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Fans at Liverpool and Newcastle may wonder whether someone who can pass the ‘fit and proper person’ test is actually capable of running a football club. At Newcastle, Mike Ashley has decided that the club is no longer for sale, even though one offer came very near to the reduced £80m asking price. He has said that he will pump another £20m into the club although most of this will go towards paying down the overdraft which is £12m over the £10m limit allowed by Barclays for Football League clubs. However, what has really infuriated fans is that he has said that he will put the naming rights to St.James’s Park up for sale. Even the previous regime refused to do that despite lucrative offers. For Toon fans, the very idea is sacrilege.
Things aren’t much better over at Liverpool. Poor performances on the pitch must have some relationship to the continuing boardroom wrangling between Messrs. Gillett and Hicks. With interest payments on their loans increased to a punitive rate, the club badly needs a buyer, particularly if it is going to build the Stanley Park stadium that is the key to its long-term success. But potential buyers are reluctant to get involved, in part because of the bad feeling between the co-owners. They are also think that they will be forced into a fire sale sooner or later, enabling them to pick up the club at a knockdown price.
The Football League has been trying to tackle broader issues about the ‘fit and proper’ person test, but seems to have backed away from facing up to them, in part because of legal difficulties. As takeovers of clubs by foreign businessmen with money in offshore accounts have become more common, the Government has been pressing the League to ensure greater financial transparency.
The Football League’s decision on the ownership of Notts County, where Sven Goran Eriksson is director of football, was supposed to be a critical indicator of the adequacy of the fit and proper persons test for owners of football clubs. But the League has backed away from stringent enforcement, at least in terms of transparency and disclosure. The League has given a green light to the new owners, but no one still knows for sure who they are. The League knows their identity, but has agreed that their names can be kept secret.
The League admitted in a statement that the ownership structure of the club ‘is complicated and features offshore entities and discretionary trusts. Together with the initial hesitation of the club’s ultimate owners to identify themselves, this made for a lengthy and at times difficult process.’ However, the League said that it was ‘now in possession of the appropriate details for those individuals who exercise control over the club.’ So that’s all right then.
The League have also suspended their investigation of QPR chairman Flavio Briatore until the outcome is known of the Italian’s legal action to clear his name in the Formula 1 ‘Crashgate’ affair. Lawyers have told the League that their hands are tied until after the outcome of the court action in Paris where a full hearing is expected later this month. In the meantime QPR fans facing continuing uncertainty about Briatore’s co-ownership of the club.
There are also uncertainties about who really owns Leeds United after Ken Bates admitted in a Jersey court that he did not know who the real owners are. Bates brought the club out of administration on behalf of Forward Sports Fund who are registered in the Cayman Islands, but no one knows who is behind them. The League would like to find out, but they may not succeed.
The Premiership got a big boost when it signed a new year £82.25m sponsorship deal with Barclays, 25 per cent up on the previous deal. Nevertheless, clubs continue to encounter financial problems. Hull City have been warned by their accountants that they may not be viable as a going concern and their troubles would deepen if they were relegated, which seems quite likely. A change of chairman may help them, but there is no benefactor on hand to bankroll them. Among other clubs in the relegation positions, West Ham continue a so far fruitless search for a new owner or at least a new major investor with the help of new advisers, while at Portsmouth the financial position has stabilised, perhaps one cause of better performances on the pitch.
In Scotland, Rangers have debts of £25m to £30m and Lloyds Banking Group had placed a director on the board. Under pressure manager Walter Smith claims that they are effectively overseeing the club’s finances. Secretary of State for Scotland, Paul Murphy, became so concerned that he warned the bankers against taking the club into administration. The underlying problem is that the Scottish Premier League is a premier league largely in name only. Television revenues and attendances have been falling. Rangers see the answer in terms of leaving the Scottish competition and either joining the English Premiership or, their preferred option, joining a new European Super League made up of clubs from smaller countries.
League 1 Southend have been threatened with administration over an unpaid tax bill which would be the third time they have gone bust. Accrington Stanley looked to have scraped together enough money to survive for now, but Blue Square South Weymouth continue to teeter on the brink and could lose their ground to their former chairman as a result.
At the glamorous end of the spectrum, Stan Kroenke continues to build up his stake in Arsenal by paying over the odds for small packets of shares, although it turns out that he is buying a lot of them on tick and owes £50m to Arsenal board members. However, he has been careful to stop just short of the number that would require him to launch a formal takeover bid and has remained silent about his intentions.
Wyn Grant is a regular contributor to Albion Road and also the publisher of footballeconomy.com, a website covering the business and economy of the game of football. |
