Governance and Debt in football

[Foreveryella 0]

Heya,

I am a student at the University of Lincoln. As part of my final year of study I must produce a dissertation on a topic of my choice. I have decided to research the governance and debt in football.

Im a season ticket holder at Carrow road and as a prolific reader of the forum, decided this would be an ideal place to gather primary research of fans views on the situation.

If you could take your time to provide your responses to the following questions  I would be extremely thankful.

1. Do the Football Association exercise satisfactory governance over the finances of football clubs?

2. Should football authorities have greater power in controlling clubs finance?

3. If clubs continue to operate with vast debts what are the likely future implications?

4. How does poor financial management of club finances effect the supporters of clubs?

5. Is the Fit and Proper Persons Test adequate? or scrutinise potential owners sufficiently to examine their financial capability to finance a takeover and football club?

 

Any responses or opinions would be greatfully received. Thanks in advance

[Gingerpele 0]

1.

At the moment, i don''t think so. When these new Fifa rules come in, its obviously a different answer. But really at the moment they do very little, i believe they have to sanction new owners (not sure what their criteria is for this though.)But that doesn''t seem to stop people like the Glazers taking over without spending any of their own money, or people with no money taking over Pompey, and shifting the club between people as payment to the next person.

2.

Well someone needs to. Some clubs are ran very well (Blackpool i believe, are mean''t to have no/very little debt because of whoever is in charge there not wanting to overspend) But it gets silly when clubs like Man.U can amass so much debt, even if they are paying it all off on time, its still far too much. And then the ''lucky'' clubs like Chelsea get a billionaire owner, who makes sure the club are buying quality players, while keeping the club out of debt.

3.

Well, my Grandad has said a couple of times to me now, that he thinks the premiership will collapse soon because of the financial problems. It would be as simple as Sky deciding they want to cover Spain more than England, so reducing the income of all English clubs.(this is unlikely though.) But the smaller clubs, even with ''large'' fan bases like us and Leeds, have or are struggling to cope with debt. The main problem is, if a football club are in debt, they seem to need to spend money to get out of it. Either buying new assets, improving the squad, for more income of to make the club more appealing to investors. It surprises me that people like Abramovic can put so much money into a football club, and he obviously at the moment hasn''t taken much back. But when the time comes to sell. presuming everything is still the same, he will probably make a profit, his workings at Chelsea have probably put the valuation of the club up 10 fold. So simply, clubs that aren''t being run sensibly are really going to suffer, but in the near future i don''t think anyone to bad will happen, as the FA don''t seem to want anything (like winding ups) to happen.

4.

I think it can seriously put fans off, look at Man.U, with all the gold and green scarfs in protest of the owners, and things like the Chase out campaign here (something i don''t really know much about, a little bit before my time). We can all act big and clever when talking about football, I can easily say Man.U isn''t being run very well, but McNally down here is running NCFC extremely well, but what do I know? But all in all, i think Fans will continue to support their team, and unless ''all'' of the clubs fans did something drastic like refuse to buy tickets, its not really going to achieve anything unless the guilty party knows their guilty.

5.

No (presuming this is the thing the FA do for potential new owners?) Pompey, just ask them. How many owners did they have last season? And none of them had any money, and to pay off their own debts, they gave the club to someone else. This is why i''m quite happy with Smith and Jones being majority share holders, with other smaller investors like Foulger chipping in. It means, although we don''t have hundreds of millions coming in (or even tens of millions) We have a fairly sound financial backing, and as long as the money is spent well we are fine. But some clubs clearly aren''t being run properly, and i think the owners are to blame, and the FA doesn''t really seem to notice.

Hope that helps.

[NorwichCasual 0]

Why don''t you do something useful and go to the ground and canvass some supporters ?

[Big Slob 0]

1. Do the Football Association exercise satisfactory governance over the finances of football clubs?

No, there''s too many clubs that owe ridiculous amounts of money, such as Man Utd owing something just short of £800m. The consequences of debt in football are also felt further afield, such as when Ipswich went into administration, they paid about 15p in the pound back to their debtors, meaning lot''s of local businesses that had helped them out in the past, went bust. i think the FA should introduce a limit on the amount of debt a club owes, and maybe also introduce a wage cap.

2. Should football authorities have greater power in controlling clubs finance?

Yes, like i said above there should be a limit on debt, such as you can only spend what revenue you make or something similar.

3. If clubs continue to operate with vast debts what are the likely future implications?

The people that they owe money to, could go bust due to cash flow problems, leading to unemployment. Alot more teams go into administration or worse such as going bust. If teams go bust then it messes up the whole league system.

4. How does poor financial management of club finances effect the supporters of clubs?

Well it depends on the individual club and what league they are in. Man Utd owe 800m yet are top of the premier league, and challenging for the champions league and Fa cup, so i guess their supporters are pretty happy at the way the club is performing on the field. however there has been alot of protests from the supporters about the ownership of the club, and the coming together of the green and gold scarf. Finances have had more of an effect on clubs such as Leeds and Sheffield Wednesday. Both big clubs, who not long ago were decent premiership sides. Leeds went from being one of the best sides in England to being harboured in the third tier of English football in only a couple of years, pretty much the main contributing factor was finance and ownership.

5. Is the Fit and Proper Persons Test adequate? or scrutinise potential owners sufficiently to examine their financial capability to finance a takeover and football club?

No, look at clubs like Portsmouth. They''ve had so many owners over the past few years, and some of the them have barely had any money. The Fa really should look at this, and change the criteria accordingly.

[way out west 0]

All those open questions plus the opportunity for people here to pontificate at length equals a real nightmare in making any sense of the answers.Good luck...

[Baracouda 47]

I''ve been a very long time lurker on here, but thought I''ll create an account to respond. How are you looking at "football"? is this UK only, European, Global. For example, the make up of many European clubs is there are no ''owners'' and whoever is a member of the club votes on elections. I believe the American Sports, are a lot stricter in governance (i.e NFL) I would assume this is the case with MLS.  The players are centrally contracted to the governing body, there''s salary caps for squads. I would also look at football pre-sky and has the increase in ''guaranteed'' monies (Just playing in Premiership) and the increased monies for champions league and other competitions had a direct impact on the financial risks clubs are willing to take.

My personal view is sky have marketed the premiership as "sexy", to sell the subscription service. I believe pre-sky the game was still more for the working man. But subsequent to sky investing large amounts of money, the game instantly became more marketable, many "flair" players joined from Europe. The likes of David Ginola/David Beckham became highly marketable assets away from a football field. Was this the case before, in such an extent?  Increasing the financial benefits of purchasing highly valued players and did this directly make it more "appealing" to rich people, who wanted to invest for various reasons. (and subsequently escalated). My personal view might be wrong, but for arguement''s sake we follow my line of thought. Does it follow to reason, the game moved too quickly for the governing bodies to control? Hope this helps.