Sunday, September 14, 2008

Enough is Enough: The UK Government has duty to stop any more dodgy takeovers of English clubs.

It's been a pretty sickening week for English football.

Geordies out on the streets complaining about a chairman who hires and sacks a local hero with impunity, after admitting he failed to do proper due diligence on the books of Newcastle before buying the club.

Abu Dhabi deciding, so it would seem, that Man City is nothing more to them than a vehicle through which they can publicise their Emirate. This is an place with an extremely questionable human rights record, which have already led some to ask for the FA to actually bother trying out the 'fit and proper' test on them. Today, news has emerged that Abu Dhabi now want to buy a smaller stake of the club, after finding out about the debts that the lovely Mr Sinawatra ran up before them. Man City have only paid a fraction of the fees that they owe for the big money transfers of players like Jo and Robinho, so if these guys were to pull out, the future would appear to be bleak for the club.

This is on top of unpopular takeovers at other English clubs. Indeed it would seem protests occurred at the Liverpool game this weekend, but these have been overshadowed by the result.

In the Man United case, a profitable club was taken over by Americans with no knowledge or care for the game other than the money it could produce, who subsequently saddled the club with the debt they'd used to buy it. This is standard, well at least before the credit crunch, form for Mergers and Acquisition; but it seems wrong to make fans pay for a takeover they didn't want and to make previously unknown owners even richer. Ticket prices at United have gone up, players are bought with even more debt, and United's total debt now stands at around £750 million, with interest payments alone of around £80 million last year. United will never go bust, but how, may one ask, have United fans benefitted from this takeover? (ignoring their, ultimately transient, successes last year.)

As the Liverpool fan in the linked piece suggests, Gillett and Hicks have been even more duplicitous in their takeover. They promised no debt from the takeover would be put on the club, that plans for a new stadium would procede forthwith, and that boardroom politics wouldn't affect the club. None of these things have happened. No new stadium seems on the horizon for Pool, and, again, the only ones to have considerably benefitted from the takeover are the owners, notwithstanding the abuse they rightfully get when they actually bother to turn up to a game.

A thesis could be written on the Chelsea takeover, but the main points are clear. A Russian with an extremely dodgy past comes out of nowhere, starts shelling out huge wads of cash, and brings the club success. Why? Partly as he wanted a new plaything, perhaps, but the political ramifications of the Chelsea takeover are becoming more and more apparent. Who'd heard of Abramovich before he bought Chelsea? Before then, he was a Russian oligarch probably sweating at Putin's relatively sudden turn against this hyper-rich segment of Russian society. What to do? Buy a football club, move to England, and make yourself untouchable. An English football club has become the get-out-of-jail-free card for this oligarch. Moreover, all the money Abramovich has poured into the club is in the form of loans, and Chelsea have total debts of £730 million, even if these admittedly interest-free.

At Arsenal, the situation is better. We are about to announce record profits for this year, with a turnover/wage ratio of less than 50%. We are a club, at the moment, run in just about the right way. Our ticket prices are still obscenely high (these have to come down, once the stadium debt is paid off), and boardroom politics have affected the club since the loathsome Uzbeki gangster turned up (thanks David Dein). But who knows what the future holds for the club. As Peter Hill-Wood himself said, if the club get a decent offer, the board has a duty to recommend it to share-holders. I genuinely worry for the future of our proud, historic club, if it falls into the hands of the vultures currently circling the premier league.

Of all the foreign takeovers, perhaps only that at Villa has been done properly. No huge debts, an owner who actually, despite not having strong historical ties to the club, seems to care about its welfare, and one who recognises the wider positive things a football club can achieve - as evidenced by making Acorns (a charity) their sponsor. Randy Lerner is an example that takeovers can be done in a 'right' way.

The money that has gone into football since the creation of the Premiership has not, of course, had a completely negative impact. The standard of football we see in the league is unrecognisably higher to that in the early 90s. The best athletes and players in the world populate our teams, and create great entertainment. It's also a lot safer to attend a football match, even if a lot of the atmosphere has been lost in the process.

Yet, there is now a fairly entrenched monopoly over whom wins the major honours in England. Even as a supporter of a team that, arguably,benefits from this monopoly, I would like to see a more competitve league.

I would like to see clubs owned by their fans, as frequently occurs in La Liga and the Bundesliga. This article shows how this ownership structure is both possible and beneficial. The German FA has set laws that ensure that even private limited companies are 51% owned by member associations. These clubs are thus run, or at least overseen, by those with its best interests at heart: the fans.

There is some hope. Andy Burnham, the new Culture secretary, favours the fan ownership system, and is, as David Conn puts it, 'an opponent of a clinically commercial view of football'. Burnham cites the American NFL as an example of a league where:

'which has equal sharing, and in which owners cannot simply pour money in from outside to buy all the best players. In the US, the most free-market country in the world, they understand that equal distribution of money creates genuine competition, which is good for the league. The danger in England is that individual clubs rush for the money today, without considering the long-term future, and so diminish the game.'

There are three main issues to consider, I feel, in sum:

* Clubs being bought by businessmen who merely want to make as much money as possible, thus making the cost of going to football more, and even prohibitively, expensive for the average football fan, alienating them from teams that are a major part of their lives.

* As a corollary to clubs being used as purely profit-making machines, for both players and owners, little concern is given to the grass-roots difference they can make to local communities. Robinho's salary for one week - £160k, reportedly - could fund a project such as kickz for four years, which is helping to transform the lives of youths in some of the UKs most difficult areas.

* Clubs being used for political ends by, let's be frank, crooks. Buying a football club can, potentially, buy dodgy men around the world political immunity or publicity. It is wrong they are being used in this way.

Football clubs were set up, a long time ago, to be community institutions, not global business brands. Somewhere, probably in the midst of the finanical immorality that has gripped the world since the Reaganite/Thatcherite deregulation boom of the 1980s, British football has lost its way. Sure, its great to watch, but at what cost has the present Premier League come?

The only ones that can do anything about this is the British Government. It's time to end a British society in which anything is for sale to anyone. The FA, clearly, will not stand in the way of these takeovers, and has lost so much power since the formation of the Premier League as to become an irrelevance.

Even if the present takeovers can't be reversed, future ones can be prevented, and an overall climate can be produced in English football conducive to fan, or at least responsible, ownership of these clubs, the jewels of English sport and society.

Because if nothing is done, English football is already dead.


Anonymous said...

One of the better stories written on takeovers yet, far better than the drivel you see even on Guardian and The Times. Any Arsenal fan who wants a takeover for the club is plain dumb. They should be stopped and I hope it takes a club like Chelsea or Man City imploding for it to happen, but it would be a lesson well-learned.

Anonymous said...

There wont be many takeovers in a few years when the kredit crunch har ruind this cauntry.....

Jeff said...

Intersting post. I'd dropped in to read reactions to Blackburn - Arsenal, but I find the subject of takeovers and the financing of football fascinating.

Anonymous said...

I agree with certain elements of your argument but in my view it is not the FA/Premier League that has wrecked football, it is UEFA.

Ask yourself, why is the TOP4 the TOP4? Simple, the Champions League. UEFA has created a monster and whilst doing so completely eroded the UEFA Cup's value and dispensed with the Cup Winners Cup. This has meant that the disparity between the competitions has grown enormously, and as a consequence the riches of the clubs who participate.

I mean, look at the UEFA Cup format. 5 teams in a group??? No H&A games??? It is a joke and there is no real value in winning it, in terms of prestige or financial.

Of course everyone wants to see the best teams in Europe pitted together. However to expand the Champions League to include over a 100 teams when the 1st round of Qualifying gets under way is madness. If UEFA did their job properly, kept alive the UEFA Cup, secured decent funding for it, the wealth gap wouldnt be so large. But the Champions League has created a vicious cycle, only these billionaires can break.

I think top level football is headed for a great fall in the near future and when it needs to rebuild itself, we need football people to rebuild it. No politicians, no investors, no agents - just people who want to give to football and want nothing in return

Anonymous said...

A great blog. The German/ Spanish route seems to be the way to go, but this is in a climate when everything in the country is up for sale at the right price. Wenger's comments in the Observer today highlight the absurdity of the situation: "These people have to understand that you can have 20 trillionaires in the Premier League and one will finish bottom". So the money will become meaningless. He also speaks about Berbatov's move.

Anonymous said...

goonerboy just a question,are you really concerned about english football league or just worried another few foriegn billionaires and arsenal might not come in the top 4? personally i dont agree with selling the soul to billianaires but why worry about every other team?

Anonymous said...

Thanks, mate for the good article. Something has to be done. But, my guess is that the gobernment will only react if a disaster happens.
My big worry with some of these super rich blocks is that they always want things going their way. If they do not keep winning despite spending millions, they may resort to unsavoury means to achieve their goals. The italian experience!!!!!!!

Anonymous said...

good piece. well written. in agreement. PS i wonder what u think of the take over at fulham by a well known Egyptian-alleged-crook in the 90s?


Anonymous said...

Nice post accept for your buying into the crap about Abu Dhabi`s "dodgy human rights record". You have obviously never been there otherwise you would realize that the locals are very happy about their government & are not interested in the western idea about democracy that keeps getting foisted on people that are not interested.