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Labour's plan to 'fix' football

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Squiggles

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After criticism from political rivals, Labour received support for its proposals to give fans a right to own at least a share of their clubs from the Uefa president, Michel Platini. The Frenchman described it as "a great idea", saying that supporters were the only people who had a genuine "identity" with clubs.

According to the plan, to be part of the Labour Party election manifesto, fans could take up to a 25% stake in a club to ease concerns over increasing levels of debt of Premier League clubs and foreign ownership.

"Personally, I think it is a great idea ... that the supporters invest in a club because they at the end of the day defend the club's identity," Platini said. "They are always there. They are always watching the games."

Platini said the decision over who can buy a club and how should be made by national governments, adding that he liked the Spanish system where, for example, Barcelona and Real Madrid are owned by fan groups known as socios.

"There are clubs now where the president is not a national of the country, the coach is not of a national of the country and the players are not nationals of the country. The only ones to have any kind of identity are the supporters," he said.
Supporters' Direct has meanwhile reacted positively to Labour's proposals, and to an interview with the shadow sports minister, Hugh Robertson, in which he also talks about the need for supporters to be guaranteed representation in clubs.

"The two parties – one of which will form the basis of the next government – both agree fans should have a stake in the clubs they support and are pledged to work to make it happen," said Dave Boyle, the chief executive. "That's great news for the trust movement and long-overdue recognition that clubs aren't businesses like any other.

"We look forward to the next government – whoever it is – putting fans at the heart of the game and we will work with them to make it happen."


The government is to unveil radical proposals that would give football fans first option to buy their clubs when they were put up for sale and require clubs to hand over a stake of up to 25% to supporters' groups.

The ideas, due to be included in the Labour manifesto with a promise of action in the first year of a new government, are designed to give fans a far greater say in how their football clubs are run and overhaul the way the game is governed.

It is believed that No 10, which has been working secretly on the plans for weeks, has resolved to deliver concrete proposals to tackle growing public disquiet at the level of debt carried by some clubs, the ownership model of others and the dysfunctional structure of the Football Association.

• Conservatives call government plans 'a gimmick'
• In detail: Brown's blueprint for reforming football
• David Conn: A vote-winner by the government?
• Football's debt, dysfunction and dissent
• Labour plans 'a great idea' – Michel Platini

The plans include:

• Requiring clubs to hand a stake of up to 25% to fans in recognition of their links with their local community.

• Implementing a change-of-control clause that would allow fans a window to put together a takeover of their club if it was up for sale or went into administration.

• Giving the football authorities a deadline to reform the FA and remove "vested interests" from the board, and streamline decision making.

• Introducing a unified system of governance that co-ordinates issues such as club ownership and youth development.

• Allowing professional leagues and the FA additional oversight of club takeovers.

The plans are likely to put Gordon Brown on a collision course with the Premier League, which has vigorously defended its free-market model in recent years, but he will claim that the proposals are for the good of the game.

Two policy ideas have emerged as frontrunners to improve supporter representation around the boardroom table, both of which would see fans taking a meaningful ownership stake in clubs.

Portsmouth's financial collapse, the outpouring of anger in response to the leveraged buyouts at Manchester United and Liverpool that loaded the clubs with combined debts of more than £1bn, and last week's shock resignation of the FA chief executive, Ian Watmore, in protest at the "vested interests" on the board are all understood to have persuaded the prime minister to act.

Reflecting the view that they will succeed in democratising ownership only if there is stronger leadership from the top, it will also set football a deadline of up to a year to overhaul its governance system.

Under the scheme to give fans a stake, supporters' trusts with elected representatives, audited accounts and Financial Services Authority recognition would be responsible for maintaining the link between clubs and their community and ensuring fans are not priced out of the game.

The government could, however, face legal challenges from existing owners over the dilution of their shares. It has echoes of the model proposed by the so-called Red Knights attempting to buy Manchester United. Wealthy fans will contribute 74.9% of the overall purchase price, but supporters will hold a "golden share" of just over 25%, giving them a blocking stake on any change of ownership and an influential boardroom voice.

Legal advice is being sought on the idea of a change of ownership at a club triggering a mandatory window for fans to take the opportunity to shape the ownership structure and buy the club at a price set by an external, independent auditor.

Under the proposals, fans would be free to set up their co-operative style model, shareholding trust or other structure that enabled them to have a say in the club.

While the government will reiterate that it has no desire to regulate football directly, the prime minister believes the democratisation of football club ownership taps into wider themes about the "mutualisation" of public services and the need for regulatory reform.


Liverpool-fans-001.jpg


Gordon Brown frequently cites his Raith Rovers share certificates as among his most treasured possessions. That fact is likely to be wheeled out again in the coming weeks to highlight his personal interest in proposals designed to enable fans to own a share of the clubs they support in the hope that it can become a touchstone election issue.

Over recent years, the government has frequently paid lip service to the supporter-led movement to increase fan representation on boards. But it is only in the last 12 months, as fan fury at Liverpool and Manchester United at the size of the debt loaded on to their clubs by overseas owners has been accompanied by financial meltdown at Portsmouth, that it has started to dominate the thoughts of a broader constituency of fans.

The issue has also entered the political mainstream as the Red Knights looking to buy Manchester United from the Glazer family mobilised, Uefa proposed new rules to force clubs to live "within their means" and Portsmouth became the first Premier League club to go into administration.

Last month Brown said at his monthly press conference that debts at some clubs were "too high" and warned them to "look very seriously to their responsibilities to supporters". A keen Raith fan who contributed to a fan buyout, he is understood to have played a key role in formulating the new proposals.

Organisations such as Supporters Direct have long looked with envy at the German Bundesliga, where 51% of the club must be owned by supporters, and Barcelona, where democratic elections are held every four years.

There are two policies on the table, from several under consideration, that appear to have gained most favour with Brown and are now being subject to legal scrutiny by aides.

The first would, in effect, force clubs to hand a proportion of their shares – perhaps up to 25% – to fans. These supporters' trusts, comprising democratically elected representatives, would be recognised in law and maintain the clubs' links with their communities in a variety of ways. The mechanism for doing so would be left to the football authorities to work out.

The second proposal would give fans the opportunity to put together a takeover bid for their club in the event of it being put up for sale or going into administration.

In a pre-defined window, they would be able to seek financial backing for a new ownership model that might lead to a community-owned model, a shareholders' trust or a single owner who pledges to be democratically accountable to fans. The club's price could be set by an independent, external auditor.

It is felt that Uefa's plans for a new Financial Fair Play regime, which it hopes to introduce in time for the 2012-13 season and would essentially prevent clubs spending more than they earn except on building infrastructure and youth development, would make it easier for an outside agency to place a value on clubs.

While there is an understanding that there is much detail to be worked through to make the schemes practical, Brown is believed to be serious about seeing the idea through if Labour were to win the election.

For all its current issues off the pitch, the Premier League, with no little justification, has been able to point to its rise to pre-eminence as the most exciting, most popular and most profitable in the world. Despite the travails of some of its clubs, it remains a British success story and the government has therefore stepped warily, occasionally challenging and cajoling the game to reform its dysfunctional structures but stopping well short of ordering change.

The new proposals mark a distinct shift in tone. The football authorities will be told to implement the ideas on club ownership and simultaneously issued with a "final warning" over the need to overhaul their governance structures.

They will call for the proposals suggested by Lord Burns to reform the FA five years ago – to introduce independent non-executives to the board, reduce the numbers of representatives from the professional and amateur games and overhaul the FA Council – to be implemented in full.

The government will order the removal of the "vested interests" on the FA board that are said to have blocked reform and led to the frustrated resignation of chief executive Ian Watmore after just 10 months.

It will also call for a unified fit and proper persons test, additional scrutiny of club takeovers and a coherent policy on youth development, with the FA taking the lead.

Some will criticise the government for jumping on the bandwagon in response to a flurry of recent calls for change in the way the game is run. But No 10 will say that it has been considering the proposals for months and point to a dialogue with football that stretches back years.

Most recently, the culture secretary at the time, Andy Burnham, wrote to the Football League, Football Association and Premier League posing seven searching questions and challenging the game to "reassess its relationship with money".

Brown is, however, also understood to be keen that the government's intervention is not interpreted as it siding with Uefa president Michel Platini over the Premier League in the debate about how the game should be regulated.

It will point to its previous support for the Premier League's position when European regulators attempted to reform the way it sells its TV rights.

The Premier League is expected to mount a robust defence of its model.

Executives recently banked £1.2bn for a series of overseas TV deals that will take the total earned from its next set of TV contracts to more than £3.2bn. On the pitch, the product is as successful as ever.

Its chief executive, Richard Scudamore, told the Guardian last week that he supported reform of the FA but said any move to restrict the freedom of club owners to speculate would seriously damage the attractiveness of the league.

I think this is more than a vote winning gimmick. Football means so much to the people of this country and it's promising at least to see the government taking an interest in the way the game is being run.
 
What good would 25% do? It's not a controlling stake.

If we're going to go down route, just go all the way as they do in Germany.
 
Promising to see the government taking an interest in the way the game is being run? Say WHAT?? If Whitehall gets its hooks into the game, the one certainty is it'll end up worse than ever.
 
[quote author=Judge Jules link=topic=39545.msg1078172#msg1078172 date=1269892544]
Promising to see the government taking an interest in the way the game is being run? Say WHAT?? If Whitehall gets its hooks into the game, the one certainty is it'll end up worse than ever.
[/quote]

Why would these proposals make it worse?
 
i do think something has to be done to regulate football, to protect clubs and fans, and to make the league as competitive as possible.

i was wondering whether, as a start, it'd be viable to impose a maximum ticket price for premier league games of, say, £20 (or at least restrict more expensive seats to a small percentage of the ground). i really think fans need protecting in this way, as too many ordinary people are being priced out or exploited.

of course, the one thing that has to change is how they allow these leveraged buyouts by people with no emotional or any other ties to the clubs. too late for us though, as i can't imagine how you could apply it retrospectively.
 
Manchester United's Champions League quarter-final at Bayern Munich on Tuesday is not only an on-field contest between two of Europe's great clubs - it also represents a clash of two very different financial philosophies.

While at United the talk is of takeovers, Bayern supporters are safe in the knowledge that such a scenario is unlikely to ever unfold at the Allianz Arena.

The system by which Bundesliga clubs are regulated, with an emphasis on strict financial rules and licensing, means Bayern are debt-free, allowing the club to offer some tickets for as little as 12 euros (£11) in a world-class stadium.

That is a world apart from the Premier League model of light-touch regulation that has allowed the United States-based Glazers to saddle United with debts of £716.5m.

It has become a debt too far for thousands of their fans, so much so that the Red Knights, a group of wealthy United followers in alliance with the Manchester United Supporters' Trust is attempting to wrest control of the club.

Stuart Dykes is a Manchester United fan living in Germany. He also supports Schalke and pays 13 euros (£12) to stand in the Veltins-Arena and watch his team.

The cost of the ticket includes free public transport to the stadium from certain areas. Membership of the Gelsenkirchen club costs him 96 euros (£86).
Allianz Arena
Bayern's space-like looking stadium

"In England, the Glazers are allowed to come in, while Portsmouth can have four owners in a season. That cannot happen in Germany," Dykes told BBC Sport.

"The German model means Bayern are attracting lots of investment but without the risk. It's completely different from United - it's a whole different philosophy.

"Bayern looked at what was happening in the United Kingdom and said: 'We don't want that to happen here'. They wanted to maintain control of the club."

Arguably, this financial prudence has come at a price, having limited the ability of German clubs to compete with their big-spending English counterparts, who can offer higher wages to players, in the Champions League.

Bayern were the last German side to be crowned champions of Europe in 2001, having lost to United in dramatic fashion two years earlier.

English clubs have triumphed twice since 2001 and appeared in the final on six occasions in the last decade, a period in which only one other German club has reached the final, Bayer Leverkusen losing to Real Madrid in 2002.

"When clubs can spend what they want, like in the Premier League, it's very difficult for German clubs to succeed," said Antonia Hagemann, project manager with the UK-based Supporters Direct organisation, which has carried out a Uefa-funded study of club ownerships and fan involvement across Europe.

"But there's a fair chance that they will have the last laugh. The German model doesn't restrict success, but the Premier League has set up a 'rat race' for everyone in Europe. It sees football as a brand - it is not interested in regulation."

At the heart of the German model are the fans, rather than owners or shareholders.

Bundesliga clubs broke the 2bn euro (£1.8bn) level for the first time in 2008-9
It was the seventh successive season in which an attendance record was set - averaging 42,000 a game
Average ticket price: 20.79 euros (£18.70) - about twice as much as in the Premier League
The Bundesliga is the European champion of sponsorship deals - 573m euros (£515m)

Until the late 1990s, all Bundesliga clubs were 100% owned by members - fans who pay to be part of the club.

However, the clubs recognised the need to compete with their European rivals and that this might not have been the best way to do it.

So some, including Bayern, spun off their professional football "sections" into outside limited companies, separate from the parent club, to attract investment.

Under Bundesliga rules, members must own 50% of the shares plus one extra vote of these spin-offs. This is the so-called 50+1 model, which makes it impossible for private investors to take over a club.

It is this model that many view as the best in Europe - and a far cry from the Premier League, where most clubs are struggling with debt. Earlier this season, Portsmouth became the first top-flight club to go into administration.

A Uefa report in February revealed that the total debt of Premier League teams - £3.4bn - is greater than that of the rest of Europe's top-flight clubs put together.

And although the Premier League clubs make up more than half of club assets in Europe, Manchester United's debt is almost more than £150m higher than that of the 36 clubs in Germany's top two divisions.

That is because Bundesliga clubs must submit information about their budgets and expected expenditure, and prove they are financially stable in order to play in the league.

There are also check-ups during the season, and licences can be withdrawn.

Second Division club Arminia Bielefeld were deducted four points by the Bundesliga for breaching the terms of their licence after suffering a financial shortfall and were fined 50,000 euros (£45,000) for the violation, which they admitted in February.

"I think the strict system is just one of the reasons preventing them [German clubs] from competing in the Champions League," said Michael Ashelm, of the Frankfurter Allgemeine Zeitung newspaper.
Robben and Ribery
You can watch Robben and Ribery for just £11

"In the past, the German clubs had many problems with things like defunct training systems and antiquated managers. This changed a lot with a new generation of managers and coaches.

"On the other hand, the financial system prevented the clubs from a disaster and allows for stable conditions - in contrast to England or Italy."

And of the comparison between top-flight clubs' debt in England and Germany, he said: "You need a strong value as a club to carry such debt as Manchester United and Liverpool - and the value of Bundesliga clubs is under it.

"This season Schalke had many problems with their liquidity. They have debts of about 140m euros (£125m)."

Schalke's debt accumulated from the construction of their new stadium, which was eased by a 100m (£90m) euro sponsorship deal with Gazprom. "For a big German club, this is life-threatening," Anselm added.

The German model does have its critics. Hannover 96 president Martin Kind has been a long-standing and vocal opponent of the 50+1 rule, and challenged it in the courts last year.

However, 32 of the 36 Bundesliga clubs rejected his proposal.

"Everyone in Germany used to look at the Premier League as the ideal model, but now the big clubs in England are in serious trouble," said Hagemann.

"I tell everyone not to follow the Premier League model. Fans in England don't really have a say.

"The English model is the worst model - its clubs have a perception a spending more money than they have."

Tony Woodcock, the former England striker who had a spell in Germany with Cologne during the 1980s, says the financial restrictions placed on Bundesliga clubs are not necessarily a disadvantage.

He believes Bayern are the "leading example" of how well run the German clubs are.

"Bayern are a bit down the pecking order in terms of attracting players compared to other European teams, but they do have some top players," he said.

"They have still attracted Franck Ribery, Mario Gomez and Arjen Robben - they have upped it a gear. To get them, you have to offer good rates. Bayern realise this."

606: DEBATE
Financial fair play?

Woodcock also believes that English clubs could learn a lesson or two from their German counterparts in how to treat their fans.

"For my first training session in Cologne, 10,000 people turned up," he said. "In Germany, they welcome the fans to the training ground but in England it's like Fort Knox."

A combination of reasonably priced tickets to watch the likes of Ribery and Robben strut their stuff in superb facilities ensures that Bayern fans are far happier than United supporters in the way their club is run, according to Dykes.

It remains to be seen whether over the next few months the Red Knights and Must can bring a similar degree of German prudence to Old Trafford.
 
[quote author=Squiggles link=topic=39545.msg1078235#msg1078235 date=1269898605]
[quote author=Judge Jules link=topic=39545.msg1078172#msg1078172 date=1269892544]
Promising to see the government taking an interest in the way the game is being run? Say WHAT?? If Whitehall gets its hooks into the game, the one certainty is it'll end up worse than ever.
[/quote]

Why would these proposals make it worse?
[/quote]

Some of the individual proposals could have merit provided the game itself decides to bring them in. My overriding objection to the proposals as they stand is to the proposed increase in centralisation of the game, represented by some of the proposals themselves (e.g.a "unified system of governance", whatever that may turn out to mean) and the fact that - good idea or not - they're being imposed by central government. That sets a precedent which I would not want to see happening, at pretty much any price. Imagine if Thatch had had that kind of power over football.
 
[quote author=SaintGeorge67 link=topic=39545.msg1078166#msg1078166 date=1269891054]
Anyone would think there's an election coming up.
[/quote]

Yep. Which by rights, they shouldn't have a cat in hell's chance of winning. Therefore expect this to be dropped quickly over the next few months.

Why would anyone care about the fans?
 
[quote author=peterhague link=topic=39545.msg1078242#msg1078242 date=1269899368]
i do think something has to be done to regulate football, to protect clubs and fans, and to make the league as competitive as possible.

i was wondering whether, as a start, it'd be viable to impose a maximum ticket price for premier league games of, say, £20 (or at least restrict more expensive seats to a small percentage of the ground). i really think fans need protecting in this way, as too many ordinary people are being priced out or exploited.

of course, the one thing that has to change is how they allow these leveraged buyouts by people with no emotional or any other ties to the clubs. too late for us though, as i can't imagine how you could apply it retrospectively.
[/quote]

Good post.
 
[quote author=Judge Jules link=topic=39545.msg1078417#msg1078417 date=1269942673]
[quote author=Squiggles link=topic=39545.msg1078235#msg1078235 date=1269898605]
[quote author=Judge Jules link=topic=39545.msg1078172#msg1078172 date=1269892544]
Promising to see the government taking an interest in the way the game is being run? Say WHAT?? If Whitehall gets its hooks into the game, the one certainty is it'll end up worse than ever.
[/quote]

Why would these proposals make it worse?
[/quote]

Some of the individual proposals could have merit provided the game itself decides to bring them in. My overriding objection to the proposals as they stand is to the proposed increase in centralisation of the game, represented by some of the proposals themselves (e.g.a "unified system of governance", whatever that may turn out to mean) and the fact that - good idea or not - they're being imposed by central government. That sets a precedent which I would not want to see happening, at pretty much any price. Imagine if Thatch had had that kind of power over football.
[/quote]

It's desperately needed though Jules. The Premier League have shown absolutely no desire to curb the excesses and run the league sensibly (much like the entire banking sector for the last decade). As a concession they implemented the "fit and proper" test for new owners and nobody has failed it yet despite all the calamities at Pompey, Shinawatra at Man City etc.
 
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