PtG Article 03.03.2006

European football review will encourage fan ownership of clubs

The independent review of European football being carried out by former Portuguese sports minister José Luis Arnaut on behalf of EU looks set to increase tensions between governing body UEFA and the continent's major clubs because it will look into how fans can take over more clubs.

Keywords: Economy Football

UEFA advocated supporter controlled clubs in "Vision Europe", last year's manifesto on how the game should be ran, and Mr Arnaut's team will take this one stage further by looking into the practicalities of encouraging fan ownership across Europe.

Mr Arnaut, who is chairman of the foreign affairs committee in Portugal's parliament and organised Euro 2004, declined all attempts by Play the Game to be interviewed. But in a statement, he said: "The game has changed immeasurably since the days when clubs were the sole preserve of their local community.

"They are now global brands with the financial and social impact that goes with that. This is a golden opportunity for governments to back the football community's clear desire to change."

Minister wants to shift cash from players to grassroots

 The review came about after pressure on UEFA from UK sports minister Richard Caborn.

The EU considers sport as just another business but Mr Caborn has indicated he is willing to push through a change to make the game exempt from the normal industrial laws, which would be possible using the Nice declaration of 2000 on the specific characteristics of sport.

In return, Mr Caborn wants less cash leaching into the pockets of players and agents and more into grass roots and increasing the community focus of football. This includes more clubs run by fans.

He said: "There's no doubt in my mind that it's time for game to take bold steps toward better governance and that a Europe-wide solution is the only answer. It's vital that this far reaching review delivers workable solutions that football can adopt across Europe."

Mr Caborn is a keen fan of Supporters Direct that has helped establish supporters' trusts at 137 clubs in England, Scotland and Wales. At 13 UK clubs, trusts are now in total control and Supporters Direct expects this number to double over the next 18 months. Mr Arnaut's review will consult with Supporters Direct to look into whether setting up a pan European version of the organization will be possible.

Supporters Direct chief executive Phil French said: "UEFA is a very progressive governing body. I think the [English] Premier League will welcome most aspects of this review like looking into the role of agents and the distribution of the Champions League money. The real battle will come from the G14 clubs as this review will determine how they are or are not run.

"This combination of political and football muscle could establish the first European sports policy. Some of the G14 clubs will look to pull apart that remit."

G14 is an international organisation for football clubs with 18 members ranging from Barcelona to Ajax in the Netherlands, Germany's Bayern Munich, Spain's Real Madrid and England's Manchester United.

The idea of supporters trusts is spreading in Europe

Supporters Direct is already in contact with groups aiming to establish trust movements in Belgium, the Czech Republic, Denmark, Germany, Greece, Ireland, Italy, Norway and Spain.

Major Spanish clubs Real Sociedad, Osasuna and Barcelona are all members clubs but Mr French expects the model provided by Germany's national association, the DfB, to provide a good example. In the Bundesliga, 51 cent of clubs must be owned by members but this rule does not preclude investment by overseas investors.

Supporters Direct has been able to help the trust movement get a foothold after the failure of many of the UK clubs that rushed to float on the stock exchange in the late 1980s and 1990s. At its height, 27 English, Scottish and Welsh clubs listed but only 12 remain today.

Professor Christine Oughton, a director at the football governance research centre at Birkbeck College in London, said: "Football clubs are different to other companies because they have two objectives: to win on the pitch and to make a profit.

"Clubs in the UK floated on the stock exchange expected a big rise in revenue from TV but investors didn't understand that clubs would be under pressure to spend it all again on wages. The prune juice economics of football meant that it went right out of the clubs again."

Remits of the review

Mr Arnaut's review will address the right models for club financing along with other topics including: how the game can improve social inclusion and lead to healthier lifestyles; the feasibility of salary caps; regulation of agents; quotas of overseas players; club ownership; distribution of revenue in football; corruption; money laundering; and child protection.

Advisors on the review will be: FIFA general secretary Urs Linsi; Jaime Lissavetzky, sports minister in Spain's left wing government; his counterparts in France and Germany, Jean-François Lamour and Wolfgang Schäuble; and the current sports minister of the EU presidency, at present Austria.

The review will be split into three bodies focusing on legal, political and financial aspects, which will carry out consultation. Separate people will head up each body with Gerry Boon, a former partner at accounting giant Deloitte & Touche's sport business group, expected to lead the financial review.

G14 resistance to UEFA proposals on governance

Part of the problem for the review team is that the EU has 25 member states but UEFA has 52 member associations. Bringing in these other 27 states, which range from Kazakstan to Liechtenstein may prove difficult but not, perhaps, as difficult as reaching a settlement with G14.

In the past, FIFA and UEFA have refused to acknowledge G14 but despite this oppositional stance, Mr Arnaut's review will consult the lobby group.

G14 chief executive officer Thomas Kurth said: "We have decided to take up the invitation of the enquiry chairman to contribute to the review. Am I surprised? Let's say I was hopeful and we have been working towards this.

"We are positive about this review but we will be very quick to push the issue of governance to the top of the agenda."

Mr Arnaut's focus on club ownership and encouraging fans to take control of their teams may provoke outright conflict between UEFA and G14, which is already in opposition to UEFA's role as the organiser of European football and the ultimate rights holder.

A G14 spokesman said: "We just hope the review looks at fundamental issues which matter to the clubs such as the calendar [and] player release."

These are likely to be covered in the review but are areas that UEFA in Vision Europe looks unlikely to comprise on.

Mr Kurth has previously insisted that Vision Europe is rooted in the past, saying: "This is a vision of the past and to prolong the past and re-establish something that was only appropriate in the past.

"There are different levels of [European football] and the first level as it exists nowadays in football is not appropriate. There is a conflict of interest between the regulatory side and the commercial side. This conflict of interest leads to abuse. [UEFA] introduces new rules and regulations that favour the interests of the federations and jeopardize the clubs."

Football associations have low expectations of the review

The first hearings for Mr Arnaut's review will be conducted in public at the end of March 2006 but Mr. Caborn's Department of Culture, Media & Sport admits the review needs input from football associations in England, France, Italy, Germany and Spain.

None of the national associations in these countries would comment on the review and a spokesman for the English Premier League, which is a separate body to England's Football Association, would only say: "We welcome the debate and will input where appropriate."

The review could accentuate tension between clubs and national associations and smaller nations are sceptical that Mr Arnaut can achieve anything.

Marc Diederich, Luxembourg football federation's lawyer and spokesman says: "We approve the idea of recognizing the specificite (sic) of football and not considering football as any other business. This would be very helpful to the whole family of football, but I am afraid that the European commission will not accept this."