Ownership Balancing Acts

June 22, 2013
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One of football’s most enduring disaster stories made a giant leap towards concluding this month with the ruling in the High Court that the Portsmouth Supporters Trust be allowed to buy both the club and Fratton Park, taking the club out of the reckless game of pass the parcel that has seen it change hands 4 times since it arrived in the Premier League in 2003. It marks the end of a torturous chapter in Portsmouth’s history that looked for the most part like it would end in liquidation and has served as a much needed example of how the often romanticised power of fan loyalty can have a practical impact in overturning years of corporate poisoning. But a dense forest lies ahead for the PST and the prospects for a fan owned club in a globalised, digitised market are uncertain.

Of course Portsmouth aren’t the first to experiment with this model. AFC Wimbledon have risen 5 divisions in a decade under fan ownership and Exeter City have experienced one of their most stable and progressive periods with the supporters calling the shots. But the rules of the game are different in the lower leagues, if not actually on the pitch then certainly at the level of financial management and assuming PST have designs on returning to the top division in the future questions present themselves about how compatible a fan owned club is with the rate of growth required to compete in the cut throat Premier League.

So far there’s little evidence. The 20% stake that Swansea City’s supporters take in their club is a further suggestion that the new model is growing but doesn’t provide a case study for full ownership – the supporters don’t have a definitive say in the running of the club and control still ultimately rests in the hands of private shareholders ie. The Premier League blueprint. But the thing to note here is that a trend is developing – ten years ago there was no fan ownership in the professional game but now nearly 5% of the Football League is experimenting with the arrangement. These figures may sound negligible but given football’s propensity for accelerating trends it could be that we are witnessing the first timid gusts of a potential whirlwind of change.

And so what are the prospects for those clubs who embrace change from below and trump for supporter control? In the lower leagues where income is generated overwhelmingly on match days and clubs operate locally, it makes sense to give those residents who literally keep the club alive a stake in its management. The fans are often the only resource between a club and its extinction so to formalise the relationship in the shape of ownership seems the logical, fair and, in some sense, inevitable next step in the process of modernisation. On the other hand, a League Two or Conference club is in most circumstances unlikely to be a major money spinner for speculative investors, and big-time backers historically tend to be drawn from the ranks of fans who made good. The vested interests of genuine fans in the well-being and sound management of their club also acts as a failsafe against smaller outfits being hijacked by reckless and clumsy outside interests looking to invest heavily for a quick fire ascent up the leagues towards the riches of the promised land.

Somehow it seems a surprise that we haven’t arrived at this point before now. Likely the high profile success story at AFC has and will continue to act as an inspirational blueprint for what can be achieved through blending passion for a small club with measured financial investment and carefully observed democracy. The story at the other end of the league ladder however looks like a cocktail of conflicting ownership models.

The Premier League, if it needs restating, is a global business in the truest sense. Large profits are drawn from match day activities but income swells disproportionately from commercial activities abroad and with the big media corporations. Purists won’t like it but the big clubs have to think more broadly now when it comes to courting the favour of potential backers and the local fans, whatever their number and passion, no longer have the deepest pockets when it comes to attracting game-changing income. How forward thinking then is the idea that power should be concentrating locally just as the clubs’ interests intensify abroad? Surely the potential for domestic growth must soon find itself bumping against a ceiling, its expansion outstripped by the insatiable appetite for the English game in Asia, the Far East and in digital media?

Maybe. Maybe not. Whoever owns the shares, the big decision makers at any club will naturally be the captains of industry of boom-and-bust eighties cliché. Football governance happens in a dense mist and the stakes are too high for Joe Terrace to be allowed too influential a say in how corporate strategy is planned. But shareholders are shareholders and theirs is a voice that the free market demands be heard, even if it’s only a question of dividends and returns.

Football fandom is an altogether different animal, besides which the world of capital investment pales in its timidity. The fans who own Portsmouth are bred locally and will have their community as well as their club in the hearts – quite how a globalised brand attracting investment from abroad and partaking in multi-billion pound TV deals would accommodate such sentimentalism is a tricky one to assess from here.

Ultimately all those involved with a football club have its best interests at heart. The potential for difference comes in the interpretation of those interests. Fans and directors all want the club to succeed but when the shareholders clash with the board over what constitutes success and how it should be sought the pressure mounts and relationships sour. The professional game is at a unique stage in its development, having been carried for over a century by supporters who feel a local connection all the signs now point to an industry under global ownership. This brings a sense of disenfranchisement that community driven fans are reluctant to accept and now a new battle for supremacy looks set to garner pace. Perhaps there’s a happy ending in store. Maybe there’s synergy to be found between two opposite powers vying for control of a local game gone global. Maybe.

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