The week before the half-term recess there was a debate entitled professional football (regulation). Now despite the unpromising title this debate in the parallel chamber of Westminster Hall was of some importance. As the mover of the debate said that that very week three of the country’s clubs were facing winding up orders in the courts, namely Portsmouth, Cardiff and Southend, because of their failure to make the necessary tax payments to Her Majesty’s Revenue and Customs. Of course this was a unique event given that three orders were served at almost identical times but what has happened to football in the UK is a parable of our time, and where football goes other sports have and will follow.
The simple fact is that professional football is in a dire state. Some would say what’s new about that? However in the past the problems of matching revenue to expenditure have tended to affect the clubs in the lower echelons of football. Now however the crisis goes to the very top. There is not a week goes by without Gillett and Hicks the American owners of Liverpool FC being in the news for all the wrong reasons either because there is yet another demonstration against them at Anfield or they are announcing once more their intention to dispose of the club or what remains of it.
Even Manchester United the most famous club in the world is in real difficulty. When the new American owners the Glazers came in and took the club over in May 2005 for £810m much of the way in which this was paid for was by loans in a highly leveraged deal. Since then although technically the club turned in a profit of £32m last year, mainly because of the sale of Ronaldo to Real Madrid, in reality the Glazers have been rolling up debt to turn it into income some of which they pocket directly themselves leaving the club in a difficult financial state. One has to pose the question where will Chelsea be when Abromovich eventually walks away?
This is nothing sort of a disgrace and is doing immense damage to the very fabric of the game of soccer. It used to be true that the old saying of how to make a fortune out of football is best start with a bigger one but what has happened over recent decades is neither sport nor good business. In fact it mirrors exactly what has happened in the worst excesses of financial institutions.
I have to declare an interest here. I am a shareholder of Forest Green Rovers and also Honorary President of the Supporters Trust. These are co-operative organisations formed by supporters to try to help their clubs by setting up a parallel structure to run alongside those clubs main boards. However in cases such as York and Exeter when those clubs went belly-up the Trusts took on running those clubs completely.
My links with FGR does tell me how difficult it is to try to make ends meet in the modern era. The causes are many and varied but include the excessive wage demands of players, falling gate revenue and expectations of better facilities. Thus FGR is still paying off the cost of moving to the New Lawn a few years ago and though it is a well-run club it has always to be very, very careful about how it handles its budget.
In its own way FGR have faced real issues of late with the cancellation of the Chester game, when their players refused to travel because they had not been paid, and the shortfall of monies from Notts County because of their financial difficulties. The knock-on effect cascades through the game, leaving other clubs seriously out of pocket.
It is about time that football puts its house in order. However it will need stronger regulation both from its own internalised bodies and the state. All communities value their local club and must support them. In return those clubs must act more responsively and repay the debt of loyalty by ensuring that they act within their means and reconnect with the grass roots of their support and wider communities.
David Drew
MP for the Stroud Constituency