The Football Shake-Up Q&A, Part Two

Should the football authorities get involved to ensure the survival of football clubs, or should it be the responsibility of the individual businesses?

Gary Andrews: Ultimately, every business should be responsible for itself. It’s not the authorities place to say what a sensible business model is, and it would be good for each club to have the autonomy to make their own mistakes.

However, there are a couple of things the authorities could do. The first is to introduce a licensing system, similar to some leagues abroad, where a club’s finances are examined and if there are serious doubts over their cash-flow or ability to complete a season, they are refused a licence. This would keep clubs within financial parameters and offers balances and checks to the excess.

The second is to reform the fit and proper persons test so it is much harder for the same old faces, or those who are looking to asset strip a club, to take over. At the moment it is toothless. The authorities should not be responsible for what goes on in the boardroom, but they can take steps to prevent crooks and failures reaching the boardroom, or having undue influence. There’s no way people like Stephen Vaughan or the late John Batchelor should be allowed anywhere near a football club.

Matt Tickner: There is absolutely no doubt that clubs need to be protected, not least from the kind of people who have ruined Portsmouth and others. Of course in practice that is extremely hard to police. If a board consists solely of businessmen out to make a fortune, then most decisions will be made for their benefit, without much regard for the fans and the club. Therefore I feel it is the responsibility of both the authorities and the club to ensure that the governance is one that benefits the club as a whole, from board-level to the fans.

In terms of authority involvement, I genuinely think that organisations like SupportersDirect, a government-backed initiative whose aim is to “promote sustainable spectator sports clubs based on supporters’ involvement & community ownership”, are a step in the right direction.

Despite BSkyB’s continual insistence, I don’t think that football has changed as much as we are led to believe and its sanctity can only be preserved through broadening ownership structures in the first instance. By removing all of the financial dependence and corporate governance away from businessmen on a board, we can hope to see football clubs run in the way to preserve tradition, football’s role in the community and, in turn, a club’s financial stability.

Ian Stirling: The game cannot be played without other clubs to play against – the original FA structure was set up in recognition of this – somewhat later the FA created the current deregulated game – when it allowed the holding company model and removed Rule 34* altogether – the FA has allowed big business too much of a say in the game – it is time to stop thinking of football clubs as businesses and to start thinking  of them as football clubs – for which the whole game has a responsibility to the communities that support them.

*(Rule 34 prevented owners and directors from asset stripping and protected the club and its fans from the most ruthless business practices. It was effectively scrapped by the FA in the early 1980s.”)

Rocco Cammisola: No. Whilst I sympathise with the fans – they’re the only ones who will really suffer – football authorities shouldn’t be expected to babysit clubs. Most clubs are run by businesspeople – men and women, who earn a living doing business – they should know what they’re doing. The only way in which I think the authorities could possibly help is by properly vetting club owners and chairmen and penalising any ludicrous financial behaviour.

Mark Pitman: There is a degree of both. Clubs quite rightly want to maximise their potential and run themselves as professional businesses without restraint. As with any business, initial investment can reap rewards with the right strategy, planning and luck, but the responsibility for the running of the business rests with those making the financial decisions. Football is not a straightforward business however, there is a social responsibility attached to each and every club, regardless of their size or status in the game. From non-league clubs with small junior set-ups to Premier League clubs with satellite academy’s all over the world, there is an important role for clubs within their communities outside of the front-end of the 1^st team that one result can make or break. The football authorities are there to enforce professional governance and standards within their respective leagues and clubs, but the Government and local authorities have a responsibility to ensure they work with the clubs in their areas, however big or small, to ensure their important role in society is not lost.

Gavin Brightman: I think that the business side of football needs to be made completely transparent. The authorities should have the right to know everything that is going on at the clubs and every penny should be accounted for. At the moment, there are a lot of easy to exploit loopholes within football from a business point of view, making it attractive to someone trying to earn a quick buck. It’s relying on business people to have honesty and morals, which won’t always be there. As The Financial Action Task Force (FATF) report of 2009 proved, money laundering and tax evasion are a very real risk in football. It seems all too easy to disguise costs in things like agent and admin fees, when no one really knows where it’s going or who it’s going to. Anyone wanting to make that quick buck could do so, as no one can dictate the market value of extra costs that go with a transfer. So it’s all too easy to take money from clubs if, say, an agent is working in cahoots with a club owner. Two players with exactly the same transfer fee could have completely different admin/agent fees involved and therefore, money could be passed about very easily. If this happens at a lower league club, it has the potential to be financially crippling and put the very existence of the club at risk of survival, with those who brought it down able to walk away.

If these sort of loopholes, that allow these so-called businessmen to exploit football clubs for cheap profit can be closed, and good business practice encouraged, then the next step would be for the football authorities to assist clubs with better guidelines and education in better business practices, in order to give them every chance of survival. The key focus should be to bridge the ‘us versus them’ divide with the clubs. The leagues and associations need to help nurture a more inclusive partnership with their member clubs and work alongside them rather than against. The FA should be engaging with the clubs, giving advice and support in managing their day-to-day operations, rather than allowing bad practice in the first place, standing off and acting only to punish when things go pear-shaped.

Jimmy Daniel: Each club is a business and should be run within its means as with any similar organisation. However, with football clubs going into administration at a more and more alarming rate, there should be something done. Wage caps across the board would be one way to ensure that clubs are run within their means. Ultimately however, it is the responsibility of the club owners to ensure that their club runs in such a way that it can live within its means

Rich Pye: The football authorities should bring in far wider ranging oversight of club accounts, including the performance and remuneration of club directors. The FA and UEFA in particular should also offer business support services designed to aid smaller clubs in planning and operating as a viable business. It is not enough to simply passively demand clubs get their affairs in order. The authorities must play an active role in helping their members.

There has to be the element of responsibility which lies with the individual clubs themselves however. As a majority of football clubs now conduct themselves solely as a business – with the possible exceptions of supporter owned clubs such as Exeter and AFC Wimbledon – they should be brought to account if they do not operate in a viable and sustainable manner.

The Football League has a key role to play in this regard. This could come in the form of a collective agreement of Football League clubs to introduce a salary-cap, a stricter interpretation of UEFA’s Financial Fair Play rules (that the League has already signed up to), or the introduction of a properly regulated set of rules and licensing conditions. Either way, the Football League and its members must get their own house in order, before demanding assistance from elsewhere.

In the next part of the Football Shake-Up Q&A we’ll be asking the panel what further measures should be taken by the footballing authorities, from the leagues and national associations, all the way up to UEFA and FIFA.