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How football is being taken over, and the huge danger these changes bring

By Tony Attwood

Following on from my piece on the billionaires running football (which focussed on Mr Whyte of Monaco, and the doings at Rangers) it might be a good idea to ask why a billionaire wants to invest in a club.

Possible answers are…

1. Something to do.   Having so much money might be a bit boring, and if you like football, it could be rather nice, especially if you like the club.   If I had a billion I think I would go and talk to Torquay United and ask if they would like to have a new stadium, and become something of a force in the south west.   The reason would be purely emotional – my father (who like his father, was devoted to Arsenal) moved to Torquay in his latter years, and our last games together were at Plainmoor.

Am I the only person who thinks like this?   Would a billion change my emotional outlook?  Who knows.

2.  Investment.  It is possible you might think that you could get your money back.  In an earlier article I pointed out that if Mr Usmanov reaches 30% he has to bid for the shares (unless he gets FSA dispensation), and if so if Mr Kronke wanted to make £££££££ he could simply sell out.  I’m not in any way saying that he does want to do this, but rather that if that was the plan it would be a good investment on his part.

3.  Advertising.  The whole Emirates, Qatar, Ethiad thing is advertising of a nation, of an airline.  It works, although it is rather expensive.

4.  Corrupt practices – money laundering, and the like.  If the buying and selling of clubs such as Portsmouth was for emotions, investment or advertising then it was a flop.  If it were for corrupt practices, then maybe it worked – although of course I have no inside information and make no allegation.

The problem is that if Torquay United wanted me and my make-believe billion, they might see me as a white knight come to do good – and that is what I would hope would happen if my billion dropped out of the sky.   But they might get so enthusiastic about my scheme they might not see, or might not want to believe in, any dubious bits beneath.  Benefactors can be good and they can be bad.

Let us not forget that Woolwich Arsenal FC was saved by a benefactor – Henry Norris.  And what a benefactor.  He honourably paid off every single debt the club had in 1910, gave firm financial assurances to the League that he would personally guarantee that the club would continue, and that he would keep the club at Plumstead for a year so that the locals could buy shares or turn up and support – and then when that failed, out of his own pocket he built Highbury Stadium.  Honour or what?

And all he got for his troubles was a dark reputation for a minor infringement of the rules later on which resulted in him taking out about 0.1% of the money he put into the club.

So when we look at billionaires and football clubs we have to recognise that

a) they can be in the game for any one of a number of reasons – honourable or not.

b) the power of their money and the emotions involved in football that make people want to believe the good times have come mean that these owners have huge, huge power.  As the SFA have gone after Craig Whyte of Rangers, he has called them a joke, and said of the fine imposed on him, “good luck in collecting the money”.  He clearly believes he can’t be touched.

And this is the danger – football has moved into the hands of people who might or might not be honourable, and by and large because of their money, are sometimes hard to call to account.

With the help of Untold readers I have been collecting details of a few of the clubs affected.  Here’s a starter pack…

Man City.  We know about Mansour bin Zayed Al Nahyan; what I was not anticipating was to turn up in Melbourne, Australia, and find another Ethiad stadium branded like the Man City stadium.  Is there to be one in every major city in the world?

The big question is, is this club taking on Uefa’s plans for Financial Fair Play?  If they are, and if they win, then that’s all the proof we need.  The billionaires run the game, not the organisations that claim to run the game.

Chelsea.  What is most interesting is that the story has always been that Mr Abramovich went to Uefa and asked them to introduce FFP. It looks as if Chelsea believed that they could bring themselves into line with FFP in time, by building up a league winning first team, and an Arsenal-style youth system.   Now the system is not delivering (although we must recognise that they have won the Champs League) they are back buying big time.  Have Chelsea abandoned FFP compliance for the moment?   Certainly the combination of Man City and Chelsea not going with FFP poses a huge problem for Uefa.

I’ll return to other English clubs later, but let’s look abroad for a moment…

Malaga.  The club was bought in June 2010, by Qatari investor, Abdullah bin Nasser bin Abdullah Al Ahmed Al Thani.    Chilean manager Manuel Pellegrini, was brought in, having  previously been at Villarreal and Real Madrid.  They have been revived and moved from relegation threat upwards.  It is a gradual climb, but this seems the new approach.  Not, buy everyone now and win the league next year, but a three year plan.   Old players out new players in.  This last season they qualified for Champions League qualifiers for the first time ever.  The system works.

Vitesse in the Netherlands could be a similar case to Malaga.  In August 2010,  Merab Jordania of Georgia took over the club and said he wanted the club to be champions of the  Eredivisie within three years.

Paris St Germain were taken over by Qatar Investment Authority in 2012, prior to that they owned 70%.   The club is valued at around €100m and the president Nasser Al-Khelaïfi said he wanted to spend €100m more in buying players.  on the transfer market in the years to come to build a strong team.   They are said to be the richest club in France – they came second in the league in 2011/12

Zenit St. Petersburg. In December 2005, Gazprom (the largest natural gas company in the world and the largest company in Russia) took a controlling stake in Zenit.  It invested over $100 million, buying new players and starting to build a new 62,000 seater stadium.  50% of Gazprom is owned by the state.  In April 2012, Zenit won the Russian Championship for the second year running.

Juventus  The owner is the Agnelli family.  Andrea Agnelli was head of Fiat, and was said to have controlled around 4.4% of Italy’s gross domestic product, 3.1% of its workforce and 16.5% of its industrial research investment.  Juve were at the centre of Calciopoli – the referee based corruption scandal, and were relegated to the second division, and had two titles removed.  Recently they have publicly renounced that ruling and claimed the titles as their own.

These are just a few of the clubs in which a billionaire has taken a club and invested significant sums in it, in order to take it forwards.  There are many more and I shall continue exploring the list in a future article.

But for now I am trying to pull threads together, and my main thought thus far is that this activity is utterly changing football.  Putting vast sums into a club does allow very rich people, within three years, to get to the top of the league in a country, and start fighting it out in the Champions League.  Yet it brings dangers such as,

Corruption: Rangers and Juventus followed different routes to corruption, and both have eventually been caught out.  Maybe there are others.

False promises: One need only say Portsmouth – although there are many others around the world

Clubs used for criminal activity.  On Untold, Anne has exposed money laundering and how it is linked to football.  (See links below)

I guess to that list I am now adding: the challenge to Uefa and the leagues.  There is the forthcoming challenge to FFP through these billionaire clubs, and there is a challenge to the leagues as exhibited by Rangers going to court and Juve’s corruption.

These are serious challenges, and I believe anyone who casts them aside as being of no significance is misreading the future of football.

———————————-

There is more to come but meanwhile you might like to look at…

 As the billionaires take over football clubs, Fifa urges “direct action”

The billionaire clubstheir owners and their success

Money laundering and football  Part 1  Part 2  Part 3

Untold Arsenal

 

15 comments to How football is being taken over, and the huge danger these changes bring

  • elkieno

    I was! Great site as I have said before, but I sometimes feel sick reading all the dodgy shit going on in clubs competing against us. I only wish the field was level so we can see how much more honour we have.
    Back to work. Boss will be wondering about me. Etihad stadium in Melbourne is a 50,000 seated and has a roof. Good stadium but they play stupid afl in it.
    (Sorry any Aussies who like it…)

  • These Billionaires have completely ruined the game. I know I’m being bias, but Wenger has been banging the drum for spending to be fair for years and everyone just laughed at him. Watching Man City win the league was depressing….watching Chelsea win the CL was even worse. Where is the honor? Where is the commitment? Football is not where it used to be.

  • Gerry Lennon

    I wonder where Gillet and Hicks fit in this model? Or our very own Stan Kroenke. I think his more ‘hands off’ approach to management is probably the best, albeit if making the club a commercial success elsewhere may appear to hinder success on the field? But if just making a club a better business model you wonder what attracts him to sporting ventures. There does not seem to be any personal gain from success being passed on, as that would go to the management and the team? Sorry if I am cutting across your further articles on the subject, but it strikes me that the one thing sporting bodies have in common, and that is lax regulations that can be exploited? They were developed, by and large, by people who were not working towards a perfect business model, but simply creating rules as a reaction, that became a framework the competing teams work within. Which left a lot of areas which got changed as and when. Consequently, things that might have been done more discreetly in the past, are now much more blatant. Tapping up is the obvious example. Although supposedly outlawed, they know nothing will be done. In a pure business sense, I suppose working in an area with little(effective) regulation will have its own appeal, particularly to Americans as opposed to the east european and oil magnates, as they built there fortunes from being part of those who controlled the regulations? Perhaps that is it? A simple matter of getting involved in something that is poorly regulated, then they can control the regulations thereafter???
    Keep up the good work, cheers.

  • Gerry – not at all cutting across future articles. In fact the series has been helped enormously by thoughts and input from readers – not least in one article where lots of people put in details of clubs with “unusual” investment patterns.

  • Scott

    Elkieno,AFL is a game MUST be watched live,and with someone familiar with it.
    It’s a brilliant game,and second only to ,excuse this,but its for easier clarification, Soccer in terms of skill requirements amongst the Football codes.
    The players are the perfect blend of speed and strength.
    Do a search on YouTube for Adam Goodes………all will be revealed.
    Anyway,another great post Tony.

  • elkieno

    Scott: with all due respect I don’t like it, league us my sport down under but money men screwed it over along with my team. I used to work at SCG running grog arOund to all the bars and got yo see many games, one game i watched (Sydney v Essendon) was a good game i suppose, but just didn’t do it for me. What annoys me about it was the whole ‘australias game’ marketing campaign, it’s not I can’t be when the of the 3 biggest states prefer league. Having teams in sydney/Brisbane doesn’t mean anything when the players are from the other states. The debate rages on and on…
    Anyway football is the best and Arsenal are best, moral high ground we have, and when it all comes crashing down like everything eventually does, then at least I no we will be ok. It’s like knowing a comet is going to hit earth in 100 years, but no one cares cos they won’t be alive so they keep on doing same thing, whereas WE/Arsenal know that preparations need to be made to survive The impending doom so are making them. Short sightedness from unintelligent sources!

  • elkieno

    I meant ‘when 2 of the 3 biggest states prefer league’ ..bloody iPhone!!!
    Anyway as you were!!!

  • Aussie Jack

    If I said what I truly think of the oil barons I would be called a racist, not that that worry`s me, I can`t be jailed for someone elses opinion. The fact that these little treasures have nothing else better to do with their money but ruin a wonderful sport in someone elses country does.
    Maybe shareholders with more than 29% interest should be required to be British citizens, at least we could make it more difficult for them.

  • nicky

    There is a well-established maxim that the love of money is the root of all evil. Notice it is the”love”notjust “money”.
    The trouble, IMO, started with the advent of commercial television, its attendant advertising and subsequent world-wide satellite broadcasting. This, coupled with a remarkable improvement in the standard of living for most of the world, has led, understandingly, to a yearning, if not a need, for things material… following, by chance, the vagaries of a world war.
    It is not surprising therefore, that sport in most of its forms, followed by billions throughout the world, has played a leading role in the use of money to further its interests.
    Inevitably, success is now blatantly linked to the way money can be “invested” to assist.
    With football as a typical example, it is certain that success at the highest level has become virtually impossible without the employment of money in a quasi-criminal fashion.
    With football being big business, all the worst excesses of big business are widely used, from money laundering,bribery, tax evasion, etc.
    The problems within the game are exacerbated by the increasing certainty that the controlling bodies themselves are infested with corruption.
    It is difficult to see the way ahead with any degree of clarity. With the present economic downturn, coupled with the ailing euro, it is possible that a financial calamity in the EU might bring about a change to normality and, hopefully, an example to the rest of the world.
    No breath-holding though.

  • Scott

    Elkieno,AFL dominates in Vic,Tassie,SA,WA,NT and the ACT,and generates a lot more money than League ever will.
    Arsenal play the best football code,and the best style as well….you’re right there.

  • elkieno

    Scott: I think ACT they don’t, brumbies n raiders both successful clubs in it’s history. plus I bet afl would give up all those states to have the east coast.
    Anyway I don’t care about league that much anymore cos of money, money, money ruining it…

  • Domhuaille MacMathghamhna

    Football HAS already been taken over,lock stock and barrel by the Robber barons (Oilygarchs, Sugar daddies, Criminal elements and Arab playboys to name a few)and some international corporate giants like Gazprom. Over the last 20 years the top 1% of the world’s richest people have doubled their incomes, and the top 1% of those people have tripled their revenues. The movement is towards a very small, powerful,elite and private group controlling entire sectors of the business and financial world, including sports and Football specifically. Why Football? Because , as Tony accurately reported….there is little if any oversight and due diligeance required of owners by FIFA,EUFA or the FA and the owners can get away with murder while getting rich selling Club’s assets and sucking profits out at will.the owners are businessmen first and maybe Football aficionados after…so in the end they have one item on the agenda…turn a profit sooner than later or enjoy their toys until they move on to shiner things.

  • Johan

    Whats different? 15-20+ years ago a lot of chairman of the clubs were rich English Businessman or monied families. Now that the EPL is a global competition the owners are global.

    To fix it, why doesn’t it go back to being a british only comp with british only players and get rid of all the foreigners and only have rich english owners.

  • Rhyle

    I’ve stated my opinion on FFP and the likelihood that it will be abused by the bigger clubs wielding the biggest commercial sticks…that is, of course if it lands at all…

    A simpler method of ensuring reasonable business practices are employed by owners, domestic or overseas, when acquiring teams which are part of the cultural fabric of the communities they represent: more robust processes from the Football League / Premier League. Signing a philosophical, as well as practical, economic contract (“to act responsibly in terms of finances”), outlining the impact of anything judged to be financial doping as of as significant an impact as a team going bust (one of those key concerns of yours – and may nip some of those key concerns of yours in the bud as well as preventing asset stripping). The inept “fit and proper” test should be beefed up, too.

    The biggest risk of lax regulation of rich owners is the marginilisation of everyone else. With the gap between the rewards at the top of the game v those at the next level (see the coming leaps in earnings for progression in the CL v the baby steps in earnings for progression in the Europa Cup). With no FFP yet…and it’s multi-year implementation / assessment drawn out to wind up in 2015 (coincidently…just when the rewards for the CL hit new peaks…) clubs are free, at this time, to splash out on building squads capable of achieving and sustaining high league positions / solid CL finishes. The longer these are sustained over the next few years the greater the operating margin they’ll achieve, particularly versus smaller clubs, who can forget about CL all together post 2015.

    FFP is an honourable, well intended piece of football legislation. I feel it’s implications at the top are minimised by the fact there is always a route around – Man City’s self sponsorship, for example – and that the impact on teams whose operating budget is much, much smaller because they’re not a commercialy viable operation has been largely neglected. Have we seen the last of the likes of Barnsley, Swindon and Bradford…maybe even the Swansea’s of the world…coming up to the PL?

  • This is a great post, I do agree that football seems to be getting out of hand with its spending. I mean they seem to be getting more and more in debt and make very little profit.

    Sophie