Capitalism in Football is Not Working!

Just days after relegation from the League Aldershot Town went into administration, formed following the demise of the old club in 1992, they had been back in the League just five years. Having failed to pay their April wage bill they became the 159th insolvency since 1992 in English football.

Amazingly since the Premier League was founded with the break away from the Football League in 1992 there have been seventy cases of insolvency in the top four tiers of English football – out of a maximum at any one time of just ninety-two businesses.

Insolvency is usually a business trading beyond its means which on this scale would normally attract the attention of legislators and regulators. Here we have a whole sector leaving an enormous trail of un-paid bills, wages, and taxes behind it.

The thing that seems to be the cause of this is the debt clubs are allowed to pile up.  At their most profligate, in the period from the 2001/02 season to the 2005/06 season, between them the 92 top-flight English clubs managed to clock up a staggering billion pounds in pre-tax losses.

These clubs often owned by wealthy individuals are involved in a reckless gamble to get rich that usually fails and results in the asset stripping of long standing community assets. Insolvent clubs are then bought from receivers for a song by rich individuals they splurge on debt end up bust and the cycle starts all over again.

There is an alternative to this wasteful business model, the European Cup showed the way, all four semi-finalists were fan owned clubs. Today many in the English game are looking at the Budesliga with its 50% plus one ownership rule as the future model for British football and where a club has not become insolvent for 42 years.

There is some hope that clubs and perhaps more importantly banks are beginning to see sense. Despite its terrible performances on the pitch, relegation to Division 2, the season was one of real achievement for Pompey. More specifically for the Pompey Supporters Trust, who became the owners of the club making it the largest club so far in complete fan ownership, this could be the turning point that those of us who support the co-operative football ownership model have been waiting for.  

The problems we have seen is that this option only gets serious attention when clubs are either in dire straits or in a few cases like FC United of Manchester or the new Northwich FC are in business terms start-up’s.

One of the few things to come out of the Blair Governments time in office of any value was Supporters Direct from the Football Taskforce. It is now working with over 180 supporters trusts’ with over 300,000 members, promoting fan ownership. There are now over 30 clubs owned by their supporters including AFC Wimbledon, Exeter City, AFC Telford, Wrexham, Wycombe Wanderers and now Portsmouth.

Despite the fact that many clubs are at a low ebb before turning to their fans this season we have seen some remarkable on the pitch performances. Wrexham became the very first Welsh team to win the FA Trophy after a thrilling penalty shoot out at Wembley.  Darlington became Northern League Champions having risen from the ashes, taking the League by storm, winning 40 of their 46 games, scoring 145 goals in the process and amassing 122 points, with over 2,000 supporters in attendance for their final game of the season at 'home' to Guisborough Town to celebrate promotion and see the trophy presented.

Also up north Scarborough Athletic became champions of the Northern Counties East League Premier Division. They have been on a steady climb from the Premier Division since gaining promotion from Division One of the League in 2008/2009. Currently playing nearly 20 miles away in Bridlington, they are working towards a return to the Borough.
Also Chester FC after only three years in fan ownership had silverware to parade as winners of the Conference North and the Cheshire Senior Cup. In the league they scored 103 goals and lost only three games.
Sadly for many peoples favourite fan owned club, FC United of Manchester, it was third time unlucky as they lost the Evo-Stik Premier Division play-off final 2-1 away to Hednesford Town in a closely fought match.
Fan owned clubs will come together at the F.A.’s National Football Centre St Georges Park for the inaugural Community Club Network Conference on Saturday 22^nd June. Clubs that are majority owned by their supporters will have workshops to share knowledge and discuss ways to promote their shared values for mutual benefit.
Star turns are Swansea City FC and US Community Owned American Football Team the Green Bay Packers. Swansea has had a great season playing cracking football and lifting their first major trophy, the League Cup, they are standout examples of fan-involvement in UK football.
The way out of boom and bust in modern football has to be fan ownership but more fans need to understand the financial and legal tools needed to turn this kind of dream into reality. What is more bankers need to get wise to the fact that the fans are the true sponsors and funders of football. It may be a while yet before we see an English equivalent to Barcelona or Bayern Munich but that that day is drawing closer.