Credit : Christopher Furlong/Getty Images

September 3, 2019   5 mins
September 3, 2019   5 mins

Football has always had a problem with club owners. The sport’s tendency to attract unscrupulous characters with money to spend was once tolerated, sometimes welcomed, as part of the natural colour of the beautiful game. But in recent years – as football has become richer and richer – the impact of incompetent and greedy club chairmen has become more profound and destructive.

Last week, Bury, league members since the 19th century, were expelled as a result of unpaid debts and poor ownership. Their neighbours, Bolton Wanderers, founder members of the Football League and one of the great old names in English football, were saved at the eleventh hour, having gone into administration in May – although their future is far from certain.

Bury’s ordeal will be familiar to fans of AFC Wimbledon, formerly Wimbledon FC, who over the last quarter of the 20th century rose from non-league to the First Division only to be sold and rebranded out of existence. Back in May 1988, the Dons had completed the greatest giant-killing act in football history when they defeated the best team in the world, Kenny Dalglish’s Liverpool, in the FA Cup final, only 11 years after entering the old Fourth Division.

But two weeks and 14 years later, on 28th May 2002, the club was effectively shut down when it was relocated 70 miles north to Milton Keynes. In this, the owners were aided and abetted by the Football Association, which approved the decision while laughably claiming that the creation of a South London-based fan-owned club would be “against the wider interests of football”. That story tells you everything about the people who run the game.

All Dons fans know the story of how the club was moved to Buckinghamshire by its Norwegian proprietors, against the wishes of supporters, but it was only made possible in the first place because the previous chairman, Sam Hammam, had sold their Plough Lane ground for housing. So they will understand how fans of Bury are now feeling, and those of Maidstone United before them, of having the heart and identity ripped out of their club, and the community of supporters around it betrayed having helped build it up over generations.

What happened at Wimbledon has become thankfully more difficult to do in recent years; the real problem for football is now irresponsible management. Growing numbers of clubs are becoming financially distressed, and in some cases bankrupt, because of reckless owners chasing the riches that promotion would bring — but ultimately failing and leaving clubs mired in debt.

Sunderland suffered such a fate, dropping two divisions in the process, while Portsmouth fell three after racking up debts of £135m trying to compete with the billionaires of the Premier League. Portsmouth fans used that opportunity to purchase the club from its failing owners, as did Brentford supporters when faced with former Chairman Ron Noades’s attempts to sell off their Griffin Park ground. But others face even bigger problems.

The most recent Begbies Traynor Football Distress Index shows that six clubs in the Championship, League 1 and League 2 show signs of serious financial trouble, including grand old names with long traditions such as Oldham Athletic and Notts County, the world’s oldest professional club (who have since lost their league status for the first time following their relegation from League 2).

Others, among them Blackpool and Charlton Athletic, suffer from erratic owners or murky ownership structures. FA rules are clearly failing to screen out unsuitable owners, and things have got so bad that The Times recently reported that League teams are supportive of a salary cap to stop unsustainable spending and stem the flow of corporate failure.

As incompetent management and financial distress have grown, the FA has done little except tweak its ‘fit and proper’ person test, befitting its history of fiddling while football burns. There is also resistance in Parliament to moving towards statutory regulation of football. In any case, regulatory changes would take too long and are unlikely to be up to the task of helping clubs avoid or recover from disastrous ownership.

No, to save football from eating itself requires a more radical solution that would give hope of real change to supporters of clubs being run into the ground. The answer is staring us in the face – fan ownership.

Clubs owned by their fans are less likely to take dramatic financial risks, not least because no one stands to profit from such endeavours, as there are no shareholders. Instead, supporters are much more inclined to take a very long-term view and act as custodians; after all, a football club is for life (and indeed is often passed onto the next generation).

Other leagues in the world support this kind of approach: membership of the Bundesliga, for example, depends on all clubs being 50%+1 owned by their fans. In Spain’s La Liga, Barcelona is the biggest fan-owned club in the world and one of the most successful.

Why doesn’t the Government take an activist approach to helping fans of financially distressed clubs? It could do this by creating a fund, which could be financed in one of three ways: from the use of dormant bank and financial assets, from an insurance fund to which all clubs pay a premium, or ideally (but most controversially) a 1% levy on transfer fees.

This fund would help re-capitalise football clubs that have been pushed into administration, receivership or bankruptcy by their owners, and would be operated by an arm’s-length body. Although to make this happen quickly initial Treasury support would be required, such state intervention would surely be justified, since football clubs are not just businesses but crucial parts of the social fabric and the source of community strength and pride.

The money would be made available as matched funding, up to a capped level (perhaps £5 million per club), to complement money raised by fans themselves to purchase their distressed club. Bidding for funds would be done through fan-led consortia, and if successful, the fund would purchase minority stakes in these clubs. These approved ownership models already exist — such as those promoted by the organisation Supporters’ Direct.

While the purpose of the fund would be to re-capitalise failed clubs into community and fan-ownership, its existence would also encourage owners to look to sell to fan-led consortia before they reached a distressed state. It is quite likely that the value of the fund would increase over time: distressed clubs often experience multiple relegations, despite often having large fan bases, and so require relatively little capital to start again.

Once stable and debt-free, they then tend to ascend the leagues quickly, increasing their turnover and value. Minority stakes could then be sold at a profit in future – either to the fans themselves, or to other approved and reputable owners. This would benefit the balance sheet of the fund, allowing it to make even more investments and creating a virtuous circle of accelerating clubs into fan ownership.

Sceptics will ask why, if AFC Wimbledon, Brentford and Portsmouth all completed this kind of renaissance without any help, such a fund is needed? But even for these clubs, which represent the wealthier end of the spectrum, raising money has been a major challenge. AFC Wimbledon is trying to build a new stadium next to the site of its former ground in Merton, and struggling with the fundraising. For smaller or poorer outfits, this kind of rebirth is very hard to achieve, especially with the associated costs increasing all the time. And yet these clubs are often the heartbeat of their towns’ identities and one of the most important economic, social and community institutions to local people.

None of this is to suggest that fan ownership should be made compulsory. While we support greater fan ownership and encourage all to move in this direction, forcing this model on well-run football clubs, such as Bournemouth or Huddersfield Town, is inappropriate and would destroy economic value. Government focus should be on giving people more control over the institutions that matter to them, especially when the traditional owner-business model has failed, not punishing success.

The impact, while a slow burn, could be revolutionary, the greatest transformation of football since the beginning of the Premier League nearly 30 years ago. And this time it would be the fans that benefit, not the owners. Football would truly become the people’s game once more.

James O’Shaughnessy is a member of the House of Lords. He served as a health minister between 2016-18, and was previously Director of Policy at 10 Downing Street under David Cameron.