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Blog on football ownership



Goldstone Rapper

Rediffusion PlayerofYear
Jan 19, 2009
14,865
BN3 7DE
Hi all, I've written a short blog on football ownership (slightly off my usual topics), inspired by recent events at Cardiff (and Hull):

http://dempseyjames.wordpress.com/2013/12/28/why-football-ownership-is-a-mess/

Hope it's of interest. I know there are lots of regular football bloggers around, so any thoughts, comments or general abuse much appreciated.

Good, well-written article.

The chasm is between supporters who bring a moral perspective of what is 'good', 'bad', 'right' and 'wrong', whereas economics is essentially amoral, of big fish eating little fish.

That's why when Vincent Tan talks of his plans, it doesn't chime with fans. When fans talk about 'heritage' or 'tradition' it seems irrelevant to him.
 

Creaky

Well-known member
Mar 26, 2013
3,833
Hookwood - Nr Horley
Good blog only lacking in real substance regarding alternatives to the current system of ownership.

I agree that it is wrong that an individual is able to take absolute control, (benign or otherwise), of an institution such as a football club.

The difficult discussion begins when alternatives to the current system are asked for.
 

Goldstone Rapper

Rediffusion PlayerofYear
Jan 19, 2009
14,865
BN3 7DE
Also, the statement:

"In fact, there is very little that has a significant impact on people’s lives over which we allow wealthy individuals to exercise complete control. Even private businesses are regulated when the products and services they produce are central to providing for people’s needs."

is very questionable since the advent of privatisation of rail, gas and electricity.
 

drew

Drew
Oct 3, 2006
22,981
Burgess Hill
Why has self regulation failed? It isn't failing at BHA and also at a host of other clubs. Just because there are two notable exceptions in Hull and Cardiff where the owners have no appreciation for the history of the clubs they have purchased doesn't mean it is a failure everywhere else. I suspect many Chelsea fans will begrudgingly accept that without Abramovich, Chelsea would still be waiting 50 years for a league title and would dream of a last 16 finish in the champions league rather than having their name on the trophy! It's not an ideal situation but I've yet to hear of a better one.
 


Creaky

Well-known member
Mar 26, 2013
3,833
Hookwood - Nr Horley
Why has self regulation failed? It isn't failing at BHA and also at a host of other clubs. Just because there are two notable exceptions in Hull and Cardiff where the owners have no appreciation for the history of the clubs they have purchased doesn't mean it is a failure everywhere else. I suspect many Chelsea fans will begrudgingly accept that without Abramovich, Chelsea would still be waiting 50 years for a league title and would dream of a last 16 finish in the champions league rather than having their name on the trophy! It's not an ideal situation but I've yet to hear of a better one.

We have seen it fail at BHA.

In any case what is this so-called "self regulation" in football - if you are alluding to FFP then that has patently far more "failures" than just the two clubs you mention.

Maybe some independent body along the format of English Heritage to regulate football clubs would work to curtail changes in the club format without the consent of fans and a stricter application of the League's "fit person" criteria both at the time of purchase and on an ongoing basis to ensure financial stability would work. I wonder how many owners would flout the FFP rules if one of the penalties was to remove them from the board of the club?
 

Aristotle

Active member
Mar 18, 2008
604
Edinburgh
Also, the statement:

"In fact, there is very little that has a significant impact on people’s lives over which we allow wealthy individuals to exercise complete control. Even private businesses are regulated when the products and services they produce are central to providing for people’s needs."

is very questionable since the advent of privatisation of rail, gas and electricity.

Thanks all for the comments. You're certainly right that the current privatisation of certain utilities results in companies having too much power to exploit consumers. But I take it that the fact that many people recognise that - e.g. the recent outcry at energy prices and Ed Milliband's promise to freeze them - is evidence that weak regulation does not go far enough.

In a way the fact that such failures of regulation are in the news presents an opportunity to extend that logic further, for example to football clubs.
 

Aristotle

Active member
Mar 18, 2008
604
Edinburgh
We have seen it fail at BHA.

In any case what is this so-called "self regulation" in football - if you are alluding to FFP then that has patently far more "failures" than just the two clubs you mention.

Maybe some independent body along the format of English Heritage to regulate football clubs would work to curtail changes in the club format without the consent of fans and a stricter application of the League's "fit person" criteria both at the time of purchase and on an ongoing basis to ensure financial stability would work. I wonder how many owners would flout the FFP rules if one of the penalties was to remove them from the board of the club?

The idea of an independent body that can remove owners from the boards of clubs if they no longer satisfy the 'fit person' criteria is a nice one.

I also completely agree that the fact that some clubs within the football system 'succeed' is no evidence that the system as a whole is working effectively in the interests of the right people. After all, it would be pretty hard to have any kind of football league in which no club was successful!!
 


Machiavelli

Well-known member
Oct 11, 2013
16,523
Fiveways
Also, the statement:

"In fact, there is very little that has a significant impact on people’s lives over which we allow wealthy individuals to exercise complete control. Even private businesses are regulated when the products and services they produce are central to providing for people’s needs."

is very questionable since the advent of privatisation of rail, gas and electricity.

Rail, gas and electricity are actually heavily regulated industries. Let's take rail as an example. Railways are an inherent monopoly. When people catch a train, they're not remotely interested in who the provider is, they just want to get from A to B. There are all sorts of regulations, rules, conditions, etc that rail providers have had to sign up to since privatisation. What's effectively occurred is that we've switched from a public monopoly to a private monopoly (secured through long-term contracts).
The sooner we switch from a private monopoly to a public monopoly, the better. My MP and the party she so brilliantly represents articulates such a view; the others don't, although there are signs that Labour might be rediscovering their mojo at long last.
We should also revisit the Beeching Report: look at the lines he closed down, and this will almost perfectly map on to the depressed areas in this country.
Finally, there are templates for an alternative to Abrahamovich, Tan et al. Look at Barcelona, Bayern, Dortmund, ... Note that these three clubs all made the Champions League semi-finals last year, and are probably the clearest favourites to do so this year.
 

drew

Drew
Oct 3, 2006
22,981
Burgess Hill
We have seen it fail at BHA.

In any case what is this so-called "self regulation" in football - if you are alluding to FFP then that has patently far more "failures" than just the two clubs you mention.

Maybe some independent body along the format of English Heritage to regulate football clubs would work to curtail changes in the club format without the consent of fans and a stricter application of the League's "fit person" criteria both at the time of purchase and on an ongoing basis to ensure financial stability would work. I wonder how many owners would flout the FFP rules if one of the penalties was to remove them from the board of the club?

Did it actually fail at BHA? We had a rocky road but we never went into administration. We are in a far better place now financially than we have been for probably the most part of the clubs history.

As for your comments regarding FFP, it hasn't yet failed because it hasn't yet been fully implemented. We won't know the effect until next year when penalties are imposed. As for your comments with regard to fans, who decides what they want. 75% of fans could be in favour of all seater stadia, would that stop the other 25% campaigning. An owner that doesn't listen to fans comments is heading for confrontation but at the end of the day, you can't please all of the fans all of the time.

As for a body that can remove an owner from the board, what difference does that make, he is still the owner. If you think you can have a body that can deem an owner not fit, so what. They can't just take away his rights as an owner. What happens to money he has put into a club. You have to accept that these are businesses with shares. You can't just take possession of a club without paying the money back.

Can you also explain how your independent body would ensure financial stability when you are patently against the only scheme ever to try and tackle that problem.

Too many fanciful ill thought out ideas that are totally detached from reality!
 

drew

Drew
Oct 3, 2006
22,981
Burgess Hill
The idea of an independent body that can remove owners from the boards of clubs if they no longer satisfy the 'fit person' criteria is a nice one.

I also completely agree that the fact that some clubs within the football system 'succeed' is no evidence that the system as a whole is working effectively in the interests of the right people. After all, it would be pretty hard to have any kind of football league in which no club was successful!!

But who are the right people? Most prem clubs are at near capacity. The tv rights are sold all over the world. We are enjoying record attendences that we didn't see in the old first division when there was standing!!

As for your comment about 'some clubs within the system succeed'. What does that mean. You can't have a situation where all clubs succeed either on or off the pitch. That is just a recipe for mediocrity. Businesses will fail and some will succeed. The difference in football is that very rarely does a club go out of business entirely. In fact, can you name an example where a club has disappeared completely? Aldershot were in the league but folded but are now back. Even Rushden and Diamonds who were in the league briefly and subsequently folded are playing again.
 


Creaky

Well-known member
Mar 26, 2013
3,833
Hookwood - Nr Horley
Did it actually fail at BHA? We had a rocky road but we never went into administration. We are in a far better place now financially than we have been for probably the most part of the clubs history.

As for your comments regarding FFP, it hasn't yet failed because it hasn't yet been fully implemented. We won't know the effect until next year when penalties are imposed. As for your comments with regard to fans, who decides what they want. 75% of fans could be in favour of all seater stadia, would that stop the other 25% campaigning. An owner that doesn't listen to fans comments is heading for confrontation but at the end of the day, you can't please all of the fans all of the time.

As for a body that can remove an owner from the board, what difference does that make, he is still the owner. If you think you can have a body that can deem an owner not fit, so what. They can't just take away his rights as an owner. What happens to money he has put into a club. You have to accept that these are businesses with shares. You can't just take possession of a club without paying the money back.

Can you also explain how your independent body would ensure financial stability when you are patently against the only scheme ever to try and tackle that problem.

Too many fanciful ill thought out ideas that are totally detached from reality!

Yes 'it' failed at BHA - No self-regulatory body, (eg The League), took any steps to prevent the Goldstone fiasco. There is NO effective self-regulation in football.

The rest of your post goes back to the core argument of the blog written by the OP - football these days is considered a business like any other and it shouldn't be.

Of course you can't in the current situation take away the rights of an owner but a regulatory body SHOULD be able to do so! A football club is as the OP argued far more than just a business.

I am against FFP as it is currently configured, that doesn't mean to say that it isn't possible to come up with a system that would work.
 

drew

Drew
Oct 3, 2006
22,981
Burgess Hill
Yes 'it' failed at BHA - No self-regulatory body, (eg The League), took any steps to prevent the Goldstone fiasco. There is NO effective self-regulation in football.

The rest of your post goes back to the core argument of the blog written by the OP - football these days is considered a business like any other and it shouldn't be.

Of course you can't in the current situation take away the rights of an owner but a regulatory body SHOULD be able to do so! A football club is as the OP argued far more than just a business.

I am against FFP as it is currently configured, that doesn't mean to say that it isn't possible to come up with a system that would work.

Come up with one then. Even if it is just an outline.

Professional football is and probably always will be a business. Football itself isn't. Get a ball and a couple of jumpers and you can play with your mates. However, once it gets organised it then costs money. Whether that is having a team with your mates playing in the Sunday league where you have to hire pitches, have kit, pay registration fees to a league or at the other end of the scale where you spend millions on players contracts and facilities. You might not like the idea that it is a business but it is and has been as far back as I can remember.

Also, there are very few situations where a regulatory body can remove an owner without compensation, in most cases where it has happened it is called nationalisation. If we take Cardiff as an example, if a 'Football Czar' decided Tan was not fit and proper, how are Cardiff going to repay the millions he has put in. If they don't, what message does that send to any other investor of Cardiff or any other club for that matter.

A few football fans who live in a fantasy land where they believe their rights are more important than anyone else's isn't going to change anything.


As for the self regulation, my point was that the system regulated itself.
 

Creaky

Well-known member
Mar 26, 2013
3,833
Hookwood - Nr Horley
Come up with one then. Even if it is just an outline.

Professional football is and probably always will be a business. Football itself isn't. Get a ball and a couple of jumpers and you can play with your mates. However, once it gets organised it then costs money. Whether that is having a team with your mates playing in the Sunday league where you have to hire pitches, have kit, pay registration fees to a league or at the other end of the scale where you spend millions on players contracts and facilities. You might not like the idea that it is a business but it is and has been as far back as I can remember.

Also, there are very few situations where a regulatory body can remove an owner without compensation, in most cases where it has happened it is called nationalisation. If we take Cardiff as an example, if a 'Football Czar' decided Tan was not fit and proper, how are Cardiff going to repay the millions he has put in. If they don't, what message does that send to any other investor of Cardiff or any other club for that matter.

A few football fans who live in a fantasy land where they believe their rights are more important than anyone else's isn't going to change anything.


As for the self regulation, my point was that the system regulated itself.

There are a number of examples where the FSA have taken action against owners of financial businesses. Action that may not have removed ownership in terms of shares but have banned the owners from directorship of the company or having any interest in the running of the company.

You appear to be in favour of a system such as FFP but the problem with the current system is that it doesn't penalise those that breach the rules but the club as a whole, including the fans.

Responsibility for breaches of the FFP regulations and unsound financial practices lies solely with the owners of the club and consequently any penalty for such practices should be imposed on them. Any removal from power, or other penalty such as fines, should be borne by them.

You ask how a club such as Cardiff could repay Tan were such penalties imposed - in essence exactly the same way as such matters are dealt with by those facing penalties imposed by regulatory bodies - they would still own any shares and be entitled to dispose of them or keep them as they wish, they just would not be able to exercise any voting rights attached to them. As for loans, they would be dealt with in a commercial way, repayments falling due as initially contracted when the loans were made.

It's not a matter of fans living in a fantasy land, a local football club matters not just to those who attend matches but the locality as a whole - in the same way as any other civic amenity.

As the OP puts it -

"Some things can be owned and transferred for money – land and buildings, for example. Yet often society retains an interest in what that individual can do with those things. Buildings are listed; planning laws are enforced. In fact, there is very little that has a significant impact on people’s lives over which we allow wealthy individuals to exercise complete control. Even private businesses are regulated when the products and services they produce are central to providing for people’s needs.

It might seem that these comparisons are overblown. After all, football is not a matter of life or death, is it? Yet the significance of football clubs as social institutions, embedded in communities, and mutually dependent on those communities should not be underestimated."
 


drew

Drew
Oct 3, 2006
22,981
Burgess Hill
There are a number of examples where the FSA have taken action against owners of financial businesses. Action that may not have removed ownership in terms of shares but have banned the owners from directorship of the company or having any interest in the running of the company.

You appear to be in favour of a system such as FFP but the problem with the current system is that it doesn't penalise those that breach the rules but the club as a whole, including the fans.

Responsibility for breaches of the FFP regulations and unsound financial practices lies solely with the owners of the club and consequently any penalty for such practices should be imposed on them. Any removal from power, or other penalty such as fines, should be borne by them.

You ask how a club such as Cardiff could repay Tan were such penalties imposed - in essence exactly the same way as such matters are dealt with by those facing penalties imposed by regulatory bodies - they would still own any shares and be entitled to dispose of them or keep them as they wish, they just would not be able to exercise any voting rights attached to them. As for loans, they would be dealt with in a commercial way, repayments falling due as initially contracted when the loans were made.

It's not a matter of fans living in a fantasy land, a local football club matters not just to those who attend matches but the locality as a whole - in the same way as any other civic amenity.

As the OP puts it -

"Some things can be owned and transferred for money – land and buildings, for example. Yet often society retains an interest in what that individual can do with those things. Buildings are listed; planning laws are enforced. In fact, there is very little that has a significant impact on people’s lives over which we allow wealthy individuals to exercise complete control. Even private businesses are regulated when the products and services they produce are central to providing for people’s needs.

It might seem that these comparisons are overblown. After all, football is not a matter of life or death, is it? Yet the significance of football clubs as social institutions, embedded in communities, and mutually dependent on those communities should not be underestimated."

But you still keep coming back to this romantic notion that the club belongs to the fans. It doesn't. It may well be more embedded in the community than your local corner shop but it remains a business. Your last quote is merely taken from the blog which itself makes reference to the pig ignorant quote from Shankly.. To rephrase the blog, a football club needs to take heed of it's customers, ie us fans that pay to watch. However, have Cardiff's gates been affected because they now play in red. How many fans are missing from Old Trafford because a bunch of fans don't like the Glazers. The answer to both is hardly any. Any changes clubs make will almost certainly in the main be driven by revenue or the potential thereof. If the Cardiff City Stadium was 95% empty purely because they wore red then I very much suspect they would be back in blue (although Tan seems that eccentric I couldn't be sure!!!).

As for the blogger making comparisons to other property/services that the wealthy control they are regulated but the regulator doesn't tell them how to actually run their businesses. To compare watching football with vital services is very sad indeed. We need power, water, etc to survive. Football is not a necessity to life.
 

Creaky

Well-known member
Mar 26, 2013
3,833
Hookwood - Nr Horley
But you still keep coming back to this romantic notion that the club belongs to the fans. It doesn't. It may well be more embedded in the community than your local corner shop but it remains a business. Your last quote is merely taken from the blog which itself makes reference to the pig ignorant quote from Shankly.. To rephrase the blog, a football club needs to take heed of it's customers, ie us fans that pay to watch. However, have Cardiff's gates been affected because they now play in red. How many fans are missing from Old Trafford because a bunch of fans don't like the Glazers. The answer to both is hardly any. Any changes clubs make will almost certainly in the main be driven by revenue or the potential thereof. If the Cardiff City Stadium was 95% empty purely because they wore red then I very much suspect they would be back in blue (although Tan seems that eccentric I couldn't be sure!!!).

As for the blogger making comparisons to other property/services that the wealthy control they are regulated but the regulator doesn't tell them how to actually run their businesses. To compare watching football with vital services is very sad indeed. We need power, water, etc to survive. Football is not a necessity to life.

I may be clinging to a "romantic notion" that a football club 'belongs' to the community, (not just the fans) - on the other hand you seem to be insisting that a football club is a business plain and simple and fans are irrelevant, it is customers that are important.

I daresay you could paint the Royal Pavilion fluorescent green and people would still visit it and pay for entrance but few would claim that doing so should be allowed.

Football may not be a necessity but it is important to many and adds to the quality of life for millions in the same way that planning regulations do.
 

Creaky

Well-known member
Mar 26, 2013
3,833
Hookwood - Nr Horley
As an aside - if football clubs should be treated as businesses plain and simple then what is the point of the FFP regulations - what other business is not allowed to make losses so long as those losses can be sustained by subsidies from a rich owner?
 


Goldstone Rapper

Rediffusion PlayerofYear
Jan 19, 2009
14,865
BN3 7DE
So as a business why should there be regulations to say they cannot make a loss beyond a certain level? - I can't think of any other business where such a regulation applies.

Of course there should be regulation to ensure football clubs don't make a loss beyond a certain level. As Matthew Seyd explains, a lot of foreign owners are prepared to pump lots of money into clubs for the prestige that football may confer upon them:



It hugely distorts football as a competitive sport if, say, one club is prepared to go £200 million in the red to buy success to make their owner a prestigious figure and other clubs are run as businesses within the parameters of their income and profits.
 
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