If the EPL is about to go bust, what can we as fans do to resurrect it?
Sensationalism has been our diet on the back pages, on the internet and at fanzines for the past decade. Foreign ‘billionaires’ coming in, huge debts to pay off, great dreams of Kaka, Ronaldo or Zidane coming to our shores: that’s the rollercoaster ride we all absorbed as a price of following the EPL.
Well: not all of us. I make no claims to be superior for not being taken in, merely that I learned my lessons about being taken in between 1997 and 2000 in other arenas, notably with ‘scholars’ and with ‘business schools’. At that time I was shocked, depressed, outraged, hopeful and then I simply took a decision to do something new.
Having analysed a pack of medical companies for my MBA internship in summer 1999 (and thought they were a bit highly priced BEFORE they went up 500% in six months) I drew up an Excel spreadsheet to model football clubs for fun in around 2001.
I wanted to see if I could work out what the belligerent Scotsman in Manchester had done and how you could build a business out of Hull, Plymouth or Bury, all of which were struggling at the time. I also did one for the Arsenal with a new ground as well. And I thought: these businesses could pay a 3 – 5% dividend if well managed, after spending quite a few years paying down the debt……
I saw the Russian come in to Chelsea and said: ‘How can a ground with 42,000 repay £250m in transfer fees and £250m in salaries?’ I reckoned that it couldn’t. Did the sums. And I pondered how this wasn’t considered the oligarch’s way of giving ‘state aid’, which is highly illegal in the EU…….until I heard that it was loans, not grants. Ho hum….
And I thought about the fans.
The one thing on our side is that ticket prices are already so high that a raider can’t push tickets up much more as a storyline to justify a purchase. Which means their way to take the money out would be with each player departing to an optimised ‘exit return’ and profits going to the owner not to the manager.
When Stan Kroenke’s name surfaced and Dein departed, I wasn’t too sure what was really going on but I could see that the LBO (Glazer) against organic growth (PHW and the Arsenal Board) argument was likely tearing the Board’s hair out. I wrote a judge-like assessment of the two cases and wondered what the ways out might be in my head, which I deliberately left out of the judgement case. As it wasn’t my job to make judgements when not a shareholder. And I posed myself a tough question: ‘What is Arsenal FC all about?’ It’s a question many clubs might reasonably ponder on and ask whether their clubs are aligned to their purpose………
And around 2007/8, I dreamed up my ‘4-3-3’ ownership formation for Arsenal FC. It could be for someone else’s club, but that was the club whose finances I had studied the most so I did the spreadsheet for the Arsenal. A what if?
I wondered this: would fans be interested in owning 25 – 30% of the club? Would employees and players/ex-players be interested in owning 25 – 30% of the club? And would the Directors be prepared to be limited to 40 – 50% in total?
My initial thoughts were these: most fans wouldn’t shell out for shares on top of season tickets unless they were rich. And most players could make more money from putting their pension pot into other places.
But what if fans built their ownership position slowly? £100 a year wouldn’t break most. So 95000 fans paying £1000 in a decade would be £95m equity injection, which would allow someone like Lady Bracewell-Smith to exit or reduce shareholding somewhat without taking a ‘do-or-die’ one-off decision right now. And 4500 fans paying £10000 in a decade would be another £45m. And a small number of rich fans, say 500 who might already be shareholders, owning £55m of shares, each holding around £100,000. That would be a £200m bloc of shares owned by 100,000 fans. You could spread it through 20 years if you wanted to…….
You could do the same with players and employees. Payment partly in shares, with an employee pool building up through the years. Would fans begrudge employees an annual coupon? Would players accept any payment in shares?? All things to think about…….
Not so easy currently at Arsenal of course. Each share costs nearly £10000. So share splits would be necessary to do that sort of thing. But it could be a way to keep Arsenal in friendly ownership whilst rewarding our Directors for the job they did since 1980. If they wanted to. Which they might not.
At Arsenal all this is quite academic: the Board run the club well and don’t necessarily want to sell their shares to fans, and although Arsenal Supporters Trust are buying up shares, the membership is small, so the number of shares bought is small.
But at other clubs, this could be a way to bring them back from the brink and into responsible ownership.
What would the challenges be?
- Finding a third party of sufficient repute and wealth who would buy a club from the brink, then allow the fans to buy it from them slowly. Would the Bank of England consider it?? Or the FA?? Or in the case of smaller clubs, the local council??
- Building the structures, legal and organisational, to ensure that fan ownership didn’t stop professional Boards running the club responsibly.
- Ensuring that banking partners were sufficiently confident about the new ownership structures to enable continued goodwill in terms of facilities and working capital.
- Ensuring that the constitution of the club enshrined the belief system of the particular sets of fans, employees etc. A Cheltenham Town might be different from Newcastle Utd might be different from Arsenal FC.
What might the benefits be?
- Stability of ownership and long-term protection of the interests of fans, whose faith passes down through generations.
- Influencing League organisers and clubs to focus on fan experience and enjoyment as a key part of our footballing culture.
- Representation on the Board for fan groupings to ensure that major financial decisions taken are consonant with the interests of the fans.
Is this a concept which might be a way to bring sanity back to the EPL?
I don’t know. Because I don’t know how many fans would be prepared to make the commitments necessary to make it happen.
But if there’s one thing I know for sure, it is this: if you want something doing properly, it’s a good idea to think about how you would do it yourself. Before you prejudge the actions of others in a too damning manner…….
And if fans really want their football clubs run in a cautious, prudent and financially stable way, then they may need to take the plunge, slowly but surely, to gain sufficient representation on Club Boards to ensure that that is so………..
And it might be of benefit for the FA and the EPL to consider that one of the key mechanisms, long-term, to ensure ‘fit and proper ownership’ of our clubs in the 21st century……….
In a clever twist the Daily Sponge has brought together its two eternal rumours saying that Andre Arshavin has pledged to leave Arsenal is Cesc Fabregas goes, because the property market is more stable in Spain.
David Sullivan has offered the West Ham players a free porno magazine to share if they win their next six games on the trot.
Barcelona and Real Madrid are fighting it out for the right to buy Portsmouth. That’s Portsmouth the city, (or is it a town) not the football club. “The club is not worth a Euro,” said Ima Tellingyou, a spoke in the Spanish League, “but the harbour has possibilities.”
WHAT YOU MISSED BECAUSE YOU WEREN’T READING PROPERLY
(and I really wish you would pay attention)
Billy the Dog in Porto: a pre-match special unlike any other
We’re slowly solving the question of Arsenal’s reserves at the start of the 20th century Read the latest
Why did Arsenal move to Highbury and not somewhere else?
Making the Arsenal. The story of how the modern Arsenal was made. A must for every Arsenal fan with a sense of humour.
From Man U to Mansfield – how football is falling apart and what three guys have done to stop it. Read here.