Archive → July, 2011
With the publishing of the football governance report today there are a lot of welcome recommendations. These are good for many smaller clubs but for Manchester United supporters, the ones you could argue who got the report rolling in the first place after the green and gold and red knights publicly stunt it looks like it doesn’t really do much. There isn’t much but the new licensing system which could affect the clubs ownership and style. One thing that caught my eye early on was point 220.
“220. We recommend that the Government consider passing legislation to protect minority supporter stakes that would otherwise be the subject of a compulsory purchase order.”
This basically means a supporters trust with shares within a club would be protected if the law was passed. In 2005 this would have meant the 15% of club would have been protected under shareholders United or todays Manchester United Supporters Trust if under todays co-operative style scheme. Sadly for us this is 6 years too late even for the recommendation. In the Premier League Arsenal, Swansea and Norwich City supporters trusts would have their shares protected under a such a system. This would be true for many other clubs throughout the Football League and lower leagues of the English Tier system.
The other point that can be noted is the new licensing model. ”The licensing model adopted should both review performance and look to promote sustainable forward-looking business plans.” You could argue in an instant the current business model in many clubs isn’t sustainable. Especially at clubs like City and Chelsea. United could also be targeted. A business plan aiming to give away a large amount of it’s revenue to interest payments with no foreseeable end can’t be called sustainable. If a licensing model was introduced that targeted a certain business style such as the rumoured Arsenal model and not the differing United or City business models we could see certain types of debt models and large scale spending models a thing of the past.
I also did a blog yesterday on how Sky could be affected by European broadcast rights at the European Court of Justice and this report supports Sky’s view keeping it as it is. My view comes from the consumers view of charging through the roof for sky sports products.
On Leveraged buyouts and debt in the game apart from criticising both areas, they haven’t said how to reduce debt and didn’t say ‘leveraged buyouts should be banned’. The only thing to protect support shareholdings would be the recommended protected supporter share legislation but even that is limited to a point. It’s the same as before buy as many shares as you can before someone takes over but with your shares in supporters trust intact. This may change as the government has asked the FA and Premier League to get involved in developing supporter ownership. One recommendation which could affect the way we currently see private ownership is the recommendation of Full Transparency on ownership and on debts. So this will change in the case of Leeds United were currently the owners who own a certain percentage can keep their details hidden will now be forced to give up who they are. Debts are also another important area for Manchester United fans. Although currently hidden away in Delaware and considered private, the PIKs which were paid off and rumoured to be refinanced, maybe forced to come to light. It could be argued this money was used to buy the club, which it was and it has had constant links mainly through the large dividend payments put in place during the bond agreement.
The report also urges clubs and supporters trusts to work together on other issues besides ownership issues. On the face of things you can’t force clubs to talk to supporters trusts, so in our case there is zero chance of David Gill and our Supporters Trust or IMUSA getting involved with each other. I don’t think either party wants anything to do with the other. Those battle lines we’re drawn along time ago.
The good points.
The likely hood of less clubs being in financial trouble through a licensing system.
Full Transparency on ownership of football clubs and on debts.
Protection of Supporter Trusts shares already held within football clubs.
The bad points.
Supporters trusts are less likely get take hold of shares unless a club is in big trouble. Administration or the like.
No mention of compulsory or optional share schemes for supporters trusts to buy shares.
Government recommends clubs still rely on Sky TV money which leads to its own problems.
There is no chance of either the club or supporters trust getting involved with one another unless something very big chances.
Anyone remember the Pub landlady who took Sky’s Premier League Football Monopoly to the European Court of Justice. Well the Court will rule on the case on the 4th October 2011 according to a source of the old twitter. This can affect the £1.78 billion tv deal in a number of ways. It would mean european broadcasters have the right to the UK market for the first time. You could buy a satellite box from Romania to Portugal. How prices would be affected at first isn’t clear but I would expect this to impact on Sky from day one. Prices in Europe are unlikely to match Skys £1000+ a month prices but it’s a possibly they could rise. This raises the interesting possibly of Sky dropping it’s rate which therefore means it’s £1.78 billion TV deal would likely fall in value and in demand. The other option this allows is the man on the street to buy from Greece or Germany instead of Sky. This along with the pub landlords could change Premier League drastically. It seems Murdoch could be hit by a second and much more expensive sting within just a few months. Not only could Murdoch be affected but the clubs themselves. There are three options I can see. Collective TV deals become a thing of the past due to value and English clubs sell their own as in Spain, the market becomes truly open with TV companies competing on a country by country basis or the Premier League rights change to a Pan European licensing system. All will for a time break Sky’s monopoly on the Premier League while one or the other is sorted out, which can only be a good thing.
The phone hacking inquiry has allowed the football goverance inquiry report to be put back two weeks. It was due out on the 18th of July which was the Monday just gone but the release date is now the 29th July which is next Friday. Hopefully this should allow for full weekend coverage in the press.
The was also an article in the financial times which mentioned just one of a number of measures set to be imposed on the Premier League by the Government Report. What is surprising is the independent chairman believes there is nothing wrong within the game. Those are the sorts of independent directors who do nothing for the game. The people given these roles should believe there is a problem and have the governments & fans interest at heart. It’s completely pointless to appoint someone who believes everything is perfectly fine the way it is.
Half a century of blogs on football governance and ownership issues but this 50th blog will look at how the club deals with the fans. It’s not only just the two issues of ownership and governance which are important to me. It’s the whole football experience, a change of ownership could improve allocations, standing and the general football experience. Currently that’s impossible to get across.
One issue which keeps popping up is tickets and allocations. In the modern game you’d think this wouldn’t be a problem but it’s a massive problem. The standard Premier League allocation for league games for each away team is either 3,000 tickets or 10% of the capacity. It is very rare these days that United see a full allocation of tickets. The main reason that does the rounds is normally persistent standing but it seems this isn’t the case. Each stadium, club and council has it’s own way of dealing with these things and normally the fan visiting has no involvement and isn’t contacted by anyone. When an allocation is cut such as away at Tottenham or Sunderland the reasoning is kept behind closed doors. The club ‘Manchester United’, don’t investigate or publish why the allocation is as it is. When a letter is sent out from the club with the tickets the only word ever used is ‘persistent standing’ but if you ever contract Tottenham Football Club or the local council, the word ‘standing’ is unlikely to the used. The words ‘Health and Safety’ are more likely to be used and the real reason isn’t clear.
Manchester United as a club fail time and time again on behalf of the fans to deal with the issue. There is also a group called ‘the fans forum’ and what they do? I have no idea. Since the club don’t allow criticism of anything they do anymore, there isn’t really much point in the group. Allocations are still dropping, drinks and tickets prices are still going up. Those are the three things most fans are interested in. IMUSA in the past was that group, they called for lower ticket prices and worked with the club on controlling standing and allocations. There is no group like this anymore which challenges the club. It still exists externally but now it has no role within the club.
The club should be challenging standing and allocations. It’s rumoured the standing it’s self isn’t the problem. Keeping the fans informed should be number one and if there is an issue which has affected an allocation it’s best to advise the fans what the issue is. If the real issue isn’t made known it can’t be fixed and it cannot be challenged in the future.
When you thought it was all going down hill, finally we have some good news. Even through this isn’t the full amount of money on offer, £268,292 has been granted for Supporters Direct to carry on operating. There is another £1.2m which will be considered over the next three years and it’s important Supporters Direct sees this money.
Another article that has been doing the rounds is from the telegraph and reports on the football governance inquiry. The word ‘radical’ is used and a number of the changes should finally remove the Premier Leagues power it has over ownership. The licensing system which has been recommend by many parties will over see ownership, directors and club finances. Another important point that has been stressed again is The FA and Premier League must follow the recommendations or legalisation will be introduced. Issues to do with future football ownership of football clubs are still unknown.