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You are here: Home > Educators > Business Studies > Business Objectives and Strategy > Business Ownership: Private Sector - Activity |
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Business Ownership: Private Sector - ActivityWhich form of ownership is best?This Activity will investigate the changes in ownership of a Coca-Cola League One soccer club. Nottingham Forest Football Club was founded in 1865. It is one of two clubs based within a couple of hundred metres of each other astride the River Trent in Nottingham. Forest have had successful times - in the 1970s and 1980s, the club, under the management of Brian Clough and Peter Taylor, won domestic and European honours. The club sought to capitalise on their success and embarked on a development of the stadium. The stadium was one of the few used for the Euro '96 European Championships in 1996. Success on the pitch, however, was not maintained and in the '90s, the club hovered between the Premier League and the old Nationwide Division 1. The club were in Division 1, now the Coca-Cola Championship, from 1999 until 2005, when they were relegated to League One. During the '90s, the club was floated on the Stock Exchange. Becoming a PLC meant the club had access to a greater amount of capital to help it expand. Forest was one of a number of clubs that went along this route. In so doing, it traded off the benefits of greater access to capital - and the chance for supporters to 'own' the club, with the rigours that come with being a listed company. 
Image: The City Ground. Reproduced by kind permission of Nottingham Forest Football Club The share price of the club fell; relegation to the first division has a significant impact on the business - revenues fall from TV money and invariably things such as sponsorship, advertising revenue and gate receipts go down. With less revenue coming in the business suffers further; costs - especially players wages still have to be paid. Forest were in debt to the tune of £20 million. In 2001 it was forced to put the entire first team squad up for sale in an attempt to balance the books. Consortiums wishing to buy the club came and went. Arguments raged about exactly what the financial position of the club was and when Forest PLC failed to present its annual report and accounts, its shares were suspended on the Stock Exchange. Nigel Doughty, a lifelong fan, sought to help and invested £12 million to support the club. Supporters also got involved in trying to help rescue the team, setting up a supporters' trust. After much wrangling, Doughty is now the Chairman of Nottingham Forest Ltd. The club are seeking to slowly build a more stable future for itself. The story of Nottingham Forest highlights many issues surrounding the ownership of a business. In investigating further, you will see that the reality of business ownership is not always as straightforward as the theory. Below are a series of questions and links that will help you to understand a little more about business ownership. Useful Links:
Questions:
(Total = 30 Marks) |
