Can Football Be Saved? A Five-Point Manifesto

Ian

Ian began writing Twohundredpercent in May 2006. He lives in Brighton. He has also written for, amongst others, Pitch Invasion, FC Business Magazine, The Score, When Saturday Comes, Stand Against Modern Football and The Football Supporter. Ian was the first winner of the Socrates Award For Not Being Dead Yet at the 2010 NOPA awards for football bloggers.

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19 Responses

  1. Micky F says:

    Excellent article. If only these 5 principles had been in place two years ago Luton would still be in the Football League. Unfortunately the modern game is riddled with chancers and conmen who are only interested in making a fast buck and then scarpering leaving a bloody mess behind them. Equally unfortunately those we entrust to protect us from these ‘characters’ are asleep at their posts. The FAPPT is nothing more than window dressing in it’s current form.

  2. oftenscore6 says:

    I agree wholeheartedly with proposals 1 and 5 – and 4 sounds sensible. Re 3, I also like the taxman being a preferred creditor like the football creditors – after all, we all lose out if the taxman is not paid in full. However, I disagree that clubs should not be punished – I don’t think you can divorce the club management actions from the effect of the overspend on the club. It doesn’t always buy ‘success’ – but it might have prevented relegation instead. My suspicion is if you didn’t punish clubs, there would be succession of overspending ‘figurehead’ directors who overspend, take a personal punishment, and the club just carries on like no overspend ever happened. In the end, it is the club which gained an advantage from the overspend, so I think it’s right that the club is penalised. If fans want to prevent it, they need to get involved themselves to ensure the club acts responsibly.

    Exiting without a CVA (ie liquidating) leaves the creditors completely stiffed – all the more galling when the same club restarts in the same division but with no debts! I think if the club exits without a CVA, they should be demoted – in non-league it’s 2-3 divisions… I think an agreed CVA should be a lesser penalty than with no CVA, even if it’s not a huge % payout – because it is at least agreed – but at a certain % level, it could also be automatic demotion.

  3. Rob says:

    oftenscore6: “However, I disagree that clubs should not be punished – I don’t think you can divorce the club management actions from the effect of the overspend on the club. It doesn’t always buy ’success’ – but it might have prevented relegation instead. My suspicion is if you didn’t punish clubs, there would be succession of overspending ‘figurehead’ directors who overspend, take a personal punishment, and the club just carries on like no overspend ever happened. In the end, it is the club which gained an advantage from the overspend, so I think it’s right that the club is penalised. If fans want to prevent it, they need to get involved themselves to ensure the club acts responsibly.”

    While I appreciate the sentiment – not every club that has entered administration has done it through overspending on on-pitch matters. In fact, looking at the list of clubs that have gone into administration since 2002 (Ipswich Town, Franchise, Wrexham, Camrbidge United, Rotherham United, Boston United, Leeds United, Luton Town, Bournemouth and Darlington), only two of those stick out as being ones who overspent on players or wages. The rest hadn’t exactly seen much in the way of on-pitch profit – Wrexham’s owners were even trying to close the club and sell the ground for personal gain! People like those in charge cauing the debts at Luton, Boston and Darlington didn’t appear to be doing it for the fans sake – that’s why the individuals need to know that they would be first in line to be punished. I’m not suggesting that a bond system would be small amounts of money either. A minimum pf £1m for directors and/or investors at Premiership level, and at least six figures for League Two. Yes, it may put of some genuine would-be owners, but I’d rather lose ten genuine would-be owners in order to off a single John Batchelor.

    “Exiting without a CVA (ie liquidating) leaves the creditors completely stiffed – all the more galling when the same club restarts in the same division but with no debts! I think if the club exits without a CVA, they should be demoted – in non-league it’s 2-3 divisions… I think an agreed CVA should be a lesser penalty than with no CVA, even if it’s not a huge % payout – because it is at least agreed – but at a certain % level, it could also be automatic demotion.”

    Agreed to a large degree. And this had always been the case until Leeds’ administration. The clubs that have failed to agree CVAs have all been because of the taxman vetoing. If the taxman is agreed as a supercreditor, there’s realy no excuse for failing to agree a CVA, and the league should go back to the pre-Leeds rule of having to exit with a CVA.

  4. ejh says:

    Aren’t there two big potential problems with all of this?

    a. How much of it would be legally enforceable in the event of an offended party taking legal action against any sanctions imposed on them? Think of the recent Briatore case, or Tottenham’s successful action years ago against their explusion from the FA Cup. Both rules and sanctions would have to be consistent with the wider structure of British and European law – are you confident that they would be? (Would it, for example, be possible to restrict club ownership to UK-registered companies? I’m not asking rhetorically – I really don’t know. But it’s not clear to me that it would.)

    b. What do you do about the syndrome – identified in your article – by which club owners are reluctant to accept measures which affect clubs owners and club ownership, precisely because it affects people like them? Are they going to agree to any of this, and even if they do, are they going to enforce any of it? The Chester City farce would suggest not and so, for that matter, would the removal of Wimbledon to Milton Keynes, which was of course entirely against the existing rules.

  5. Albert Ross says:

    The points deduction situation is a thorny one and there needs to be some review of it – but the problem is that the reason it was brought in was of course to discourage clubs from “Doing a Leicester”. Given that there needs to be a discouragement for that, how about saying that clubs entering Administration will be deducted ten points, unless doing so will result in their relegation. That way, the disincentive remains to those that would seek to benefit from overspending and jettisoning debt, while not penalising those for whom admin has been used to protect them from bad owners (eg Wrexham, Luton).

  6. NottyImp says:

    You mention Rotherham as a repeat administration offender. You can add Bournemouth and Darlington to that list, as well. A week out of its second period of adminstration in recent years, having paid creditors just 1p in the pound, Rotherham splashed out £150k on a striker. That can’t be right and is tantamount to chaeting and fraud, in my view.

  7. Martin says:

    They are all entirely sensible ideas and should be brought in as soon as possible.

    Sadly, as you state, turkeys don’t vote for Christmas.

  8. Why not a condition of promotion from any league that the club be currently solvent, and have not had an ‘insolvency event’ in the past season?, so teams cannot do a Leicester and the cases of Wrexham and Luton do not get punished too severely. Doesn’t something like this exist between the Bundesliga’s two leagues?

    Of course this rules out Notts County and Bournemouth for promotion, but don’t take my position as a Rochdale fan as a contributing factor in my idea(!)

  9. oftenscore6 says:

    Rob, re “not every club that has entered administration has done so through overspending on on-pitch matters”, every club / business has a budget which will cover both on-pitch and off-pitch matters. The on-pitch part may not be huge and may not bring success, but if they spend more than they earn, what’s the difference? If they don’t get the projected income or overspend on off-pitch matters, they have to make cuts somewhere else. But instead, some act like ostriches, carry on spending and hope for a sugar daddy rescue / fold and reform in the same division.
    I think if the FA required the bonds you suggest, quite a few clubs would struggle to find directors at all! Many good directors are not there just to provide finance (some do not provide any at all), but invest their time (which may be unpaid) in providing business acumen and advice, or managing or overseeing parts of the club/business.

  10. Martin says:

    “quite a few clubs would struggle to find directors at all!”

    Indeed.

    I suspect the likes of Ken Bates would *still* find some way of Leeds paying his “personal” bond for him anyway.

  11. Rob says:

    ejh:

    “a. How much of it would be legally enforceable in the event of an offended party taking legal action against any sanctions imposed on them?”

    I think the only one is likely to be the ensuring that the club is based in the UK – but if that had to be extended to the EU, I wouldn’t have a problem with that. It’s more designed at removing clubs using paper trails and offshore tax havens, than anything else. Outside of that, most industries have rules and regulations that individuals and companies have to comply with, as well as the law. Even within football – the League ordered Bournemouth to pay their unsecured creditors within two years, when the legal norm is closer to five.

    “b. What do you do about the syndrome – identified in your article – by which club owners are reluctant to accept measures which affect clubs owners and club ownership, precisely because it affects people like them? Are they going to agree to any of this, and even if they do, are they going to enforce any of it? The Chester City farce would suggest not and so, for that matter, would the removal of Wimbledon to Milton Keynes, which was of course entirely against the existing rules.”

    Like I say, it’s precisely the reason none of this would be implemented. As far as my point with Wimbledon is concerned, it would have prevented the sale of Plough Lane. Without which, one of the most “compelling” reasons for the move – that the owners had done everything they could to find a new venue in London (except look for one) – disappears in an instant.

    Matt Boothman:
    I’m not convinced that clubs “doing a Leicester” is an issue. It’s a one-off (so far) and even then, there are vastly different circumstances in Leicester’s administration compared to most – not least including the involvement of Eric Hall. Neither Notts County nor Bournemouth have had an “insolvency event” this season, by the way. Both are under transfer embargoes for one reason or another, but neither have had insolvency events.

    “oftenscore6″
    “every club / business has a budget which will cover both on-pitch and off-pitch matters. The on-pitch part may not be huge and may not bring success, but if they spend more than they earn, what’s the difference? If they don’t get the projected income or overspend on off-pitch matters, they have to make cuts somewhere else. But instead, some act like ostriches, carry on spending and hope for a sugar daddy rescue / fold and reform in the same division.”

    I think we’re talking at cross purposes in terms of off-pitch matters. You appear to be thinking of clubs spending beyond their means just trying to get as high as possible, which, while it does happen, isn’t really what I was thinking of. Points deductions are no penalties at all to the likes of Stephen Vaughan (with the six figure cleaning bill he racked up in a matter of months) Mark Guterman and Luton’s owners over the last decade, yet even with fans protesting and pleading with the football authorities to do something about the so-called custodians of their clubs, what happens? Three clubs with almost 100 points deducted between them in three seasons. A shambles, and absolutely no deterrent to individuals looking to follow in their footsteps. If I shoot someone, it’s not the people at Smith & Wesson that get arrested. If you’re considered fit and proper enough to be responsible for owning a club, you’re fit enough to take responsibilities for your own actions.

    “I think if the FA required the bonds you suggest, quite a few clubs would struggle to find directors at all!”

    I’d rather lose 100 genuine honest to goodness directors to keep one asset stripper away. But, maybe a lack of directors, would lead to a rise in Trust owned-clubs. John Armstrong-Holmes may have announced that Trust run clubs are a failed social experiment, but then he would, considering that not only did Notts County struggle under his watch, but he also recommended that his members sold their club to a bunch of people that don’t exist. The people at Exeter, Wimbledon and FCUM are more than happy with how their clubs are being run.

    “Many good directors are not there just to provide finance (some do not provide any at all), but invest their time (which may be unpaid) in providing business acumen and advice, or managing or overseeing parts of the club/business.”

    There’s nothing stopping any individual giving unpaid time and advice to a club without being a director.

    Martin:
    “I suspect the likes of Ken Bates would *still* find some way of Leeds paying his “personal” bond for him anyway.”

    Maybe the “likes of Ken Bates”, but actual Ken Bates would fail a retrospective FAPPT, as anyone who has read the chapter of Tom Bower’s Broken Dreams about Bates time at Chelsea will tell you.

  12. Sp3ktor says:

    Some interesting points but personally I can’t see the clubs involved wanting to introduce many of them. I really don’t want to come across as a Big Chief Poo-poo, but…

    1. Would this have stopped the likes of Bill Archer, no. What about foreign investors with somewhat murky pasts (Gaydamak, Usmanov) – it’s hard to legislate against rumour. Sadlym when clubs are at their most vulnerable, supporters don’t care where the money comes from to get them back on their feet.

    2. I’m of the opinion that spending beyond what you’re good for in football is cheating. I think the 10 point penalty is fair. Relegation, even from the League, is not the end of a club – any true fan would support their team even if they were in the Ryman Div 1 South – football tribute bands like FCUM are heart-warming testimonies to this. Asking for a bond would deter investors and make digging a club out of a hole even harder – now an investor would have to clear debts and pay up for a bond they have no control over – doesn’t leave much to strengthen the squad.

    3. I agree but I’d like every creditor to be seen as a super-creditor. After football interests and the tax man have been paid off in full, usually the only remaining creditors are local businesses. If football clubs want to be seen as a valuable part of the local community they should have to pay their way in it.

    4. Seems perfectly acceptable to me, but then I’m not paid to do the accounts for for football club. Given how widespread this is, you’d never get the clubs to agree to this.

    5. A good idea – but sadly, given the position most clubs are in, would never be agreed. For most clubs the stadium is their only tangible asset – they’d have nothing to guarantee loans against – and it would drastically reduce their value – again detering investors.

    Sorry to be so negative, it was a very interesting read. Look forward to seeing more.

  13. Martin says:

    Sp3ktor, local businesses choose to do business with their local football club. Why more don’t do adequate credit checking on them is presumably through loyalty or lack of funds or time.

    HMRC are the only “creditor” who has no choice, and that’s partly why they have been so abused.

  14. Michael Wood says:

    As always many good points raised but I will add this thought and my take on a solution (which agrees with Matt Boorman – cause I always get on with Rochdale)

    It is important not to see the 10 point deduction that clubs get as a penalty for that club. It is a recompense to the other clubs who have not over spent but it makes more sense to take the points off a tally rather than awarding the other 23 clubs in a division 10 bonus points for playing fair.

    Considering the deduction a penalty suggests that the offence is a personal one – that the club does it in isolation – but it is not it is a crime against the rest of the football community which is recompensed accordingly.

    That said I do not like it. It makes a game of administration and punishes the wrong people. My solution would be – should a club go into administration – to put a block on that club going up for a period of four years from that point and a block on them going down for two years (after an initial three months, to avoid the convenience of administration) creating the clubs as jam cars (for those who remember TCR)

    Using Leeds as an example they would have been relegated after going into administration a week before the end of the season to avoid a club using the protection which is offered for the integrity of clubs as a convenience but had they had the serious need to go into admin in January (and this spate of call offs could cause clubs to do that) they would have been insulated at the foot of the division.

    They would then be ignored for promotion and relegation purposes. They could win League One but the 2 and 3 clubs would be promoted, they could finish 24th but the clubs 20, 21, 22 and 23rd would be relegated.

    This gives the club a shield of protection that at the end of a period of administration that they would be a similar entity than they were when they went in but it circumnavigates the idea of using it as a way to advance your club. A half decade without the ability to be promoted would see that opportunists would not prospect.

  15. Okay; so Leicester are the only team to do a Leicester so far – but perhaps some other means of disallowing teams to gain an advantage on the field could be implemented (ie not just a ten point penalty). If Rotherham go up this year it is on the back of multiple administrations which even saw them lose their ground (which was all due to overspending to sustain their ill-fated Division One place); Darlington were another side that continually abused the system to try to gain promotion until they ran out of rich idiots. Possibly finances should be checked as being solvent, and certain financial conditions met (I don’t know what exactly, I’m not an economist) before a promotion place is granted – it might even stop sides like Stockport being promoted and then falling back into admin; again I seem to remember something of this nature in Germany.

  16. Micky F says:

    Some of the respondents have argued for the retention of the automatic 10 point deduction for clubs entering Admin on the basis that it is a punishment/deterent for clubs who overspend.

    However this does not differentiate those clubs who got into difficulty without overspending. In the 2 years before they last went into Admin Luton took in far more in transfer fees than they spent, yet the board still couldn’t pay the clubs debts. No-one has ever been able to explain where all the money from transfers went and the football authorities simply didn’t care.

    The Leicester example was a one-off which could have been far more effectively dealt with by banning teams in Admin from being promoted. Under current rules a team in Admin could still be promoted if they finished 11 points ahead of the team below them, unlikely I know but still possible.

  17. dk says:

    Very few Directors, I would imagine make decisions on the basis that they will fail and go into admin. It is the risk/reward balance that needs to be restored. A lot of the wage inflation that is at the root of footballs financial problems is related to clubs attempting to get into or maintaining a presence in the Champions League/ Premier division.

    Therefore, Champions League entry should be dependent on success in winning the league league cup FA cup or fair play league. This would hopefully spread champion’s league entry around and punish clubs who inflate player salaries to stay in the top 4.

    The difference between the Premier League and Championship should be less in terms of TV income, this can only be achieved by sharing the money around more.

    Finally Club’s constitutions should be on the German model where fans own 50%, this puts off nefarious owners who require 100% control to run their webs of intrigue.

  18. Damon says:

    “Agreed to a large degree. And this had always been the case until Leeds’ administration. The clubs that have failed to agree CVAs have all been because of the taxman vetoing. If the taxman is agreed as a supercreditor, there’s realy no excuse for failing to agree a CVA, and the league should go back to the pre-Leeds rule of having to exit with a CVA.”

    Quite. And if the Taxman was a preferred creditor, the clubs who currently don’t pay the taxman would probably do so – thus there would be less chance of a club receiving a winding up order, going in to admin or requiring a CVA in the first place.

    Cracking article by the way, Rob.

  1. January 13, 2010

    Social comments and analytics for this post…

    This post was mentioned on Twitter by twoht: Rob Freeman’s 3,500 word manifesto on football financing is here: http://bit.ly/8epbsU – Don’t be scared by the length. It’s very, very good…

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