True Business- real life for small businesses

UK footie fans have this week witnessed a very different game, played out to gasps from fans and pundits alike. If you’re not a footie fan, don’t worry- you don’t need to know the off-side rule to get your head round this: we’re talking the business of football.

Basically, this weekend was the culmination of the trasnsfer window; a frenetic time when players are bought and sold. Because of the enormous fees commanded by top players, these transfers have a knock-on effect on the broader business of football in general. Not surprisingly, this is also a time when whole clubs (or major shareholdings in them) change hands, too.

Enter Sheikh Mansour bin Zayed Al Nahyan, the sports-mad tycoon who happens to be a member of Abu Dhabi’s ruling family and now the owner of a 90% shareholding in Manchester City Football Club; a snip at £210million.

The footie world is very excited about this. The Sheikh (also owner of Al Jazeera Football Club and chairman of the Emirates Racing Authority) has already moved to pump millions of pounds into British football, energising the transfer market and giving some stiff competition to other billionaire players like Chelsea’s owner, Roman Abramovich. Sport- and the TV rights which support it- needs constant zing, and we need flamboyant new characters to inject some novelty and enthusiasm whenever possible.

On the business side, though, I think there are some interesting points to make.

Firstly, Al Nahyan has not bought Man City with Abu Dhabi’s burgeoning sovereign wealth funds. Oh no. He’s bought the club with his personal money. It’s not an investment, it’s a plaything. Sure, Abu Dhabi wants to better understand the sports and leisure industries, but the club is fundamentally a toy. The world is definitely dividing up into the super-rich, the comfortable, and the unbearably impoverished- and on a fully global scale.

Secondly, we need to learn from Abu Dhabi (and Dubai and her neighbours). The Emirs understand that the oil money won’t last forever, and they are using their wealth to invest in projects around the world to ensure future stability. (Companies do this too- it’s why petrochemicals giants like BP or EDF Energy are putting money into renewables). One of Abu Dhabi’s funds, for example, now owns New York’s Chrysler Building. Strangely enough, the UK has known for twenty years that North Sea Oil wouldn’t last forever- and yet we find ourselves at the mercy of bumpy markets today.

Stability is – literally – worth its weight in gold to any company. If, like me, you started your company single-handedly, you’ll look back and realise how you lived hand-to-mouth in the early days. I now have a modest “pot” for emergencies, and I’ve diversified the sorts of products I offer. All of these things are complicated to do, and take up time and energy. Yet, they’re essential complications, because they smooth out the path of my business and soften any nasty surprises. Now, I know this will come as a shock… but my business isn’t quite the size of Sheikh Mansour’s. The principles are the same, though. Enjoy the season!