Another week, another clutch of football clubs in dire financial trouble. It’s becoming all rather predictable.
Portsmouth will be lucky to survive the season after going into administration for the third time since 1999; Rangers’ new owner is being pursued by the club’s administrators for £9million.
Meanwhile Birmingham City and Coventry City announce that their statutory accounts will be filed late, so both will suffer fines levied by Companies House.
Football’s takeover mania has had prolonged and very few positive consequences, all of which stem (Rangers apart) from an extraordinary display of FA weakness almost 30 years ago.
As the professional game became increasingly popular at the turn of the 19th Century, the FA imposed rules on clubs preventing them from operating as ‘normal’ commercial entities.
While clubs could become limited companies, their directors couldn’t be paid or distribute dividends of more than five per cent to shareholders.
These rules, later codified as Rule 34, were amended in 1981 to allow clubs access to ‘better, more professional management’, a rather vague aim, which resulted in the dividend threshold being raised to 15 per cent and permitted football club directors to be paid.
This was the proverbial thin end of the wedge, for two years later, the FA allowed Tottenham to effectively take every penny of profit out of the club.
In 1983, Irving Scholar announced that he planned floating Spurs on the stock market.
Before the process was completed, Scholar’s advisers asked the FA if they could establish a holding company in order to avoid the rules regarding dividends and director payments. The FA capitulated and English football changed forever.
It was almost a decade before Sky started pumping extraordinary sums of money into the game, but between 1983-92, the structure which allowed most of this cash to subsequently line the pockets of either players or a new breed of club director was gradually assembled.
The FA’s original intent when introducing restrictions on dividend and director payments was to nurture a sense that being a club director was a form of public service.
Directors were considered custodians, appointed to oversee their club’s welfare and, because their positions at the helm of non-profit organisations were unpaid, fans were not subject to regular increases in admission prices.
Today, football clubs are like any other company, capable of being bought and sold to the highest bidder, no questions asked.
Indeed, the evidence of the last 28 years since Charlton went into administration, suggests that the FA’s ‘fit and proper person’ test is far from robust.
Admittedly, no other country has a perfect ownership model, but unless the FA does something about who can buy English clubs, the game’s popularity will continue to wane.
Already, as a result of steady ticket price increases, supporters’ average age profile has changed.
According to Manchester United’s independent supporters’ association, for example, the average age of fans increased from 19 in the 1970s to over 50 in 2010, “with less than ten per cent of the crowd being (aged) under 24… (which) threatens the very existence of the game.”
