Initial Public Offer

Initial public offer (IPO) as the name suggests refers to when a company goes public or issue shares of the company to the public in order to raise capital for the first time. After the IPO, the company gets listed and its shares are traded on stock exchange. Once it gets listed then the permission to trade these shares is granted by shareholders i. e. to whom the shares have been allotted in the IPO. There can be many reasons for bringing out an IPO. First, when the company issues new shares to the public, then the money raised from public goes to the company. Second, when the Govt. Sell their stake in the company to the public, then the money raised goes to the Govt. (like the disinvestment of PSUs). However, one must be wondering why would individuals invest in a particular company? The answer is dividends. The shareholders expect the company will distribute the share of future profits among them as dividends. How an IPO is conducted IPOs generally involve book runners i. e. one or more investment banks known as underwriters. The underwriters retain a portion of the proceeds as their fee. This fee is called an underwriting spread. Various methods of conducting an IPO are Dutch auction, Firm Commitment, Best Efforts, Bought Deal and Self Distribution of stock. IPOs can be made through the Fixed Price Method or Book Building Method. In the fixed price method, the price at which the securities are offered is fixed in advance. In the book building method, the investors have to bid for shares within a price band specified by the issuer and the final price is decided after observing the result of the bidding. The fixing of the band and the bidding process are done with the help of an investment bank or a group of several companies specializing in securities. While most of the companies are eligible to make a public issue are free to decide the price band but infrastructure companies are subject to follow SEBI norms as well as banks are required to get RBI’s permission. The prices are decided by the company's board of directors, which fixes the band after consulting the book runner (particularly an investment bank). In India, the issuer is allowed a price band of 20% (that is the cap of band should not be more than 20% above the floor price i. e. the lowest price that a seller will accept). After deciding the band, bids are invited on all prices of the band. Once the book is closed, the seller fixes the price at which all of its shares will get sold. However, there can be a situation of Oversubscription of an IPO (i. e. if applications are received for more number of shares than the company is authorised to allot). In that case, the allocations would be done proportionately among all the successful bidders i. e. among those bidders who did bidding at the price determined by the company or at the price higher than that. After the price has been determined on the basis of bidding, the public advertisement containing the rice as well as table showing the number of securities and the amount payable by an investor is issued. Various Investors Involved ? ? ? Retail Investors Non-Institutional Investors Qualified Institutional Buyers If a company is making an issue through 100 % book building process then1) Minimum 35% shall be offered to Retail Investors 2) Minimum 15% shall be offered to Non-Institutional Investors 3) Maximum 50% shall be off ered to Qualified Institutional Buyers. There can also be FPO (Follow on public offer) when company’s offer to the public is not for the first time. There are certain advantages attached with going public. Capital can be used to pay off existing debt or to fund capital expenditure. Moreover, another advantage is an increased public awareness of a particular company as IPOs helps in attracting new potential customers which may ultimately leads to increase in the market share of a company. Before deciding whether to go public or not, a company must evaluate all the potential benefits or challenges that will arise. The book runners involved in the process (i. e. investment banks) are given the responsibility to find out the pros and cons of an IPO and determine whether it is favourable or not for the company.

Uefa & Football Governance

Jaime Andreu-Romeo – Head of European Sport Unit, European Commission Leonardo Nascimento de Araujo – AC Milan and FIFA World Cup Champion ‘94 John Barton – T. E. A. M. Marketing Genevieve Berti – Communications Manager of G-14 Marco Brunelli – Lega Calcio and our tutor Richard Bunn – TV and Media consultant Michele Centenaro – Senior Product Manager, Club Competitions, UEFA Jerome Champagne – Deputy Secretary General, FIFA Jean-Paul de la Fuente – Founding Director, Deureka Peter Gillieron – General Secretary, Association Suisse de Football Michel Guenaire – Head of Sport-Law Division, Gide, Loyrette et Nouel, Paris Rodolfo Hecht – President, Media Partners Group Jonathan Hill – Communications and Public Affairs Liaison to the European Union, UEFA GianniInfantino – General Counsel Commercial Legal Services, UEFA Thomas Kurth – General Manager of G-14 Antonio Marchesi â€⠀œ Senior Partner, Deloitte and Touche Sports, Italy Lars-Christer Olsson – Director of Professional Football and Marketing, UEFA Denis Oswald – IOC member and President of FISA (International Rowing Federation) Alex Phillips- Senior Product Manager, Professional Football, UEFA Arnaud Rouger-Conseil Juridique, LFP (Professional Football League – France) Freddy Rumo- President of Executive Board of Neuchatel Xamax FC and former UEFA Vice President Jefferson Slack- Director, Inter Active, FC Internazionale Milano Stefan Szymanski – Professor of Economics, The Business School, Imperial College London Alain Rumpf – Coordinator of the Professional Cycling Council, International Cycling Union (UCI) Additionally we would like to thank UEFA -Division of Services, especially Barbara Rodel, Division of Professional Football and Marketing, especially Marion Haap, Lucia Castelli at Atalanta Bergamasca Calcio, Ruth Beck-Perrenoud from the Olympic Museum for her help in research, our professors at DeMontfort University (Leicester, UK), SDA Bocconi (Milan, IT) Universite de Neuchatel, (Neuchatel, CH), the CIES and FIFA, sponsor of the International Master, especially Vincent Monnier. Finally we thank our families and friends for their patience, support and inspiration, especially during the last phase of this project. 5 PROLOGUEThe headlines of sport news sections have been filled with tension-riddled declarations from football club managers toward football’s organisers about too many matches, national team call-ups at key points in the season and concern over players victim of injuries during â€Å"useless international friendlies. † The response is sometimes swift, sometimes harsh, but always illustrative of the conflicts between the members of the so-called football family. We recognise that all families have conflicts, some tragic, others trivial, but we were struck by the intensity of this banter internally sewing a frown to football’s countenance while still outwardly presenting a naive smile. We began to analyse the relationships and gradually realised that there were some family members with serious concerns who were not addressing each other.We heard the uproar from major club figureheads when UEFA took the nth decision to change its prize event, the Champions League. We also felt the inescapable force of commercialised-globalisation when Brazilian international players flew half-way across the world to China for 90 minutes of football worth US$ 1 million. We shed a tear when Italian legend AC Fiorentina were dissolved and Angelo DiLivio, a FIFA World Cup finalist, voluntarily descended to the fourth and final professional division and set out to paint the second Florentine renaissance, this time named Florentia Viola. We love football and we have a great interest to see the beautiful game continue to flourish to the ends of the Earth.Thus when we saw these unresolved dissonances spreadin g through the game, we made the decision to throw ourselves into the melee and clarify who the actors were, what their interests were and how they were relating to each other. After surveying the field we chose to focus on the clubs and UEFA, and then more specifically on the group of clubs creating the most commotion, the G-14. Their name seemed to pop up everywhere from the headlines, to the European Commission but never from UEFA. We found the door, brushed aside the coats and stepped into the magic wardrobe of UEFA, G-14 and European Football. . . 6 INTRODUCTION I. Aim The final aim of this project is to propose some adjustments to the current governance model of European football in order to address the conflicts arising from the pressures of the modern sport.In order to do that we structured our research to answer the overriding question of â€Å"How do international sport governing bodies adapt and respond to the pressures of lobby groups? †, looking specifically to th e case of UEFA and G-14. With the overriding question in mind, we structured our project to answer the following questions: 1. What are the conflicting circumstances within the governance of European football that are bearing the rise of such lobby groups? 2. How efficiently are those conflicting circumstances being addressed by the pertinent actors? 3. What are the main risks to the sport that can arise from the process in which the conflicts are being managed, and how can those risks be mitigated? II. Paper Structure and Scope The tructure of this paper is sub-divided in five chapters: In the first chapter we present the field of play and provide some background information on the stage and scenario in which the main actions take place. We will demonstrate the current governance structure of European football, briefly touch on the peculiar dynamics of the football industry, present the major relevant stakeholders, their interests and inter-relationships and illustrate the complexi ty of the competition calendar of professional football in Europe. This information will be relevant for the complete understanding of the issues treated in the paper. The second chapter presents the major actors involved in the production of the spectacle of European football.Although we recognize that the media and the major sponsors are important enablers in the distribution and popularisation of European football and its influence over the shaping of the game has been growing along the years, we have chosen to focus the scope of our analysis on the clubs (and with them, the G-14), the national associations, the leagues and UEFA, as we believe those are still the most influential actors in the design of football as a product. After presenting the major actors, in the third chapter we analyse the convergences and divergences of interests among them, the main areas of conflict and the potential risks that such conflicts can impose to the future of European football. We then take a break at chapter four and look outside European football in the search for examples of conflict management at similar sporting contexts. Our objective with chapter four is to learn some lessons that could be applied in the process of defining our final recommendations for the present case.Finally, in chapter five we present a model with recommendations for adjustments to the current governance of European football, with the aim of minimizing the conflicts and tensions among the members of the Football Family. 7 Although UEFA has a broad range of activities touching on every discipline of association football in Europe, the scope of this paper is limited to elite professional men’s football, as this is currently the only form of the game that has achieved significant commercial potential. And it is not until significant flows of money begin to pour over a sport that the major conflicts among different stakeholders start to surface. III. Research Methods and constraints Our res earch was carried out during May and June 2003. It has been structured around a hypothesisdriven approach, a methodology commonly used by management consulting firms.The approach consists in five major steps as shown in Figure I: Figure I – The hypothesis-driven approach 1 2 3 4 5 Overriding question Issue tree Hypotheses Research Analyses & Conclusions 1. Overriding question The Overriding question is the ultimate question the project aims to answer. As mentioned before, we have defined it as: â€Å"How do international sports governing bodies adapt and respond to the pressures of lobby groups? † 2. Issue tree The second step consists in identifying the relevant issues that need to be addressed in order to answer the overriding question. The issue tree is a hierarchical structure of questions that will be answered during the project leading to the final answer to the overriding question.For this paper we have defined three main issues and a set of 24 sub-issues in two different levels as shown in Figure II. 3. Hypotheses Once the issue tree has been defined we have generated the hypotheses for the project. The hypotheses are tentative answers to the issues based on the authors’ intuition and background knowledge on the subject. They may be proved right or they may be discharged after the research and the analyses are conducted. The importance of generating a sound set of hypotheses is that it provides the group with a comprehensive overview of the project’s main messages at its very beginning. 4. Research In this step we have designed the analyses that needed to be conducted to prove or discharge our hypotheses.Based on that set of analyses, we defined the input data to be gathered and determined their potential sources. 8 Input data was collected through the following methods: †¢ Preliminary interviews with representatives of UEFA and G-14 to validate the soundness of the initial list of hypotheses. †¢ Interviews with re presentatives of sport governing bodies, football clubs, national associations, national leagues, governmental bodies, sports marketing companies, media companies, lawyers, economists, players and industry analysts to capture the different views on the subject and its potential developments. †¢ Review of official documents provided by G-14 and UEFA, besides books and papers from academics on matters concerning the scope of our project. Search and review of websites of official governing bodies, clubs, and specialized sport press for relevant news and archive materials. †¢ Final interviews with UEFA and G-14 to discuss and validate our preliminary findings. 5. Analyses and conclusions After finishing the process of data gathering we have conducted the analyses necessary to prove or discharge the hypotheses and have drawn our final conclusions. Research Constraints Although the hypothesis-driven approach adds focus and drive to the project, speeding up the problem solving pr ocess, this project was conducted along six weeks of full-time work and there is some limitation to what can be achieved in such a reduced time frame.Notwithstanding, we have been fortunate by the fact that some of the major exponents in the European football industry were extremely collaborative and candid about the subject, allowing us to conduct twenty three high-level interviews across four different countries covering representatives of and experts on all main stakeholders involved in the subject. Precisely because of time constraints, we have not been able to directly interview executives from TV companies or sponsors, nor have we been able to conduct quantitative analyses on the opinion of fans as far as the issues touched by this paper are concerned. Our conclusions with regards to those groups of stakeholders are based on interviews with industry analysts and any available research material published on the subject.With respect to research materials we have been able to obt ain the majority of information needed to prove or discharge our set of hypotheses, perhaps with the exception of conclusive empirical data about the determinants of demand for sport. This would be particularly useful in allowing the design of more precise scenarios for the future of the game, and further research in this area might prove valuable. 9 Figure II – The original project issue tree (as designed in the first group meeting) Overriding question How do international sport governing bodies adapt and respond to the pressures of lobby groups? The case of UEFA and G14 Issue A What are the conflicts within the internal structure of European Football and why are they arising? A1 What are the interests of UEFA? A2 What are the general interests of the clubs? A3How do those interests interplay? A4 What additional factors could be creating / amplifying conflicts? A1. 1 How does UEFA pursue those interests? A2. 1 How do top clubs pursue those interests? A3. 1 What are the areas of convergence? A1. 2 How do those interests represent the views of the member associations? A2. 2 How do other professional clubs pursue those interests? How do amateur clubs pursue those interests? A3. 2 What are the areas of divergence? A2. 3 Issue B How efficiently are those conflicts being managed? B1 How have past conflicts been managed? B2 What are other examples of conflict management in sports? B3 What lessons can we learn from those examples? Issue CWhat risks can arise for the sport from the management of such conflicts and how can those risks be mitigated? C1 What if UEFA rigidly fixes its position against the Lobbying group? C2 What if UEFA adopts a reactive role towards the conflict? C3 How can UEFA adopt a proactive model to solve conflicts? C1. 1 What are the threats for UEFA coming from G-14? C3. 1 What are the most sensitive areas to be considered by this model? What are the key success factors for the model? C1. 2 What are the threats for G-14? C3. 2 C1. 3 What w ould be the consequences of those threats if carried out? C3. 3 How should the model be designed? 10 CHAPTER ONE: BACKGROUND 1. 1. 1. 1. 1. STRUCTURE OF EUROPEAN FOOTBALL GOVERNANCE AND FOOTBALL – THE PYRAMID STRUCTUREThe governance of association football resembles a pyramid where each layer takes on different responsibilities in different geographical scope. The formation of this pyramid has historical roots in the early stages of organized football in Britain and it has not been a uniform process. As Britain changed from an agrarian to an industrial society in the late 18 century, the games played in the open fields of the countryside were adapted to suit the narrow streets and hard surfaces of the new urban communities. The leisure time determined by sun, seasons, and feudal obligation was replaced by the much more restricted leisure hours decreed by the artificial light of the factories and the needs of the owners.Improvements in roads and transportation allowed games to be played outside the local village, and as steam trains started to link the ever growing towns of Britain, it became possible to play on a national basis the games that the middle class favoured and promoted. This expanding scope involved agreement on rules and the formation of a national governing body. 1 th And that is where the pyramid begins to be formed. With the spread of the sport around the world, the pyramid started evolving from a local and national to an international scope and finally reached its current form as shown in Figure 1. 1: Figure 1. 1: The pyramidal structure of European football FIFA UEFA National Leagues National Associations REGIONAL ASSOCIATIONS CLUBSThe clubs The clubs are the basic cell and the foundation of the pyramid. Originally founded as local associations their initial objective was to offer the local community the possibility of engaging in the sport, thereby promoting the idea of â€Å"sport for all†. With the introduction of a regular c ompetition, The FA Challenge 1 MURRAY Bill, The world’s game – a history of soccer, University of Illinois Press, 1998, p. 2 11 Cup in 1871, spectator crowds in England began to increase dramatically and in 1901 a crowd of 110,820 turned up to see Tottenham Hotspur and Sheffield United contest the final of the trophy . These crowds were increasingly giving birth to the popularisation of football as a spectator sport.Today, the main objective of top professional football clubs has shifted from the offer of opportunities to engage in the practice of the sport, to the offer of the spectacle of the game and all the attached psychological, emotional and social benefits for the fan. But the clubs still remain the basis and the primary link of contact with the communities. Regional associations Regional associations form the next level; although this form of association is not present in all countries. Clubs are usually affiliated to these organisations. Their scope of action is limited to a region within a country in which they are responsible for organising regional championships or coordinating the sport.National associations The first national association to come into scene was the English Football Association, or simply the FA as it is known today. It emerged from the London FA that became virtually the sole authority for the game in England after different regional associations in England came to a compromise agreement in 1877. By 1905 it had achieved the mark of 10. 000 local clubs affiliated to it. The success of the London FA in establishing its control over other regional associations came with the popularity of the Challenge Cup, instituted in 1871, a competition that is still played today. Also helping to secure the success of the dribbling game was the regular match with Scotland which began officially in 1872. 4 3 2Today, national associations besides organizing club competitions and being responsible for the coordination of a national tea m to represent the country in international competitions are also the supreme regulatory and disciplinary body of the sport within the national boundaries, although, as we will see later, they have limited autonomy and have to abide by the rules of UEFA and FIFA. By doing this they are granted a monopolistic position in the national organization of the game, as FIFA as the ultimate body in the pyramid will only recognize one association per country. National Leagues Some countries such as France, Italy or England know another form of organisation with the introduction in the structure of national leagues. The origin of leagues dates back to the England of the end of the 19 century.In 1885, after a series of complaints about athletes accepting money and the creation of committees to deal with them, followed by threats of serious punishments, the FA legalized professionalism. This meant that players had to be given a regular income. The Challenge Cup was still the main competition. Be ing a knock-out competition, even the best teams could be eliminated in an early round being left with nothing to do. The answer was the Football League. The league was 2 3 4 5 5 th : Ibid, p. 9 Ibid, p. 6 Ibid, p. 7 The elite club competitions are respectively organised in these countries by the ‘Ligue Nationale’, ‘Lega Calcio’ and the ‘Premier League’. 12 ade up of selected teams that agreed to play one another on set dates, on a home and away basis, and promised to field their strongest teams and to give league matches preference over all others. The individuals engaged in the discussions about the new league were essentially self-made men, small business owners and industrialists who came from a social category different from that of the men of the FA. With the FA watching anxiously, discussions were held by those in favour of the league. On 8 September 1888 the new football league kicked off competition with twelve teams. A constitution wo uld be drawn up determining issues such as points scoring system, how to share the gate money, and later, a system of promotion from and relegation to a second division.According to its founder and guiding spirit, the Scottish-born Birmingham businessman William McGregor, the aim of the league was to protect the interests of the clubs taking part in its competition. He openly declared that â€Å"the league should never aspire to be a legislating body†¦ by the very nature of things the League must be a selfish body. † The English Football League conceded the right of the FA to control football in all areas but the organisation of league competition. This meant that the FA was left to control the Challenge Cup, internationals, amateur football and certain matters concerning the rewards and disciplining of the professionals. 6Today, the relationship between national leagues and national associations throughout Europe is very similar to the one verified in England in the lat e 19 th century. While the national association is responsible for the control and development of all aspects and disciplines of football within the national boundaries, the league’s main interest is the commercial development of its major product, a league competition. Although there are tensions from time to time, the two bodies co-habit in relative peace given their share of common interests on the game. UEFA The next level of the pyramid is formed by the continental confederations, or more specifically in the case of Europe, UEFA – The Union of European Football Associations. As the name suggests, UEFA is formed by 52 national associations .It is the governing body of football on the continent of Europe and has as its core mission to safeguard the development of European football at every level of the game and to promote the principles of unity and solidarity, as we will detail later. Along the same lines of the national associations UEFA enjoys a monopolistic posi tion on the organisation of the game in Europe, guaranteed by the pyramid structure. It is relevant to notice that unlike the reality at the national level, where a league takes from the national association the responsibility of organizing and commercially developing an elite competition among clubs, the figure of the league does not exist at the continental level. The task of organizing and commercialising European club competition falls into UEFA’s direct jurisdiction.FIFA FIFA, is the supreme authority of football in the world. Its creation, in 1904, precedes that of the continental confederations, and thus, its membership structure is also formed by national associations. 7 6 7 MURRAY Bill, The world’s game – a history of soccer, University of Illinois Press, 1998, p. 11 See a complete list of UEFA’s member associations at appendix a. 13 Technically, the continental confederations, like UEFA, are not members of FIFA, but are recognized bodies and hav e the right to elect the vice presidents and members of FIFA’s Executive Committee. FIFA’s purpose is to promote and develop the game of football throughout the world, and to be the uardian of the regulations of the game. Unlike national associations, national leagues and continental confederations, FIFA currently does not organise club football competitions, although it regulates over matters that impact club football reality, such as transfer systems, and the coordinated international calendar. FIFA’s activities as far as competition organisation is concerned are currently limited to international competitions among national teams. FIFA is responsible for holding the whole pyramid together. The ownership of the FIFA World Cup, the most important single sporting event in the world, and a large and universal membership base are its main sources of power.By making use of regulations such as the need for a national association to be a member of a continental feder ation for two years before being granted membership to FIFA , and by obliging continental confederations to comply with and enforce compliance with the FIFA statutes, regulations and decisions, and to ensure that international leagues or any other such combination of clubs or leagues shall not be formed without its consent and approval of FIFA , or by prohibiting affiliated national associations and their clubs to play matches or entertain other sports contacts with associations which are not affiliated to FIFA or with clubs belonging to them without FIFA’s consent , it guarantees that the layers and the monopoly of the pyramid in the organisation of football are respected. 1. 1. 2. THE EUROPEAN FOOTBALL INDUSTRY 11 10 9 8Definition of the Football Industry Many people resent the use of the term ‘business’ to describe the activities performed by the main actors in the European football scenario. However, it is undeniable that European football has undergone an ac centuated process of commercialisation, especially in the last fifteen years, which has brought significant amounts of money into the game. Instead of engaging in an emotional and semantic discussion to determine if football is a game, if it is a business or if it is as much a business as it is a game, we will define as football business the group of commercial activities performed by the actors in the football industry, and we will define as football industry the group of legal entities whose commercial activities are rooted in the game of football.However, such a definition of the football industry is a very broad one and for the purpose of this paper it needs to be narrowed down as proposed in Figure 1. 2. 8 9 10 11 FIFA has currently 204 member associations (one per country), which represents a larger membership base than the UN. FIFA Statutes, art 4, par. 1 FIFA Statutes, art. 9, par. 3 FIFA Statutes, art. 57, par. 1 14 Figure 1. 2 – The structure of the football industr y12 Sports Industry Football Other Sports Sporting goods Facility dependent sports services Sport consultation services Spectacle sport Hybrid Sport Participant Sport Club Football National team Football Participant services Spectator services Sponsorship services Media servicesLicence services Scope of this paper Outside the scope of this paper The product-based typology proposed in Figure 1. 2 divides the sport industry into three main segments: Sporting goods, Facility dependent sports services and Sport consultation services. †¢ Sporting goods: companies producing apparel, shoes, equipment, team and/or league merchandise, ‘sport’ licensed products. Examples of companies in this segment include Nike, Adidas and Reebok. †¢ Sport consultation services: companies supplying advice in areas such as management, medical, design, building and maintenance, programming, among others. Examples include IMG, Octagon, and InFront. Facility dependent sports services: orga nisations offering sport as their end product be it as spectacle (matches, competitions) or as access to participation. This segment, like the others, can be further subdivided in three categories: spectacle, participant and hybrid sport. – Spectacle sport: the most prominent feature of organisations in this category is the ability to generate substantial revenues directly or indirectly from spectators. Here, athletes are usually professionals. Examples of organisations in this category are Manchester United, Juventus and the English Premier League. 12 Adapted from WESTERBEEK & SMITH, Sport Business in the Global Marketplace, Palgrave, 2003, p. 87 15 Participant sport: this is the category of entities providing opportunities for people to engage in sporting activities, usually on a non-professional basis, like gyms, community sports centres and amateur sport clubs. – Hybrid sport: in this category, sports organisations offer a mix of spectacle and participant sport. As Westerbeek and Smith 13 point out, governing bodies are likely to be hybrid sport organisations as they are charged with developing a mass participation base for the sport with the ambition of securing its longevity, while encouraging and promoting the few outstanding athletes that can perform in elite spectacle sport, providing the sport with the exposure so essential to its popularity, while developing the basis for spectacle sports’ revenue streams.Once the segmentation is understood, we can then define the European Football Industry in this paper as the group of legal entities acting in the facility dependent sports services, specifically within the boundaries of the spectacle and hybrid sport category in the territory covered by the fifty two member associations of UEFA. It is important to remark that this industry is built on two main pillars, club football and national team football, that ultimately have to â€Å"share† part of the same resources: top-level pla yers, spectatorship, calendar time, among others. Dimension and Growth of the European Football Industry There is no reliable data about the size of the European Football Industry as defined above.Deloitte & Touche estimates that, in the season 2000/2001, it should be close to national team football in Europe is in the range of 90-10% respectively. 15 10 billion. 14 A possible breakdown of this number is shown in Figure 1. 3. We reckon that the split between club football and Another important consideration is the fact that domestic football (in top and lower divisions) is by far the most important segment of the industry. As we can see from Figure 1. 3, the lion’s share of the industry is represented by top-division club football in the domestic leagues, amounting to 6. 6bn, thereof the so-called ‘big-five’ leagues (England, Italy, Spain, Germany and France) dominate 78%.Put in perspective, those numbers are not very impressive, as the entire European Football I ndustry would not even feature in the ranking Fortune Global 500 16 in 2002. What is impressive though, is the consistent fast pace with which this industry has been growing over the past 10 years. The top-division clubs at the ‘big-five’ leagues all grew at similar rates from the mid-1990s to 2001 – between 18% to 24% per annum, 17 while UEFA’s consolidated revenues grew at an impressive rate of 29% per annum 18 during the nine-year period comprised between the seasons 1992/1993 and 2001/2002 mainly 13 14 15 WESTERBEEK & SMITH, Sport Business in the Global Marketplace, Palgrave, 2003 Deloitte & Touche Annual Review of Football Finance – June 2002 – p. 16 A priori, by looking at Figure 1. , this proportion might sound counter-intuitive but we must not forget that a share of UEFA’s and the European federations’ revenues is based on club football. The Fortune Global 500 ranks the 500 largest companies in the world based on their g lobal revenues. In the 2002 ranking, Wal Mart appears as number 1 with global revenues around US$220 billion, while Takenaka, a Japanese company in the construction business ranks 500 with global revenues slightly above US$10bn. DELOITTE & TOUCHE Annual Review of Football Finance 2001/2000 – p. 4 UEFA’s consolidated revenues including amounts paid beforehand – UEFA CEO Annual Report 2002 p. 33 16 17 18 16 riven by the growth of the UEFA Champions League as we will show later. And although these growth rates are recently giving sign of slowing the pace, we believe it is more a matter of an internal adjustment of the industry than the apocalyptical actualisation of the burst of a bubble as many analysts like to put it. Most of the economic fundaments supporting the growth of the European Football Industry are solid, as notwithstanding the latest downsizing in the value of broadcast rights paid for some properties and the breakdown of companies like ISL and KirchMe dia, we do not see signs of an actual decrease in the demand for European Football.Much on the contrary, as we have seen that the TV audience for the 2002/03 UEFA Champions League grew by 9% in relation to the previous year, meaning that the competition produced an average live audience of 46 million viewers per match-week in the larger markets. 19 Figure 1. 3 – Estimated market size of the European Football Industry 2000/2001 billion 1. 3 1. 2 6. 6 ‘Big-5’ Leagues 10. 0 0. 7 0. 2 10 year average 24% 17% 14% 13% 10% 78% England Italy Spain Germany France growth > 20% p. a. Top division domestic club football1 Lower division domestic club football3 UEFA Club Competitions2 Annualized EURO Cup2 Sources: 1) Deloitte & Touche, 2) UEFA , 3) Authors’ estimatesRevenues of National Associations, Leagues, UEFA, others3 Total1 It is important to notice though, that if the industry has experienced significant growth in revenues in the last decade, profitability has not kept pace. This is mainly because of the rise in the spending on players in a phenomenon known as the ‘prune juice’ effect, which refers to the tendency for revenues generated by football clubs to simply pass through the clubs’ accounts on the way to players’ pockets. Just to illustrate that point, as already mentioned, the consolidated revenues of the top-division clubs in the ‘big-five’ leagues grew at an annual rate between 18% and 24% between the seasons 1995/96 and 2000/01.In the same period the ratio wages/revenues went from 47% to 60% in England, and from 57% to 75% in Italy, just to mention two of the major markets. profitability 21 20 The result is a plunge in the 23 of the industry in the major markets 22 with the most accentuated cases being Italy going from –1% to –19% in six seasons and Spain going from –7% to –28% in four seasons. 19 20 21 22 23 UEFA’s champion audience, Sportbusiness. com, June 3 2003 Analysis of the authors based on the Deloitte and Touche Review of Football Finances – 2002 Measured as Operating Profits / Revenues The exception is Germany that managed to keep its profitability between 8% and 10% during the period There are no available date for Spanish top-division clubs in the seasons 1999/00 and 2000/01 17Business Model of the Football Industry The current business model of the European Football Industry relies on four main revenue streams: 1. Match day revenues – Expenditure of fans on-site, mainly derived from gate receipts (including season tickets). 2. Media rights – Value paid by media companies to acquire the rights of broadcasting a specific sport property. 3. Sponsorship – Mainly derived from brand/name placing on team shirts and around stadia. 4. Other commercial revenues – Mainly revenues from licensed merchandise, but also includes conference and catering services. Figure 1. 4 gives an overview on the proportions of these revenue streams for a sample of domestic leagues. Figure 1. – Breakdown of top-division clubs revenue streams – 2000/01 16% 31% 18% 16% 42% 34% 40% 25% 54% 39% 51% 45% 51% 20% 18% 20% 12% 4% 41% 43% 13% 30% 17% 9% 15% 22% 14% 18% 15% 12% 13% England Italy Spain (97/98) Key: Germany France Portugal Netherlands Norway Matchday Broadcast Sponsorship (includes all commercial revenues for England) Other commercial Source: Deloitte & Touche As we can see from the graph above, TV is in general the single largest contributor to clubs’ revenues in the ‘big-five’ leagues. According to Deloitte & Touche in the season 2000/01, TV responded for 2. 4 billion, or 46% of the 5. 2 billion total revenues of the top-division clubs in the ‘big-five’ leagues.However, this proportion will vary significantly according to the size of the TV market in which the club is located. There is a clear difference between the relevance of TV monies for the top-division clubs in the ‘big-five’ leagues and the top-division clubs in other mid-size or small leagues like Portugal, Netherlands and Norway, as shown in the graph. The Fan: The Heart of the Football Industry Although the importance of television and sponsors is clear in the current business model of the European Football Industry, which might lead us to conclude that those are the most important actors in this industry, the dynamics of the industry rely ultimately on the interest of spectators. Figure 1. shows a simplified map of value relationships between actors in this industry. 18 Figure 1. 5 – Summarized Value Chain of the Football Industry Simplified Simplified 2 Leagues Sponsors ? Clubs B C 1 3 ? Television A Football Fans Population Note: For the sake of simplification this map does not consider some important stakeholders in the Football Industry such as governing bodies and federations, players, clubs’ shareholders, national teams, a mong others The cornerstone of value for the Football Industry is relationship – between fans and the clubs. In this relationship the clubs supply the fans with the game and all the emotional, social and psychological benefits attached to it.The fans, in turn, provide the club with financial resources in the form of gate receipts, season tickets or membership fees and purchase of licensed merchandise besides the emotional association, support, loyalty, exposure, among other non-tangible benefits. Relationship illustrates the fact that clubs need the league structure to create the on-field competition environment required by fans. And the quality of the competition, measured in the quality of teams taking part in that competition and in the level of competitive balance, is one of the most important drivers of demand for football. This relationship between clubs and leagues 24 is one of the ell-known peculiarities of the Football Industry. In any other industry the ideal object ive of the players would be to achieve a monopolistic position driving competitors out of business, whereas in the Football Industry this is not only impossible, but also not desirable, since clubs need to cooperate for the joint-production of the game. However, there are inherent conflicts between teams since the league structure also determines a team’s individual share of industry profits. Relationship reflects the fact that part of the football fans are not necessarily attached to one specific club but have overall interest in a particular competition.The marketing strategy of the UEFA Champions League has the benefit of strengthening this link eventually intending to increase the share of the population interested for European football regardless of a particular team allegiance. In the left side of the map we have television companies. Traditionally, revenues of free-to-air television companies are based on advertisement from sponsors. In order to attract sponsors, 24 Le agues or whatever entity responsible for organising a football competition 19 television companies must be able to attract audience, and this is done by offering content. That is represented by relationship A. Television companies offer content to the public in the quest for an audience.By getting an audience, television companies become attractive to sponsors. That is shown in relationship C. Sponsors will pay to use television as a channel to advertise their products and services to their target markets among the audience. Pay-TV companies have an incremental revenue stream. In addition to advertisement from sponsors they rely on subscription fees from consumers interested in having access to exclusive content. In both cases though, it is clear that audience is key. In markets where the interest for a particular sport captures a large share of the population, which is the case of football in the ‘big-five’ leagues, the link represented in relationships 25TV companies and sponsors realise the importance of and wish to exploit it. That is represented by and relationships ? and ?. In relationship ? , TV companies pay to acquire the right (if possible exclusive) to broadcast individual matches or competitions in the hope to attract an audience. In relationship ? sponsors pay to associate themselves with teams or leagues both as a way to get visibility to sports fans and as a way to associate their brand with the sporting brand they are sponsoring, thus exploring the goodwill present in the link between the fan and the sport. Their ultimate goal is to get the population to consume their products and services.In all cases it is simple to understand that the ultimate source of value for the Football Industry is the interest of the fan for the sport. The fan is the TV viewer, the pay-TV subscriber, the stadium spectator, and potentially the end consumer of the sponsors’ products and services. The larger the fan base and the larger its identificat ion with the sport, the higher the probability that this sport will attract the interest of TV and sponsors. Of course, the potential value of the Football Industry in a particular region will depend also on the size of the TV and the advertisement markets in that region, which in the end bear relation with the demographics of the region. Thus the focal point of he Football Industry is the football fan, 26 and that is the reason why it is crucial for clubs, leagues and governing bodies to understand what drives spectator interest for European football, in other words, what are the drivers of demand for football. Demand for Football Spectatorship Stefan Szymanski summarizes the most important factors driving fan interest for football in three classic elements: 27 Quality of the game Uncertainty of outcome (of the match and of the competition) Success of the fan’s own team 25 26 England, Italy, Spain, Germany and France There are several studies intending to qualify the footbal l fan according to different levels of commitment and interest.For the sake of this paper we qualify as football fan any person interested in the game regardless of the level of commitment. Interview with Stefan SZYMANSKI, Professor of Economics, Imperial College London 27 20 The quality of the game would touch on aspects such as the entertainment and spectacle, the aesthetic pleasure of watching the game, the quality of the visiting team. The uncertainty of outcome has two major aspects: uncertainty of outcome of the match and the uncertainty of outcome of a competition. About the uncertainty of match outcome, the review of the literature shows that generally, the closer the result of the match is expected to be, the more attractive the game will be to fans.Along the same lines fans would be less enthusiastic about a game in which the result is seen as a foregone conclusion. Furthermore this uncertainty must be preserved at all costs, as the integrity of the game is completely conn ected to the integrity of the result. 28 The uncertainty of outcome of the competition is measured in terms of competitive balance. There is general agreement that match attendance will be influenced by the closeness of the championship race. As more teams have a chance of reaching the finals or play-offs, fans will expect a close contest and anticipate high quality play. This anticipation will be reflected in a higher level of fan enjoyment and consumer utility and a boost to crowd size. 29Success of the fan’s own team implies that supporters achieve satisfaction from identifying with a winning team. Arguably, a team that consistently loses will have difficulty attracting large crowds. active supporter bases than their domestic peers. But if a winning season contributes to the increase of the commitment of the supporter base of a specific club and if the fan base, as argued before, is the principal source of goodwill for a club, it seems obvious to state that clubs, as indiv idual entities, will seek to maximize their winning ratios as a way to increase the supporter base. This practice, if successful, will eventually conflict with the element of uncertainty of outcome.The challenge for clubs and organisers of competitions is to understand the optimal combination between those three elements (quality of the game, uncertainty of outcome and success of own team) in the determination of demand for football as they frequently can conflict among themselves. Conclusion In summary, as much as we want to avoid the discussion of football being a business or a game, we must recognise that the dynamics of the football industry present some specific characteristics that make us conclude that football cannot be taken as just a regular business. These special characteristics fall mainly in three inter-related areas: 1. Football clubs are cultural and community assets with associated sporting and community objectives.There is a long and unfinished academic debate argu ing that football clubs are utility 30 That could help to explain why clubs like Manchester United or Real Madrid have larger and more 28 In that sense potential contractual clauses like the one suggested by the press in the Beckham transfer from Manchester United to Real Madrid, in which the acquiring club will pay a bonus to the ceding club based on the former’s future performances at championships at which both teams compete could allow for the public’s perception of match fixing between the two clubs in a specific scenario, which could eventually hurt long-term demand for the game. WESTERBEEK & SMITH, Sport Business in the Global Marketplace, Palgrave, 2003, p. 64 29 30Although formation of fan basis is a more complex phenomenon and depends on many other factors apart from a team’s winning record at a given time. 21 maximisers pursuing non-pecuniary objectives rather than maximisation of economic value as any other business. Sloan 31 argues that while in US professional team sports, many teams have an established track record of profitability, in the case of European football teams, profit making clubs have been very much the exception and not the rule. He goes further explaining that chairmen and directors with a controlling interest in football clubs are usually individuals who have achieved success in business in other fields.Their motives for investing may include a desire for power or prestige, or simple sporting enthusiasm: a wish to see the local club succeed on the field of play. In many cases profit of the club seems unlikely to be the major motivating factor. As one of our experts interviewed puts it: ‘Clubs are too much under the control of local business owners or major individuals in the community looking for personal gain. When these people take the reigns of a club usually they end up satisfying themselves. Many of them have come to my office and said: – For me, investing in a club is just like having a PR c ampaign. Rather than giving money to an advertising agency, I buy a club and since the press talks a lot about me, it has an equivalent effect. ’ . The relationship between the supporter and the club can be very different to a standard customercompany relationship. Lomax 32 explains that most supporters choose their clubs at a young age and then stick to this choice however irrational it may seem at face value. Football supporters are key stakeholders contributing to the club not just by being loyal customers but also by actively adding to the match day spectacle, and often committing financially to keep their club afloat as it was the case with the English supporters of Northampton FC that contributed with money in a fundraising campaign to alleviate the club’s financial distress. 3.As already mentioned, the Football Industry depends on both competition and co-operation among clubs. Football then redistributes income from leading to lagging clubs (and leagues) in orde r to promote competitive balance. This redistribution of income would not be allowed in most traditional industries. The combination of those three factors makes the dynamics of the football industry special in relation to most of the other regular forms of businesses. 1. 1. 3. STAKEHOLDERS’ M AP After analysing the governance structure and the dynamics of the European Football Industry, it makes sense to map its stakeholders in a more comprehensive way. Figure 1. 6 depicts those stakeholders: 31SLOANE Peter, The economics of professional football: The football club as a utility maximiser, Scottish Journal of Political Economy pp. 121-145, June 1971 32 LOMAX Brian, Democracy and Fandom: Developing a supporters’ trust at Northampton Town FC, in: GARLAND John, MALCOLM Dominic and ROWE Michael (Ed),The Future of Football – Challenges for the 21st century, Frank Cass, 2000 22 Figure 1. 6 – Stakeholders Map of the European Football Industry Non Non Exhaustive Exhaustive Fans / Spectators Club Patrons Clubs UEFA Stock Market G-14 European Union Players National Leagues National Associations FIFA European Football Industry Media Sponsors Press Once the stakeholders are identified we will make use of table 1. to map their interests, analyse their bargaining power, identify the main groups over which they exercise their power and qualify the types of pressures suffered by each group. Some of the points covered in this section are introductory and will be explained in more details later, but we think it is important to bear in mind the relationships described below, as they will be helpful to understand the nature of the conflicts treated in this paper. Table 1. 1 – General overview of stakeholders interests, power and pressures Stakeholder Main Interests †¢ Identification †¢ Entertainment Power Focal point of the industry but not sufficiently organised (H/M)* Vulnerability Not sufficiently organised †¢ Too emotionally a ttached to the game, will accept poor treatment †¢ Internal conflict between individual and cooperative objectives Pressure exerted Pressure received Fans / Spectators †¢ Spectacle †¢ Psychological satisfaction †¢ Social Integration Immediate pressure for sport performance over clubs Community Fans (H/M) Press (H) Players (H) Pressure on Governing Bodies and leagues over a number of issues related to the regulation of the game (Revenue sharing, competition format, supply of players to national teams, calendar) Patrons (H) UEFA (H) G-14 (H/M) Media (H/M) FIFA (H) Sponsors (H) Leagues (H) Stock Market (H) Nat. Assoc. (H) Increase demand for football Clubs †¢ On pitch performance limited by budget constraints Basic cell of the industry, controls the most valuable assets for the production of the game (H)* †¢ Short-term view †¢ Little control over main cost items †¢ Not a homogeneous and organized group †¢ Lacks direct representation at highe r decision making level *High (H), Medium (M), Low (L) 23 Table 1. 1 – General overview of stakeholders interests, power and pressures – continued Stakeholder Main Interests †¢ Develop the following of the game in Europe Power* Vulnerability Pressure exerted Pressure received* G-14 (H) Other clubs (M) FIFA (H) UEFA †¢ Keep tight control of the game in Europe †¢ Promote solidarity †¢ Promote port for all †¢ Develop other disciplines of the game †¢ Develop the following of the game universally Detains the natural monopoly in the organisation of the game in Europe, holds the key for eligibility of players and clubs at competitions (H) †¢ Relies too much on elite club competition to fund its activities Pressure on clubs and players to comply with the regulations and principles EU (H) Press (H) Fans (L) Media (M) Sponsors (L) Players (M) Leagues (L) FIFA †¢ Keep a strong control of the game †¢ Promote solidarity †¢ Develop o ther disciplines of the game †¢ Content – to get audience from the fans Is the supreme body of world football (H) †¢ Relies too much on one single national team event to fund its activitiesPressure on national associations, confederations, clubs to comply with the rules and regulations of the game EU (H) Media (M) Sponsors (L) Confederations (M) Media †¢ Has an interest in the game as long as it generates audience. Will switch to other content options as soon as it does not †¢ Content – to get readership from the fans Is the single major investor in the game. Without TV money Football collapses (H) †¢ Limited bargaining power over the price of top events †¢ Limited concern about the long term issues of the game †¢ Subject to competition law Pressure on leagues and UEFA for changes in the format in the quest for immediate rise in audienceFans (H) EU (H) Internal competition (H) Sponsors (H) Press Extremely influential over fans (H) Has the control over the national game, is represented with decision power at UEFA and FIFA, owns the national teams – a major source of passion (H/M) Usually controls the central marketing of domestic competitions (M) In the top level, due to the limited supply of talent and due to identification of fans (H). In the lower level due to the high replaceability (L) †¢ Credibility It is the ‘Big Brother’ watching the steps of Clubs, National Associations, Leagues and Players Fans (H) Other types of media (H) National Leagues (H) Players (H) National Associations Aligned with FIFA and UEFA at the domestic level Being confined to national borders may suffer from globalisation tendencies Pressure on the clubs, and on the leagues G-14 (H) Clubs (M) Fans (M) Media (H) Press (H) National leagues †¢ Organise club competition at the domestic level †¢ Commercial optimisation of domestic competition Being confined to national borders may suffer from globalisation tendencies Pressure on the clubs for cooperation over the quest for individual objectives, pressure on national associations Clubs (H) Media (H) Fans (L) †¢ Self realisation Players †¢ Financial security †¢ Status †¢ In general not too organised †¢ Incredibly risky and specific career – shortClubs (H/M) Pressure on the clubs for better labour conditions Fans (H) Press (H) Nat. Assoc. (H/M) Leagues (M) *High (H), Medium (M), Low (L) 24 Table 1. 1 – General overview of stakeholders interests, power and pressures – continued Stakeholder Main Interests †¢ Guarantee fair trade in the industry †¢ Help Federations to implement professional management †¢ Keep the balance among football and other industries †¢ Increase representation of top clubs in the decision making process of professional club football at international level †¢ Advise clubs on current financial challenges Power Vulnerability Pressure exerted Pressure received EU Can change the structure in which the professional level of the game is managed (H)Most of the time acts like an observer, not taking action until an actor complains †¢ Do not represent all top clubs †¢ Not officially recognised by UEFA †¢ Cannot impede UEFA or FIFA to directly deal with individual member clubs †¢ Threatening behaviour †¢ Relegation / Promotion system †¢ Eligibility for international competitions Pressure on the governing bodies on anti-competitive practices Industry sectors (H) Member states (H) G-14 (The Lobby Group) Represents the major top clubs in Europe (H) Pressure on UEFA, FIFA, national associations, other clubs and the EU Fans (L), UEFA (H), Member clubs (L) Stock Market †¢ Maximisation of shareholder valueImportant source of funds for some clubs, but not very representative in the industry as a whole (M/L) †¢ Too dependant on the highs and lows of sporting performance †¢ Subject to regulations made by people who may not be profit seekers †¢ Limited sensitivity to the long term peculiarities of the game †¢ Limited control over the sponsorship agreement Pressure on the listed clubs for diversification of revenues and for financial returns Regulatory bodies (H) Fans (L) †¢ Visibility to fans Sponsors †¢ Association with the goodwill of clubs and competitions One of the major sources of revenue in the Industry(H) †¢ Reduced bargaining power over the price of top events †¢ Internal competition in the sponsorship industryPressure on competition organisers, clubs and players Shareholders (H) Other sponsors (H) Club Patrons †¢ Prestige †¢ Value transfer to other businesses Owner and benefactor of the club (H) Too much emotionally involved with the club Over players for pitch performance Fans (M), Players (H), Community (H) *High (H), Medium (M), Low (L) 25 1. 1. 4. PROFESSIONAL FOOTBALL COMPETITION CALENDAR The pyramid structure of football gove rnance, along with the international nature of the game impose additional challenges to the organisation of competition in Europe. All layers of the pyramid rely mainly on the organisation and participation at competitions to generate the funds for their activities.Be it FIFA with its quadrennial World Cup or biennial Confederations’ Cup , UEFA with the Euro or the UEFA Champions League, the National Associations with the participation in the international competitions for national teams organised by FIFA and UEFA or with the organisation of the domestic cups, the national leagues with the organisation of the domestic league, or the clubs participating in domestic and international competitions, all actors depend ultimately on competition to subsist. The complexity in the organisation of the competition calendar comes from the fact that the actors have to share the same restricted resources: players and time.National team competitions, to be able to exploit their full commerc ial potential, have to count on the presence of top players, often the same players that are fighting for top teams in club competitions. International club competitions, along the same lines, hope to count with the participation of the most popular clubs, the same ones participating in domestic competitions. All of this constrained by the fact that there are only 52 weeks in the year, and there is a physical limitation to the number of matches a player can play in a given period of time. Thus it is not an easy task to find the right combination of supply among the different types of competitions: the one that will maximise the utility for the football fan. Figure 1. shows the configuration of the football calendar for the season 2002/2003, displaying the major competitions currently being played at the elite level of football in Europe. Figure 1. 7 – European Competition Calendar – Elite Professional Football – Season 2002/2003 2002 June July August September O ctober November December 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 Week Domestic League1) Domestic Cup6) UEFA Champions League2) UEFA Cup2) UEFA Intertoto Cup Super Cup / Intercontinental FIFA World Cup7) Euro (qualification) International Friendlies3) 4) Na tio n Te al am Cl u b Week 4) Domestic League1) Domestic Cup6) UEFA Champions League2) UEFA Cup2) UEFA Intertoto Cup Super Cup / Intercontinental FIFA World Cup7) Euro (qualification) International Friendlies3) 003 Season 02/03 January February March April May J Total 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 Matchdates 38 10 23 15 10 2 9 8 4 Na tio n Te al am Notes: Cl ub 1) Based on the English Premier League 2) Including qualifying rounds 3) According to FIFA Coordinated International Calendar 4) Week 22 starts on Monday May 26th and finishes on Sunday June 1st 5) Weekend matches include Monday and Friday for the Domestic League 6) Based on the FA Cup – Starting at the 3rd round when Premier League clubs join the cup 7) Maximum of 7 matches per national team Key: Weekend matches5) Mid-week matches Source: Analysis of the authors based on data from Rec. Sport.Soccer Statistics Foundation (RSSSF), UEFA and FIFA 26 Figure 1. 7 shows that the majority of the annual football activity is based on domestic club football, including a domestic league and a domestic cup. Although the graph is based on the Premier League and the FA Cup, the activity in other countries follow a similar pattern. There is usually a domestic league being played from August to May mainly during the weekends with a number of match dates varying slightly depending on the number of participants at the top division of the league (usually between 18 and 20 in the major markets), and there is a domestic cup usually being played during the mid weeks over around 10 rounds. he UEFA Intertoto Cup. UEFA Champions League Eligibility for the UEFA Champions League depends on th e technical performance of clubs at their domestic leagues, and on the ranking of national associations prepared by UEFA. As an example, the champions and the runners-up at the English Premier League automatically secure a berth among the 32 participants at the UEFA Champions League, while the third and fourth places will play at a qualifying stage. The same is valid for Spain and Italy. But countries ranked lower by UEFA receive a reduced number of berths for the competitions with some countries receiving only a place at the qualifying phases.The competition is preceded by three qualifying phases played by 56 clubs entering in different stages. From the qualifying phases 16 clubs eventually gain access to the competition. Those clubs join the other 16 that secured an automatic berth, totalling 32 clubs. Currently, the 32 clubs play a first group stage (eight groups of four teams) with the two top teams in each group qualifying for a second group stage (four groups of four teams). T he group stages are followed by a knock out stage (quarter finals and semi finals) with home and away matches followed by a one leg final match at a predetermined venue. For the season 2003/04 UEFA has decided to eliminate the second group stage, meaning that the sixteen clubs ualifying from the first group stage (eight groups of four teams) will enter directly into the knock out stage (eighth finals, quarter finals, semi finals, and the final). This will reduce the maximum number of matches per club from 17 to 13. UEFA Cup Eligibility for the UEFA Cup is open to teams finishing in leading positions behind the champions in the domestic top divisions, besides the winners of the national cup competition, the winners of the league cup competition in certain countries, the three winners of the final matches at the UEFA Intertoto Cup and three clubs from UEFA’s annual fair play assessment. The UEFA Cup is a knock-out competition played home and away (except for the final match whi ch is played in a one leg match) and is preceded by a qualifying stage.At the third round, the eight teams falling in third place at the first group stage of the UEFA Champions League, also join the UEFA Cup. Figure 1. 8 Illustrates the format of the UEFA Cup, which is currently being revised by UEFA. 34 33 In the international scenario, there are three main club competitions currently being organised by UEFA, The UEFA Champions League, The UEFA Cup and 33 The domestic cup usually counts on the participation of clubs from many professional divisions, but the top clubs will join the cup at an advanced stage. Not considering the qualifying rounds 34 27 Figure 1. 8 – Format of the UEFA Cup # of Clubs 82 41 + 52 96 48 24 + 3 From Intertoto Qualifying Stage First Round Second Round + 8 From UCL 32 16 8 4 2 Champion Third Round Eighth Finals

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Summarise in your own word your understanding of resources and the need to manage these appropriately - Essay Example On the other hand, from a wider ecological or biological perception, a resource gratifies the requirements of a given living organism (Bennet, 2014). The idea of resources can be applied in various realms comprising biology, economics, computer science, ecology, human resources and management. In addition, the concept can further be linked to such notions as sustainability, competition, stewardship and conservation. Within the broader human society, on-commercial or commercial factors need resource allocation via resource management (Moser, 2007). Consequently resources have 3 core features; limited availability, utility as well as potential for consumption or depletion. There have been various categorizations of resources such as abiotic versus biotic, on-renewable versus renewable as well as actual versus potential, alongside more sophisticated classification. In economics resources are described as assets or services that are utilized in the production of services and goods that satisfy human wants and needs. Economic can also be broadly described as the discipline that studies how a society is able to manage its scarce resources. Thus 3 classes of resources are identified in classical economics that comprise capital, labor and land, best known as factors of production. Resources must be managed effectively so as to enhance productivity, improve efficiency, as well as eliminate waste. Businesses and governments world over implement resource management solutions. With the right management solution; governments together with business will assist eradicate common problems related to poor planning of resources. Through effective standardization of the resource management procedures, governments and businesses can enhance visibility together with control leading to considerable advantages to any undertaking. Some of the core benefits that may result from effective

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Journal - Essay Example 6). In contrast, in the American culture, confidentiality and privacy are given importance. Therefore, it is unacceptable to ask details about age, income, salary, or even personal details such as weight, among others. It is definitely uncomfortable for one to see or to experience people from other cultures behaving in ways perceived as unacceptable in one. For the particular example of public display of affection, people from Western culture deem it normal and acceptable to shake hands, embracing each other, hugging, as a sign of greeting or bidding goodbyes. The behavior, regarded as unacceptable in Arab culture, and even in some Asian culture, should be revealed and known in the Western culture so that people would understand how to properly behave in day to day interactions without offending other people from diverse cultural orientations. As indicated in Echo Depiction, â€Å"Arabs quickly gain a negative impression if one (even a westerner) behaves too open with a person of th e opposite sex.  Ã‚  Arabs could interpret that sort of behavior by their standards and consider the person to have low moral standards† (par. 5).

Constitutional Law of the EU Essay Example | Topics and Well Written Essays - 2000 words

Constitutional Law of the EU - Essay Example If they fail to do so, the Commission can initiate action under the provisions of Article 169 EC. As such, the Member States have to change their national legislation to accommodate and give effect to Directives2. The Member States have to transpose a Directive into their domestic law. Such incorporation is satisfied if the transposition is done in a clear and precise manner. For instance, if some rights are provided to an individual by a Directive, then subsequent to transposition, that individual should be able to initiate legal action in national courts, duly relying on those rights3. In Plaumann v Commission4, the Commission had restrained the German Government from reducing duty on the import of clementines. The plaintiff, Plaumann, was an importer of clementines. He challenged this decision of the Commission in the ECJ. The Court applied the test of individual concern to this case; and examined whether the plaintiff was affected by the decision. The plaintiff was held to be a member of the class of clementine importers. The Court also examined whether the plaintiff could be differentiated from that class, by virtue of the attributes peculiar to him. It ruled that as Plaumann belonged to that particular class of importers, he was not individually affected by the Commission’s decision. In addition, the Court opined that anyone was free to become an importer5. In the Greenpeace case, both the Court of First Instance and the ECJ refused to admit the plea of the applicants. The latter, residents of the Canary Islands, had requested the Court to annul the decision of the Commission to provide financial aid for the construction of two power plants in these islands. It was held by the CFI and the ECJ that the applicants were not individually concerned. They were residents like any other residents on the Canary Islands, and that their environmental concerns were similar to that of the other residents. Hence, both the

Hospitality Operations Management Essay Example | Topics and Well Written Essays - 2000 words

Hospitality Operations Management - Essay Example Hence, the strategic development should be integrated into the system to increase the satisfaction among its consumers and develop its brand image. This greater acceptance would increase the credibility of the organisation to perform and enhance its image among the consumers (Sian & et. al., 2009). With this regard, the Hilton Hotels & Resort has been catering services to its clients, through its excellent presence in 540 locations in 78 countries. The hotel provides elegant services and develops its cliental base by providing international cuisine and other value added services. The hotel has been serving elegant clients and effectively handling its operational works to develop its consumer base (1Hilton Worldwide, 2014). In this context, the essay elaborates on the observation reports of the operation of the hotel. Furthermore, elaborations are provided on different quality services that are offered by the organisation. Different prices that are prevalent within the organisation are observed to be having a huge impact on the varied compiling prices that are used by the organisations to develop its competitive advantage. The dissimilar economic factors and other development of the diverse strategies are observed to be dependent on the economic factors that explain the pricing mechanism undertaken by the hotel. The diverse prices that are prevalent in the system are further observed to be having a huge impact on the development of the operational system. The development of proper service price will help in enhancing the operation management system (Kenessey & et. al., 2005). The two major pricing methods that are followed by the hospitality sector could be observed as cost oriented as well as market oriented pricing techniques. The cost oriented pricing techniques are involved with the cost that is included to cover the profits and even cover the cost of profit. The cost oriented pricing techniques follows a traditional

Why America should choose to drill for oil in Alaska Essay Example for Free

Why America should choose to drill for oil in Alaska Essay Drilling for oil in Alaska has been one of the most controversial topics in the United Stated for many years. Many U. S geologists have confirmed that billions of barrels of oil lie beneath the Alaskan coastal plain. In the east of Alaska lies The Arctic National Wildlife Refuge considered to be the largest oil field of North America. It is essential for United States to take a plunge in Alaska and seek out this viable opportunity. These fresh barrels of US oil will break away the country’s dependency on the oil rich Middle Eastern countries especially Iraq. The House of Representatives approved drilling in Alaska by passing an energy bill in Aug 2001. This year, the President of United States, lifted the ban on oil and gas drilling in Alaskas Bristol Bay Prices of oil have risen dramatically in the last few years and the nation’s dependency is becoming too costly. It is estimated by the U. S Department of Interior that â€Å"nine to 16 billion barrels of recoverable oil† can be extracted from ANWR (Arctic National Wildlife Refuge) in North America. This amount of oil is enough to last the entire United States eighteen months. While these statistics might seem trivial but if â€Å"the US consumes about 20 million barrels of oil per day, and at a rate of 1. 5 million barrels per day from Alaska, 7. 5% of Americas oil consumption could be met for over 20 years† (Muhawi). Prices of oil will dramatically fall. These lowered prices of oil could radically improve the economical scenario of United States. In addition to this, American oil imports will also reduce by 15% with the help of the Alaskan oil. American imports are over 25% from the Middle East. Environmentalists who fear that habitats of caribou, polar bears, wolves, and many other species will be destroyed should relax because only 8 percent (1. 5 million acres) is being analyzed for development. This development will cause negligible environmental damage. It is incorrect for media to show snowcapped mountains and polar bears as news footage because it misleads audiences and makes them believe that drilling will be in those areas. Areas that will be drilled are on a small part of Alaska where humans already live. Alaska consists of protected land of 141 million acres which is almost equal to the area of California and New York together. So, the rest of Alaska will remain preserved in its true form. The National Academy of Sciences reported lately that oil drilling had troubled some endangered species and made whaling difficult however it has neither caused huge oil spills nor a decrease in migration of caribou. Caribou herd that passes through ANWR is predicted to be harmed by the drilling of oil. However, people are often unaware that since drilling started in Prudhoe Bay in 1977 it has actually lead to an increase in migration of the caribou herd from 3,000 to 23,000. Many cutting edge technologies are also being introduced to reduce and eradicate the negative effects of the drilling. Thousands of jobs and opportunities will also be created from drilling in Alaska. It is estimated that 250,000 to 735000 jobs will be created. (Drilling in the Alaska National Wildlife Refuge). This particular development would help the Alaskans by providing them with greater incomes and purchasing power. It has also benefited Alaskans by providing them with better healthcare and schools and other positive societal and economic effects. People who oppose drilling argue that excessive consumption of United States is a bigger problem. They believe that we should rather focus our energies towards consuming lesser oil. This is a great idea yet very hard to follow. Oil, gas and coal are responsible for running eighty-eight percent of America’s transportation, businesses, and housing needs. No technology, conservation or alternatives can replace these important fuels. Many years of research and testing will bring an alternative or a solution to this problem. Till then we have to rely on our fossil fuels. Another insignificant opposing view is that drilling maybe risky because it might not yield anything. It is also believed to be our last resort and could be used when all our other sources of oil have run out. Both of these views are supported by sentiment and not facts. It is important for the average American to weigh the facts surrounding this controversy and then decide whether Alaskan land should be allowed for drilling oil or not and not be swept away by mere emotion. WORKS CITED â€Å"Making the case for ANWR development†. ANWR. ORG. 2005. Retrieved: 4th http://anwr.org/

Service User And Care Involvement Analysis Social Work Essay

Service User And Care Involvement Analysis Social Work Essay This review will consist of an introduction, aims of the review, and methods of data collection, findings on a series of questions and answers on the extent of service user involvement in the discharge process, conclusions, and possible recommendations for change. It will conclude with a reflection piece. The following review will discuss the issue of service user involvement in the discharge/transfer procedure. The review was compiled by the author within a nineteen bedded Forensic Mental Health unit. The ward was at full capacity at the time of writing this review. The service users all had different levels of mental illness, each with a different history, level of cognitive awareness, degree of institutionalisation and willingness to adapt and change. This review will assess to what extent service users are involved with the discharge planning process in the ward, if any, and give possible recommendations on how this process may be improved. Aims of the Review During this placement the author decided on a subject to review, this subject was service user involvement in discharge planning. While collating information for the review some questions arose these questions were: Does the service user feel included in decision making? How does the staff involve the service user in the decision making if at all? Has discharge been discussed with the service user? These questions lead to the author constructing some key questions to carry out in the review these will be discussed further in the findings. 91 Methods used to construct review The data for the review was collected over a ten week period within the ward. The author consulted service users notes, attended multidisciplinary team meetings and conducted a series of semi-structured, one to one interviews with service users and staff, including a consultant, doctors, ward manager, nurses, nursing assistants and occupational therapists. A literature search was also carried out using accredited databases including CINAHL and the British Nursing Index. Relevant journal articles were found on these databases using keywords such as service user, involvement and mental health services. Nursing research books were also used to gather information along with web sites underlining national policies and models for mental health nursing. 110 Findings How are decisions made within the placement area regarding discharge planning? A Forensic Mental Health Unit is not part of the prison services it is a service that specialises in the assessment and treatment of people who have a Mental Disorder. According to the Mental Health Care and Treatment Act 2003 a mental disorder is an illness such a personality disorder or learning disability defined by the act, whereby the mental disorder has been a contributing factor to the person offending. Throughout the weeks on this placement research was carried out by the author on policies and procedures for discharge planning. The one in particular that was found to be relevant was the Care Programme Approach (CPA). CPA is about early identification of needs, assignment of individuals or organisations to meet those needs in an agreed and co-ordinated way and regular reviews of progress with the service user and care providers. CPA is also about involving family or carers at the earliest point. The Care Programme Approach requires that service users should be provided with copies of their care plans and it has been increasingly common for service users who have been the responsibility of forensic psychiatrists to have copies of documents relating to their care. (DOH 2008). Systems were in place for comprehensive care planning. There was evidence to show that the service users social, educational and occupational needs were taken into account in the care planning process and other specialist interventions were available. In addition to this, in some cases, discharge/transfer planning was evident from an early stage (not long after admission), although in other cases a few months had elapsed before any document noted those discussions. Discharge planning is enhanced by the Care Programme Approach (CPA) a multi-disciplinary care planning systematic approach that involves service users and their carers. Care Programme Approach is the framework for care co-ordination and resource allocation in mental health services. Decisions for discharge are made through the multi-disciplinary team which consists of consultants, ward manager, nursing staff, occupational therapy and social workers. discharge guidance 4. This will go forward to a tribunal where the service user will be invited to take part, here all the evidence will be put forward and a decision will be made. If the service user is restricted then the decision will be made by the First Minister. When a service user is restricted it means an order has b een applied to them as they are seen by the act to be a more serious offender, this then means that the Home Office is responsible for granting discharge and a representative will be invited to the Tribunal (MHCT Act 2003 SECTION 37/41). Most service users have long term mental health problems and complex social needs and have been in contact with mental health services for more than twenty years so never think about discharge. Being in hospital for so long has become part of their lives so service users see it as pointless being discharged, what would I do. 488 SECTION 117 AFTER-CARE Prior to 1983, no statutory provision was made for the after-care of patients discharged from hospital. Section 117 introduced and defined formal after-care. In particular it stated: It shall be the ditty of the health authority and the local authority to provide in conjunction with voluntary agencies after-care services for any person to whom this Section applies, until such time that the health authority and local authority are satisfied that the person concerned is no longer in need of such services . Section 117 of the 1983 Mental Health Act applies to patients who have been detained under Section 3,37, 37/41, 47/49, 48/49. Before a decision is taken to discharge or grant leave to a patient, it is the responsibility of the RMO to ensure, in consultation with other members of the multi-disciplinary team, that the patients needs for health and social care have been fully assessed, and that the care plan addresses them. The Section 117 meeting The aim of the meeting is to draw up an after-care plan, based on the most recent multi-disciplinary assessment of the patients needs. During the meeting the following areas should be covered as appropriate: Housing Finances Relationships/family Employment Social needs Psychology/mental health difficulties Relapse predictors Known risk factors When the care plan is agreed the team should ensure that a key worker is identified to monitor the care plan. The Care Co-Ordinator can come from either of the statutory agencies, and should not be appointed unless they are present at the meeting, or unless they have given their prior agreement.. The process for Sec 117 can be found in Trust Policy and Procedure and applies to all patients accepted by psychiatric services. What decisions/involvement does the service user have in this process? Within this placement the care and treatment plans are reviewed on a regular basis. Service users are expected to meet with their key worker and other team members on a regular basis, care plans are reviewed at these meetings and a mutual agreement will be decided, on the best way forward, once the care plan has been agreed by all the service user has to adhere to the care plan.(discharge guidance)no.16 Rights, Relationships and Recovery (2006): The Report of the National Review of Mental Health Nursing in Scotland Service users are encouraged to be fully involved in all aspects of their care as far as they are able to. Service users past and present wishes should be taken into account, their views and opinions with regards to their treatment plan must also be recorded, as stated in the Mental Health (Care and Treatment) Act Scotland 2003. These wishes and aspects will be turned into a care plan that is individual to the service user. The principles of the act underpin any decision made relating to a detained service user in Scotland. The Milan Committee devoted a chapter in the act that referred to high risk patients it stated that service users should have the right of appeal to be transferred from a high or medium secure facility to that of a facility with lower security conditions. (Mental Health Care and Treatment Scotland Act 2003). This however seemed to be the problem across the board, lack of medium/low secure facilities to discharge /transfer appropriate service users to. Service users have the opportunity for regular one-to-ones with their key workers (weekly basis) or more regularly if they require. Service users have the opportunity to put forward their thoughts on discharge and any other aspect of their care at the review, such as their rights, beliefs and their right to a tribunal. The author attended these independant tribunals while on this placement and at these tribunals people had stated that their human rights had been violated (The Human Rights Act 1998). They felt they were still being discriminated against for offences they had committed 20-30 years ago and feel they were being held under excessive security hence the reason for the tribunal to appeal against this level of security. this would mean they would be granted grounds access on a trial period which may be supervised, then become unsupervised for a trial period to see how the service user would cope, this in turn will lead to a further tribunal taking place in a set time agreed f or example 4 or 6 months away, where the service user may be granted discharge/transfer to a lower secure unit depending that all provisions that had been put in place had been adhered to, for example, risk assessment reviewed, treatment regime being followed, attend all social/therapy/strategy groups that were agreed. The review takes place every four months, again this is a multi-disciplinary meeting and service users are invited to attend with the support of advocacy or someone of their choice. The Human Rights Act 1998 gives legal effect in the UK to certain fundamental rights and freedoms contained in the European Convention on Human Rights (ECHR). These rights not only affect matters of life and death like freedom from torture and killing, but also affect your rights in everyday life: what you can say and do, your beliefs, your right to a fair trial and many other similar basic entitlements. During the time spent on this placement it was noted that service users and key workers met at the beginning of the week to discuss how they felt things had been for them, the service user has the opportunity to discuss what changes they would like to happen, this is then recorded in the service users notes and taken forward to the clinical team that week where it would be discussed if any changes in care and treatment would take place, the service user is then informed of any changes and decisions made which they have the right to appeal against (The Human Rights Act 1998). The opportunity arose for the author to take part in these weekly reviews, during this one-to-one time most service users were able to express their thoughts and feelings about issues they had encountered that week and describe what therapeutic strategies they used to get through it. The service user will be provided with a copy of the Treatment Plan Objectives, or informed in detail of the contents of the treatment plan, in the event that any learning or specific reading or language difficulty information should be provided in a way that is most likely to be understood. Arnstein (1969) constructed a ladder of participation which described eight stages of user participation in services, including mental health. These stages ranged from no participation to user controlled services. The above service users would be placed on the sixth rung of the ladder in the partnership range as they agree to share planning and decision-making responsibilities. Partnership Partnership, like community, is a much abused term. I think it is useful when a number of different interests willingly come together formally or informally to achieve some common purpose. The partners dont have to be equal in skills, funds or even confidence, but they do have to trust each other and share some commitment. In participation processes as in our personal and social lives building trust and commitment takes time. discharge guidance 16.6 908 Does this placement area reflect its practice on local or national policies regarding service user involvement in discharge planning? (Mental Health Care and Treatment Scotland Act 2003). (The Human Rights Act 1998). When asked their views on the subject the Ward manager and senior nursing staff presented documentation which reaffirmed current practice within the ward. The Ten Essential Shared Capabilities (ESCs) DOH (2004) he explained was the model now being followed on the ward, has just been implemented into this area of placement within the last two years, which the ward staff have adopted well by providing a person-centred approach as much as possible. This new person-centred model embraced the ethos of the above, and senior staff stressed that good practice dictated that service users have the opportunity to appropriately influence delivery of care and support. A review of policies and procedures as well as discussions with staff provided evidence that the policies were actually in place. Throughout the placement, the author noticed that efforts were being made all the time to nurse according to the new model. Included were regular one to one sessions between nurses and service users to hear their views and thoughts, these already took place before the ESCs were introduced. Moreover some staff do find it difficult to adopt the ESCs and the mental health act due to the restraints of the environment (secure ward); however they are prepared to embrace the opportunity for further education and support. 211 Identify barriers and constraints. Before a decision is taken to discharge or grant leave to a patient, it is the responsibility of the RMO to ensure, in consultation with other members of the multi-disciplinary team, that the patients needs for health and social care have been fully assessed, and that the care plan addresses them. Section 117 of the 1983 Mental Health Act applies to patients who have been detained under Section 3,37, 37/41, 47/49, 48/49. While on placement and conducting this review the author noted that one of the barriers to effective involvement came from some of the service users, due to the complex nature of the area the service users had become institutionalised and found it difficult to be thinking about discharge at this stage in their lives, so they just accept the way things are and do not get too much involved as far as care plans are involved and just say what they think the staff want to hear. In secure settings engagement of service users in assessment and treatment can be difficult, as there is a potential risk of perceived coercion. Moreover with the lack of medium secure facilities around this can hinder service users from moving on within the specified time limit agreed, as there are no provisions. 138 Recommendations for Development SMART Most service users were more concerned about their futures and life post discharge. They wanted their time between now and then to be concerned with preparing them for discharge. It was frustrating for many service users that they felt that little in the way of such preparation was taking place. Continue to provide service users with support and skills needed appropriate to their function and skills already held, for example cookery groups, IT groups. Provide groups that enhance social skills such as coping strategy groups, anger management, alcohol/drug treatment/groups. High secure units should ensure that at the point of discharge patients have a copy of their discharge care plan in a suitable format which includes appropriate information about the circumstances that might result in their return to a secure mental health provision such as However a recommendation that high secure units should ensure that factors to be weighed in assessing relapse are part of the risk assessment included in the discharge plan of all service users. The National Service Framework for Mental Health states that Service users and carers should be involved in planning, providing and evaluating training for all health care professionals (Department of Health, 1999). This is the case in most health care provisions but for more education, training and information to be more readily available. Strengthening the user perspective and user involvement in mental health services has been a key part of policymaking in many countries, and also has been encouraged by World Health Organization (WHO) in order to establish services that are better tailored to peoples needs and used more appropriately. 265 Reflection In this review, I need to reflect on the situation that took place during my clinical placement to develop and utilise my interpersonal skills in order to maintain the therapeutic relationships with service users. In this reflection, I am going to use Gibbs Reflective Cycle Gibbs (1988). This model is a recognised framework for my reflection. Gibbs (1988) consists of six stages to complete one cycle which is able to improve my nursing practice continuously and learning from the experience for better practice in the future. During the first week of placement I was encouraged to work closely with my mentor. This gave me the opportunity to orientate myself to the ward and get an overview of the needs and requirements of the service users. This also provided me with the chance to observe how the nursing team worked on the ward. During this time I had learned that if the concept of inter-professional working is to succeed in practice, professionals need excellent team working and communication skills. Good communication, as we have staged in our group work theory, (skills for practice 3) is crucial in the effective delivery of patient care and poor communication can result in increased risk to the service users. I have learned the valuable skills required for good communication and will transfer these into practice by adapting to the local communication procedures (expand). The NMC advices that at the point of registration students should have the necessary skills to communicate effectively with colleagues and other departments to improve patients care (NMC, 2004). 256