The takeover of football clubs in England
The Football Association Premier League in England is the biggest league in world football in terms of the income that can be generated. Accordingly it is becoming an extremely attractive market for wealthy businessmen throughout the World.
Over the last few years there has been a large increase in English football clubs being taken over by foreign investors.
How can foreign investors take over English football clubs?
The way in which foreign investors will take over an English football club will depend upon the already existing structure of the Football Club.
The ownership structures of football clubs playing in England can differ between privately owned companies and public limited companies (plc). Accordingly if a foreign investor wants to take over an English football club they will have to do this in accordance with the rules in relation to the existing structure of the club.
For example if the club is a privately owned company then they will simply have to have an appropriate offer accepted by the existing owners. However, if the club is a plc then there is a requirement that the new owner has a certain number of shares in place before they can take ownership of the club.
What is the problem with the foreign investment into English football?
Although there is the potential for new owners of football clubs to bring much more money into the game there is also the potential for the new owners to place the club in a precarious financial position. For example when one Premier League football club was taken over by American owners in 2005 the club was plunged into huge amounts of debts as vast loans were taken out in order to purchase the club.
This kind of investment has attracted strong criticism from fans which in some quarters have put together proposals to own the football club themselves.
How would the fans take over ownership of the club?
If a group of fans wished to take over ownership of the football club this would have to be done in exactly the same way in which a new owner would do it. This would be done either by making an offer to the existing owners or by purchasing enough shares to assume legal ownership of the club.
How would it be possible for fans to do this?
Many football fans will own a few shares in their football club but it seems a strange proposition for a group of ordinary fans to purchase enough to assume ownership of the club.
However, in relation to one Premier League club there has been a recent proposal put together by fans which has aimed to attract wealthy business investors who are also fans of the club to put together a body which would have enough money to purchase the club.
Would this work in practice?
It is difficult to see how this would work in practice as when the potential body was put in place there was already concerns about how the decisions would be made with so many people investing large amounts of money.
This actually ended up with the body not being able to put a bid on the table.
If they were able to put a bid together and did assume control of the club it may be difficult to see how the decisions concerning the running of the club would be organised by so many different stake holders.
Are there any clubs which are owned by the fans in the top level of world football?
The Spanish football club Barcelona is the best example of a club being owned by the fans.
How are major decisions taken by the club?
The major decisions taken by the club are taken by the President of the club.
How is the President appointed?
The President of the club is appointed through a democratic election whereby all the fans who have an interest in the club can vote for the candidate they wish to oversee the running of the club.
Would this work in English football?
This concept may work in practice in English football but it may be a difficult situation to achieve with the way English football is currently structured. If the fans were to own the club there is still the problem with how the money will be generated to do this and if they were to assume ownership there is still the problem of the fact that many investors have put in large amounts of money so would want a higher stake in the club.
Is the UK Government trying to do anything to improve the possibility of football fans owning their club?
The outgoing Labour Government put together proposals that if they were to be re-elected that when a football club is put up for sale the first option on the purchase of it would be for the fans. Furthermore there was also a proposal that a 25 per cent stake in each club should be handed over to supporters groups.
Is it likely that these changes will be implemented?
Following the change in government there has been no indication that these proposals will in fact be adopted.
Would these proposals be met with animosity from the footballing powers?
The body which runs the top division of English football – the Football Association Premier League – has various rules and regulations in place regarding the ownership and takeover of football clubs.
Any government involvement in relation to the above proposals would be viewed as an interference with the independence of the Premier League and would not be welcomed.