's a hard, cold fact that both Swansea City and Swansea the city have benefitted hugely, and not just in direct financial terms, from the investment Swansea's council made into the football club back along and if Swansea's council wasn't wrong, as clearly it wasn't, to invest in its football club then why would Plymouth be wrong to act similarly?

My brain hurts.

Sir Francis Drake wrote:

There is clearly a judgement to be made concerning the viability of the business plan of the target for the investment. As you say Stapleton/Kagami/Gardner/Todd were clearly a proposition best avoided. It is possible that the same applies to Brent.

Would it necessarily apply to every owner? I don't think so but there would always be an element of risk whoever it was. It's a matter of managing the risk and weighing the costs against the benefits.

The point I'm getting at here is that "investment" is one thing and "subsidy" another. The first, properly arranged complete with safeguards and terms and conditions is perfectly acceptable to me; the second much less so. They are not the same thing.

It's a hard, cold fact that both Swansea City and Swansea the city have benefitted hugely, and not just in direct financial terms, from the investment Swansea's council made into the football club back along and if Swansea's council wasn't wrong, as clearly it wasn't, to invest in its football club then why would Plymouth be wrong to act similarly?

invest in things that matter not football clubs

How many people or institutions have invested in Argyle and ever made a profit?
In fact, how many people or institutions have invested in a football club and made a profit?

With Brent involved, I can't see it happening. He has proven his intentions/abilities, or lack of them. However, something like a Trust run club in partnership with a few wealthy fans/businessmen, just might stir the imagination and loosen the purse strings.

The club is already in a great location. A well finished stadium, with the corners filled in, an impressive grandstand and associated facilities bringing the capacity up to say 25k, with the structure suitable to easily go higher, would almost certainly inspire the latent fanbase. This is what happened at clubs of comparable support potential such as Hull & Swansea.

As landlords, PCC could  utilise the facility out of season for events/concerts etc. and if the club were to get on a roll through increased attendances and skilled management both on and off the pitch, the whole city would benefit from top flight football and a packed to the rafters Home Park for the visits of Chelsea, United,City, Arsenal, Liverpool etc etc.

The city itself would also get noticed for all its 'splendour' [location / historical wise] as the sleeping giant finally awakens.

I'm getting all moist 

I think the Council investing in Argyle, who then 'naturally' make it the The Premier League ( where the investment bears fruit) is a bit of a fairytale.

For teams like Argyle, the more likely (albeit still hugely unlikely) scenario for us ever getting there is to replicate the Bournemouth story - Land a top manager in conjunction with acquiring a wealthy backer.

Once the City of Hull and Swansea councils had declared their intent to invest in the facilities for both clubs, then outside investment peaked its interest in taking the clubs to the next level. Brent's already said that it'd be easier to sell the club with a new stand rather than in the current state of the Mayflower. His plan was uninspiring and I doubt it'd have attracted any large investor, but if the facilities at the club were brought to a high standard that would allow the club to compete at the highest level (we've already got the pitch), then I'm sure any egotistical millionaire looking for a football club as a hobby wouldn't ignore us totally. But, the facilities (or at least intent to build) need to be in place first. The council could provide that, as well as incorporating at least Albion (who seem to need a bit of help). The benefits wouldn't be direct profit from the development, but the general raise in cash flow that cities with top division clubs benefit from. As SFD rightly points out, the city of Swansea has benefit immensely from the club's rise. I think I read somewhere that our demise from the Championship to League Two has lost the city's economy an estimated £10m. There's no doubt in my mind that a successful Argyle would benefit Plymouth, its not a self-serving investment.