What are the requirements for owning a football club?
Football is the biggest sport in England in terms of fan base but also in terms of commercial value meaning that it is an extremely attractive business enterprise for many wealthy businessmen. The top flight of football in England – the FA Premier League – has attracted huge amounts of investment in recent years with much of this being from overseas. One of the major problems with the ownership of football clubs has been the lack of transparency in the ownership and deals that are made etc. As a consequence of this since 2004 a test has been introduced in English football which all owners and directors must pass.
This is called the fit and proper test.
Since the introduction of the fit and proper test it has ensured that the ownership requirements for football clubs in England are the strictest of any industry throughout the country. The tests are deemed to go beyond any requirement of company law.
This is due to the previous requirements being the same as they were for any other company in England and Wales, therefore being governed by UK company law.
Prior to 2004 there was no test at all in relation to the ownership of a football club. Since 2004, however, there have still been many problems in relation to the ownership rules as for example one Premier League football club has had a total of 4 owners during one season leading to financial difficulties and eventual administration.
The Fit and Proper Test
One of the initial problems with the application of a fit and proper test for English football is that due to different bodies existing in the running and organisation of English football has led to different test being applied across different leagues.
Structure of English Football
The structure of English football is as follows:
The Football Association Premier League governs the Barclays Premier League
The Football League governs the Coca Cola Championship, League One and League Two
The Football Association governs the Blue Square Premier League and the lower leagues
The FA Premier League, the Football League and the FA all have different versions of the fit and proper test due to the FA Premier League strengthening theirs while the others did not.
One aspect which applies across all the different above bodies is that the fit and proper test must be passed by all directors of a football club and any owners who own a share of 30% or more.
Elements of the Test
There may be slight differences in the tests adopted by the different governing bodies; however, all fit and proper tests include the following elements:
Individuals will be disqualified from acting as directors or becoming an owner if they:
Are prohibited by law from being a director
Are involved or have the power to be involved in another football club
Have unspent criminal convictions
Have incurred administration twice as a director of the same or different football clubs
For more information on:
- What are the differences between the different tests?
- The types of criminal convictions
- Ban by another Sporting Body
- The application of the test
- The Timing of the Test
- Possible Reform