Time to pick Premier League pockets

Last week, Lord William Nimmo Smith, who chaired an inquiry into the financial affairs of Rangers Football Club, ruled that chairman Craig Whyte was not a ‘fit and proper person’ to own a football club. No shit, Sherlock. Rangers went into administration in February thanks to a £9million unpaid tax bill. Why wait until after he’s bankrupted the club to decide that he’s an unfit owner? Horse, stable door, bolted. Re-arrange the words.

With Port Vale and Darlington in administration and Portsmouth facing the very real doomsday prospect of liquidation, the question of club ownership has once again come to the fore. The English FA has just unveiled plans for a new body, the Football Association Regulatory Authority, to conduct due diligence checks on the finances of club owners. The problem is that even a most robust ‘fit and proper person’ test won’t prevent football clubs, particularly those in the Championship, from ‘chasing the dream’ and crashing as a result.

The debate about club ownership has largely focused on murky foreign investors seeking to make a fast buck from football. Last July, Channel 4’s Dispatches programme, ‘How to buy a football club’, claimed to lift the lid on the shady business of foreign ownership. Undercover reporters, posing as prospective investors, used hidden cameras to record Thai entrepreneur Joe Sim offering to fix the takeover of a Football League club.

The fear that football is going to hell in a handcart thanks to predatory overseas investors is both lazy and wrong. Portsmouth is clearly a prime example of a club whose financial troubles stem from a succession of dodgy overseas investors. But other clubs are thriving under foreign ownership. Chelsea fans might grumble about Roman Abramovich’s impatience, but the club’s success in the past decade was entirely due to the Russian oil tycoon’s largesse. Sunderland fans aren’t waving ‘Yanks Out’ banners in protest at US owner Ellis Short. Similarly, you don’t see too many Manchester City fans complaining about the nationality of their super-rich owners. Fulham have Egyptian retail tycoon Mohammed Al Fayed to thank for turning lower-league nobodies into an established Premiership club.

This is not to brush over the problems. The leveraged takeover of Manchester United by the Glazer family has left the club with a huge debt to service. The stewardship of Blackburn Rovers, since the takeover by Indian poultry magnates the Venkys, has been far from finger-lickin’ good. However, for every club under foreign ownership that has run into dire financial straits, you’ll find dozens that have been mismanaged by red-blooded Brits. Darlington’s problems were not caused by shady Far East investors but by good old-fashioned British crook George Reynolds. It was the vanity of Reynolds, a convicted safe-cracker, which did for Darlo. He used high-interest loans to finance the construction of a 25,000-seater stadium, which the club had no hope of filling. Within six months of moving into their new stadium in 2003, Darlington entered administration and have been mired in crisis ever since.

The plight of Rangers is another example of homegrown mismanagement. Ostensibly Craig Whyte appeared to tick all the right boxes when he bought the club in May 2011. He was a local self-made millionaire and a lifelong Rangers supporter who’d owned an executive box at Ibrox. His takeover of the club was warmly welcomed. ‘I think it will bring back a level of stability to the club that was necessary to go forward on the footballing side’, said then-manager Walter Smith. However, the dream started to turn sour when, in October 2011, a BBC Scotland documentary, Rangers: The Inside Story, revealed that Whyte had been barred for seven years from holding a company directorship and alleged that he had been involved in a series of illegal business practices.

You don’t need to be crooked to land your club in a financial mess. Crystal Palace have twice entered administration in the space of 11 years. On each occasion, the club was owned not by absentee foreign owners but by local, self-made, Palace-supporting businessmen. Both Mark Goldberg and Simon Jordan undoubtedly had the best interests of the club at heart, but both led Palace to the brink of financial ruin. Goldberg overstretched himself when he bought the club from previous chairman Ron Noades and failed to rein in expenditure when the club was relegated from the Premiership. Simon Jordan wasn’t anywhere near as reckless as Goldberg, but was unable to keep the club afloat when the Premiership ‘parachute payments’ ran out.

Crystal Palace isn’t the only club to have flirted with liquidation after dropping out of the top flight. QPR, Leicester, Derby, Bradford, Wimbledon, Ipswich, Leeds, Southampton and Portsmouth have all gone into administration after struggling to recover from the financial impact of relegation. With the exception of Wimbledon and Portsmouth, none of these clubs was under foreign ownership when the administrators were appointed. Instead of worrying about the financial probity of offshore investors, we should focus on the ever-widening financial gulf between the Premiership and the Championship. Clubs aiming for promotion to the top flight inevitably overstretch themselves while relegated clubs find it very challenging to adjust to the double-whammy of lost TV revenue and reduced gate receipts. Little surprise, then, that in the 2009-10 season, 21 of the 24 Championship clubs operated at a loss.

The Football League is bringing in new financial fair-play rules which will require Championship clubs to live within their means. This ought to reduce the risk of clubs becoming insolvent. However, these rules would also institutionalise the inequality between the top flight and the rest. The only way to bridge that gulf is a more equitable distribution of TV revenue across all four divisions. But that would require Premiership clubs to accept a smaller slice of the cake. And that, of course, will never happen. Turkeys will never vote for Christmas.

Duleep Allirajah is spiked’s sports columnist. Follow him on Twitter @DuleepOffside.