Wednesday 4 May 2016

Forget 'Fit and Proper Person', Supporters Need Sustainability Contract

One line of argument re protests for the Burnley game has been why should we care about the interests of the Football League when the authorities are doing nothing to protect us (and others) from either asset strippers or oddballs with delusions of grandeur? Related to this, there's a piece on Football League World posing the question 'is the football league failing football clubs and football fans?', looking in particular at Blackpool, Leeds and us.

The usual issue raised is how can the Football League have a 'fit and proper person' test and still allow the Oystons and Duchatelets to buy clubs and run them in ways that end in failure, for whatever reason. Looking at the rule, I don't think it's appropriate to say that it isn't fit for purpose; rather it is fit for purpose but only with a limited interpretation and is badly named and worded. If it was called the 'not likely to suddenly go bust or get locked up' test nobody could complain. Perhaps like most laws and regulations it could use a rewrite in light of experience.

According to the Football League, the intention of the ‘fit and proper person’ test is “to protect the image and integrity of the League and its competitions, the well-being of the Clubs, and the interests of all the stakeholders in those Clubs, by preventing anyone who is subject to a ‘Disqualifying Condition’ being involved in or influencing the management or administration of a Club”. Reading between the lines suggests that the test is focused purely on financial sustainability and conflict of interest, with narrow guidelines. To fall foul of the test on financial grounds seems to require bankruptcy and/or a history of involvement with a club that has experienced an ‘event of insolvency’, while a potential purchaser of a club may fail on the grounds that he/she has insufficient financial backing. To fail on grounds of conflict of interest just considers the person’s involvement with another UK football club (I’d actually favour an extension of this to cover at least all European football clubs, which would hopefully put an end to unwanted ‘networks’).

However, calling it a 'fit and proper person’ test suggests a wider assessment of a person’s capabilities and plans for a football club - as does the Football League's talk of protecting "all the stakeholders" in clubs. If supporters are defined as stakeholders (rather than customers) the rule takes us into broader areas. As it stands, and I assume as it was intended, the test just about does what it is mean to do - filter out a few and possibly deter some more, on financial sustainability criteria. Even then it is hard to say that it has had a material impact (in terms of fewer clubs going into administration than before), given that it was introduced along with the change to dock a club 10 points for going into administration and in the wake of the collapse of ITVDigital in March 2002 owing the Football League some £180m and a spate of clubs subsequently going into administration.

If supporters are (quite properly) considered stakeholders, surely just a look at the varying degrees of protest from fans of clubs as diverse as Man Utd, Liverpool, Hull, Cardiff, Leeds, Charlton, Blackpool, Brighton, Wrexham – and many more – in response to the behaviour of the owners of their clubs is enough to conclude that the Football League is not doing enough to promote and defend supporters' interests. Fans of course like to moan and a period of a team underperforming can lead to calls for owners to sell up/move on just because sometimes unrealistic expectations are not fulfilled. Relegation alone is not exactly grounds for an owner to be reassessed by the Football League. But basically there is nothing in the League’s current tests to defend supporters’ interests when it comes to issues such as outright asset-stripping through to insensitivity to a club’s traditions.

So can anything practical and desirable be done, perhaps not in time to help us in the struggle to secure a change of ownership but to increase the weighting of supporters’ interests as stakeholders? I'd suggest that trying to rework the 'fit and proper person' test is a waste of time: rename it and keep it in place while looking to add new elements for supporters. There are of course already initiatives with good intentions; last year Labour was promising that if elected it would introduce legislation to give supporters trusts two guaranteed places on the board and the option to purchase a minority stake when more than 30% of a club’s shares was changing hands. And according to Wikopedia, more than 110 supporters trusts own equity in their clubs, while over 40 have board representation.

Personally I'm not a big fan of supporters having board representation (as we once did), however well meaning. It works well enough in Germany, but the corporate tradition is different there, it is normal for example for unions to have places on the board. I doubt whether having a place or two on the Charlton board would help us much if at all. Duchatelet would appoint a few more directors to ensure that the fans' representatives could never win any vote and board meetings would just become a rubber-stamping exercise with all the decisions taken in advance by the same people as now. Also, a kind of 'right to buy' a minority stake would take us into very uncertain territory, especially given the way most deals are now structured. And if supporters don't have the resources at a point in time not of their choosing are they then just denied a voice?  

Instead, I'd suggest an area that could be developed. When any company is bought and sold, or floated on a market, there is a detailed process of due diligence. And when we buy and sell properties we go through the process of solicitor's inquiries. I can't believe it's beyond the wit of the authorities (and their lawyers) to have some form of sustainability contract covering areas of concern for supporters that any purchaser of a football club has to sign up to. This would require organised bodies to speak for the supporters, but the Trusts are now fulfilling that role. It would also require the teeth to be meaningful, ie real penalties/sanctions for the owners as individuals if they break one or more of the covenants, up to and including a forced sale. That's one for the lawyers.

Supporters aren't daft (however much some owners may like to think so) and nobody would be suggesting an agreement detailing levels of financial bankrolling, transfer policy etc (tempting to think of a future contract for Charlton requiring any owner not to appoint another Belgian manager/head coach but that would - quite rightly - fall foul of at least EU legislation). But clauses on issues such as a change of ground, requiring any owner to secure the consent of supporters, would I think be desirable and practical.

I don't doubt that the football authorities will do nothing unless put under pressure. But I also don't doubt that such pressure will continue to be evident and will probably intensify as more dissatisfied supporters group together, a process made much easier by social media. How refreshing it would be if the authorities (in their own interest) took a step back and actually concluded that the interests of supporters as stakeholders are not being properly defended, the 'fit and proper person' test can't be modified to address the problem, and that alternative arrangements (whether board places, minority ownership, or something along the lines of a sustainability contract) need to be assessed and implemented. But I guess that would be like expecting the Bournemouth owner to be crying over a £7.6m fine for breaching financial fair play rules (or alternatively not laughing heartily at anyone dumb enough to have based a strategy for a club on the notion that FFP could produce a level playing field).

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