Football 'must reform finances'

15 September 2011 Last updated at 13:44 GMT By Bill Wilson Business reporter, BBC News There are calls for more fan trusts, such as that which runs AFC Wimbledon A member of a parliamentary inquiry into how football in England is run has called again for the government and sport's authorities to change the way the game operates.

Damian Collins MP is a member of the Commons' committee which has said that the sport's finances need revamping.

He urged the adoption of proposals MPs made this summer after taking evidence from industry figures.

"We feel very strongly that no change is not an option," Mr Collins said.

Supporters' trusts

"There is a big public interest in this, and frustration, as since the 1960s there has been a long line of reports made [into football]," he said.

"We are now waiting for the government's response to our report, which should be made by the end of September," said the Conservative MP for Folkestone and Hythe.

"We think there are things the government could take up."

Among them he believed legislation could be passed to bring about a restructuring of the Football Association.

And he said Treasury rules that created "artificial barriers" to the formation of fans' trusts to take over the running of clubs, needed to be reformed.

AFC Wimbledon, who entered the Football League this summer, nine years after being formed, are cited as one example of a successful trust, with the club being run totally by its supporters.

Debt levels

Mr Collins said some English football clubs had been jettisoning some of their financial obligations in order to keep on investing in players, as a way for the team to keep playing at as high a level of football as possible.

That in turn, clubs hoped, might bring in further investment.

However, Mr Collins said it was therefore not surprising that many clubs were unable to balance their books and had ended up with unsustainable levels of debt.

Among the major financial and structural recommendations the Commons' Culture Media and Sport Committee made, and wants adopted, are:

the introduction of a strong and formal club licensing model in English footballthe introduction of a rigorous fit and proper persons test for club owners and directorsthe abolition of the football creditors rule (which sees footballers and football clubs paid what they are owed first if a club goes into administration)changes to the law to recognise the special nature of supporters' trusts, and to make fund raising easier for these trustsfor the FA to review and improve grass roots football spending, and to raise the level of coaching for the FA to review the structure of its board and council Investment 'bedrock'

"Financial sustainability is a big issue in the game," Mr Collins told a meeting organised by Birkbeck College's sport business centre in London.

"There is a good way and a bad way to invest. The bad way is to spend on players you can't afford for a short period of time in order to achieve success.

"However if the backer or investor pulls out, then there is a quick collapse."

He added: "But it is good to invest in grounds, facilities, and youth academies.

"We want to encourage that, something which gives clubs a bedrock from which to move on."

Mr Collins hit the headlines earlier this year when he used parliamentary privilege to allege that two Fifa executive members had been bribed to vote for Qatar as World Cup hosts for 2022.

He has been a trenchant critic of football's global governing body.

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FA urgently needs reform say MPs

Whittingdale MP wants FA overhaul

The Football Association has been urged by MPs to make big changes in the way the game is run in England.

A report by MPs stresses the need to address the financial instability and the levels of debt in football.

John Whittingdale MP said: "Significant changes need to be made to the way the game is run to secure the future of England's football heritage."

Portsmouth became the first Premier League club to go into administration in February 2010.

"No one doubts the success of the Premier League in revitalising English football," Whittingdale said.

"But it has been accompanied by serious financial problems throughout the football league pyramid."

The Commons Culture, Media and Sport Committee [chaired by Whittingdale] has recommended that more rigorous measures should be introduced to promote a sustainable business and should underpin self-regulation measures introduced by the Premier League and the Football League.

Continue reading the main story

The FA is the organisation for the job, but it has some way to go getting its own house in order before it can tackle the problems in the English game

John Whittingdale MP

The report also suggests that a strong fit and proper persons test is consistently applied, and that the selling of a club's ground should not take place unless it is in the club's interest.

The Committee report also said that "there is no more blatant an example of lack of transparency than the recent ownership history of Leeds United" and has urged the FA to investigate if necessary with the assistance of Her Majesty's Revenue and Customs.

Other recommendations include an end to the Football Creditor's Rule, an FA review of expenditure at grass roots level, and a restructuring of the FA board.

"The FA is the organisation for the job, but it has some way to go getting its own house in order before it can tackle the problems in the English game, and address the future," Whittingdale added.

"We need a reformed FA to oversee and underpin a rigorous and consistent club licensing system and robust rules on club ownership, which should be transparent to supporters."

Continue reading the main story Matt Slater,
BBC sports news reporter

"The Culture, Media and Sport Committee's report on Football Governance is 112 pages of good sense and honorable intentions. Those eight evidence-gathering sessions, hundreds of written submissions and trips to see what German football looks like were not wasted. Sadly, we have been here before: many, many times. Government interventions into English football have been as regular and pointless as England's failures in summer tournaments. MPs get bored, ministers move on, governments change, football stays the same. Will this time be any different?"

The Commons Culture, Media and Sport Committee's findings now pass to Sports Minister Hugh Robertson, who will co-ordinate the Government's response and relay to football's governing bodies which recommendations it would like to see adopted.

"We will look carefully at the report in detail before setting out the Government's plans in our response," Robertson said.

"But it's clear that no change in the areas of governance, financial regulation, transparency and the involvement of supporters is not an option.

"There is a moment here for the football authorities to respond positively and decisively to both the content and spirit of the report and we will be working with them to achieve this," he added.

Shadow Sports Minister Ian Austin was equally supportive of the measures and recommendations made in Friday's report.

"The game needs strong leadership on governance issues, transparency for every professional club and proper involvement for supporters and fans because giving fans a bigger stake in their clubs and a greater say in the decisions which are made by football's governing bodies should be an integral part of modern football," Austin said.

"In the period ahead it is important that the FA build on reforms to be considered by their shareholders next month and the Premier League embraces the need for change by making a clear commitment to improved governance arrangements."

Some of the recommendations made may not meet with the Premier League's approval, but the corporation have said they will await the Government's response before reacting to the Commons Culture, Media and Sport Committee's findings.

David Bernstein took on the role of FA Chairman in December 2010

"The CMS Select Committee has undertaken a lengthy and considered inquiry into the governance structures of English football, one we were happy to contribute to with both written and oral evidence," the Premier League said in a statement.

"We, along with the other football authorities, will now consider the report's contents and await the Sports Minister's response before taking a view on the recommendations and any part the Premier League may have to play in implementing them."

Supporters Direct, which gives advice and funding to fans wanting to enhance representation and set up trusts at clubs, has welcomed the report into football governance in England.

Brian Burgess of Supporters Direct said: "The Select Committee's inquiry has provided a welcome opportunity to consider the challenges facing football in this country and hear the views of the fans.

"With 52 clubs who are or have been in the top 92 having suffered from insolvency events since 1992 it is clear that things cannot carry on as they are.

"We look forward to working with the Government, the FA, the Premier League and the Football League to develop practical solutions to respond to the report's recommendations," Burgess added.

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