Ownership of football clubs and the integrity of the competition
One of the key aspects of the sporting world is to protect the integrity of the competition. If there is not a fair competition in the sporting context then this completely overshadows the sporting contest.
It is therefore felt that if two football clubs are playing in the same competition and are owned by the same person or business this could have an adverse effect on the competition diminishing the integrity of the competition. As a consequence the same individual or business entity is unable to own two clubs playing in the same competition.
Football Association Premier League rules versus UEFA Rules
The dual ownership of football clubs is prohibited both under the rules of the Football Association Premier League and under the rules of the European Governing Body of football – UEFA. However, there are certain disparities between the two sets of rules.
FA Premier League Rules
Under the FA Premier League rules an owner of a football club or a director of a football club must adhere to the fit and proper test and must sign a declaration that they comply with this test. The fit and proper test applies to all directors and individuals holding over a 30% shareholding.
Accordingly anyone who owns or has the power to own a football club in the FA Premier League is regarded to fall outside the remit of the fit and proper test and unable to own another club.
The UEFA Rules were brought in following a high profile case in 2000 and were first established for the 2000/01 season. The rule prohibits two football clubs in which a person or a company has an interest from being admitted into the same UEFA club competition.
What is meant as having an interest in another club?
Having an interest in another football club has been defined as meaning the following:
The majority of the shareholders’ voting rights in another club in the same UEFA club competition
The right to appoint or remove a majority of the directors in another club in the same UEFA club competition
The majority of the shareholders’ voting rights (through a shareholders’ agreement) in another club in the same UEFA club competition
Following the initial implementation of these rules the Court of Arbitration for Sport (CAS) ruled fully on the UEFA rules stating that any shareholding of 50.1% or more would potentially breach the UEFA rules at point 1 above. Furthermore the CAS also added on a further situation which should fall within the UEFA rules – a person or a company would also be seen to fall foul of the UEFA rules when they can exercise a decisive influence over the decision making of another club.
What are the potential issues between the two sets of rules?
If you look at a potential situation we can see the differences between the two sets of rules with the main problem the potential shareholding to be regarded as the owner. For example one individual could own more than 30% of the shares in an FA Premier League club being regarded as the owner. That same person could also own a 49% share in a club which plays its football outside of the FA Premier League. There therefore exists the potential of those two clubs playing against each other in European competition and allowed by UEFA whereas if the two sides would not be able to compete against each other in the FA Premier League.
Can an owner of a football club also have interests in other sporting teams of other companies?
A potential owner of a football club will be able to own or have a controlling interest in other forms of business or sporting teams so long as there is not a conflict of interest. For example the current owner of Manchester United is also the owner of an NFL team in the USA. This is allowed as there is clearly no conflict of interest between the two.
However, if the owner of the team also owned for example the television broadcaster or was a Member of Parliament it is likely that he would be seen not to adhere to the fit and proper test. However, this is not always the case in other countries as the current owner of AC Milan in Italy is also the current Prime Minister of the Country, also owning broadcasting companies. If a situation similar to this were to occur in the FA Premier League it is likely to fall foul of the fit and proper test.