Home > Uncategorized > You’ll never walk alone

You’ll never walk alone

I’ve just tried to explain to Eileen, what’s happening at Liverpool Football Club: not easy, and she’s smart. I have a friend who’s a serious Liverpool fan, and as a Man U supporter (Green and Gold) I feel for him. The whole sorry affair illustrates the dangers of corporate investment in businesses of which the investors have no understanding.

Yes, Hicks and Gillett arrived at Anfield with a reputation as sports entrepreneurs in the US . . . but in a system that is, as I understand it, (correct me, please) almost entirely franchise based. British football doesn’t work that way. Whatever its ownership structure or corporate base, you can’t pick up a club and move it around from city to city. It isn’t even possible to force a move from one part of a city to another, as the owners of Hearts and Hibs in Edinburgh found out a few years ago when the idea of a shared stadium was floated, or even across the street, as is demonstrated in Dundee by the two clubs there. You can’t buy the goodwill of a football club from the owners of its shares, because they don’t have title to it. That  belongs to the fans . . . or fanatics, if you like . . . and it has to be acquired separately. Cash isn’t involved and there’s more to it than simply putting on a scarf and sitting in the directors’ box, or even mingling with the fans in the stands. H & G didn’t get that, nor did the guy at Newcastle until it was too late for him. You don’t have it for life either; it’s a short step from the crowd singing ‘There’s only one (insert name of owner of your choice)’  to the song changing to ‘sack the board, sack the board sack the board.’

For that reason, and another, that you can’t value future performance other than through an earn-out deal, it has to be virtually impossible to put a fixed price on a club as a business, beyond that of its assets, and so, when the two Anfield Yanks decide arbitrarily that their property is worth £600m, that’s sheer nonsense; all the more so when under their stewardship its performances have declined to their present level. They should take the money on offer and run; for my pal’s sake, I hope that’s what their advisers are telling them.

Categories: Uncategorized
  1. Phil Hull
    October 11, 2010 at 11:04 pm

    A couple of points – “franchise football” does exist in the Uk – just ask AFC Wimbledon fans where their original club is now – yes Milton Keynes. Although this has proved that it can be done it doesn’t change the fact that it shouldn’t and that the movement of football clubs doesn’t happen. Turning to my own team, Luton Town, when the 2020 consortium took the club out of administration they stated that they were not the “owners” of the club, merely the current custodians on behlaf of the fans. While they have made mistakes they have remained true to this belief and I genuinely believe that they will return the club to the football league soon. More clubs should follow this view.
    As for Liverpool – the real culprits and the Premier League and the FA who have no idea what a “fit and proper person” looks like. I am also sorry to say that there is a very real danger that Man Utd could go the same way in a few years time.

    • October 12, 2010 at 10:34 am

      If you take another look at what I wrote . . . I remarked that British football doesn’t work that way The very fact that AFC Wimbledon exists makes my point. The great majority of the original Crazy Gang support . . . not that there were a hell of a lot of them as I recall . . . wanted nothing to do with a move to Milton Keynes, so they regenerated, just like Doctor Who. The man who moved his company found that he had effectively to start a new business and build a new loyalty base. As for your lot, they’re realists, and their approach underlines my point.

      As for the ‘Fit and proper person’ test, I’ve often wondered where the FA and the Premier League acquired the legal right to say who can be a director of a limited company. Does Which have the right to approve the appointment of Sir Terry Leahy?

  2. Phil Hull
    October 12, 2010 at 10:37 pm

    Yes, I agree with what you have written but the point I was making (badly) was that it was AFC Wimbledon who had to start from a much lower league when it should have been MK Dons who started from the bottom – they should never have been allowed to start in what is now League 1.

    Re ‘Fit and Proper person’, you are right that there isn’t really a legal right but having assumed that right they have to exercise it properly!

    • October 12, 2010 at 11:34 pm

      I agree, sort of, but . . . if the Football League has the power to do that, wouldn’t that be as much of a franchise system as the NFL, in another way? This discussion is really about the power of the fans. Sad truth about what was Wimbledon is that latterly they didn’t have their own ground, and they didn’t have any sort of a fan base, for all they won the FA cup. I knew a Dons fan; he owned a PR consultancy, and wore a very thick overcoat. As I understood it at the time, he was fairly typical. A good chunk of their regulars weren’t really football people, but guys who went along for a laugh. If they had been a ‘proper’ club, with a genuine and decent sized support who bought season tickets every year regardless of form or fashion, would the MK move have happened? Not so sure.

      As for ‘fit and proper’, Hicks and Gillett would have passed any test when they bought the club. The trouble arose because when it came to it, they weren’t unfit, just not very good. For me the real problem is the hole in our company law that allows chancers to buy a company as if it was a house, with a 100% loan, and then to transfer their personal debt to the purchased corporate entity. I can’t see how that should be legal. By the way, when I watch Champions League games with my mates, I always wear the green and gold.

      I agree with very little that FIFA/UEFA do, but Platini’s move to make clubs trade within their turnover is for me a step in the right direction, if it stops people like Abramovich and the Sheikh coming along and using unlimited wealth to give hitherto crap teams a sudden and ridiculous advantage. However, if my limited understanding is anywhere near to the mark, isn’t it likely simply to preserve the status quo and make it even more difficult for ‘smaller’ clubs to join the elite?

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