Football is attracting big money, but not being run like big-business

governance in football

The largess and excess of those closely connected with modern day football are well documented and attract scrutiny from all corners of the media and most of the general public. The latest TV rights package for the English Premier League was sold recently for just shy of £4.5 billion for 3 years at the time of writing, with two packages still as yet unsold.

This figure may seem eye-watering for the privilege of showing people sat at home 22 men run around after a ball, when you also take into consideration that this doesn’t include any of the 3pm Saturday afternoon matches, but that is the reality of modern day football.

It’s not just English TV however that is attracting this kind of money. The recent TV deal for Italian top flight league, Serie A, was sold for over €1 billion and in general, the sums paid for the rights to show televised games from Europe’s ‘Big 5’ leagues (England, France, Spain, Italy and Germany) are increasing year on year.

With this kind of money being injected into football, it’s easy to see why owning a top flight football club is an attractive proposition, however, it is also the potential cash rewards that attracts those with the sole objective of personal financial gains over and above anything else.

The prospect of financial gains influencing football club owners is not a new phenomenon introduced by new money. Between 1985 and 1990, Swindon Town were making illegal payments to players and agents alike as a tax avoidance measure, resulting in the jailing of Chairman Brian Hillier and the subsequent demotion of the football club as punitive measures.

In 1995, Doncaster Rovers owner Ken Richardson was found guilty of hiring someone to burn their stadium to the ground so that he may collect the insurance money. The plan failed when the arsonist-for-hire left his mobile phone at the scene with frequent calls to the Richardson’s phone number, including right before the fire started. The best laid plans….

It wasn’t until the 6-week ownership of Portsmouth in 2009 that the English FA decided that maybe there should be some rules in place for who can own a football club and what their duties and obligations should be. Never let it be said that football’s authorities across the world don’t keep their fingers on the pulse.

Sadly, even with these measures in place, failings have been made by those in charge, most notably allowing Massimo Cellino to ‘pass’ the test when purchasing Leeds United in 2014, despite having been convicted for deceiving the Italian Ministry of Agriculture out of £7.5 million in 1996, and for false accounting at a previous club he owned, Cagliari, in 2001. His purchase made headline news, and the allegations surrounding corruption and tax evasion didn’t end there. He has since sold the club, leaving with the message ‘if you can survive working with me, you can survive anything.’

Questionable ownership is not only limited to English clubs however, with famous examples able to be cited from most countries around the world, the most current example being one of European football’s most decorated football clubs, AC Milan. The protracted purchase of the club last summer in a €740 million deal is now already appearing to be on shaky financial ground, despite the club spending more than €220 million on new players after the takeover. The Chinese-led consortium in charge has seemingly disbanded, meaning its head, Li Yonghong, has essentially become sole owner, without the necessary funds to run such an illustrious club.

The well documented corruption scandals involving the sport’s governing body, FIFA, and the head of European football, UEFA, highlights the governance failings at all levels across the world’s most participated sport. With so much money being invested at a time when many arguably more prominent businesses are collapsing into insolvency, it must be time for those in charge to treat those in a position of power and ownership with tighter scrutiny and greater regulations.

As often in football, the nation that bucks this trend is Germany. In 1998, the authorities announced what has become known as 50+1 rule, meaning that all clubs must have majority ownership from the member’s association, limiting the potential for any external influence of lenders or individual takeovers that may not have the best interest of the club and its members at heart. Whilst this has been argued to be restricting German footballs growth and appeal to the wider world, it has at least eliminated any governance failings concerning the running of the clubs- personal tax avoidance notwithstanding.

If the social and moral obligations that club owners hold were made more explicit, and the structure put in place that force the club’s boards to act more professionally and responsibly, then the image of football to the wider world would surely increase, and with the financial benefits available from TV deals and merchandise available to responsibly run clubs these days, there must come a time when football grows up and is dragged into the corporate world.

As with all change, it must be embraced at the top, which not only means the top of the individual clubs and their boards, but with the governing bodies. Mr Infatino, over to you.

posted on & filed under Governance Practices.