In the last few years I have written a number of articles trying to explain some common Economic Theories using football as a reference point. Up until now they have all been hypothetical but there is a real link between the theory and the reality that many football clubs are currently experiencing.
The “Doom Cycle” is a phrase often used to refer to the current boom-bust-bailout structure of the financial sector that leads to economic crises, which in turn, thanks to the butterfly principal, causing wide-spread social and financial problems across the world. The pain of the last few years of economic struggle is still too real for many people to have forgotten. The Doom Cycle has been defined by The New York Times as: “a virtueless circle in which banks and other financial institutions take ever-greater risks to boost returns”
In footballing terms, it means trying every possible variable to try and break a cycle of bad results and poor seasons. Whilst a club may go on a long win-less streak or consistently lose to lower-ranked opponents in the cup, within that sequence there will have been many positives, but they may not be seen by the fans. Football is a cruel game and failure to take chances when presented, or convert possession into something meaningful can be costly. Just because a team has the ball, doesn’t mean they will win. One club suffering at the moment is Arsenal. In their most recent game, the North London derby against Tottenham Hotspur they had over 75% of the ball in the second half but still lost 2-0. The virtueless circle where you try anything different, whether than is a formation, personnel, preparation or set pieces to find a win. It is fair to say that you get to a point somewhere along the line where you will take any win, irrespective of how it comes.
“You can’t buy any luck when you are at the bottom” said someone to me recently. Every club has sympathy with teams at the bottom (well, at least to your face), saying platitudes such as “your luck will turn” or “It will turn out alright”. To those 21 other teams in the league they will hope you stay down at the bottom – after all it is one less position for them to worry out.
As results continue to be poor, crowd numbers fall. Football fans are either unconditionally loyal (circa 20% of the fan base) or are results driven (70%) with 10% sitting somewhere in between. When times are good, the crowds come and watch and spend money in the ground. When scores go against you, those results-driven fans decide to spend their time and money elsewhere on a Saturday afternoon. That is totally understandable. Alas, when budgets are set at the start of the season you do not factor in being bottom of the league – you set realistic targets for average gate revenue and yield per spectator. You can’t factor in those 2 or 3 big games that provide some extra insurance being postponed or being moved. For every one we were Dulwich Hamlet coming to play us with their hundreds of beer-enthused fans there are a dozen Brightlingsea Regents (no disrespect to them – a trip to them is a season highlight) who will bring a handful of fans.
So as results decline, so do the crowds and match day revenue. To keep a balanced budget that means having to cut spending in other areas, which potentially impacts the performance of the team even further. And so on – the club enters a Doom Cycle or a virtueless circle of short-term decline. I think we have dispelled the myth now that the answer to any problem is to “increase the budget”. Most fans understand that we are not in a position to do that. We have our cloth, cut to size and we have to wear it.
Some fans have questioned the commitment and focus of the club, even suggesting that there is foul play at work on the board in how we manage the club’s finances. It’s tough to have the answer the same questions time and time again, especially those around the budget. There is no secret fund, piggy bag or plastic bag full of cash. Sure, we could take money from elsewhere – not paying our electricity bill or income tax, but we’ve been there, done that. Still some think that the responsibility of the individual board members is to constantly put their hand in their pocket.