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Ownership and governance
options for football clubs
Jonathan Michie and Andy Walsh
Paper for February 3rd 1999 Conference on
The Corporate Governance of Professional Football
Birkbeck College, London
27th January 1999 version - comments very welcome
Contents
1. Introduction
The attempted take-over of Manchester United by BSkyB in 1998 - an
attempt which may be renewed in 1999 if the Government gives BSkyB the
go-ahead - highlighted what had been apparent for some time. Football
has become increasingly commercialised. It is now big business.1
Associated with this increasing commercialisation has been a second
worrying development. At most Premier League clubs in England there
has been a gentrification or yuppification of the fan base, amounting
to a form of social exclusion.2 Ticket price increases have
priced many traditional football fans out of regular attendance. This
is particularly the case with young fans.
On the positive side, there has at least been wide recognition not
only of the dangers to the game from these twin developments, but also
of the need for action to deal with the problem.3 Hence,
for example, the establishment of the Football Task Force.4
However, the BSkyB bid is more significant than simply having
served to draw attention to these existing problems. It also
represents a serious additional threat to the game. Firstly because it
will exacerbate the problems referred to above. And secondly because
it will create additional threats to the game, most particularly the
threat that the top, glamour clubs will be taken over by media
companies. This will result in these clubs being run in the interests
of the media companies that own them. Indeed, it would be the legal
requirement of the companies' Directors to so act, regardless of
whether their actions were in the best interests of the football club.
According to British company law, if the Directors were presented with
a course of action that would be in the interests of the parent
company but not the football club, they would be legally obliged to
adopt the course of action that was in the interests of the parent
company of which they were Directors. The interests of the football
club, and their fans, would have to be sacrificed. A practical example
might have been when, in 1998, the Premier League threatened
Manchester United with expulsion (along with the other clubs involved)
if they joined the European Super League about which the clubs were in
discussions. Had BSkyB owned Manchester United at the time, it might
well have been considered to have been in the interests of the
broadcasting company to go ahead with the European Super League, and
to therefore use Manchester United to help launch it, regardless of
the longer term damage which would have been done to the football club
through expulsion from the Premier League.
There would, though, be a far more general, continual potential
conflict of interest over matters such as the amount of money to be
put into the operation of the football club in lieu of the fact that
nothing was being paid for the right to screen live matches, which
otherwise would generate large revenues for the club. And there would
always be the danger of asset stripping by selling players, or selling
the club's football ground as commercial property, or whatever.
The need to consider alternative forms of ownership and governance
for football clubs is therefore urgent. Our paper aims to contribute
to this task. Sections 4 and 5 below consider the various possible
options. Some of these are undeniably ambitious and perhaps utopian,
but others are very much on the immediate agenda, given the threat
from BSkyB. Before speculating on where we would like to be, though,
it is important first to consider where we are now, which we discuss
in Section 3, and how we got there, which is the question we begin
with, in the following Section.
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2. How did we get in this mess?
The establishment of PLCs in football is based more on the desire
to take money out of the game than, as football club directors would
have one believe, putting money in. The flotation of a football club
is often accompanied by a club director or financial advisor talking
the language of 'people's capitalism'. Manchester United's 1991
prospectus declared a wish to 'give employees and supporters a greater
opportunity to invest in Manchester United' and talked of a desire to
'widen the ownership' of the Club. The latter is ironic as it was
Louis Edwards, the father of United's current Chief Executive Martin
Edwards, who deliberately set out to concentrate the ownership of
Manchester United in his own hands in order that he might exploit the
Club for his own gain. One story from the time recalls Louis taking
the late Sir Matt Busby into his confidence about a potential new
share issue; Sir Matt rejected the idea. Instead he suggested that the
Board go to the fans if money was needed who 'would gladly throw money
over the wall'. It is no surprise to learn that one of Louis's
advisors at the time was Roland Smith, now Professor Sir Roland
Smith and Chairman of MUFC plc, the alleged architect behind United's
current sell-out to BSkyB.
2.1 Club to Private company
Around one hundred years ago football clubs began to form
themselves into limited companies a move intended to protect those
running the clubs from personal liability should the newly found
professionalism of the era go awry. In an effort to protect the
integrity of the game the Football Association imposed Articles of
Association that debarred profiteering by club directors. Rule 34
imposed a maximum dividend payout and outlawed payments to club
directors. It also laid down the provision that in the event of a club
folding, the assets would have to go to other local sporting
institutions. As illustrated below, and also in the paper from the
Barcelona supporters' group, we can see that this principle was
adopted abroad where the idea of football being organised into 'clubs'
was enshrined in the constitutions of famous institutions such as FC
Barcelona. As can be seen in the case of Barcelona, the concept was
developed to give the 'Club' a real link with its community and its
supporter base.
This move for the good of the game stands in stark contrast to the
FA's capitulation to the bigger clubs one hundred years later when the
FA allowed itself to be used in the establishment of the Premier
League, breaking away from the rest of league football.
2.2 PLCs
In 1983 Tottenham Hotspur became the first English club to go to
the market. Few regarded it as a good idea; the City was
unenthusiastic, and fans and others in football were suspicious. It
was not until the Hillsborough Disaster and the financial implications
of Lord Justice Taylor's report that the idea of using the financial
markets to raise investment capital really took hold. There are around
twenty clubs now quoted on the markets with capitalisation ranging
from a couple of million at Swansea City to over half a billion at
Manchester United. In the meantime, as this development was taking
place the vision shown by the FA's forebearers in devising Rule 34 was
being circumvented. The formation of PLCs as holding companies was
used to allow clubs to appoint paid directors. Gone were the days when
local businessmen became involved in football just to boost their
prestige and standing in the local community. Now the far more
'modern' pairing appears to be boosting personal wealth and
massaging egos.
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3. Football at the crossroads
At the time of this conference the idea of a regulator for football
is being widely floated in the media, and is being seriously
considered by the Football Taskforce. The incoming Labour Government
set up the Taskforce as a direct response to widespread public concern
for the health of 'The Peoples Game', thus honouring its pre-election
pledge. This new approach to football is in contrast to the attitude
of previous Governments who thought that the problems of football
should be resolved from within. There appears to be for the first time
proper recognition that sports such as football play an important part
in the social and cultural fabric of society. In addition the
Government to date appears to have recognised the important role that
all the various interest groups in football have to play. For the
first time, fans' and players representatives have a recognised place
at the table and though there is still a great deal of cynicism about
what the eventual outcome may be, a start has at least been made in
tackling some of the most pressing problems.
3.1 Greed and power
Ironically the FA already has the power to carry out the role of
regulator but appears unwilling to act. Rule 34 still stands but in
the sixteen years since Spurs first floated the FA has failed to come
up with a plan of how to protect the game from the commercial
pressures that now threaten to suffocate it. The European governing
body, UEFA, is now the latest target of attack from the big clubs. The
insatiable desire of these clubs for more control and more money has
forced the revamping of the European club competitions. This has been
driven not by the wishes of the fans, players or, it seems the
managers, but by TV and commercial interests. The European clubs who
accepted the ethos that a football club was part of the community,
enshrining that tenet in their constitutions are now also threatening
to float on the stock market. Franz Beckenbauer and other European
football directors have cast avaricious glances at what is available
to their English counterparts. They may dress up the aims in the
language of the 'greater common good' but that is precisely what
directors of English football clubs have done before. Often the
appointment of a new 'suit' from the City to a football club
boardroom is accompanied by the declaration that the esteemed
individual is a life long fan; by implication they are not a threat to
the existing order. It is doubtful whether any of the fans following
the team around the country, paying ever increasing prices for the
privilege, would recognise any of these individuals from their
travels. Yet it is a tacit acknowledgement that the approval of the
club's supporters for the actions taken in the boardroom is still seen
as in some way necessary. The antics and comments of the Newcastle
United FC directors Douglas Hall and Freddie Shepherd may have exposed
a mind-set that extends beyond the river Tyne; at the very least this
episode demonstrated that taking the fans for granted can have serious
consequences, at least in the short-term.
3.2 World Championship
It took seven years from the formation of the breakaway Premier
League to the threats of a breakaway European Super League but there
are signs now of a quickening of the process. Within a few months of
matters reaching an uneasy settlement at a European level a world-wide
dimension for club football was being broached. FIFA General Secretary
Sepp Blatter's declared wish for a two year World Cup were seized upon
by Rupert Murdoch, his response was to agree with the proposal except
that the competition should be contested by clubs not countries.5
3.3 Who runs football?
Football the world over recognises the authority of bodies such as
the national FAs, UEFA and the world governing body FIFA but that
authority is undermined by the secrecy and exclusivity of these
organisations. There is little involvement or input at the
administrative level from those at the sharp end: fans, players,
managers and staff. This allows media moguls like Berlusconi and
Murdoch to exploit divisions and cynicism for their commercial
advantage. Murdoch is no sports fan but for commercial reasons has
declared his admiration for the American model of sports clubs and
sports administration. Two of America's biggest sports are in the grip
of crisis, and some commentators believe this is a result of the way
sport is actually organised. Is it therefore merely a coincidence that
after the virtual collapse of the live audience for American Baseball
and with a similar scenario now unfolding in American Basketball that
Murdoch is looking to Europe, and England in particular, for new areas
to exploit? Possible ways to combat the commercial threat to our
national game are explored later in this paper. Arguments are made for
Government intervention not because football is a charity case, far
from it. Rather, those charged with protecting the welfare of the
sport and the interests of its participants have reneged on their
responsibility, allowing the very future of the sport to be placed in
real jeopardy.
Back to Contents
4. Future options
We are faced with a choice. Allowing the further commercialisation
of the game, with the glamour clubs to be bought up by global media
corporations, further weakening the social, cultural and sporting role
of the local football club and exacerbating the current process of
social exclusion. Or recognise the wider public interest, and
strengthen the links between clubs and fans. How can the second choice
be implemented? What would it mean in practice?
There are a number of ways in which aspects at least of the wider
public interest have been recognised. Lessons can therefore be learned
from some of these examples from the past, from other countries, and
even from the operation of some English clubs today. We are not,
however, simply advocating a return to the past. On the contrary, that
would be to return to the structure that created the current mess.
4.1 Mutualisation
The ultimate form of fan involvement would perhaps be to have a
mutual structure. Here the fans would own the club itself. This would
be through their membership of the club, and their involvement through
attendance, rather than the ownership of share capital. This is
discussed in the paper by Michie and Ramalingam (1999) and so we do
not analyse it further here, other than to note the following.
Firstly, the problem of how to get from here to there would be large,
given the existing share capital that would need, in the case of most
clubs, to be bought out. Secondly, the case of Barcelona indicates
that even given such an option, much depends on the detail regarding
the actual operation of such a structure (on which, see L'Elefant Blau,
1999).
4.2 Trust status
Apart from mutualisation, the other way to move from a PLC to an
alternative structure that would avoid the continual danger of
take-over by outside commercial interests wanting to use football
clubs for their own (media) ends, would be the use of trust status.
(For a discussion of how a Supporters Trust works in practice, at
Northampton Town FC, see the separate paper from Lomax, 1999.) This
for example is how the ownership and operation of the Guardian
newspaper is structured. To have a football club operated as a trust
has the added advantage over a PLC that no dividends have to be paid
out to share owners. The club's revenues can be kept within the game.
The problem, again, is how to get from here to there. The question can
be posed in two ways. First, how to persuade the existing shareholders
to accept the change in the status of their shares - into a form in
which no dividends are paid? Or secondly, where to find the money to
buy the existing shareholders out?
In the case of those clubs that are already PLCs, it seems unlikely
that the institutional shareholders would agree to the change in the
status of their shares. They would, presumably, need to be bought out.
The bulk of the other shareholders would in most cases be fans of the
club, either Directors of the club who may hold large shareholdings,
or else the large number of small shareholders. Here it might be
thought there would be more chance of the shareholders agreeing to the
change in status of their shares, into shares in a Trust. For most of
these shareholders the prospect of an annual dividend would not be
particularly important. However, what would be important in most cases
would be that the individuals would be able to sell their shares at
any time, to realise the capital. There are two issues here. Firstly,
would one be able to sell one's shares in the Trust? To whom? And
secondly, how much would one get? How would the price be determined,
if the shares were not being traded on the stock exchange? To be a
practical proposal, any move to Trust status would need to provide the
desired answer to both these questions. Firstly, it would have to be
possible to sell one's Trust-shares. And secondly, there would have to
be the expectation that one would receive as good a price as one would
have, had they remained PLC-shares.
One way of answering these questions is to refer back to how the
problem of the institutional shareholders would be dealt with.
Ironically, what appears at first sight to be a problem might turn
out, in the context of the British football industry, to instead
represent the answer as to how Trust status might be a realistic and
practical way forward. The problems referred to in the previous
paragraph arise in the context of the move from PLC to Trust being
'all or nothing'. With all the shares being Trust shares, how will
these be valued. And who would buy them, if they pay no dividends, and
whether or not one will be able to sell them again in the future - and
for how much - is rather uncertain. These questions would be answered
if the company were actually to remain a PLC, with its shares still
traded on the Stock Exchange. The problem of the institutional
shareholders would be solved if it was ignored, by not attempting to
bring them into the Trust, leaving them instead as they are, as
holders of dividend-paying shares in a PLC traded on the Stock
Exchange. So where does the Trust come in. The suggestion here is that
a part, but not all, of the shares might be transferred to a Trust.
One would then have a PLC in which a block of the shares would be
owned by a Trust. This Trust would have Trustees. The Trust might have
one or more of their members as Directors of the PLC. They would
certainly make it their business to ensure that the PLC Board had
suitable Directors and that the Board acted in all times in the
interest of the club. One of the key points would be to have this
block of shares held by the Trust sufficiently large to prevent a
take-over of the PLC by outside commercial interests who might misuse
the club for their own commercial ends.
Both sets of problems - those of how to overcome the objections of
the institutional shareholders, and those of how to overcome the
objections of the non-institutional shareholders - would thus be dealt
with simultaneously. All shares would, in effect, continue to be
treated in like manner, as they are now. This would require that those
who had transferred their shares to the Trust would have to be able to
sell them at any time, and to be able to receive the same as if they
were non-Trust shares being sold on the stock exchange. But if those
who held their shares within the Trust sold them on the stock
exchange, the proportion of shares held by the Trust would diminish.
The preferred method of dealing with this would therefore be for the
Trust itself to automatically buy the shares from anyone who held
shares within the Trust who wanted to sell. Where, though, would they
get the money to do this?
The answer to this is also provided by the 'problem' of the
institutional shareholders having prevented a wholesale transfer to
Trust status. Because instead the company continues to be a PLC,
albeit with a large block of the PLC shares held collectively in a
Trust, administered by Trustees, all shares would need to be treated
symmetrically in terms of dividend payments. One implication of having
only a part-Trust structure is that the advantage referred to above,
of not having to pay dividends, would not be fully realised. However,
the Trust could be established as follows. When given the choice of
whether to transfer your shares into the Trust, we have already said
that it would be a risk-free option, in that you could still sell them
outside the Trust, as PLC shares, at any time on the stock exchange.
In addition, although dividends would no longer be receivable, they
would have to be paid by the PLC to the Trust on all the shares just
as they are individually on all the PLC shares. Thus each of the
shares you transfer to the Trust would be paid a dividend,
administered by the Trustees, and this annual income would be used to
buy additional shares for the Trust, and would be allocated in
proportion to all those holding their shares in the Trust. Thus, if
one chose to transfer one's shares to the Trust, then instead of being
paid a cash dividend of say 5% a year, one would instead receive
additional shares each year, to be added to one's existing
shareholding within the Trust, equivalent to 5% of one's holdings.
If a shareholder actually wanted the cash that would have come as a
dividend then they could of course just sell the additional 5% of
shares. And rather than go through this slightly convoluted procedure,
the Trust might ask as a matter of course which option each
shareholder wanted to elect for - to take the dividend in cash, or in
additional shares, or in some mixture of the two. The hope would be
that the additional shares which the Trust would need to buy to add to
the existing shareholdings of those whose shares were held within the
Trust would outweigh any sales of shares by those whose shares were
held within the Trust. Put another way, it was said above that there
might be a problem of the Trust representing a declining proportion of
shares if those who held shares within the Trust chose to sell. The
point is that such shares would be bought by the Trust using their
annual dividend receipts, and these shares would be allocated to the
remaining Trust-shareholders in lieu of dividends.
In addition to the annual purchase of PLC shares by the Trust - for
allocation to Trust shareholders in lieu of dividends - it might be
that other PLC shareholders would transfer to the Trust, so that the
proportion of shares held by the Trust would rise by a greater amount
than would be accounted for just by their annual purchase of PLC
shares. Or perhaps more likely than PLC shareholdings moving to the
Trust, new shareholders buying PLC shares through the stock exchange,
might elect to have these shares held within the Trust. Indeed, the
Trust would presumably continually campaign for local people to buy
shares and have them held in this way.
One specific target for such a campaign might be the employees of
the club, including the players. There are Government tax incentives
for people to take up shares in their company. And in the case of the
Premiership clubs - which are the ones where the scale of the sums
involved make it particularly difficult to imagine a complete buy-out
from PLC status to any other (Trust, mutual or the like) - the players
often have large sums to invest to make provision for their
post-playing days, and in any such investment it would make sense to
receive the annual income in the form of additional shares rather than
cash.
4.3 International examples
Some reference has already been made to overseas examples and the
paper from Barcelona's 'L'Elefant Blau' goes into greater detail for
that particular football club. Elsewhere in Spain there are similar
examples of other clubs being owned and democratically run by the
fans. Typically a Board of Directors is elected to run the club and
remains directly accountable to the members. There has been widespread
adoption of some of the principles established in England prior to the
First World War. The English FA's Rule 34 for example recognises that
football clubs have sprung from the local sporting community and
provides for the assets to be distributed to the local sports
institutions if the football club is ever wound up. This 'ashes to
ashes' view of a professional football club is not just a quaint
tradition; it is regarded as sacrosanct to many fans on the continent
of Europe used to nothing less. The current constitution and rules of
many Spanish clubs have been in place for over sixty years having been
adopted under General Franco's regime in 1930s Spain (see Crolley and
Duke, 1996). There has been evidence in recent years of a desire to
follow the English example once more, to change the present rules and
allow the establishment of publicly quoted companies. This is a threat
that the fans are in general are deeply suspicious of - rightly so, in
our view.
In Germany similar examples exist of clubs being owned by the
members. As recently as 5th December 1994 Schalke 04
adopted a new constitution, for the club to be owned by its members.
This was drawn up in conjunction with the German FA and the DFB, with
the aim of providing a model for the whole Bundesliga. Each year up to
eleven people are elected to an administrative 'Board', called the
Aufsichstrat. Though football predominates, Schalke field teams in
many sports including table tennis, athletics, basketball and
handball. The Aufsichstrat includes a representative elected from the
Sportbeirat, a committee representing all the sporting staff of the
club. In addition Schalke has around 400 fan clubs across the world
organised into a Federation; they too elect a representative to the
Aufsichstrat. A further six members are elected at the Club AGM and
the Aufsichstrat has the power to co-opt up to three further members
should they feel specialist advice or expertise in a certain area is
needed.6
For the day to day running of the Club an Executive of between
three and five members is elected by the Aufsichstrat called the
Vorstand; all of those on the Vorstand are paid and employed
full-time.
In England the supporters and staff are only ever involved in the
running of clubs when there is a crisis. On the European Continent it
is an accepted part of the club culture that the game is administered
with all members of the club having an interest and taking part. To
change attitudes will require a momentous effort but as FC Barcelona
and others have shown over the years, a democratic club structure is
no bar to running a successful club.
4.4 Fans' voice
It needs to be remembered that one of the main aims of the various
examples and options referred to above is to ensure that the interests
of the fans are taken properly into account, and that fans are not,
over time, excluded from the clubs. The social exclusion that has,
undoubtedly, taken place to some extent over the past few years, must
be overcome. This means that the various ownership options should not
be viewed mechanistically, as technical 'solutions'. Such options will
only be as good as their implementation. Conversely, some progress
could be made even within existing PLC structures. Proper
representation of fans' interests could be required of football clubs
by Government. This could be through a Code of Conduct, which clubs
would have to comment on in their Annual Reports, or even by requiring
appropriate Articles of Association to be incorporated by all
companies whose business included owning a football club.
Again it would be crucial to pay attention to the detail. Most
football PLC Boards would no doubt claim that the Directors are all
supporters of the club. Such fan representation would therefore have
to be seen to be genuinely independent of the club.
4.5 Historical examples: Back to the
future?
The independence of a supporter on the Board is vital if the
members of the club, the fans, are to have any faith in the system.
The fans' representative must be seen to be independent and to carry
the same authority as other Board members. This can not be achieved
when the level of authority in the boardroom is determined by the
number of shares held by the individual as is the case today.7
The Board of Directors should be a team of individuals put in place to
achieve the best possible set of outcomes for the club and its
members. In this respect any supporter representation at Board level
must be meaningful. At Manchester City Francis Lee used the carrot of
a fan on the Board to show how different he was going to be when he
took over from Peter Swales. The fans' representative on City's Board
was Dave Wallace, editor of the fanzine 'King of the Kippax'.
The experience was not a happy one, Wallace was not treated as an
equal by other members of the Board, he was seen as a means of
demonstrating 'a new openness' but the Board merely wanted him to act
as their PR agent amongst the fans. The Board did not allow Wallace to
be present at all of their discussions and when Wallace refused to tow
the line the post of fans' representative was abolished.
4.6 Current examples: Northampton and
Bournemouth
It is ironic that with Swales and Lee long gone Manchester City now
find themselves in the Nationwide League Second Division where real
fan power is active in the boardrooms of AFC Bournemouth and
Northampton Town.
In 1992 Northampton Town were in receivership. The fans and the
local community saved the club from extinction. Although the club is
not wholly owned by its members, a supporters' trust now has
approaching 10 per cent of the shareholding and elects a director to
the Board.8 The local authority now owns the ground freeing
the club from expensive upkeep as well as preventing the threat of a
speculative purchaser coming in and selling the land for development
as has happened at other clubs.
When Bournemouth found themselves in financial difficulties in 1996
they looked to the trust fund set up at Northampton and called on the
local community to help establish their own supporters' trust which
now runs the club. The involvement of the wider communities in
Northampton and Bournemouth in running their football clubs has
definite parallels with the continental approach to football as part
of the community.
4.7 Local Government
Local Government has played - and continues to play - an important
role in football clubs. This is usually most crucially with regard to
the ground. This involvement by the local authority has often been
used as a lever to try to tackle problems such as racism at grounds,
for example with both Millwall and Leeds.
On the other hand it is important not to simply advocate greater
local authority involvement to solve the problem of how to take
account of the wider public interest, or in reaction to the success
stories referred to above. Local authorities are already
over-stretched. The reasons that the individuals concerned have become
local councillors or local authority officers may be quite unrelated
to the sort of issues referred to above, and the sort of skills
required to tackle them. A vision for the future of football in
Britain should certainly include a careful consideration of the role
that the local authority could and should play, but this will be both
more complex and varied than any generalisable ownership structure
that could be set out in the context of the current paper. Certainly,
though, in cases where local authorities currently lease the football
ground to the club, we would suggest that the Department of Culture,
Media and Sport could brief local authorities on the sort of
arrangements for fan involvement that might be proposed to football
clubs as part of the agreement when clubs seek to negotiate, or
renegotiate, the lease on the ground. Such considerations might also
include introducing the role of 'golden shares', discussed in the
following section.
4.8 Golden shares
During the privatisations of the 1980s, the practice of the
Government retaining a 'golden share' was used to prevent, for
example, foreign interests buying up newly-privatised concerns that
were considered to be of strategic importance to Britain. There can
surely be few companies where the importance of maintaining a degree
of local ownership is more important than the case of local football
clubs. Thus while it is not our intention in this paper to be
prescriptive about what role local and national government might play
in the ownership and management of football clubs, there is clearly a
strong case for using this sort of notion of 'golden shares', held
perhaps by both local and central government. These would serve more
as a blocking mechanism, as with their use in the 1980s'
privatisations, than as a real ownership stake. The most obvious
purpose would be to prevent take-overs of football clubs, at least
without explicit consideration and approval by local and central
government.
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5. Next Steps: Beyond the Task Force
The above discussion has not been intended to be prescriptive.
Rather, it has considered various options and has suggested that there
are a variety of lessons that can be learned from examples of
different football clubs, here and now, as well as from abroad and in
the past. One of the reasons for not having been overly prescriptive
is that while the danger to football in Britain has been made urgent
and imminent with the BSkyB threat to take-over Manchester United, it
is still early days in terms of consideration of the Football Task
Force recommendations and possible legislative and/or regulatory
responses to that. The only definite, prescriptive conclusion that is
absolutely clear is therefore that the current BSkyB attempt to take
over Manchester United must be stopped, at least until such time as
the recommendations of the Football Task Force have had a chance to be
properly considered, debated, and acted on.9
Beyond that, there are certain general themes that come through
from the various examples and proposals reported above. The first and
foremost is the importance of staying focused on the goal, and the key
danger to it. The goal is to develop football as an important part of
Britain's social, cultural and sporting life. And within that, to
strengthen and further develop the links of the clubs with the local
communities. It may prove no exaggeration to say that whether or not
this Government succeeds in one of the key goals it has set itself -
namely to overcome social exclusion - will depend to a significant
degree on whether it can rise to the challenge facing football in
Britain. Football has perhaps been, in a small way, part of the
problem. It threatens to become part of the problem in a big way. Yet
there is no doubt that given the political will, it could become part
of the solution to many of the problems of social exclusion, not just
by encouraging young people back into football grounds but also
through the wider community programmes.
The second general theme is that it is not just what is done that
is important, it is how it's done. While a proper elaboration of the
legal and institutional mechanisms are important, equally vital are
matters such as the representation of fans' views and interests. Any
proposal needs to be specific about ensuring that such representation
is arrived at democratically, and that the process is not subverted by
the Board of Directors at a club unenthusiastic about having any input
from the fans.
Thirdly, while some of the general principles need to be applied
throughout the game, when it comes to specific ownership structures
there may be no 'one best way'. In some cases the ideal of a mutual,
with the club owned and run as precisely that - a club - may be
achievable. In other cases the existing ownership structure may be
acceptable provided the sort of general principles referred to above -
relating to the representation of fans' views, and the protection from
take-over - are acted on. Then there are the existing PLCs for which
the big question is how to get from here to there when that might
involve buying out the existing shareholders. Where would the money
come from? As discussed above, there may be ways of overcoming even
these problems. But the answers may be different from club to club.
Fourthly, there are practical legislative and regulatory measures
the Government could take, both to advance the general goals of
overcoming social exclusion, and also to underpin and assist the
various specific action that might be taken from club to club. Thus, a
golden share could be taken in all PLCs that own football clubs to at
least prevent their take-over and misuse by outside commercial
interests. And the proper and independent involvement of fans in the
running of clubs could be made a requirement through specified
Articles of Association for such companies, or at the very least
through guidelines that had to be commented upon in the companies'
Annual Reports.
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6. Conclusion
The aim of this paper has been to consider the various ownership
and governance options for football. This is an important issue given
the increased commercialisation which has been generally recognised as
having, to some degree at least, taken the game away from the fans and
the fans away from the game. But the problem over these past few years
has not been fan apathy. On the contrary, this period has witnessed
the emergence of an independent culture, with the launch and growth of
fanzines, and the founding and growth of independent supporters'
associations. Alongside the growth of the problem has developed
activity that could be crucial to the solution. There is clearly a
great deal more work needed to flesh out the ideas raised in this and
related papers, and to implement the proposals from the Football Task
Force. Focusing on this long time horizon should not be used as an
excuse, by Government or anyone else, for taking their eye off the
immediate and urgent danger to the game from the threatened BSkyB
take-over of Manchester United. If that were allowed to proceed it
would do more damage to the longer-term work needed than would just
about anything else. Similarly, there is an urgent need to prevent
British football being split between a few glamour clubs to be owned
and run be global media interests on the one hand, with the majority
of Premiership clubs - not to mention the non-Premiership clubs -
carved out. But this immediate battle needs to be seen within the
broader and longer-term need to develop the game positively. Without
that, the 'glamour' clubs will be left sitting on the Stock Exchange
waiting for the next corporate raiders to come along. The longer-term
vision needs to be seen as inextricably linked to the immediate
campaigning issues.
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References
Brown, Adam (1999), 'The Football Task Force: New Governance or Old
Compromises?', Paper presented at The Corporate Governance of
Professional Football conference, Birkbeck College, February 3rd
Crolley and Duke (1996), Football Nation and the State,
Longmanns
Conn, David (1997), The Football Business, Mainstream
Publishing Projects
Conn, David (1999), 'The 'new commercialism'', Paper presented at
The Corporate Governance of Professional Football conference, Birkbeck
College, February 3rd
L'Elefant Blau (1999), 'The Battle for Barcelona', Paper presented
at The Corporate Governance of Professional Football conference,
Birkbeck College, February 3rd
Lomax, Brian (1999), 'Supporter involvement in Northampton Town
FC', Paper presented at The Corporate Governance of Professional
Football conference, Birkbeck College, February 3rd
Michie, Jonathan (1999), 'From Barnsley to the Green Bay Packers:
ownership of football clubs', Paper presented at The Corporate
Governance of Professional Football conference, Birkbeck College,
February 3rd
- On which, see Conn (1997) and Conn (1999).
- This is nicely illustrated at Newcastle Football Club which
infamously rips off - according to the Directors whose
conversation was, unknown to them, being recorded - their fans by
selling the replica shirts which so many of them can be seen
wearing at the club's matches. As with most grounds now,
significant sums are also made from the more expensive seats in
Executive Boxes. The replica shirts that the traditional
supporters wear in such numbers are banned from these Executive
Boxes.
- The problem of social exclusion has been made a particular
priority for action by this Government, although to date the links
with football appear not to have been fully made.
- On which, see Brown (1999).
- Despite his ambition, even Mr Murdoch is aware of his
limitations: he can always try to own a football club but a
country takes a little more time and time is in short supply.
- At the present time the Aufsichstrat consists of just nine as
only one member has been co-opted.
- Unless of course the Director elected by fans also represented a
block of shares held in Trust, as described in the paper from
Lomax (1999) for the case of Northampton Town FC.
- On which see Lomax (1999)
- And, we would say, the various contributions to the February 3rd
1999 and July 8th 1999 conferences at Birkbeck College,
have likewise had a chance to be properly considered.
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