Archive article from The Socialist Issue 312
Kick big business out of football
THE BEGINNING of the football season has been dominated by the news of the takeover of Chelsea football club by Russian oligarch Roman Abramovich. Chelsea have subsequently spent £70 million on players when other premiership clubs are having to sell players to survive. JOHN REID assesses the state of play and calls time on the domination of football by millionaires and charlatans.
Football has been transformed from the people's game into a billion pound leisure industry. The founders of the Football Association in the late nineteenth century attempted to safeguard football from being used as a means to make vast profits and to asset strip clubs. Rule 34 limited a director's income, safeguarded club grounds and preserved clubs as sporting institutions.
This all changed when Spurs' chairman Irving Scholar flouted rule 34 by creating a PLC holding company in the 1980s, which could be floated on the stock exchange.
Rule 34 was scrapped and since then football has become dominated by an even shadier bunch of characters than the small businessmen who had previously run it. Football clubs are now seen as profit centres rather than sports clubs.
THESE DUBIOUS individuals have made millions of pounds from relatively small investments. Ken Bates bought Chelsea for £1 and has made around £18 million selling his shares to Roman Abramovich.
The entry of Roman Abramovich into football could become the most significant event since the formation of the Premier League.
His £150 million takeover has wiped out Chelsea's £90 million pound debts and he has embarked on a multi-million pound spending spree which, while being good for Chelsea, could escalate a spending race between the big clubs on the transfer market, pushing clubs further into debt.
Only Manchester United can match Chelsea's spending ability without going into the red. Arsenal may be forced to sell prize asset players or abandon a move to their new £300 million pound stadium.
THE MAJORITY of football clubs are now seriously in debt – many in, or on the verge of, going into receivership. The PFA (the players union) have been called in to oversee the financial problems of Sunderland, who are having difficulty paying their players' wages and are involved in similar activity at up to 40 clubs.
Amongst the 72 Football League clubs (the leagues below the Premier League) many clubs are in a terminal state. Players are being laid off by these clubs as are club staff. The number of players in the Football League has fallen from 1,727 to 1,395 in two years.
MANY PUNDITS have called for an investigation into the finances of Roman Abramovich and his suitability as an owner of a football club. He is plagued by accusations of links with criminals and the Russian Mafia. He has been investigated over allegations that he failed to pay £300 million in tax. His giant firm Russian Aluminium has been involved in a lawsuit alleging money laundering, bribery and fraud.
He is worth between $6 and $8 billion, money made from asset stripping publicly owned enterprises in the ex-Soviet Union, which left thousands of people unemployed and in dire poverty. He is described by Russian business analyst Mikhail Krutikhin as "the real financial genius of the bandit capitalist epoch."
Open the books
THE 15 or so European mega-corporate football clubs now dominate world football. If they have their way they will eventually play out a European super league designed for and played out on television. Already FIFA (the world governing body of football) are talking of cutting the premier leagues of the top European divisions to 16 teams, and this would pave the way for a European
League. The rest of the 76 clubs in England and Wales would either go semi-professional or go to the wall.
There needs to be an urgent investigation into the finances of not just Abramovich but of all football club owners. The founders of the league at least tried to maintain a semblance of equity between clubs.
The new breed of football owner is only interested in the quest for profit. Martin Edwards, ex-supremo of Manchester United, said at the outset of the Premier League that the smaller clubs were bleeding football to death and needed to be put to sleep.
Let us open up the books of football to find out who really owns and controls our clubs. Clubs should be taken out of the hands of these shady businessmen and should be run in trust by supporters as non-profit making sporting institutions. The boards of all clubs should be democratically elected by the method of one vote per club member and fans should be entitled to become club members for a nominal fee.