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Ownership Travails
Although things have quietened down surrounding Birmingham City and the travails of their parent company, the Football League have been kept busy by other clubs with ownership issues. Nottingham Forest have been placed under a total transfer embargo due to the non-payment of transfer fees for £5million signing Britt Assombalonga, while Leeds United owner Massimo Cellino has been told he does not have to sell his shares as “he does not exercise control over them”.
The situation at Forest is made all the more farcical by the fact that they were already under a transfer embargo, due to them breaching the FFP rules. However, they were still able to sign three players during the January window – with £250,000 won from Skybet – as the FL gave dispensation in each case. The new embargo means that they now cannot even receive dispensation to sign players on loan until the money owing is paid off – something Forest Chairman Fawaz Al-Hasawi has said will happen “imminently”. However, that is now too late for Peterborough, whose chairman Darragh MacAnthony angrily took to twitter on deadline day to explain why the Posh wouldn’t be making any signings.
At Leeds, Massimo Cellino has been told although he is banned from being a director and owner due to failing the fit and proper persons test, he will not have to sell his stake in Leeds as it owned via a “blind trust”. Leeds are in the bizarre position of having an owner who doesn’t actually own them, as they have successfully proved to the FL that the shares in Leeds are held by this blind trust and that Cellino exercises no control over it’s vehicle Eleonera Sports which owns 75% of Leeds United. Leeds fans are used to this having seen Ken Bates run the club as chairman from 2005 – 2012 on behalf of unknown owners – another situation the FL apparently were okay with.
Even up in Scotland it appears football has become messy, with Rangers manager Kenny McDowall apparently being told that if the five players that Rangers have taken on loan from Newcastle United are fit, then they must play. Newcastle owner Mike Ashley owns an 8.9% stake in Rangers and has been blocked from buying more shares; in the meantime he has loaned them money to keep the Glasgow club afloat and has placed two directors – Derek Llambias and Barry Leach – on the board at Ibrox.
With all the furore around Blues last month I think people got nervous when the Football League got involved, and made a statement to the effect that
they were investigating and that there were a range of sanctions they could implement should they find incidences of rule breaches. From seeing what’s going on in football around the country it appears to me that the FL are pretty toothless; as much as they try to enforce their own rules they are blocked by legal challenges which go on to prove just how much they struggle to enforce penalties.
From what I hear the FL continue to be happy with the situation at Blues, taking the pragmatic view that although Carson is conducting various machinations in Hong Kong to try and seize power within BIH again, none of them currently affect the club. The club receives no input from Carson on day to day matters, no interference in team or management issues and therefore Carson isn’t exercising control. Until that situation changes, I do not believe the FL will do anything about how many shares Carson and/or his family own – which I will be honest pleases me as the FL can only punish the club, not Carson.
In our book “Haircuts and League Cups” (which you can still buy online at www.haircutsandleaguecups.co.uk or Amazon – shameless plug), Will and I talked about how the governance of football wasn’t fit for the purpose because of the lack of ability the FL has to enforce it’s own rules. As much as I believe fans should be involved in the ownershp of clubs – and should put their money where their mouths of in doing that – I think the FL needs to rethink its rules in how it regulates ownership. Rather than employing a test that struggles to stand up to legal challenges, I think the FL should make it clear that clubs must publicise all persons who own a reportable amount of shares – 5% or more – and more importantly, ensure that all clubs have at least one person (or family) that owns over 30% – a clearly definable owner. Rather than implementing rules that ensure that people will try and keep things obfuscated as possible, I’d prefer rules that enforce openness and transparency.
23 Responses to “Ownership Travails”
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It is fairly obvious these days, that the people who control football, are not trustworthy. FIFA sanctioned a World Cup to be played in Quatar. Some time later they found out that it’s very hot in Quatar, but all the dollars pushed their way,must have blinded them, to this fact. Every week, on match of the day, we see serious contentious decisions made by referees, that are discussed by the pundits, but nothing is ever done about it. With the amount of holding that goes on in penalty areas, football has almost become like watching rugby. (except that most footballers wouldn’t last 5 minutes in a rugby game). The game now thrives on controversy, players diving etc. but newspapers love this because it sells copy. This also brings the punters in and that is all the Football League, care about.
And why have Bolton, who are over £160m in debt, escaped the FL evil eye?
They are even bringing players in!
Debt isn’t a big deal – it’s being able to service it that is.
Consider a mortgage – it’s a huge commitment, maybe three or four times your yearly salary – but as long as you can pay it, it’s not a problem.
thing is, whatever set of rules they come up with there will always be a way found to get round them, if someone with pots of money wants something badly enough they will find a way of doing it, and the fl have to prove the rules have been flouted, look at Man City with the etihad stadium
As always OP another interesting and thought provoking read. Like you i would welcome a change in the rules if it meant that there was more transparency with club ownership, but i would like the FL to go a little bit further by making any potential owner to submitt written plans (that can be made public) outlinning how they intend to run and protect a club for a certain period of time. I would also force any new owner to make a deposit which would then sit in an account untouched by the owner or club, but should a situation arise ie Notingham forest and transfer payments then the FL can make any such payments (still enforcing the embargo until the deposit is repaid). When the owner decides he has had enough he would get his deposit back.
Only a thought but one which i think would show alot of fans that a new owner was serious about ownership…..
I’m sure your readers need no reminding that the Chief Executive of the Football League is none other than Shaun Harvey who, when in a similar role at Leeds United, was found by a County Court judge to have harassed an elderly couple and ordered to pay substantial damages (out of the club’s coffers of course). Fit and proper to judge others? I think not.
http://www.theguardian.com/football/2013/dec/18/leeds-shaun-harvey-yorkshire-radio
Thanks for that link Max. I read it through with amazement. When I got to this bit:
“For six of those years – before and after Leeds under Bates and Harvey collapsed into administration in 2007 owing around £35m, including £7m unpaid taxes – the club was owned via an offshore company in the Cayman Islands, a tax haven. Harvey gave evidence to a parliamentary select committee inquiry in 2011 that he did not know who the club’s owners were.”
Cayman Islands, offshore company, no one really knows who truly owns the club? The words
Henhouse + fox+in+is+the when re-arranged spring to mind!
I think, as Dan suggests, it’s a safe bet that we’ll see nothing of any substantive action from the FL.
It does cause me to despair at the chasm between passionate fair-play loving fans of any club; and the scheming, tax-avoiding, sometimes criminal activities of those who chose to own the clubs. Still, what’s changed. In the words of the song that older bluenoses will recall “It’s the rich that get the pleasure; it’s the poor that gets the blame.”
It seems the FL rules & regulations are so full of loopholes they’re almost transparrent
I think that for too long the same clubs remain at the top of English football because, definitely because , they dominate by having more money than others. I understand this is not allowed in the American soccer leagues because there is a limit imposed on transfer fees and wages. Until that is brought back into n our football, because we did have it once, the same unfairness will continue in the Premier League, and too a smaller amount, because of the knock-on effect in the leagues below. Sky’s stranglehold on this situation needs to be ended and only a change in the rules about fees and wages will do it.
We do have a salary cap of sorts in the Football League under FFP… however its based on club turnover rather than one set limit for everyone. So in effect, the richer a club, the more money they can spend. Then the poorer clubs can’t spend as much to improve their teams.
To be honest, who cares about the salary cap (FFP) as Forest broke it and look at the joke situation that created – where they purchased players with money given to them by Sky even after breaching Financial Fair Play rules. You can’t make this stuff up!
I think a team salary cap would be an excellent proposition (with perhaps one or two exemptions for marquee signings) as is the case in rugby union. However in order to avoid the situation in rugby where some of the best players leave (in rugby’s case to France) for a big payday towards the end of their careers, I believe the top leagues in Europe should agree a common salary cap. I also believe that prize money at the end of the season should be distributed evenly across the teams, after all – they all participate in the same number of games! The current situation just reaffirms the strong financial disparity between the top teams and everybody else. Hopefully something like this can be sorted when the Blues are back in the top flight although that might be dreaming – the FA could never sort something out this radical by next season :p
KRO & SOTV
These are all fantastic ideas – the problem is that to change anything you would need the support of the Premier League (yeah right!!!). Distinct case of Turkeys voting for Xmas – not going to happen, why would people like Richard Scudamore or clubs like Man City, Man Utd, Arsenal and Chelsea implement anything that could threaten their stranglehold on the game.
A very sorry state of affairs, and doubtful it will ever change….
The FL need to realise that rules and regulations are all very well,but it’s how they are implemented that is the problem.
Raymondo a good point mate but if suddenly we got purchased by Sheikh Yerwallet Im not absolutely sure that I wouldnt been in agreement with you! Im afraid we all long to have a wealthy and supportive owner but in the interim must be happy with the impending demise of the Villa.
You will never solve the problem of fit and proper owners.
Firstly, I could run a football club. I don’t need to know about football. I could employ a manager, a director of football an accountant and any expert you can think of.
Secondly, you don’t need pots of money. Players are the main cost and if you keep their wages under control, your experts cost a lot less than players and you can make the books balance. You might slip down the league because other clubs have other sources of money and it’ll make you unpopular with the fans but running a club without a subsidy is not impossible.
Thirdly, what you really need is honesty but this is difficult to test for unless you have a criminal record. If someone without a criminal record wants to buy a football cllub there is no good reason to stop them.
Finally, if they then turn out to be a crook, what can you do? if they’ve legitimately paid for the club, how do you make them sell their shares? The football league (or premier league) are not the law and can’t compel them to sell. All they can do is kick the club out of thier competition. This will stop the clubs income and in most cases put it into administration. It will also spoil the integrity of the competition and is probably best avoided.
I like the legitimately purchased shares bit, what if the shares were bought with ill gotten gains, who will do something about it.
You make interesting points, Dan but one of the problems surrounding ownership is caused by consortiums. Clubs are owned by these consortiums but then THEIR members change at ridiculous rates. Maybe there should be a rule that states the consortium should not be allowed to change it’s members like they do. I find it very suspicious when they do so frequently to be honest. Commiting to a football club should be for the long haul, it seems to me though the only people commited to any club these days are the fans themselves! Shouldn’t ALL consortium members face the leagues fitness test to own a club? If a consortium then becomes owner of a club then changes it’s members like they do, have the new members been tested by the league? I doubt it given that the consortium already owns the club so there are a lot of loopholes right there. Unfortunately Football provides too many opportunities for money laundering & corruption & with weak bodies like the FA & the Football League governing things won’t get any better unless they tighten up their rules!!
All very good points. The only good point I see in consortia, is that clubs have been saved by them. I don’t like them either, but I wonder how many clubs would have gone out of business without them?
It never used to be this complicated , did it ?
True Staffs, I should add that not all Consortiums are bad.
Interesting musings on the ideal structure for club ownership, Daniel. The problem with your suggestion that there should be one person/family with 30% + ownership is that it precludes community ownership, as in the case of Portsmouth. Surely, in the ideal world, this is how all clubs should be owned – by the fans! No more megalomaniac, greedy criminals! (I include the FL, PL, FIFA, etc in that label)
As this issue of football club ownership is more and more exposed and under the microscope it looks like controlled anarchy. What authorities there are seem to be effectively saying ‘Well, there are rules chaps but you can stretch the elastic a bit; just don’t get too scandalous or greedy and all will be fine”
If such elasticity were practiced on the field there would be no red or yellow cards and we’d see more broken legs and other serious injuries.
Even our former owners, who when all is said and done did a great job keeping the club solvent and relevant, made their piles out of pornography. Not Baroness Karen but her gilded upbringing was made possible by her dad Terry being one of the UK’s biggest printers of porn. Sullivan served time in prison for living off immoral earnings. This is all on public record.
Such is life.
When I see what’s going on at Leeds, Forest and Rangers, it does put our situation in a bit of perspective. In a way, I am glad we are not alone though, perversely, the more clubs that are in a dangerous ownership situation, the LESS likely it is that football governing bodies will do anything about it. I mean, basically, those bodies would not want lots of clubs in a particular division (rather than just one isolated bad apple) being hit by sanctions — as it makes a mockery of the rules.
In fact, Dan is right, how much worse do things need to get before the Football League take action? When a quarter of the clubs are in a mess? Half? Three-quarters? Surely at some point the FL must realise the existing rules are a joke.