Often Partisan

Ownership in Football – an OP editorial

If there is one thing I have noticed this season, it’s the preponderance of clubs who have problematic owners. Our opponents today, Coventry City, are also under a transfer embargo as they haven’t agreed funding for next year with their owners. Portsmouth are in administration; Leeds United fans are protesting against Ken Bates. It got me to thinking about the fit and proper persons test, and what’s wrong with it.

First of all, what is the fit and proper persons test? Well, you can have a read of it yourself here on the Football League’s website. What it boils down to is simple; if you’ve either have an unspent conviction, a conviction spent or otherwise for a dishonest act or have had problems with insolvency in your business life before, you’re not allowed to own or be a director of a Football League club. The test, which was adopted in March 2005 have been failed twice – by Rotherham United Director Dennis Coleman in 2008 and by Chester City owner Stephen Vaughan in 2009. Bearing in mind some of the farces we have seen in football since 2005 – take for instance the Munto Finance affair at Notts County – that amount seems unfeasibly low.

It also strikes me as bizarre that one of the ways you can fail the test is for:

(v) dishonestly receiving a programme broadcast from within the UK with intent to avoid payment under Section 297 of the Copyright, Designs and Patents Act 1988;

In other words, for being caught and convicted for watching a dodgy football stream on the internet or similar. Clearly what we don’t need in an owner.

So, okay, the test seems pretty useless – it’s not stopping some of the misfortunes we’ve seen in football and it seems ludicrously easy to pass. How does football change that? What reassurances would football fans want from an owner? What should be tested to see if an owner is right for a club? I’ve thought about this for a while, and I came up with this:

  • Football club owners mustn’t be dodgy. So, the stuff about no convictions etc has to stay, even if it doesn’t seem to catch many out
  • Football club owners need to have the money that they say that they have
  • Football club owners need to have a clue about what they’re doing, business-wise.
  • And ideally, football club owners need to have the best interests of the club at heart.

The next question is how do the football authorities test potential and current owners for this?

I think in addition to the current declarations, there have to be some other measures put into place. For instance, I think every professional club in the league should be forced to lodge a bond with the Football League in return for its place. The bonds could be on a sliding scale; say £250k for a League two side, £500k for a league one side and £1mil for a Championship side (Note I have pulled these figures out of thin air for demonstration’s sake). Thus before a prospective owner can take full ownership of a club, then they have to lodge that cash with the FL. If things go wrong, then the FL has some money to give back to the club to help keep things going until the end of the season. Furthermore, it’s a token that an owner has some money to put into the club.

I also would like to see a system whereby directors have to take a course in football administration. For instance, coaches in the Premier League have to have a UEFA “A” coaching badge, so why not force directors to either have or be on a course for a qualification – such as this an MBA in Football Industries at Liverpool Uni – something the FA clearly have a high regard for. If people who are directors of clubs have at least studied how the football business works, then maybe clubs might be run better?

The hardest thing to test is if football club owners have the best interests of a club at heart; that is something that is fairly intangible and as such isn’t testable – and of course, it’s probably the most important thing. My hope would be that by forcing clubs to have qualified directors and a bond system in place it would scare off at least some chancers – if it cleaned up football a bit, surely that would be a good thing?

The key is it has to come from the FL, and that is something I cannot see coming any time soon. There seems to be a very laissez-faire attitude at the FL that they cannot get involved in how clubs are run at all and thus by washing their hands of the situation the FL aren’t helping it. That has to change first if football ownership is to become better for all concerned.

Talking Points sponsored by John Hicken Industrial roofing and cladding materials

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  • Ash w

    I would like to see that owners have to put up in cash the cost of running the club for a season up fro t into some sort of safety deposit scheme to ensure the club can be run until the end of the season. This would ensure clubs would not enter administration during the season and if a club was struggling it would at least take them till the next transfer window when appropriate cuts could be made to playing staff and wage bills through player sales.

  • skareggae72

    Looking through fans comments from todays opponents Coventry,it seems that nobody knows who actually owns the club,so how on earth do they pass the `fit and proper persons test?`.
    These person(s) will always find a way around the rules & a way to twist the rules.

  • Rich

    @ash there is such an account it’s called an escrow account. I think it’s a good idea

  • Smokin

    sorry, but 10/10 for best intentions, 0/10 for ideas.

    1) keep the dishonsty rules, fair enough
    2) owners need to have money. I am sure most do. But firstly, the vast majority of the money is not likely to be liquid, and secondly it is for their business judgement whether they spend it or not. Steve Morgan at Wolves being an example
    3) owners need to have a clue business wise??? hahaha sorry but if they treated football like any other business they owned they would never get involved. The only people who ever do are those who have shown good business acumen elswhere, fell in love with football, and forget everything they ever learnt. The vast majority of clubs make losses year after year and rely on their owners to keep them as going concerns.
    4) have the best interest of the club at heart. As you say, who judges this? Sullivan And Gold had the best interests of Blues at heart, they ran the club tightly, did not get into debt, and as such generally did not waste money on players. Carson Yeung had the best interests of the club at heart. He bought us Foster, Hleb, Zigic, Bentley, Martins, on paper a team that no one seriously thought at the start of last seson would get us relegated.

    Finally, the fact that you have a qualification does not mean you have a clue about what you are doing. The folks involved in the Supporters Trust are no doubt quyualified in therir own walks of life, but still manage to put out ill advised statements. And most of the MBA’s I have worked for would not know how to successfully run a burger bar.

    Personally I would not care about any of this if we could be a toy of an Arab sheik. Nor would I care that he would be a totalitarian dictator, oppressing the majority of his people. He would pass the fit and proper test, and would buy us Messi :)

    KRO

  • TrevorFrancisTracksuit

    Another great article – keep them coming!

    I’m not a financial genius by any means so my views could have flaws, but I think a key one should be that they cannot undertake leveraged buy-outs, i.e. put the debt incurred from purchasing the club onto the club itself, like we’ve seen with the Glazers. Or at least, there should be a percentage limit to which they can do this. 50% would be very, very generous.

    Likewise the selling of the ground and loaning it back to the club, which is in effect anti-competitive, as who else is going to come in and take it off the team to then play on? I can’t but think that this damaged clubs like Leeds and sometime nomadic teams like Charlton, Boro and Wimbledon back in the day for years.

    I’ve been thinking (call it planning for the worst-case scenario) about what would happen if Blues didn’t exist and we became a phoenix AFC Birmingham. I’m guessing that we couldn’t afford to play at St Andrews, which would only remain blue and white if Tesco outbid Sainsbury’s for the land, and we’d probably be ground-sharing with Solihull Moors. The turf and the bricks and mortar should not be used by a crooked or broke owner as a bartering chip, and if it reached that point, there should be compulsory administration to save the club in the long-term.

    There are to my mind two key players to make changes happen – the FA and the government. For the former, unfortunately I think it will take an existing Prem team to go defunct before they pay any attention. As it is, they can blithely sit in their first class cabin on the Titanic, awash with money and worldly delights, and so ignore the approaching iceberg, and the working class chumps going overboard look so distant from their gilt-edged window. Plus they have a piece of paper in their hand saying that the ship’s captain is fit and proper (end of stretched metaphor!)

    As for the government, unfortunately, like the ‘Labour’ one before it, it remains in thrall to big business, and will bend over backwards to accommodate its demands. A real government would recognise the cultural value and importance of a club in binding communities and creating a sense of identity and purpose. You’d hope a ‘conservative’ government would seek to conserve this heritage through minimum standards that ensure that towns and cities like Portsmouth and Coventry are never under threat of being without a club to support. Unfortunately, the other side of the Tories is their monetarist love of chasing the pound. And while it’s still possible to sit and eat canapes in the box of a top 4 Prem team and pretend that all football is champagne football, and while the money is flowing freely at the top of the pyramid, I don’t think they’re too concerned about the grubby reality for most clubs sat below them.

    As I write this, I’m wondering if an e-petition to force it to be debated in government might be an approach – I think you need 100,000 to sign up, which isn’t many football fans – any thoughts anyone? Has this been tried / done already?

    As I said, keep up the good work, excellent stuff

  • chris

    they will always find a way around most rules.
    how about no club can carry a debt for more than three months and if it does it is deducted 10 pts for each occurance.
    also the punishment for admin is too lenient, ti should be automatic relegation, this may force owners not to gamble with debt.
    but how do you invent rules to cope with an owner from another country (and the laws in that country which maybe different to ours) who keeps the club in profit from having his assets frozen so affecting the stability of said club?
    clubs could have foriegn owners who’s ability to run a club are affected by something happening in their homeland, such as we have seen in Libya, Egypt, etc or recession / banking as west ham with icelandic owners.
    you just can’t cover all scenarios.

  • alexjhurley

    I think tightening up on who can buy a club is something we clearly need, but won’t solve the prob on its own. I think greater regulation of clubs is required by an independent body. “off foot” or something. They would scrutinise the clubs accounts and business plans and have powers to veto stupid financial decisions. In return clubs get a licence. Clubs consistently display an inability to run themselves properly, so this would impose a bit more rigour and force in some competance.

    That’s what I’d do anyway!

  • Atahualpa is a BlueNose

    What about having an official supporters’ group involved??

    They would be given the chance to scrutinize plans, funding, aims and objectives and be in a position to give a final nod to any change of ownership. Obviously they’d need proper experience, knowledge and know – how in their ranks. I believe the Bundesliga have a structure where fans are given a say on transfers, decisions etc., which affect their club.

    Maybe it is time to look to the continent for some precedence and inspiration.

  • Tilts

    I been banging this lone drum for ages….

    Every club should have 10% of yearly TV Revenue into a trust. At least when a club enters administration there is money there for a rescue package.

    Imagine you spend 5 years in the premier that’s around £250m TV income so £25m will be in a trust. It’s not a great deal of money but administration usually comes about after relegation so £25m to a championship club in administration could be the best way of avoiding liquidation.

    I do feel also that HMRC have cranked it up just lately and TAX has to be viewed as the most important bill to pay and perhaps government intervention in football by way of all HMRC payments to be paid monthly without fail or a sequence of actions that accumulates in points deductions for the 6 months unpaid!!

    The game has a responsibility to set football up so useless owners don’t continue to make fans suffer so much.

    It’s highly expected that Portsmouth will go from the hysteria of 2008 Cup Winners, 2009 Europa League to 2014 of probably propping up League Two because I would be shocked to see them not have further problems during a likely season in League One next season…. Why is it always the fans who suffer?

  • bluenose08

    Is it only me that feels it is unjust when a club gets deducted 10pts because the owners havent run it properly. All that does is punish the players and the fans. There should be a rule that forces the owners to put the club up for sale if they enter administration or fail to declare their accounts on time. k.r.o.

  • DoctorD

    I like the idea of forcing clubs to put part of their money in a pot that can be used if things to tits up. Football is a very weird busines — in our case, you had Sullivan and the Golds selling it (presumably partly to make money and partly because they’d had enough) to a guy with questionable finances, who presumably also wanted to make money out of it. However, the only way you can make money is by selling your “product” (horrible word, I know) — i.e. matches — to fans and TV companies and by buying and selling players. Unfortunately, the sums involved bear no resemblance to the actual size of the business in terms of staff numbers. And you can’t really make more of your product, unless you happen to play in Europe. So basically it’s a completely ridiculous business to be involved in that doesn’t follow any kind of conventional norms. It’s like no other, not least because the fans have such a vested interest in success. And therefore it means you do need people in charge with their heads screwed completely on. Except we rarely do. It pains me to say it, but the previous regime were pretty decent custodians of our club, until the end that is.

  • Dirty Bertie

    Sorry Almajir but you’re whistling in the wind if you expect the FL or anyone else to resolve the problems of football ownership. The key is not them but the supporters.

    And as for Tilts plaintive plea: “Why is it always the fans that suffer?” – because they’re easy to control with one man and a dog!

    I agree with Smokin, except for his comment on the Supporters Trust. Unless the fans can speak as one and FORCE the ownership, governing bodies or government to change things for the better nothing, zilch, nada, zero will be done other than the odd dummy shoved in the face of fans to shut them up.

    You may not agree with everything the Blues Trust says and does (that’s democracy for ya) but you can be certain it has the best interests of the club and its supporters to heart. It is your only real chance of getting things changed for the better.

    Only costs a five a year, what you got to lose? (Apart from 2 pints, obviously)

    • almajir

      I agree re the Supporters Trust – which is why I support the idea of it – and you’re right that change realistically has to come with the backing of the supporters. I fear that the apathy displayed by many won’t help though.

      • Dirty Bertie

        Ok, they can pay the fiver and remain apathetic, but with a smug smile on their faces (still can’t find those smiley faces!).

  • Aussiebrum

    It’s dangerous for any regulatory footballing authority to impose rules on ownership – after all the football authorities are often so poorly run. Can anyone really argue in favor of Sep Blatters work at FIFA, the role of the FIFA Executive or many others.

    Likewise, if people invest their capital and time in a club it’s up to the shareholders and fans to support or not support them.

    Football is governed by self interest – you need only look at the “big clubs” appalling efforts to combat Manchester City and their sponsorships.

    For years these “mega” clubs used their financial clout to dictate to all – now they are crying poor once someone else has deeper pockets than they do.

    The real concern isn’t that clubs are in financial difficulty – that will always happen.

    What really needs to be done is the football leagues in England need to be fairer to increase interest.

    This would increase the flow of money across the 92 clubs. Currently the formula for television revenues is unfair, it’s so heavily biased in favor of the top few clubs.

    The teams that fail in the Champions League have no right to be in Europa – that is an absolute outrage and must change.

    I’d like the League Cup to be changed – with the Champions League and Europa Clubs not eligible, ensuring an avenue into Europe for another club and more importantly, guaranteeing a Wembley experience for at least two more clubs every year.

    Football should be played on Friday night, Saturday night and Monday night, with some of the increased revenue spread equally among the 92 clubs.

    I have a difficulty with loans, this allows the big clubs to buy up so many players, then control the flow and loan them out. Therefore, loan fees should be illegal.

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