Tom Miers: Struggling football clubs need to start thinking big

SCOTLAND’S lamentable performances in club and international football are the despair of the country. What can be done? Obviously there are improvements to be made in terms of technique, skills and the organisation of the sport, all the subject of numerous recent reports and initiatives.

But there is another glaring flaw with Scottish football which surely must be addressed. This is the lack of competition within the club game. Rangers and Celtic, the Old Firm, face no serious challenge to their dominance. It is now almost impossible for any other team to win the league.

As a result, Scottish domestic football is becoming ever more dreary, repetitive and unattractive as a spectacle. Commercially it is being left behind. Scottish clubs, particularly outwith the Old Firm, are finding it harder and harder to compete in Europe.

Last week Peter Lawwell, Celtic’s chief executive, warned that “the social phenomenon which is football in Scotland is under threat of extinction”. He called for new ideas to bring fresh investment to the game.

But the Old Firm’s favoured solution – exodus to another league – would leave the rest of the clubs stuck in a backwater with no hope of escape. Instead, Scottish football must re-invent the domestic game if it is to flourish once more.

Lawwell is right in one thing: success in club football is about money. And the basic problem with Scottish football is that the middle tier of clubs – Aberdeen, Hearts, Hibs, the Dundee clubs and others – cannot raise the revenue to compete with the Old Firm. The reason is that they are trapped in stadiums that are too small.

In a football market such as Scotland, where television revenue is a relatively small proportion of income, club revenue is strongly correlated to attendances at games. Obviously, higher gates mean more ticket sales, but they also affect merchandising sales, sponsorship and broadcasting, and the club’s attractiveness to new fans.

Capacity at Scotland’s “middle-tier” clubs is too low to generate sufficient revenue to challenge Rangers and Celtic, even if their grounds were full for every game, which they are not. The capacity restriction means they can’t improve income by seeking to attract new customers, as other businesses can. For instance, cutting prices or investing in marketing their product cannot be made to pay by increased sales.

Ticket prices therefore have to remain high to maximise revenue from available seats, and as a result attendances typically fall well below capacity. Average attendances at Aberdeen in the 2010-11 season, for example, were only 40 per cent of capacity. In other words, one of the basic laws of economics – the dynamic between supply and demand – cannot work properly, because supply cannot increase sufficiently.

It is sometimes said that the likes of Aberdeen and Hearts can never compete with the Old Firm because there is insufficient appetite for attending football matches. Our youth are too busy playing computer games and watching television.

This is nonsense. The demographic base is clearly there to grow these clubs’ support with the right vision and opportunity. Attending public spectacles of all kinds has never been more popular. Southampton is a city with a population of 240,000, only fractionally bigger than Aberdeen. Its club spent last season in the third tier of English football, yet attracted average crowds of 22,000, more than double Aberdeen’s. Sunderland, in the Premier League, enjoyed an average gate of more than 40,000, even though the city’s population (178,000) is comparable to Dundee’s (152,000). The two Dundee clubs’ joint average gate last season was just over 12,000.

In the 2004-5 season, Hearts conducted an interesting experiment by staging its Uefa Cup group matches at Murrayfield. These three games attracted an average gate of nearly 24,000, some 6,500 more than the capacity at Tynecastle. If the club owned or shared a stadium with a capacity of, say, 40,000, its average gate, ticket income and commercial revenue could all be dramatically expanded. The same applies to Aberdeen, Hibs and the others.

The whole of Scottish football would benefit from such a scenario. There would be higher overall revenues as attendances climbed, and television and advertising income would grow with the greater excitement and interest.

The Old Firm might lose the odd competition, but they might well benefit in Europe from the new competitiveness of domestic matches. Smaller Scottish clubs would also reap the harvest, and not just from higher overall revenues. More competitive domestic competitions would create a ladder of success. When the big boys take points off each other and knock each other out of the cups, opportunities arise for the minnows.

Unfortunately, the middle tier of clubs lack the wherewithal to expand stadium capacity. So they are trapped in a vicious circle. Actually, the sums required are not that great. Some modern football stadiums have been built very cost-efficiently. Building a group of up to half a dozen new stadiums with associated infrastructure in Scotland could cost perhaps £200 million in total, less if it involved the sale of existing grounds.

Presumably the Scottish Government would not want to find the necessary funds itself. In that case, it should throw its support behind the only other way of raising sufficient funds to transform football: Scotland hosting a major international football tournament.

Both the World Cup and the European Championship would raise enough money for the hosts – even co-hosts – to invest the required amount. The 2010 World Cup grossed $1 billion for South Africa. At the same time, such a tournament would boost interest in the domestic game, allowing all clubs to increase their fan base.

The next available tournaments to host are the European Championships from 2020 onwards or the World Cup of 2030. These might seem a long way away, but bids take a long time to prepare. Past efforts show that repeat bidding is often necessary to demonstrate the requisite determination and gain sympathy and support from the international associations. With that in mind, Scotland has a strong hand to play because of its originality, particularly if it offered an exciting vision to regenerate the game here.

The size of these tournaments now means that Scotland would probably have to co-host the event with another association. The obvious candidate to share the World Cup is England. England has a disastrous recent record of bidding for the tournament, and the FA is rethinking its approach to international football politics. It would benefit by collaborating with Scotland, who would add a fresh angle and some welcome novelty. The European tournament could be shared with any of the British Isles associations, or perhaps hosted alone with the help of borrowed stadiums in the North-East of England.

The question remains: which “middle-tier” clubs would benefit from this project and where would their new stadiums be?

The issue of ground-sharing, relocation and redevelopment is, of course, fraught with emotion and disagreement. That’s why the best way would be to leave it to the clubs to bid for stadium funding under these proposals. The bid criteria for success would be based on cost and the ambition to increase attendances and enthusiasm for the game.

In each situation there would no doubt be a pay-off between tradition and old rivalries on the one hand, and the promise of broader horizons and long-term success on the other. But the important thing would be that it was a free choice. Ambition and optimism would win out, with probably a surprise package or two rising to the challenge.

• Tom Miers is an independent public policy consultant and a Ross County fan A full version of this article is available from thinkscotland.org