There has been massive investment from both home and overseas concerns into British football over the past twenty years or so.
Ownership has shifted from local owners who in the main grew up supporting the club they went on to run to Multi millionaires and financial consortiums who do not have the same affinity with the clubs or the local communities that they serve and draw support.
This has had some mixed results. Celtic are a club who are now part of a PLC who’s majority shareholder is both foreign and not known to have been a supporter of Celtic for his entire life. At this time Celtic are a financially stable club but that brings its own concerns from supporters who feel the decision making process of the PLC has disenfranchised the typical Celtic fan.
Another example and one that shows what can go wrong with PLC or outside ownership are Liverpool FC a club and company which is now a subsidiary of an American sporting group.
Liverpool FC were bought in February 2007 by two American business men Tom Hicks and George Gillett who also had interests in American sporting franchises.
They purchased the club at £5,000 per share valuing the club at £174.1m (£202m if you add in the debt they said they would clear) with a promise to invest £215 million for the new stadium proposed at nearby Stanley Park. The Board unanimously recommended that the club’s shareholders accept this offer.
Fantastic, what could possibly go wrong? Well nearly everything as it turns out because these people seemed to view the club as a money making opportunity for themselves rather than a football club with a strong attachment to the community it had served for over 100 years.
In the beginning they told the fans that they would make funds available, both for team strengthening and the building of the club’s new stadium in Stanley Park and denied they had secured the club on borrowed money. They also announced that Rick Parry a board member would remain as chief executive to allow for continuity.
One prominent Liverpool fans said, “They have made clear their intention to move as quickly as practicable on the financing and construction of our proposed new stadium at Stanley Park and also to support investment in the playing squad.”
Unfortunately this did not happen in fact the opposite was true there was no money for the stadium and the Playing squad was which had been successful was not improved. There was also infighting at boardroom level which hit an all time low when Hicks hired a TV company to film him and his family dressed up in Liverpool kit at his Texas Ranch where he openly called for the removal of Rick Parry from the board.
We are used to the term “smoke and mirrors” in Scottish football and there was certainly a lot of that coming from Hicks and Gillett. They claimed that under their owner ship they had invested over £100m in the team. The truth is they did £172m however, they recouped £144m on player sales meaning a net spend of £28m.
Over their reign, we all saw how the fortunes of Liverpool plummeted. Now Liverpool did bring in some good players but they were not as good as the guys leaving with the exception of a few. The other major cause of the decline was that the infighting in the boardroom and especially the TV stunt and claims of swindling. This really affected the management team and the players. People like Steven Gerrard and Jamie Carragher both Liverpool to the core were very distressed along with the support by the way the club was being run and the debt that it was incurring.
The Liverpool support were on the streets demonstrating to have these two guy removed from the board and for the club to be sold. They did try and sell the club but they wanted far too much money from potential buyers. Meanwhile the clubs finances were in a perilous state. The clubs debt had spiralled to £237m and no one seemed to know where the money was going.
Hicks and Gillett were forced into selling the controlling stake in the company after the Royal Bank of Scotland took them to court over breach of contract. Mr Justice Floyd ruled that Hicks and Gillett had breached their contract with RBS, the bank owed the majority of the club’s £237m debt and they wanted their money back.
Liverpool have now been bought by US company New England Sports Ventures, owners of the Boston Red Sox. Here’s hoping history does not repeat its self.
There are a few examples that have been more positive like Chelsea and Man City but both these clubs are running massive debts and the rich foreign owners may get bored with their toys one day and it’s hard to see how these clubs will survive without their sugar daddies.
So as we Celtic fans look on with envy at the billions being poured into the EPL we need to ask ourselves what would happen to our club if we ever joined that league? It’s a good bet that our current owner rather than invest massive amounts of cash into our club would most likely sell up for a profit and move on.
Who would be in control of our club then and how safe would our future be? It is clear to see from the Liverpool example that the supporters lost all confidence in the people running the club and this lead to a large gulf forming between the community that follow Liverpool and their club.
I have a feeling this would be the same with Celtic fans. The problem with clubs being owned by a PLC is that once you go down that road it’s very hard to change back to a limited company or a fans co-operative.
The very least the club could do is appoint a member of the Celtic Supporters Trust to the board to try and keep a clear line of communication open between the support and the club.
The bottom line is should we continue along this road or should we look at a different model for running the club and getting it back in the hands of the support?
Tomorrow we’ll be asking what we supporters want and expect from the club and it’s owners.
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