The Sweeper: Should Government Intervene in Debt-Ridden English Football?

Big Story

As a General Election looms, the Telegraph is reporting this weekend that there are plans in parliament for a regulatory body (“Office of Football Regulation“) to prevent clubs from running up irresponsible debt-to-turnover ratios and stop the winding-up orders that have in recent days threatened the existence of several long-running English teams.  Legislators are also looking into ways a regulatory body could give fans a greater say in governance of their clubs.  Momentum for this wide-ranging legislation has picked up in recent days:

The potential government plans – ahead of the forthcoming general election – follow a decision by Tony Lloyd, the Labour MP, to table an Early Day Motion in the Commons calling for supporters to hold tangible stakes in their clubs and for the government and the football authorities “to create a binding framework which will regulate club debt”.

The Telegraph declares that the move “would be one of the most controversial political interventions into sport in history” and will meet resistance from all quarters, including the Premier League, the Football Association and the Football League (although it doesn’t lay out clear reasons why).

In a separate story, the Telegraph details how Manchester United supporters and other rival supporters’ groups, galvanized by Tony Lloyd’s early day motion, are soliciting government ministers to assist in efforts to wrest control of their clubs from owners whom they believe do not have their club’s best interests at heart:

Those in the boardrooms of clubs and footballing authorities who chose to dismiss the fans’ movement as a gentle, unthreatening wave of dissent risk being caught out like King Canute. Fans’ anger over leveraged debt, the increasing sophistication of supporters’ methods, and the soapbox offered by the General Election, mean that this is a movement that must be taken seriously.

Manchester United Supporters Trust president Richard Hytner, who is looking at several different fan ownership scenarios for Manchester United, says “ours is not a case built on sentiment; it is based on commercial common sense. Loyal fans who love our club are worth a fortune and worthy of respect.”

There is certainly a populist element to recent promises of more government oversight of club affairs, and supporters should be wary of exploitation from political parties seeking election on the back of promised “commercial common sense.”  It is far from certain that government-enforced debt regulation and increased fan participation, while admirable, will yield “a new and prosperous chapter,” as Hytner believes it will for United.

But moves for more government regulation of football debts at least in principle reflect a growing belief that clubs should no longer be seen as private financial interests to be exploited by self-interested owners, but public entities with long, autonomous histories, with fans at their centre.  Pitch Invasion will be watching closely as this story develops…

Quick Hits

  • West Ham co-owner David Gold believes the Premier League has an obligation to save Portsmouth from oblivion because it will deeply impact the other top-flight clubs: “That can’t be right. For that reason, you have an obligation to save a football club. We have allowed Portsmouth to get into this mess. The brand is 20 Premier League football clubs. We must take responsibility.”
  • The BBC’s Emma Wallis reports on racism pervading Italian football: “In a country where Prime Minister Silvio Berlusconi famously described US President Barack Obama as ‘tanned’, it is perhaps not surprising that tackling racism is a minefield.  Writer Francesco Pacifico says the concept of racism is different in Italy. He says it is difficult to eradicate racist attitudes because ‘in Italy there is no notion of a few rotten apples… we’re all rotten apples.’”
  • EPL Talk looks at the clumsy introduction of Fox Soccer Plus, and the contninued lack of communication to US viewers about the implications of changes to the soccer broadcasting strata.

9 thoughts on “The Sweeper: Should Government Intervene in Debt-Ridden English Football?

  1. Tim Vickerman

    ‘West Ham co-owner David Gold believes the Premier League has an obligation to save Portsmouth from oblivion because it will deeply impact the other top-flight clubs: “That can’t be right. For that reason, you have an obligation to save a football club. We have allowed Portsmouth to get into this mess. The brand is 20 Premier League football clubs. We must take responsibility.”’

    So do football clubs want to be treated as businesses or sporting institutions? If it’s the former, then they should pay the consequences of total mismanagement and incompetence. If every other club generously chips in to keep their rivals going in times of crisis, all Premier League teams may as well pile up the debt in the desperate hope of achieving some success…oh.

  2. Tim Vickerman

    While a salary cap is a good idea in theory, it would have to be Europe-wide. The Premier League won’t (and nor should it) voluntarily introduce a salary cap if Serie A, La Liga and the Bundesliga clubs can continue to offer unlimited wages. They would also be incredibly difficult to enforce and require complete transparency in club accounts, which I think is a long way off. There are always other ways around it, such as image rights and endorsements and so on. And I’m not sure the European Union would allow it.

    I’m convinced more than ever that squad limits is the solution. Let’s say 20 professionals per club over the age of 21 can be registered for all competitions Europe-wide by the end of the August transfer window. Clubs would be allowed to maybe register 2 or 3 replacement (but not additional) players after the January transfer window. There would be no emergency loans permitted so if a club had an injury crisis, they would have to turn to younger players from their youth set-up. This would hopefully prevent the bigger clubs hoarding talent and having to give more chances to younger players.

    I’m sure there are flaws and loopholes to such a rule and would like to hear about them and/or any other suggestions…

  3. Tim Vickerman

    I’d just like to add that I think a salary cap (should it be viable) should be set the same for all clubs in the same competition rather than a percentage of turnover. Making it a percentage of turnover would pretty much ensure the status quo for eternity. But, though perfect for ensuring a good, open sporting competition, that’s not in the interests of the big clubs.

  4. Damon

    Lets get this right. The Uk has a ‘lame duck’ government where big business and not the people rule the roost. The current government has failed to regulate amongst other things:

    - The Financial sector including UK groups RBS, BOS, Lloyds et al.

    These organisations are more or less government owned (supposedly), yet each of these organisations does what it wants in terms of harrassing staff, cutting wages, cutting staff levels, enforcing redundancy and transforming its internal structures so as to ‘improve shareprice’.

    At the same time lots of these financial companies supposedly owned/regulated/monitored by UK government offer senior executives millions of shares, atronomical cash bonus payments and what do the government do about it, very little as far as I can see apart from be dictated too by them.

    The Government in Scotland is already ‘mildly’ involved in Scottish football through a variety of themes. These are largely though Quango-ish things such as ‘health promotions’, ‘anti-racism’ campaigns, ‘family friendly support’ and ‘anti-sectarianism’. All of these campaigns and bureuacracic interference have led to less atmosphere in stadiums, obsessive safety campaigns and overall have been to the detrimate of matchday support, atmopshere and enjoyment.

    Outwith football, UK politicians have been uncovered as seriel ‘benefits cheats and scroungers’ by way of exploiting an expenses loophole in addition to salary.

    In short, institutionally UK politics is rife with greed and at a personal level politicians have been living in a greed bubble for years.

    I am all for fans getting in on the act with respect to clubs, ownership and the likes. But as soon as the incompetant UK governmental structures and politicians get involved in UK football it is time to really start worrying.

    Be warned.

  5. Tom Dunmore

    I’d recommend anyone who wants to know more about the actual substance of these proposals read through the full debate available in Hansard from last week.

    I don’t think kneejerk reactions against government regulation help too much, though the caution is understandable from the points expressed here; but the problem is the failure of the football authorities (especially the Premier League and Football Association) to regulate football with any of the fiscal sense shown by an authority such as the NFL, or the sense of social responsibility at the heart of the Bundesliga model. They have not done their job, and football is not simply another business. It asks not to be treated as one by law in some cases (asking for exceptions to EU law as a sport), and that should work both ways.

    Tony Lloyd, the MP who put forward the motion being debated in parliament, put it like this in the debate:

    Let me turn to the regulatory framework, which simply does not work. Whether we talk about the Football League or the premier league that have commercial interests or the FA that supposedly takes the high-order view of the global interests of the game, I regret seeing clubs operating by standards that do not work. When the FA wrote to me in preparation for this debate, it said that it has made great progress in recent years, working alongside its professional game partners to ensure collectively that the football authorities provide the right balance of regulation and incentive to ensure the sustainability of football clubs. If that is the case, where have the FA been in recent times? An FA that is so complacent is an FA that is not fit for purpose, which is why we need external regulation.

  6. Damon

    The debate is all it is really but such intricate explorations via Hansard/parliamentary debates are simply a lot of ‘hot air’. Sometimes its better to be crass, and forthright about these issues as if more people were, the more chance change could occur.

    There is little chance of english/scottish football being a model of social responsibility now really as cultural shifts in society have changed the face of football supporting forever. For me, ‘old school’ its a big loss.

    The thing is football supporters/people have the power to change things and bring the system down. If everyone withdrew money from a greedy bank it would collapse (DSB Bank in Holland). Similarly, if Man Utd fans stopped going to Old Trafford on a weekly basis and crowds evaporated you can bet there would be change at the top. But what happens, peopel still roll up on a weekly basis to pay £45 to get in.

    We have a tendancy to get bogged down in bureaucracy and debate and more debate. I would dream of the Premiership being a model like the Bundesliga but, as mentioned, the face of UK culture has changed too much and lots of the responsibility for that falls at the feet of politicians.

  7. Don Wilson

    The bigger clubs in football don’t want the government to intervene. Why would they? If the government intervened their clubs wouldn’t be as “powerful”.