Fan Ownership: A Practical Future?
Yesterday, we looked at how the idea of fan ownership has received serious attention in recent weeks, with the growing profiles of supporters’ trusts at English clubs. Today, wrapping up our weeklong series, we look at the the practicalities of cash, stadiums and regulations in fan ownership schemes.
In England, even if the will is there for fan ownership, there are huge practicalities to work around. The relationship between the Trust and the board is a key one. In Arsenal’s case, they have a good working relationship, whereas the Manchester United Supporters’ Trust have been a large driving force behind the Green and Gold protests.
And just because the Trust has the best interests of the team at heart, it doesn’t mean they’re prepared to throw their hard raised money at a club without due care, or that the relationship between club and trust is always smooth. At St Albans, the Saints Trust recently very pointedly rejected a request from the board to inject £10k into the club, firing a perfect riposte to the directors with an open letter.
At Merthyr Tydfil, last year saw the chairman and the Trust locked in a messy battle over cash for the club, while regimes past at Southampton have used PR methods to rubbish the Saints Trust in the past.
Clearly, there is a publicity battle to be fought, and one where a chairman with a good PR team or the ear of the local paper may have the upper hand. Getting a dialogue with the club is a hard job for any Trust.
There is also the issue of stadiums to consider. It’s no coincidence that both Brentford’s ex-vice chairman Brian Burgess and Exeter’s current vice-chair Julian Tagg have both told Pitch Invasion that a new or rebuilt stadium is key to the club’s future.
It’s also no coincidence that one of the most high-profile failures of the Trust movement, Stockport County, have suffered because they didn’t own their own stadium. As Dave Boyle says: “In Stockport’s case, they didn’t get a penny of the money spent on drinks and pies during their own matches, let alone during the rest of the week.”
It’s a situation Oxford United can well appreciate, while Crystal Palace’s financial position was hampered by the complex ground ownership arrangement. For Portsmouth, a small stadium for the Premier League has hurt their earning potential (although you suspect a larger Fratton Park wouldn’t have prevented the losses from mounting up), while Wimbledon simply had their stadium sold with no home to go to.
But Boyle also has words of caution for those clubs who do own their stadium. “There is a downside to owning your ground, as many clubs have used the asset value to borrow money to pay off other losses, in other words using the capital value of the ground to shore up revenue losses. You can’t do that if you don’t own the ground, and that to me is the real thing to avoid.
“It’s a short-term fix for long-term problems, so I’m all in favour of clubs having the rights over income at the club but not at all keen on them having the right to borrow against the value of it. The other issue is that plenty of people are attracted to football clubs because they own land and its pretty cheap. A club which didn’t own its land – or at least couldn’t use it for anything other than football and couldn’t borrow against it – would be a poison pill for the speculators and asset strippers who continue to plague lower-level football (by wilson santiago). Bees United are looking at some innovative ways in which that might be achieved and we’re helping them with those.”
And one area where all are in agreement is the need for regulation in football. “The biggest issue is finance,” says Brian Burgess, former chair of Brentford’s Bees United trust. “Just how do you finance a competitive playing budget when you haven’t got access to non-football income of one kind or another, whether it’s generated by a new stadium with lots of revenue earning facilities, or whether it’s sponsorship or TV money or just soft loans or equity from wealthy individuals?”
Towards a Level Playing Field
Concerns about how clubs can be kept on something like a level playing field whoever owns it have even started coming from the footballing authorities themselves. Lord Triesman and Lord Mahwinny have both talked about the need for clubs to cut debt-fueled spending. Others recognise that the way financial matters are currently structured in football risk sending even more clubs into administration or, worse, liquidation.
For Burgess, the move to change has to come from the top and he can see evidence of this: “UEFA are bringing in laws now so that in three years time a club wanting to compete in the Champions League or the Europa League will be required to show they’re breaking even.
“That’ll be a challenge for some of the clubs, and that’ll be a challenge for UEFA to enforce it. Time will tell but UEFA are going firmly down that route and they’ve just set up a football fans compliance panel, and Brian Lomax, the previous chairman of Supporters’ Direct, is on that panel. They’ve got three years to try and get things lined up so clubs will comply with that.
“That’s top down pressure from Europe. That, perhaps combined with the bottom-up pressure from supporters and Supporters’ Trusts, might mean the leagues tighten up regulation and introduce some form of salary cap, which they have in the Conference and League Two. A combination of these trends might change the world sufficiently for Supporters’ Trusts to be able to flourish.”
Currently, there are several sympathetic politicians in the government towards the need for further regulation in football.
Cabinet minister Andy Burnham is a former chair of Supporters’ Direct while the current Secretary of State for Culture, Media and Sport, Ben Bradshaw, is also the MP for Exeter. While Bradshaw isn’t as directly linked to the movement as Burnham is, he did supply a lot of help and support to Exeter City back in 2003 and understands how a Trust run club could work.
That could all change after the general election, where the Conservatives may well be in charge. Even if Labour gets in, there’s no guarantee Burham or Bradshaw will still be MPs or will have as much influence. The Conservatives will, as likely, have bigger priorities to deal with as an incoming administration and their natural leanings are towards the free market ideals of the Premier League. But if there’s a big development at a club like, say, Liverpool or Manchester United, who knows what their response will be.
But, away from the Premier League and the wider issues, those clubs under Trust ownership have ongoing daily challenges. As Exeter City’s vice-chairman Julian Tagg says “any progress has to be within the ethos of the Trust.” It’s a tough balance.
Exeter are struggling towards the bottom of League One having enjoyed two promotions in successive seasons. And although the Trust, as owners, aren’t quite the same as the club (the directors), when things aren’t going well the Trust will come in for criticism too, some of it justified, some of it not.
At times it can be easy to forget that here is a group of fans who stepped in to save their club from dying and has turned it from a team with a losing attitude to one with a positive one. But that was some years ago now, in 2003. Today the challenge to to keep that membership growing, engaged and, most of all informed.
Any Trust club will recognise at least part of the criticism by the Scarborough fan in the comments on Tuesday’s article. But as a club gets more successful and, hoepfully, more professional, how does that Trust ethos marry with a professionalism that demands a drive for profit and success?
Perhaps more teams will follow Brentford’s lead and enter into a hybrid model with a wealthy benefactor. Brentford will have £1m a year for the next five years. Exeter City’s Trust put in a million into the club over five years.
Brian Burgess can see these sorts of deals becoming more common. “I think that’s quite a good model for other Trusts,” he says, “because we have to live in the real world. The economics of football as such mean it’s very difficult to compete under the current regime with the big clubs and cubs who’ve got wealthy supporters putting in loads of money. So you need to do this sort of deal and at least we’ve got some safeguards in with the golden share in particularly.”
But while Brentford are keen to show this model can work, Dave Boyle isn’t quite so sure, although he recognises that the Bees were largely forced down this route because many of their plans had to be torn up due to the recession.
“I’m not sure the relationship is sustainable in the medium term,” says Boyle. “I have a problem with the benefactor model in general, so I’d be very reticent about suggesting a hybrid was possible.
“I think we need to move football benefaction out of the category of the trophy asset and into something looking like charitable or arts donations. When people give money to those enterprises, they do so for a warm glow in their hearts, some publicity, and often because they care.
“In football, it always begins with similar language, about someone’s affinity for the club, but soon transpires that they have total control of the club’s policy, the donation was actually a loan and by the end it turns out that it looked a lot more like a calculated business decision or speculative investment gone wrong.”
Perhaps a compromise is in order, such as at Swansea, where the Trust had a huge hand in saving the club and still retains influence and a seat on the board. Or perhaps, such as in the case of Arsenal, it best acts as a watchdog for the fans and ensures the club maintains good communication with supporters’ representatives.
Whatever the future for Supporters’ Trusts and fan ownerships, it promises to be a busy one. Maybe the present focus on fan ownership will prove to be a passing fad, or perhaps it will go from strength to strength, as Vic Crescit of Arsenal’s trust hopes:
“Generally I believe fan ownership, including majority fan ownership and board membership, will be commonplace in the future. I think we’ll look back in 20 years and wonder what all the fuss was about. The level of disaffection and alienation of fans will either be recognised and dealt with or the game will wither and die as a mass spectator activity. It’s as simple as that. I’m optimistic that it’ll be the former.”