Culture, Media and Sport Committee
Football Governance
Seventh Report of Session 2010–12”
has been published today.
I would draw nobbers' attention to paragraph 180-181, about Club Ownership. This appears just after a discussion on the beneficial aspects of local, responsible ownership.
180. The problem is that this is by no means the whole story. There are also too many examples of domestic owners acting against the long-term interests of their club either out of naivety or duplicity. While this has always been a part of the game, the financial stakes are much higher now: the temptations and opportunities greater; and the falls more precipitous. There is, for instance, much evidence critical of owners overreaching in order to “live the dream”. The complaint is that such over-reaching serves further to inflate wages and push up spending levels, issues that lie at the heart of English football’s financial problems. Leeds United under Peter Ridsdale and Bradford City under Geoffrey Richmond are perhaps the most infamous examples. Sean Hamil warned that such behaviour threatened to push good owners out of the game, as they could not compete themselves without taking excessive risk:
"If you have a scenario where someone of the quality of Delia Smith, a successful entrepreneur, or Sir John Madejski, successful entrepreneur and local boy who tried to build a sort of major sporting institution in his hometown, decide it is not worth it and that they would like to get out, I think that is a problem."
181. Lord Triesman was equally critical of clubs who had sought to achieve success:
"by spending money, as I think was described in the last session, related to their ambition rather than to their business model. They want to beat other clubs; they spend what they believe is necessary to do that. The model falls apart—Leeds is a very strong example of that—and they are left with a huge financial crisis on their hands. People in other clubs reflect not only on the amounts that were spent but on the unfairness to the competitive regime that it creates.
I know people think that “financial doping” is a rather dramatic term but it is a pretty accurate term for what is described."
Greg Clarke alluded to the level of frustration among more prudent owners:
"We had a lively debate at our last chairman’s conference. […] there was a motion from the floor from a very respected chairman of a Football League club. He has been a long time, high quality owner who said, ‘I’m sick of bad owners going out of business and besmirching the game""
The below is also relevant :
78. In similar vein, Burnley Chairman Barry Kilby spoke of the pressure to over-spend in order to remain in the Premier League during his club’s recent season in the top tier: “The word ‘ambition’ always crops up—lack of ambition is one of the usual ones you get in the phone-in programmes”. He noted too that fans’ expectations were likely to increase during a second season in the Premier League:
"When we got up it was a bit easier at first. We were new, we hadn’t been in the Premier League for 30-odd years, so perhaps it was easier to keep the fans’ expectations; we are being sensible, we’re clearing our debts, if we do go back down we’ll be able to handle it. I think they did understand, but I’ve got a feeling if we had been in another year or so the pressures would have built to spend more."
The earlier experience of Bradford City, whose owner went on a spending spree subsequently dubbed “six weeks of madness” in a failed attempt to survive a second season in the Premier League, rather bears out Barry Kilby’s comments.