23/07/2013

50+1 Versus "Fit and Proper" FA Test

The basis of the Bundesliga is the 50+1 rule, whereby 51% (minimum) of the football club must belong to club members. The basis of the Premier League is the "fit and proper test" whereby the FA decide whether prospective buyers are suitable for running a football club, the Al-Kuwait's, Venky's, Carson Yeung, SISU and a number of other 'business men' all somehow managed to pass.

The system simply is not working. Too many football clubs are being destroyed by corporate investors with short term economic aspirations.

Bundesliga is perfect football model
One benefit from this corrupt model is the rise of supporter trusts. The only way fans will well and truly own their club is through supporters trusts. These organisations have the ability to fight for a club, elect capable board members, and apply for stadiums to become community assets to ensure the protection of their passion.

Swansea City's Supporters Trust took a 20% stake in their club, providing them with the opportunity to have a say in the running, appointments and decisions made by the board. Recently, Swansea has been crowned the epitome of how a football club should be run.

In the season of 2011/12, Swansea became the first Welsh club to make it to the top flight of English football. They managed to establish themselves in the league and avoid the all too familiar drop back down that can occur when a club is promoted from the Championship. A year on and they were crowned winners of the League cup following a 5-0 victory over Bradford City - not only a record victory, but Swansea's first major trophy.

On the tenth of April 2013, after 14 months of administration, a ground-breaking and historic deal was coordinated allowing the Pompey Trust a 51% share of Portsmouth Football Club. After suffering three relegation's in four seasons, the Pompey Trust strive towards clambering back up the difficult ladders of the football league.

Supporters Trusts are not uncommon in football clubs, but the day where the significance of them dramatically increases is yet to come. Since the appreciation towards Swansea's ownership structure, shared ownership involving fans is becoming a widespread phenomenon. This is a huge development in the football industry and has the potential to prevent future clubs suffering similar experiences to the ones Portsmouth were unfortunately exposed to.

Football club's are being swarmed with potent investors, bringing with them short term interests, weak financial management and poor governance. This leads to a number of sometimes irreparable problems.

Firstly it allows detrimental decisions to be made which can result in the systematic destruction of historic clubs. Evidence of this comes from Blackburn Rovers Football Club, who in one season alone were run by five different managersm resulting in an unsettled season causing a lack of motivation among players, and communicative confusion due to conflicting statements made by various board members.

Secondly, poor governance of a football club diminishes a relationship between the owners and the fans. This is generally due to conflicting interests, such as owners viewing the club as a business and focusing on global expansion with the aim of economic benefits, rather than considering the core values the fans of the club hold.

An example of this is the situation Cardiff City have found themselves in. Despite achieving promotion to the Premier League this season, a re-branding scheme was initiated by Vincent Tan. This enforced the change of playing in a traditional blue kit to playing in a red kit. The logo of the club was also changed, abandoning the traditional bluebird (the reference to the club's nickname: 'The Bluebirds') and introducing a new logo of a red dragon. These changes were introduced in the attempt of achieving a "symbolic fusion with Asia."

Although some fans seemed happy with the changes and agreed that they could lead to economic benefit, many fans opposed the re-branding process and some have even left the club, justifying their leave on the grounds that the club has been stripped of its core traditions and values.

Finally, poor financial management can lead to liquidation and administration, a dangerous position for any club to be in. Club's exposed to this, such as Portsmouth Football Club, have suffered relegation's due to the docking of vital points in the league for entering such financial states.

Administration initially would require the selling of assets to remove the club from that state, which may involve selling key players in the squad who would fetch the largest amount of money. Consequently, this could lead to a reduced standard of ability in the squad resulting in poor performances which in turn may cause further relegation.

The resolution to all of these critical problems, is shared ownership involving Supporters Trusts. The advantages of owners working with these trusts are obvious. Initially it will automatically allow for an improved relationship between fans and owners as fans have been permitted a say in the running of the club.

For some clubs, this may actually increase the finances of the club, as in some cases, a decrease in attendances has occurred, (for example, Blackburn Rovers, Coventry City, Birmingham City in protest to the owners) therefore a change in ownership structure may prompt a return to usual attendances.

A second benefit is that fans have the club's interests at heart as they are the life and soul of the club itself. They are the people who have continuously supported the club throughout their life, injecting their money, time and passion into the club. The importance of this is that they have the ability to recognise the consequences of decisions on the club and consider the long term effects of actions, whereas business orientated owners of clubs may consider simply the short term economic effects of actions.

Opinions of fans are hugely important in a club, and part fan ownership allow fans to have a say. It allows for fans to elect capable members into the board meaning a greater bond of trust is shared between the fans and the owners. Unlike the political system, fans of football clubs are unable to elect members of the board who they trust to care for the club. If fans held a share in the club they would be able to have a say in who is elected to the board, ensuring that the people holding key roles in the club are people who hold the clubs interests close to their hearts.

The recent influx of involvement between Supporters Trusts and football clubs demonstrates a clear need for more clubs to embrace the opportunities it could create. There are clear advantages for the ownership model demonstrated by the likes of Swansea City, and the completion of the 51% stake of Portsmouth by the Pompey Trust ensures that further problems will not ensue for fans of Portsmouth. To prevent the problems illustrated throughout this article from occurring, a development of the ownership model in English football is one that should seriously be considered.

No comments:

Post a Comment