Table of Contents
- Factors of management that are strength to the program
- Factors of Profitability and viability
- Application of Triangulation to gain an accurate value of the club
- Changes to improve value
- Events from 1997 to 2003 and principles of improvement
- How sale of the club will affect the strategic direction
- Related Marketing essays
The Premier league is the top soccer division in England. It is claimed to be the richest league in the world where some of the most popular players and football teams play. Most professional sports teams that are capable of buying top football players are generally the most successful. Foreign investment in English Premier League teams has become a trend and a way of becoming rich and successful.
Most of the clubs in the league are controlled by foreign investors out to make profits. Liverpool F.C was formed in 1892 by John Houlding to play at Anfield after Everton F.C vacated the field. The club is arguably the most successful club in England. It has won 18 First Division titles, 7 FA Cups, 7 League Cups, and 5 European Cups.Liverpool F.C. signed a deal with Prince Faisal Al Saud to initiate and activate an elite commercial collaboration between F6, Liverpool F.C., and the Richard Petty Nascar Team.
Factors of management that are strength to the program
Collaboration with effective partners is a major strength in the performance of the club. These exclusive collaborations explore collaborative commercial opportunities viable to football, Nascar racing, and interactive media in the Middle East country, Saudi Arabia and the surrounding nations. The Middle East sport market has great potential of growth, as the fan base in the region is growing everyday. The deal will strive to enhance the level of football competition, sports management expertise and soccer players in the region. Among the strategic partnership, plans in mind include the creation of academies and training facilities owned and controlled by Prince Faisal's organization.
The framework for collaboration in Nascar has been created to evaluate the expansion of a Nascar racing circuit and Richard Petty racing institutions in the Middle East environs. F6 is one of the leading investors in interactive sports media in Saudi Arabia and has considered this deal as a perfect opportunity to bring in local teams and athletes, and introduce new methods of management and training in sports. It will also provide employment opportunities and innovative reality media production techniques (Foster et al, 2006).
Liverpool fans have greatly contributed towards the success of the club. The number of Liverpool fans has increased as a result of celebrating the club’s sale to new owners and also due to the appointment of a new manager Roy Hodgson. The signing of a new player Joe Cole saw the Liverpool website break its previous record of 65 million page views to over 85 million page views. The news of Joe Cole signing raised the page view impressions to over 483,000 in just an hour. In addition, the time that the club’s fan spend in the site increased from five minutes to seven minutes while the average number of page view increased from 4.5 to 5.95.
Factors of Profitability and viability
One of the factors contributing to profitability and viability of Liverpool is the use of market value approach. This approach has enabled the company to assess its market value and thus evaluate its overall performance (Foster et al, 2006). Other approaches that have also contributed to the clubs success include the Acquisition-Based valuation approach and the Sabermetrics technique. The Acquisition-Based valuation approach assists in making viable acquisition for the club while the sabermetrics is very useful in the evaluation of players’ performance and the overall performance of the club (Foster et al, 2006). As a result, Liverpool F.C. debts have almost doubled to £86m based on the latest financial reports. The club has however recorded an increase in profits after making losses the previous year. The club’s annual accounts show a pre-tax profit of £10.2m in 2008, which is an increase fro the previous year in which the club made a loss of £21.7m.
Application of Triangulation to gain an accurate value of the club
Technological development and growth has been one of the most effective ways of using triangulation to gain accurate value for Liverpool. The club launched Assigra’s agentless backup and recovery hardware, Televaulting that prides a back-up for data in a disc. Liverpool was in the past using legacy tape-based backup and disaster recovery (DR). The use of the new software is aimed at increasing the speed of back up and recovery and provides a guarantee 100% success rate in recovering lost data. The old system was limiting in that every time a back up of the i-series based ticketing system took place, the whole system had to be shut down. This was greatly inconveniencing because the backups were limited to once a day only. The club had to think of a way of recovering data in case it was lost in an effective manner (Turner, 2007). The new backup system now safe guard vital business data across Liverpool FC’s major sites: Anfield, Melwood and Academy.
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Changes to improve value
Liverpool introduced a new approach to training in order to ascend and stay at the top of English and European football. The owners of the club have created the position of Director of football strategy in a bid to ensure that the club maintains a top position in English football. Although the Director of football strategy is the most unpopular post in English football, the new owners of Liverpool view this as the most appropriate strategy to run the club. The owners have introduced the principles of sabermetrics, which are very successful in baseball. Sabermetrics is defined as the analysis of baseball based on objective evidence, particularly baseball statistics that evaluate the in-game activity as opposed to industry activity such as attendance.
It is thus a set of statistics that is used to assess the overall performance of a player or team. For instance, Top player ratings normally referred to, as Batter-Fielder/Pitcher Wins is a rating used to evaluate the value of baseball players and to facilitate the comparison of players against each other, despite playing for different teams or different positions. Value Over Replacement Player (VORP) is a metric that measures hitters contribution (offensive) and Pitchers contribution in a team compared to a fictitious average player (Turner, 2007). This measurement is used to evaluate a payer’s Replacement level. The use of these quantitative metrics in football has transformed Liverpool F.C. for the better.
Events from 1997 to 2003 and principles of improvement
Gérard Houllier, the former French national team manager, was introduced into the Liverpool management team for the 1998–99 season to work alongside Roy Evans. Evans did not find the deal favorable to him and decided to quit in November of 1998. The club became a founder member of the G-14 group of clubs in September 2000. The organization was formed to create a united voice to air their opinions and suggestions to soccer governing bodies FIFA and UEFA. Liverpool remained an active member of the G-14 clubs until it was disbanded in 2008. In its place, the European Club Association was established. The 2000-01 season was one of the best Liverpool’s seasons in the clubs history.
The players Owen, Fowler, Gerrard and Hyypia played a role to the club’s third place finish and hence a qualification to play in the champion league. The club also won the FA Cup, League Cup and UEFA Cup, together with the charity shield and the European Super Cup in 2001. Liverpool finished as number two in the premier league 2001–02 season, their best league finish since 1991, but was subjected to a embarrassing defeat in the League Cup Third Round by Grimsby Town. The Clubs manager Houllier suffered a serious heart problem, which made him inactive in the club for three months beginning from November.
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How sale of the club will affect the strategic direction
The sale of the club by CFO will affect my strategic direction in several ways. The sale of the club might affect the value of the club depending on the effect it will have on the stakeholders of the club. If the fans are not happy with the sale, then the clubs fan-base will be affected. Fewer fans will visit the club’s website leading to a fall in the club’s earnings. Some investors might feel cheated and withdrawal their support for the club. This will affect the equity value of the club. The sale of the club will thus affect the overall running of the club including the approaches used by the management.
Factors that would underlie the changes and research to strengthen the recommendations
There are two factors that would underlie the changes in Liverpool football club. The two factors are change of the valuation approach in acquisition and accounting for player-related payments.. Acquisition-Based Valuation Approach is the best approach to consider when determining any acquisition for the club. This approach involves considering similar previous acquisitions before making an investment (Foster et al, 2006). Ability to account for all player-payments greatly contributes towards the appropriate management of the club. Some of the sources of player-payments include, sign-on bonus, transfer fees, and match fees.
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Liverpool football club s one of the most successful clubs in English football. The club has been successful as a result of its effective management and overall business strategies. The new owners have introduced new approaches in management as well as the training of the players. One of the newly introduced approach, sabermetrics, has provided the best evaluation and assessment criteria for both the club as well as the individual performance of the players. The cub has also adopted a new method, Televaulting, for backup and data recovery. The new method ensures that vital business data is safe and secure.