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What money can't buy

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What money can't buy


In the rest of Europe, they know the value of a club's soul - which is why no billionaire could prise Barcelona from their fans.


David Conn


July 29, 2007 6:16 PM


Possibly the lowest point in the English football authorities' limp efforts to do or say anything about the buying and selling of our great clubs was reached shortly after the Glazer family succeeded in their bitterly contested takeover of Manchester United in May 2005. The family's acquisition had been opposed by the directors and most of the fans, who argued that the Glazers had no discernible connection to the club and were planning to load it with the costs of their takeover. That fear has since proved well founded - United now owe £660m to the financial institutions that backed the Glazers.


United's dashing title win last season and the cash spent on new players this summer have created a general impression that the takeover has done the club no harm. But the money for players can only be found after £62m in interest alone has been shipped annually out of the club. Armchair fans around the world may be oblivious to the debt, but at home United fans are indignant about the steepling season-ticket price rise, announced just as the richest ever TV deal pours into the Premier League. Old Trafford season tickets have risen 14 per cent, and, in addition, fans will be charged automatically for every cup match United play at home, perhaps another £300. They may be league champions again, but the club's season-ticket waiting list is disappearing. In July, they announced they had season tickets on open sale, priced £570 to £722, for the first time in more than a decade.


The FA had no rules to prevent the takeover or even enable it to express a view, nor does the government have any legal framework to protect sports clubs, or sport itself, from being treated as just another business. In Britain, we say we value sport, but we have never taken the trouble, formally, to treat it as a distinct social and cultural activity with inherent values, as many other European countries have. Football fans here pledge lifelong loyalty to their clubs, but the clubs are all companies, increasingly bought by billionaires looking to make even more money.


The FA once took a robust view that clubs were not there for owners or directors to exploit. In 1899, just as professional, commercialised football was taking off, the FA imposed rules to protect the clubs' sporting heart. These allowed clubs to form limited companies, but prohibited directors from being paid, restricted the dividends to shareholders, and protected grounds from asset-stripping.


Later codified as the FA's Rule 34, these restrictions established the culture that being a club director was a form of public service, that directors should be 'custodians', to support and look after clubs. There never was a golden age of selfless club owners, but the system of clubs as not-for-profit companies did provide the basis for their phenomenal growth. Fans were never overcharged, which helped to encourage loyalty and return visits. But it was not all good news: lack of investment led to decrepit facilities, a failure to deal with hooliganism and crumbling and unsafe grounds.


The FA and their rules were in need of updating as football itself changed and modernised, but instead they surrendered completely. When, in 1983, Irving Scholar's Tottenham Hotspur became the first club to announce the intention of floating on the stock market, the club's advisers asked the FA if Spurs would be free to form a holding company to evade the FA's restrictions on dividends and directors' salaries. The FA, who have never explained why, permitted Spurs to do what they wanted. Every other club that floated after that formed holding companies similarly, to bypass the FA's rules.


Football clubs became companies for sale like any others, against the 'heritage' and rules once insisted upon by their governing body. No other country has a perfect system, but in Spain the tradition of the membership club survives. Barcelona and Real Madrid are both owned by members who democratically elect a president and board. The clubs are resented for receiving the largest share of Spanish football's TV money and are ruthlessly ambitious, but nevertheless Barcelona, particularly, embody a sense of belonging in their very structure. When Roman Abramovich went looking for a major club to buy in 2003, he considered first Barca and Real, but discovered that, because they were member-owned, they were beyond his reach. Spanish clubs that were in debt in the early 1990s were required by law to convert to limited companies but, alongside Barca and Real, Athletic Bilbao and Real Sociedad survive as member clubs and bastions of Basque belonging.


In Germany, the football association stipulate that Bundesliga clubs must be 51 per cent owned by their members, the fans. This is one part of a general policy maintained by the German FA that clubs should remain connected to their local communities, with prices affordable to young and poorer people. At Schalke 04, entry to league matches at the magnificent 62,000-capacity Veltins Arena (including safe, modern terracing for 17,000 people to stand) begins at €9 (£6).


In Italy, the clubs have long been owned by businessmen or, as with Juventus and Milan, by corporations. In theory the clubs could have been ripe for takeovers, but US-leveraged buy-out investors see England, not Italy, as the honeypot. Abramovich is said to have looked at the Italian giants, but Fiat and Silvio Berlusconi's Fininvest are not for selling Juve or Milan, which add prestige to their corporate, and in Berlusconi's case political, image.


The sale of clubs to foreign tycoons has enabled the most recent generation of English 'custodians' to earn once-unthinkable personal fortunes. Martin Edwards made a reported £93m from selling his Manchester United shares on the stock market, before the Glazers bought the club. West Ham chairman Terry Brown made more than £30m from the sale of his shares to the Icelanders, and so it goes on.


The arriving foreign businessmen, and the top clubs, say what is happening is all for the good, a sign of the Premier League's international success and desirability. But the relationship between sport and business is much more complicated than that; it is about more than money and television rights.


Elsewhere in Europe - and here when the FA knew their role - there have been attempts to define that relationship, to develop rules to protect the larger meaning and purpose of sport. Years ago, sadly, the FA gave up, and while our government talks of its love of sport, it will not assert itself. So, in English football's richest era, the greatest clubs have been up for sale, the buyers welcomed with a handshake and with just a feeble plea in their ear from the governing body, asking if they might be kind enough to respect the game's 'heritage'.


· David Conn writes for the Guardian and is the author of 'The Beautiful Game?'

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