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Huge television deals
and global advertising
sponsorship opportunities
continue to tempt investors
from around the world
into acquiring UK premier
league soccer clubs.
Many of the buyers are
canny business people
adding diversity to vast
corporate
empires.
Some of them are
simply passionate fans
of the beautiful game,
whose
entrepreneurial
judgement has been left
on the bench.
Whichever way you look
at it, owning a football
club must surely be one
of the riskiest commercial
ventures around. How
many other enterprises
combine so many risks,
from the high value human capital of
the players right through to the complex
public liability risks represented by a
football ground filled with delirious (or
disappointed) fans?
On face value, owning a football club looks
like a risk management nightmare! But,
in reality, nearly all of the risk exposure
issues that any soccer club faces are
insurable - at a price.
On me head!
Soccer players are highly trained athletes
and they frequently take a knock. The
sports pages are filled with stories of star
players going down with anything from
knee injuries to broken bones.
Clubs need to buy standard accident and
injury covers that protect players and
their club from personal accident costs,
through to loss of earnings and private
healthcare. Depending on the player
and size of the club, such covers are
sometimes negotiated through a player’s
agent and the premium cost shared with
the player.
But it’s complicated, as Chris Nash, active
underwriter with Sportscover Syndicate
3334, points out. “There are side issues
that need to be taken into account
relating to, for example, players that
are on loan and players that are loaned
out,” he explains. “Players’ representative
duties, when they play for the national
team, must also be addressed. The club
What if I owned a… football club?
Owning a football club is one of the riskiest
commercial ventures around but nearly all the
risk exposure issues are insurable.
usually ask clubs to do an ‘emu parade’
before games where staff walk the pitch
in a line to look for potentially harmful
objects,” Nash says.
A good groundsman is worth his salt, as
liability problems to do with the quality of
the pitch could arise. But it pays to hire a
decent electrician as well. A lot of games
are played at night and it is not unusual
for fixtures to be cancelled because
floodlighting has failed. The penalties
for compensating disappointed fans and
keeping unhappy sponsors on side are
immense.
“That’s a contingency that can be insured
if a club owner is prepared to pay the
premium and accept the conditions
placed upon them,” Sportscover’s Nash
points out.
There are less tangible – but nonetheless
insurable – issues that owners need to
address if they are to avoid scoring an
own goal with sponsors or advertisers.
“Reputation – or ‘death and disgrace’ -
is an important risk where star players
are closely associated with the club’s
own brand,” Nash points out. “A scandal
surrounding a player could spell the end
of a relationship with sponsors or even
the direct sales of a club’s product.”
A scandal surrounding a footballer: how
likely is that? Hmm. The more you think
about the risks around owning a football
club, the more attractive the fantasy
football league becomes.
won’t normally release the player unless
the national team demonstrates it has
cover in place.”
Owners face risks to their prized assets
off the pitch as well, of course. Soccer
teams are always on the move, playing
away games in their own country and, if
they are successful, cup ties abroad.
There hasn’t been an incident to match
the Munich air disaster of 1958 when eight
Manchester United players lost their lives,
but 50 years on the loss still resonates
strongly with owners and underwriters
alike.
“It is usual for entire teams to not travel
together and for insurers to ask for
the team to be split between different
scheduled flights,” Chris Nash explains. “If
the team does travel together the insurer
will usually include an aggregation limit in
the coverage.”
Offside ref! Offside!
Back at home, there are wide ranging
liability exposures, the most obvious being
public liability and the risk management of
big crowds. Around the stadium, owners
also have employers’ liability exposures
that extend to ground and security staff
as well as players.
With players, including the opposition,
clubs face an on-field risk exposure
relating to foreign objects on the pitch
that could lead to injuries. “We insurers
Article printed in Touchline courtesy of Lloyd’s of London.
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