£7m debts? You're Ok to run a football club

[robf]

The saga at Hereford United seems to go on and on.

 

It certainly seems that the FA "fit and proper" test (or "owners and directors test" as I believe it is officially known) doesn't seem to be worth the paper it is written on. How on earth can they say that a person who has been involved with 27 dissolved companies, leaving debts of £7m is "fit and proper" to be a football director?

 

Link - http://www.herefordtimes.com/sport/11615135.Hereford_United_chairman_s_failed_companies/

[JOHNNYAITCH]

If it excluded businessmen who have left in their wake failed companies and unpaid debts then there would be a very small pool of businessmen to choose from. It's the nature of businesses that the majority fail in the end, many (maybe the majority) leaving unpaid debts..and for all sorts of reasons

 

Of course none of that means the F&PP test is adequate, nor that he should be allowed to own Hereford United..the HMRC debts that one of the companies left would worry me for a start..pay the taxman first

[bookworm]

bet there is a dodgy builder or firm run by some fit and proper person just waiting in the wings to build on the clubs ground after obtaining it for a pittance...

[carl]

If there was proper regulation in place the guy in question should be made bankrupt whether he was responsible directly for the debts or not- an affiliation should be enough to warrant such a sanction and in its place should be conditions that restrict him from personal future investments AND personal credit. This is the responsibility many business people escape-we only have to look at recent events at our own Football club to know that (Perry Deakin, Fatso & co)

 

Why should poorer people go bankrupt for lesser amounts, with restrictions to their occupation, but these business people get away scot free, and in the end it is only the fans that suffer?

[robf]

Flipping heck, I don't think even MOLD sunk to these levels.

 

Have a read of this article and then listen to the audio link:

 

http://saveedgarstreet.com/

[JOHNNYAITCH]

If there was proper regulation in place the guy in question should be made bankrupt whether he was responsible directly for the debts or notp/quote]

 

There is proper regulation in place

 

You can't declare someone bankrupt just cos of a failed business venture..why would anyone risk setting up a business if failure and unpaid debts was always going to mean bankruptcy?

 

- an affiliation should be enough to warrant such a sanction and in its place should be conditions that restrict him from personal future investments AND personal credit.

 

So a business (A) fails leaving debts cos one of their customers (B) doesn't pay up meaning they can't pay for their orders and so the blameles directors of A should suffer such consequences? Why would anyone trade with another company if the latter's failure was going to screw them up for life?

 

 

This is the responsibility many business people escape-we only have to look at recent events at our own Football club to know that (Perry Deakin, Fatso & co)

 

Of course there are unscrupulous businessmen but seems you want to punish the honest for the adverse consequences of unknowingly dealing with the unscrupulous. By this logic owners of businesses damaged by Deakin and co and maybe even forced out of business with unpaid debts themselves by Vale's unpaid bills should suffer the same consequences as the Vale lot.

 

Why should poorer people go bankrupt for lesser amounts, with restrictions to their occupation, but these business people get away scot free, and in the end it is only the fans that suffer?

 

They don't get away scot free..business people are made bankrupt all the time. Why should those owed money noy be able to pursue bankruptcy just cos the amount is relatively smalll...that would be a licence to run up smallish debts with no intention of repaying them

[Trampilot]

I was once told by a financially qualified friend that the banks will keep lending if you have lots of noughts at the end of your account - regardless of the account being in credit or debit. The more noughts you have the more you get.

[JOHNNYAITCH]

Yup..to them your debt to them is an asset

[robf]

There is proper regulation in place

 

There is regulation in place. Whether it is "proper" or not is a moot point. ;)

 

Certainly in terms of the FA's "fit and proper" regulations there is an awful lot more that surely could be done.

 

It is quite clear to anyone following the Hereford case that they want the ground (near to a shopping centre) to redevelop. They aren't investing in the club, paying off debts or anything so they clearly don't care if it ceases to exist.

 

Even if you cannot reject a potential football owner for running companies with debts, the rules should surely be changed to prevent owners making clubs homeless by building on their land and so on. That could be a relatively simple legal addition to the "fit and proper" rules - in that owners must agree to remain at the present ground, at present attendance levels (thus stopping them selling it off piecemeal) or that the club can only move to a stadium which is built, has a long-term lease/agreement for the club to stay there and is of a similar size to the old ground.

 

All of the above would be relatively simple for a lawyer to re-word and add to the FA Rules - the problem is that they simply have no appetite/cannot be bothered and as a result, it is opening the door for dodgy "quick buck" investors to get hold of clubs.

[JOHNNYAITCH]

There is regulation in place. Whether it is "proper" or not is a moot point. ;)

 

Only for some ;)

 

Certainly in terms of the FA's "fit and proper" regulations there is an awful lot more that surely could be done.

 

I agree

 

As i said "Of course none of that means the F&PP test is adequate, nor that he should be allowed to own Hereford United..the HMRC debts that one of the companies left would worry me for a start..pay the taxman first "

 

I do think that one of the issues for the FA is it would deter lots of potential owners if the F&PP test was more stringent and they could see more clubs going under cos of that. But they should be alwasy revisiting the conditions and indeed should find a way to ensure that new owners don't asset strip to the point iof the club disasppesring or losing it's (for want of a better word) soul (relocation, renaming, stadium sales etc). Financial penalties might work but could just go unpaid as the owner disappears into the sunset with the proceeds of a stadium sale in his back pocket and criminal law probably could not apply.

 

The whole notion of club ownership and how clubs are owned is really what needs to be addressed but that's a long way away from happening; as long as single wealthy individuals are allowed to own clubs there will always be these risks

[bookworm]

£7 million, thats **** all to these asset stripping shysters and corrupt business men.

[robf]

Only for some ;)

 

If it's "only for some" then by definition it's a moot point (i.e. the subject of debate). If all agreed or indeed disagreed, then it wouldn't be the subject of debate? ;)

[robf]

The whole notion of club ownership and how clubs are owned is really what needs to be addressed but that's a long way away from happening; as long as single wealthy individuals are allowed to own clubs there will always be these risks

 

I personally feel that a new law would work here.

 

Perhaps the govt could pass a law giving local councils the chance to "list" their football clubs (i.e. declare them community assets) with a list of guidelines over what can be done at a football club. Things like enhanced "fit and proper" rules but also things like protecting the status of the ground (i.e. "owners must provide a place for games to be played within the county", "not sell the ground to a third party" etc) ensure regular consultation with fans perhaps even as far as public disclosure of annual accounts, disclosure of shareholders, a ban on splitting the company up into myriad limited companies (i.e. one for the ground, one for the team, one for the shop) those sort of things.

 

Perhaps the one that would work most of all (but which may not be workable in law) would be to prevent any club setting up loans that are more than x amount (let's say 10%) of the club's annual turnover. Half the problem is that clubs spend (either corruptly or foolishly) to get success and when it backfires there are untold debts to pay. If there was some way of limiting how much clubs could get into debt then that alone would keep a lot of clubs sustainable. Of course, the problem with that is the "parachute" payments which already give clubs a huge financial advantage. If everyone else had financial restrictions, it's only going to benefit those with the parachute cash (thanks Premier League!)

 

Perhaps a fallback that if any of the rules are broken then the club (i.e. the golden share) will (subject to an FA investigation) automatically pass into council ownership thus ensuring a way of clawing back clubs from dodgy characters.

 

I don't know if any of the above is workable but there needs to be something changed, I feel.

[JOHNNYAITCH]

If it's "only for some" then by definition it's a moot point (i.e. the subject of debate). If all agreed or indeed disagreed, then it wouldn't be the subject of debate? ;)

 

The wink was an indication that I wasn't being serious..twas a play on words

[JOHNNYAITCH]

I personally feel that a new law would work here.

 

Perhaps the govt could pass a law giving local councils the chance to "list" their football clubs (i.e. declare them community assets) with a list of guidelines over what can be done at a football club.

 

Probably a case of that..I thought I'd read something about some of the old Archibald Leach features being listed? Parts of Highbury were listed so it esiricted what the Arsenal owners could do

 

Things like enhanced "fit and proper" rules but also things like protecting the status of the ground (i.e. "owners must provide a place for games to be played within the county", "not sell the ground to a third party" etc) ensure regular consultation with fans perhaps even as far as public disclosure of annual accounts, disclosure of shareholders, a ban on splitting the company up into myriad limited companies (i.e. one for the ground, one for the team, one for the shop) those sort of things.

 

All sound ideas..the punishment for not sticking to them has to have sufficient deterrent

 

Perhaps the one that would work most of all (but which may not be workable in law) would be to prevent any club setting up loans that are more than x amount (let's say 10%) of the club's annual turnover. Half the problem is that clubs spend (either corruptly or foolishly) to get success and when it backfires there are untold debts to pay. If there was some way of limiting how much clubs could get into debt then that alone would keep a lot of clubs sustainable.

 

Again there has to be some punishment factro to deter the owner form breaking those rules.

 

Of course, the problem with that is the "parachute" payments which already give clubs a huge financial advantage. If everyone else had financial restrictions, it's only going to benefit those with the parachute cash (thanks Premier League!)

 

Indeed

 

Perhaps a fallback that if any of the rules are broken then the club (i.e. the golden share) will (subject to an FA investigation) automatically pass into council ownership thus ensuring a way of clawing back clubs from dodgy characters.

 

But does that still leave the owner with an asset (land etc) that he/she can sell to get what they can form the situation. Maybe a block on selling stadium where the golden share is not owned by the stadium owner?

 

I don't know if any of the above is workable but there needs to be something changed, I feel.

 

 

Agreed

 

I think the whole ownership issue has to be reformed..that no individual can own more than X%, that X% has to be held by some sort of trust with a board of trustees etc. Ok it might mean that the days of a club rising to the top thru a sugar daddy are long gone but if it means clubs are in better hands and sustainable then so be it..growth will have to be more organic