Introducing Custodian Theory for Liverpool Football Club

Posted: October 6, 2010 by mcdonaldtaf in Business, Finance, Liverpool FC
Tags: , , , ,

Some of you will recall that earlier this year I asked my fellow fans to help me out with research for my Masters degree. I’m still waiting for my final grade but I felt, given we may be about to enter into new ownership, that now may be an apt time to release my final work. I’d like to get this work out to the widest possible audience so please feel free to spread the word through social networks.

This is only an introductory document but I would hope to continue my work on the theory (time permitting). It is a theory I believe ‘has legs’ and should be heeded by football clubs. The next step would be getting inside a Premier League club. Before you say it,  I’ve asked and got a resounding NO! At some stage, once I know where in the UK I’m going to be living, I’ll get in touch with all Premier League clubs to see if I can get an inside view of the theory at work.

I was in contact with Liverpool FC while I wrote this document. While my contact was helpful the club was not interested in assisting in any other way, which was a shame. They have also received a copy of the final work together with a presentation, but I have heard no more from them.

One of the things I did find in my research, but is not really mentioned in the document, is that custodian theory has been about for generations. I strongly recommend you pick up a copy of David Conn’s ‘The Beautiful Game’ to educate yourselves in the horrors of football’s board-rooms. I also recommend ‘Soccernomics’ by Kuper and Szymanski.

While I’m on recommendations some of you will know I write for The Tomkins Times. I was lucky enough to have been offered the opportunity to help Paul Tomkins  with his upcoming book. Unfortunately with losing my job and having to continue the fight against a morally bankrupt company (not LFC), I have been unable to offer any real assistance. I have however started to read a draft of ‘Pay as You Play: The True Price of Success in the Premier League Era’. The book has already received plaudits from respected football writers and will be a must have for your football collection.

So back onto my work. The document can be downloaded below and an abstract follows. If you have any questions or thoughts (is there something I’ve missed?) then please feel free to contact me.

Abstract

While many businesses are focussed, by necessity, on ensuring that client retention is uppermost in their strategic thinking there are other organisations which benefit from an emotive tie to the business; negating the need for such a retention focus to be present. Due to this emotive connection it is suggested the owners are seen as custodians rather than faceless owners. Thus the owners may retain a higher profile than would be normally expected.


The key benefits for this type of business are that customer retention is a lot more assured than would be experienced within other industries. However, it is hypothesised that when customer dissatisfaction is experienced this may manifest itself in other (potentially more harmful) ways.


This paper is the first introductory work to validating a new theory entitled ‘custodian theory’. Custodian theory suggests that businesses whose customers experience an emotive tie to the business should take additional care in respect of corporate social responsibility, communication and customer relationships. This paper also looks to review agency and stewardship theory in relation to custodian theory.


Football clubs were felt to be prime examples of custodian businesses and dis-satisfaction among some football club’s fan bases clearly demonstrated the impacts of not paying attention to custodian theory.


High debts, business deals and an increased competitiveness within the football marketplace are contemporary subjects which are attracting significant press exposure.


One of the main football clubs under the spotlight is Liverpool Football Club. Given their recent press exposure the club was chosen to collate research on from the club’s fan-base. The research undertaken utilised new social networking and internet technologies to collate information to validate the theory. Using an online survey the case study set out to show that the theory existed and was in need of additional research together with recording the potential impact of poor custodian theory practices.


Empirical evidence collected has initially validated the theory and this initial study has shown the theory requires additional research; and that custodian businesses (and football clubs in particular) may be causing themselves significant detriment within their marketplaces when they do not pay attention to the aspects of custodian theory.



The full document is available for download here: Introduction to Custodian Theory

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Comments
  1. Sam Wanjere says:

    “Custodian theory suggests that businesses whose customers experience an emotive tie to the business should take additional care in respect of corporate social responsibility, communication and customer relationships.” An interesting philosophical thought. I will tie that with the idea of owners as “custodians” versus opting to be faceless.

    Not sure I still am on topic but recent events at Anfield, spanning the nightmarish last three years, have shown there is a massive need to take the fans’ pulse and consider what they believe about the club. The rise of groups like SOS has aptly shown dissatisfied fans are dangerous creatures indeed.

    The idea you’ve put forth in turn begs a question. Can anyone really own an organization where fans have invested their emotions, such as a football club? It is where custody comes in, just like trusteeship. This is a humble role indeed that requires one to undertake to guard and preserve some heritage. Heritage broadly includes history, experiences, lore, and any such items that fans latch on to in order to stay connected.

    Aren’t we still talking about the miracle of Istanbul, a whole five or so years since? Just today we’ve learned there is genuine interest in purchase of LFC, yet the two should-be custodians, Gillette and Hicks, have rushed off to challenge the board’s decision. Are they acting as custodians/trustees or are they more of owners? Faceless they may not be but they act as if they own the collective memories of all Reds fans worldwide!

    You’ve introduced the areas of CSR, which can best be defined as simply giving back. Does a club give back to loyal fans by raising ticket prices and the cost of merchandise? Should it not be more concerned with strengthening the unique bond it has with its publics instead of alienating them further? In an age of economic hardship, would you rather make more money or allow loyal followers to fill a stadium and spread their feel good factor?

    While I apologized for probably digressing, the issues you raise are food for thought and interesting, despite the academic nature of the same. It is a subject matter I’d love to see pursued a little more.

    All in all I think your line of argument is vindicated some more by what might happen in our ownership wrangles. Should G & H be forced to sell up, it will be victory for the fans, in this case represented by their unions like SOS. If this is not a pointer to what kind of owner is needed at Anfield (custodian/trustee type), I fail to know what is?

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