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Why Club Ownership in England is More Challenging Than Anywhere Else
Blogs

Why Club Ownership in England is More Challenging Than Anywhere Else

Why Club Ownership in England is More Challenging Than Anywhere Else

Who would own a football club eh? For many people, logic dictates that if they don’t have the required quality to make it as professional players, the next best thing is one of three things - football management, a job intertwined with the sport, or lastly, club ownership.

However, club ownership is a complex business, and not altogether a pleasant one - just look at the relationship Tottenham fans have with Daniel Levy, or United fans used to have with the Glazers.

In England in particular, club ownership has so many caveats and thresholds to meet that domestic investors have become almost non-existent, with foreign entities and tycoons the only bodies willing to risk the wrath of Premier League fans and regulatory authorities.

But why is it so challenging? What are the obstacles and hurdles club ownership must clear to make a success of their investment? And how does owning a Premier League club differ to rivals in Europe's other top leagues?

What Owners Must Consider?

For starters, owners must first win over the fans of whichever club they purchase. The most recent high profile example of a club takeover in the Premier League is that of Chelsea, when the Clearlake Consortium of Behdad Egbali and Todd Boehly purchased a 60% share in the London club after Roman Abramovichs’ abdication at the start of the Russia/Ukraine conflict.

With results over the last three years massively disproportionate to the outrageous sums the club are spending on players, the new owners are often maligned figures amongst Chelsea social media groups, with many still harking back to the Russian billionaire’s time at the helm.

Heavy spending does not necessarily endear owners to the fans - the brief endorphin rush of landing a marquee signing can be almost instantaneously wiped out if the player fails to make an immediate impact.

Chelsea have a number of examples of this - Marc Cucurella, Enzo Fernandez and Moises Caicedo were all brought to the club for over £60 million, but failed to announce themselves in the first season or so at the club, leading to significant criticism, both of the players themselves, and of the ownership.

Now of course, football is a very reactionary game - players recieve flack after stringing together one or two bad performances, while managers can be fired if they fail to win in a five or six game period. Thankfully, the fortunes of the Chelsea trio have changed, and this season in particular, they have all found themselves playing a key part in the Blue's Champions league pursuit. But not all players are quite as lucky, and it eventually all comes back to the board.

English clubs also have a deep-rooted identity, meaning that any new club owner must learn quickly and on the job. Owners who are perceived to be out of touch or distant from the clubs culture draw hostility from the fans, especially from those who live the community - after all, English clubs are perceived as mostly community assets, and if locals think the club is not being run properly, the first stop for criticism is the board, directors, and ownership.

There is also heavy regulatory scrutiny, particularly in the Premier League - any criminal conviction, however minor, mean that a prospective buyer can be eliminated from the process by the “fit and proper test”, while the recent financial collapses of Bury FC, Derby County and most recently Reading have led both the EFL and the Premier League to be much more cautious and aware of potential new owners, as well as existing ones.

Financial demands are another significant pitfall. Running a club by itself is pricey enough; transfer fees, wages, infrastructure and marketing all take a heavy toll on a club's bank account. Furthermore, clubs must abide by sustainability laws, which include financial fair play (FFP), and Profit and Sustainability (P&S).

The laws are aimed at limiting the losses a club makes in a financial year, limiting the amount an ownership can spend, as well as invest.

The last major obstacle to club ownership is media scrutiny. In England, more than anywhere else in the world, the media is intensely aware of the issues, challenges and moving parts of any given football club, meaning that if there is any shifty business going on behind the scenes, it is very hard to keep a secret - the court case regarding Manchester City’s many breaches of financial fair play is testament to that.

What is more, the media are on top of any kind of rift or point of friction that emerges at a club, whether it be between the fans and owners, or between multiple owners themselves. Anything that goes on behind the scenes is usually common knowledge a week later, particularly if there is any type of controversy surrounding it.

It's Not Getting Any Easier...

As if there weren’t enough (completely necessary) hoops to jump through, the Premier League will be adding another one due course. The implementation of an independent regulator, which is still being discussed within the halls of the House of Parliament, would introduce more regular tests and checks at clubs at random, helping to ensure they are maintaining integrity and working within all the enforced limitations and parameters.

It is an unprecedented move, triggered by a number of events. The collapses of clubs such as Bury were a clear indicator that the football pyramid needs more rigid financial oversight, while the European Super league attempt of 2021 showed that big clubs are increasingly trying to act as privately owned assets rather than community assets.

To make the prospect of owning a club even less attractive, many English clubs have ageing infrastructure and assets. Some stadiums have been around for over a century, while some training facilities are decades out of date.

These club owned properties are costly to refurbish or upgrade, with a new stadium typically requiring hundreds of millions to be put to the side for it, a move which would limit how effective a club can be in the transfer market.

How Does Ownership Work Abroad?

The reason a Premier League club is so difficult to run these days is because the English top flight has a very different set of rules when placed alongside its cohorts in Germany, Spain, Italy and France.

Nowhere else operates quite as differently to the Premier League as the German Bundesliga. While top clubs in Spain, England, France and Italy are for the most part privately owned, the majority of Bundesliga clubs are member controlled thanks to the 50+1 rule.

This rule states that fans must retain a 50+1% voting share in the club, meaning that any crucial decision involving the clubs management and strategy are generally agreed upon by supporters. This rule also has the dual benefit of preventing private or foreign takeovers - anyone interested in running the club will only ever have a minority share of it.

In Italy too, things are different - FFP rules, while still applicable, are very poorly enforced in the country’s top flight, leading to financial problems later down the line for some clubs - think of Parma’s bankruptcy, or Inter Milan’s small budget relative to their size. Due to the lack of enforcement of FFP, clubs are pretty much allowed to spend their money as they please.

Later down the line, this leads to the aforementioned cash flow issues, and while loans and large investments helped them function largely as normal, those debts will still be hanging over the club's ownership.

Spain La Liga is probably the division that most closely mirrors how Premier League ownership works. Most clubs are privately owned, and fan ownership is not required like it is over in Germany.

However, there are a couple of key differences - most importantly in the lack of the fit and proper test. While prospective Premier League owners need to take and pass this test to show they are a viable candidate for a takeover, Spain has no such rulings, allowing anyone from anywhere to pursue a club takeover, just as long as they have the required funds to do so.

Unlike the Premier League, there is also a salary cap which is strictly enforced in Spain, which restricts how much a club can spend without breaching their own personalised limit.

The figure is allocated to each club based on their financial health. The number is calculated by taking the predicted revenue for the season, and subtracting both non-sporting expenses and debt repayments, with the resulting figure being their salary cap for the campaign.

This makes owning a club in Spain rather tricky, as clubs need to be on top of their accounts, and be smart with their investments. While the Premier League does not have a system like this, the lack of something resembling this cap somewhat encourages heavy spending, which has the potential to land Premier League clubs in trouble.

Notably, while 18 of the 20 La Liga clubs are allowed to be privately owned, Spanish giants Barcelona and Real Madrid are member owned, adhering to the same laws as the majority of Bundesliga clubs. This stems from a law passed back in 1990 that saw the majority of Spanish teams become listed as publicly limited companies.

However, four clubs, which included Barca and Real, were exempt, due to their financial solvency at the time, allowing them to keep their fan owned status. This is one of the major reasons behind the two clubs' Spanish dominance in the 21st century.

So when compared to rival divisions, England has a number of restrictions that make owning a club less than simple. Between strict financial regulation, club goals, ageing infrastructure and opinionated fans, running an English club is up alongside solving time travel and understanding Pi in terms of difficulty.

Of course, some clubs get it right - Nottingham Forest and Brighton have provided excellent examples of well run clubs in recent seasons - but far more often, top flight ownership stutters, and as result draws heavy scrutiny, from media and fans alike.

With the increasing lack of domestic investors willing to put their neck on the line, clubs ownership looks to be headed towards solely foreign sources, those who have the financial backing and power to muscle their way through most laws.

However, with a financial regulator introduction on the horizon, and with a number of high profile breaches and collapses in recent years, English football has shown the world that owning one of its clubs is far from straightforward.

Benji Kosartiyer
Journalist
Harry Pascoe

Lead Writer

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