Clubs like United and Liverpool need a revolution
Evolution be damned. Clubs like Manchester United and Liverpool need a revolution. Truly Reds has never been radical or politically driven, nor is it about to start preaching anarchy now. We believe however, that the time has come for football fans to take control of their clubs from the Gordon Gekko type greedy tycoons who are slowly destroying our great clubs and even the game itself. All shades of governments and self appointed football guardians like the FA, UEFA and FIFA are either unable or, more than likely unwilling, to stop OUR clubs from being financially driven out of existence by corporations who only see them as a means of making a quick, few million bucks. Football has sadly become all about the almighty dollar.
“There is a tide of change in British football and there is a chance that fan power will be unleashed, and that the fans will take charge of their clubs. If one club can lead the way others will follow” – Paul Marshall from the Red Knights group.
Paul Marshall is co leader of the Red Knights group. He delivered a powerful speech at the Liberal Democrat conference in Liverpool where he called for a revolution in club ownership and urged the Coalition Government to act. Marshall spoke at the influential Lib Dem think tank Centre Forum where other speakers included the Premier League’s chief executive Richard Scudamore and the MP Don Foster, who has been a champion of the supporters’ cause for many years. What Marshall had to say should be of great interest to Manchester United and indeed, all fans of our great game.
Truly Reds is therefore pleased to show its complete support for what Paul Marshall had to say…
“We are convening in the home town of one of the greatest English football clubs, in fact I would go as far as to say the second greatest. Yet in recent years this club has been brought to its knees by the mismanagement of two Americans, George Gillett and Tom Hicks who know little about football and even less about Liverpool.
Liverpool FC is owned by the wrong people. So is Manchester United and so are most of our great clubs. I am going to concentrate my words today on this question of ownership. What is the best form of ownership of a football club and why? But before I do that, I would like to talk about football as a business. Football is bad business. Over half of all professional football clubs in England have been in administration at some stage since 1992 and 14 of the 20 clubs in the Premiership operate at a loss.
At first glance one might think this curious. Premier League annual TV rights have grown from £60m in 1992 to £1.2bn in 2010. The turnover of the Premier League has grown by 70% in the past 4 years. Whilst the initial growth in TV rights was due to domestic audience, the boom is continuing as overseas viewers tune in. Foreign rights already account for 44% of total broadcast revenues and are set to overtake domestic rights, perhaps as soon as next year. The Premier League is one of Britain’s most successful exports.
It is this kind of growth story which has attracted not only the trophy hunters like Roman Abramovich and Sheik Mansour but also the leverage buyout specialists like Hicks and Gillette. But growth alone doth not a good business make. Why is football a bad business? English football clubs see more change and disruption in their ownership structures than any other business on the planet. There is a revolving door of ownership which only moves slightly less fast than the revolving door of managers.
Last year 67% of Premier League turnover went on player wages. Our continental cousins were no better. In Serie A, 73% of club turnover went on players and La Liga 69%. Only the Bundesliga managed to keep player wages below 50%. Incidentally the culprits here are not the big clubs, but the small clubs trying to keep up. Man Utd spent only 44% on player wages and Arsenal 46%. But 9 UK clubs spent over 70% and Portsmouth spent 100%.
If a self made tycoon wants to blow his life’s fortune on a football club he should be free to do so. Communities and towns like Blackburn, Reading and Wigan have often benefited from the investments that have gone into their clubs and stadiums. And I am sure that Fulham fans are happy to keep cheering Al Fayed’s laps of honour provided he serves up the cash.
The problem arises when the owners have no shared identity with the supporters, when they are not part of the community and instead of supporting the community they actually take money out of the club, as in the case of the Glazers or Liverpool’s current owners. Then we have the reverse of community, we have something antithetical to the spirit of a football club. We have the rape of a community.
To decide the right form of ownership you have to go back to the basics of what a football club is for. I think the purposes of a football club are threefold. A club provides:
1. Community. That community may no longer be confined to the people who live within a few square miles of the stadium. But it is still a community. I may be a Cockney Red but I still hug complete strangers when we score a goal because they are wearing the same scarf as me (whether that be Red – or Green & Gold).
2. Identity. For millions of people, the single biggest way of anchoring their identity is through their football club. In an increasingly rootless society, with many living many miles from family or place of birth, and without many of the traditional sources of community, like church, the football club can be the single biggest definer of personal identity. The reason football clubs unleash such enormous passion and loyalty is because of this link to personal identity.
3. Entertainment. Obviously some clubs more than others….
A football club should not be seen either primarily or even secondarily, as a means of making money. All of our football clubs started life as member organisations, not as limited liability companies. Rugby and cricket clubs remain member organisations to this day and are run by their supporters. Football clubs became corporate entities because that was the deal struck with prospective owners in return for their investment but they are not like other corporate entities.
Their central purpose is not profit maximisation but community, identity and entertainment. The right form of ownership is one which reflects and enhances the purposes, and that means that it has to involve the supporters.
Do the fans want it? You bet. In a recent survey by Co-operatives UK, 83% of Man Utd fans and 72% of Liverpool fans said their clubs would be in better hands if owned co-operatively. 56% of fans nationwide believe their clubs would be in better hands if owned co-operatively by fans. According to the survey, Man Utd supporters would be prepared to invest an average of £600 each to buy the club – this implies up to £2.34billion from the UK fanbase alone.
Could clubs be owned by their supporters and still compete at the highest level? The answer is, of course they can. The Bundesliga operates under the 50+1 rule. At least 51% of the club must be owned by members. The Bundesliga is now the most profitable league in the world, with its operating profits, at €172m, almost double the Premier League’s €93m.
Its average attendance is the highest in the world at 41,904 per game versus the EPL’s 35,592. And it spends less than 50% of revenues on player wages. Last year Bayern Munich reached the final of the Champions League and Germany, as usual, knocked England out of the World Cup.
The other two clubs cited as examples of supporter ownership are Barcelona and Real Madrid, currently among the two most successful and high spending teams in the world even if we all know that Real Madrid get a little help from time to time from the Spanish Government.
But the fans have to make it happen, they must be the instruments of change. Unfortunately we are not starting where Barcelona was in 1899. We are starting from a position where the clubs are owned by tycoons or wannabee tycoons. So to return the clubs to the fans, the fans will need to pay their share. If the community demands success, the community has to be willing to pay for it even though many supporters are already paying ever increasing ticket prices, either to fund a club’s over ambitious spending or to service unnecessarily high levels of debt.
But this fan power exists, we caught a glimpse of that with the launch of the Red Knights, when 125,000 signed up in just a couple of weeks to the MUST campaign to oust the Glazers. MUST’s membership is now up to 164,000 and they are targeting 1 million members. The global following of the big clubs in the age of the Internet means that the supporters have the power to go much further. It has been estimated, by the Glazers themselves, that Manchester United now has a global following of 330 million people. If even a fraction of this group could be harnessed to help fund a bid, then the club could be returned to its supporters. £3 per fan would cover what the club is worth, £4 per fan what the Glazers are currently asking.
The fans would also need to show their financial support on an ongoing basis. This need be no more than the membership fee. Barcelona requires an annual membership fee of £157. £157 x 175,000 = £27.5m per annually, a useful transfer kitty, certainly more than Alex Ferguson is currently allowed to spend under the Glazers.
For Manchester United and Liverpool in particular, with their giant global fan bases, it should not be that difficult to create a membership scheme which could sustain the club’s success. And it is a great surprise to me that in the midst of their ownership crisis, the Liverpool fan base has not risen up to take control. At the very least the club management ought to launch an equivalent of the Arsenal Fan Share Scheme to test supporters’ appetite. There is a tide of change in British football and there is a chance that fan power will be unleashed, that the fans will take charge of their clubs. If one club can lead the way others will follow.
All my Liberal instincts tell me to let this tide follow its course and let change happen through people power. Bring on the revolution. If ever there could be a better example of the Big Society, this is it. Let the supporters run the clubs. But the problem is that England is starting in the wrong place. It is easy to begin the story as member based associations, it is much more difficult to move back from a position of corporate ownership to member based ownership. So, if it does not happen naturally, we may need some legislation to encourage the revolution:
It may be unfashionable to say this but the Labour party had the best policy on football at the last election with their two proposals to introduce:
1) A minimum fan ownership rule as part of the licence regime for playing in the Premiership.
2) A change of control clause giving fans first option in the event of a change of ownership.
In relation to the minimum fan ownership rule, the challenge is to agree what that minimum level should be. Membership only becomes real when you can have a say over the direction of the club and for this the membership need a majority. Thus, Barcelona offer members free tours of the Nou Camp, discounts in the shop, free subscription to the club magazine and a diploma signed by the President. These could all be available to minority shareholders but what is really powerful is to give fans control over the direction of the club.
Barcelona gives fans the right to vote every 6 years for the club’s President. They just elected their new President after an intense 4-way campaign including televised debates on Catalan TV. This is the kind of voting power which really makes it attractive for supporters to pay a membership fee. And that requires a majority of the votes to be in the hands of supporters. So I would propose we start with a minimum fan ownership of 25% and progress to 51% in time, possibly 5 years.
The LibDems believe in empowering people, either through choice if it is about economics or voice – politics/community. As a football club supporter, of course I have choice in a way, I could stop consuming the product but it is not like normal economic transaction. I am not just a consumer. As a passionate supporter I do not want to stop consuming the product. The club is part of my identity, part of who I am. I never stop supporting. Indeed we fans have a masochistic tendency, the worse things get the more loyal we become.
The club is a community and in a community you need voice. But if clubs are owned by one individual supporters have no voice. So clubs need to be made democratic and accountable to their supporters. Not as electors in a normal political community but as fellow supporters.
Vince Cable is fond of talking about a “mixed ecology” of ownership in the banking world. David Cameron is fond of the Big Society. Football clubs are neither part of the mainstream economy nor are they analogous to political communities where traditional politics applies. They are somewhere in between. They are associations of people brought together by a shared passion and identity. You could not have a better example of where people power should apply and where the government has an opportunity to demonstrate its commitment to the Big Society.”
Is ‘Revolution’ too strong a word for what clubs like United and Liverpool desperately need?