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The Ethics Behind Football Club Ownership
October 10, 2020 0

Should football associations be more strict on club ownerships?

In August 2017, Paris Saint-Germain F.C. (PSG) announced they had secured the transfer of the Brazilian superstar Neymar da Silva Santos Júnior from Barcelona F.C. for a whopping €222 million (£200.5 million). It was more than double the previous transfer record. If you had not grasped how the influx of new rich owners had affected the game before, you were sure to comprehend now. The world of football had fundamentally changed.

It started with the acquisition of Chelsea F.C. by Russian billionaire Roman Abramovich. His investments propelled Chelsea to greater heights as they picked up Premier League trophies and challenged the likes of Manchester United. Perhaps inspired by his success a host of new acquisitions followed. In 2008, Sheikh Mansour of UAE, through the Abu Dhabi United Group, acquired Manchester City F.C. and immediately secured the transfer of Brazilian superstar Robinho. Famously, Robinho had never even heard of Manchester City until that point. In 2009, Red Bull acquired the playing rights of fifth-tier German club SSV Markranstädt, and created RB Leipzig in its place. They were semi-finalists of the latest Champions League, Europe’s premier football club competition. In 2010, Leicester City F.C. was sold to a Thai-led consortium called Asian Football Investments (AFI), owned by King Power Group, whose owner was Vichai Srivaddhanaprabha. Six years later, Leicester City would go on to win the Premier League trophy. In 2011, PSG was bought by Qatar Sports Investments (QSI), a subsidiary of the Qatar Investment Authority (QIA), Qatar’s sovereign wealth fund. Since the 2012/2013 season began, PSG have won the Ligue 1 (France’s premier football league) seven times out of eight, and recently finished as finalists of the Champions League.

Football fans have differing opinions about the influx of new money in football. Unsurprisingly, you will find that their opinion is often tied to what club they support. On one hand, many feel that the sudden influx of money that makes some clubs so successful despite not having any rich history, is unfair and a distortion of the beautiful game. They criticize the type of fans it seems to create. Those fans who switch allegiances and support clubs that are newly successful are labelled “plastics” or “glory hunters”, indicating that these people are more interested in associating with success than they are in the beautiful game. On the other hand, many question how else is any small club supposed to challenge the pre-established clubs such as Real Madrid or Juventus. Is it really fair that these clubs continue to dominate the game because of their higher revenue without being challenged? They ponder whether it is really fair that Manchester City fans get called plastics but Barcelona fans never do. After all, would there really be so many Barcelona fans if not for their success?

No matter one’s opinion on the matter, it is abundantly clear that there is a significant impact on football as a result of new owners coming into the game. Football associations of various countries continue to debate their impact, and create policies that they deem fit to cope with the impact. Crucially, every time a club’s owner wishes to sell the club to a particular buyer, this must be approved by the football association of the country.

So today we ask the question:

“Should football associations be more strict when sanctioning the sale of football clubs?”

Arguments supporting football clubs being more strict on club ownerships:

Fans care about more than just winning

The moral nature of the buyer must be evaluated.

Money should not be accepted from any source, it is important that the world of football is not tainted. Roman Abramovich is a Russian oligarch with close ties to the Kremlin, whose human rights issues are well known. There have been serious allegations of corruption against him, and a “no questions asked” policy is simply not good enough. He is just one example of many. Recently, the Public Investment Fund (PIF), which is the sovereign wealth fund of Saudi Arabia, attempted to take over Newcastle United F.C. The chairman of PIF is none other than the crown prince of Saudi Arabia, Mohammad bin Salman, who according to a UN report, should be investigated and sanctioned for the extrajudicial killing of Jamal Khashoggi. That level of personal connection to a horrendous crime is surely important even if you do not want to consider the state level crimes committed by Saudi Arabia, particularly in Yemen. Ironically, one of the victims of Saudi Arabia’s policies is the Premier League itself. Saudi Arabia’s reluctance to clamp down on illegally streamed Premier League content licensed to BeIN sports, a Qatar based company has not only victimized BeIN sports, but has also made TV deals with the Premier League less lucrative. Regardless of your opinion on the specific issue, it is clear that many potential buyers have morally dubious backgrounds, let us understand why this matters.

  • Firstly, it is simply immoral to allow such takeovers, and cruelly disregards the suffering of the victims of corrupt behavior. Imagine being in the shoes of Hatice Cengiz, the fiancée of Jamal Khashoggi. As she implores the Newcastle United fans to stand up against the takeover, how does it feel to be her as she is told that no one cares for justice, that money comes first? Surely football associations must take a moral stance when it comes to these situations.
  • Secondly, owning these football clubs abroad is a source of financial security for many of these individuals. Aiding the creation of financial security for such actors is akin to aiding them in their corruption itself. They are only brave enough to be corrupt because they know that their money will make others turn a blind eye to their misdeeds. Owning a football club abroad means that if some day their assets get frozen back in their country due to a changing political climate, they can rely on their foreign club ownership for financial support. This must not be allowed.
  • Thirdly, let us not pretend that they own these clubs for benevolent reasons. Owning football clubs is a way for many such actors to redeem themselves in the public image. If people associate their names with a football club instead of a corrupt regime, then their public perception improves. When fans watch football and talk about how much these billionaires have invested into the game, they are far less likely to advocate against these potentially corrupt individuals as they now view them in a positive light. Football associations should not let these billionaires use their football clubs as a tool to help them cover up their wrongs and create a positive public perception.

It may affect the welfare and identity of the club.

While many celebrate the impact of new money and what it can do for football clubs, what often gets missed in the headlines is all the instances of the club being used to make the new owners richer at the cost of the club and its local fans. Whereas original club owners are often locally based and are fans of the clubs themselves, the new foreign owners rarely share that affinity for the club, and merely see it as a means of making money. Manchester United’s takeover by the American Glazer family between 2003 and 2005 was a leveraged buyout. Basically this means that the Glazers took a loan to buy Manchester United, and then secured the loan against the club’s assets. As a result of the takeover, Man United were in debt for the first time since 1931, totaling around £660 million. At least Man United survived, think of what happened to Wigan Athletic. Dave Whelan, the local owner of the club, sold the club to Hong Kong based International Entertainment Corporation (IEC). 19 months later, IEC sold the club to Next Leader Fund(NLF), also based in Hong Kong. Right after taking over, NLF’s owner Au Yeung announced that NLF would not fund the club any longer and the club went into administration. All of these calamities could have been avoided with adequate oversight.

The impact of these takeovers go beyond the welfare of the club. Even in situations where the club does well financially and even wins championships, that is not good enough if it comes at the cost of the identity of the club. It matters if the new owners keep raising ticket prices to the point where the working class football loving people of the city can no longer afford to go watch the games at the stadium, because that attacks a fundamental component of their tradition and identity. It matters if the club is so financially powerful that it can keep buying expensive players and forgets to invest in local infrastructure that allows local talent to develop. Manchester United is now a club registered in the Cayman Islands. It does not take a genius to guess that it must be for tax reasons. That is a far cry from the club that was created to help local railway workers. City of Manchester Stadium was a symbol of pride for the people of Manchester, yet Manchester City’s owners renamed it Etihad stadium so that more sponsor money could come in. Fans care about more than just winning. We must understand the concept of managed expectations. Fans of Aston Villa were deliriously happy to simply avoid getting relegated from the Premier League, yet Manchester City fans were devastated at coming second in the league. New money and success does not mean more happiness for fans, it just changes expectations and they may easily fail to achieve those expectations. Increased possibility of success does not guarantee happiness, and the loss of identity required to achieve it is too high a cost to pay. If you still think all fans care about is success, then think of the case of RB Leipzig of Germany. They are intensely disliked by German fans in spite of their European success. This is due to the fact that Leipzig’s owner Red Bull in practice managed to circumvent the rule in Germany that football clubs must be majority fan owned, which is seen as an attack on the football culture of Germany. Some things are just more important than success.

Arguments against having strict measures on club ownerships:

Football associations do not have the right to be moral arbiters.

It is understandable that someone may feel uneasy about the moral character of a potential buyer. However, football associations should not attempt to address that beyond ensuring that the relevant laws of the country are being followed. The only thing they should evaluate, is whether the particular investment is good for football. This is due to a couple of reasons.

  • Firstly, football associations are not bodies that have been elected by people into governance. The decision is not for this unaccountable body of primarily football experts to make, but rather for the politicians of the country. If the country sanctions a particular person and bars them from owning property, then the football association has no option but to disallow the takeover. However, it should not be making any decisions of its own as that is an undemocratic moral imposition on the citizens of the country and everyone associated with the football club.
  • Secondly, even if you believe that it is legitimate for unelected football representatives to be making such decisions on principle, consider how it is likely to be applied. The considerations become political, and riddled with many biases. For instance, perhaps the football associations would prevent a takeover from a Russian billionaire because of their ties to the Kremlin, but would the same standard be applied to an American billionaire because of their ties to the American government which has also committed many human rights violations through the years? It is unlikely that such a subjective policy could be applied in a fair and equal manner. The matter becomes even more complicated when you realize that you can find moral flaws with any billionaire if you scrutinize enough. No billionaire, even Bill Gates who has done more to end malaria than most governments, has managed to avoid moral scrutiny for some of his actions, so it is difficult to implement this policy in the real world.

    Making moral decisions may seem like a good idea at first, but when you look at it more closely, it is actually a very dangerous game to play. As long as the model relies on billionaires taking ownership over clubs, there is almost always going to be some level of dubious acts involved, hence it is best to simply assess whether the money for the club is going to be put to good use. If you still feel morally uneasy, the only solution is to move towards fan owned clubs like in Germany, or the ownership structure of Barcelona.

It is good for club welfare and football.

The saga over Wigan Athletic is concerning. However, it should not distract us from the fact that in the vast majority of cases new owners bring much needed financial relief for clubs. Many may not remember that Leicester City was in administration during 2002/2003 season with debts of around £30 million. If not for King Power taking over they would never be in the position they are today. The fans cannot retain their sense of identity based attachment to the club if the club does not even survive financially. It is undeniable that often club owners are looking to sell because they cannot sustain the club in a secure manner and allowing these takeovers are crucial for long term sustainability of these clubs. Beyond just survival, the influx of new money to these clubs is beneficial for a couple of reasons.

  • Firstly, it must be acknowledged that success is crucial to retaining interest of fans. People are fans of the club and football, but they also get disheartened if the team does not play well, and soon stop watching. In 1988, a Lokomotive Leipzig game against Napoli drew 90,000 fans. Yet as teams in the eastern part of Germany faltered, the fans also disappeared. By the time Red Bull came into the picture in 2009, clubs in eastern part of Germany drew about a measly 2,000 fans per game. Now nearly every match of RB Leipzig is sold out with 40,000 capacity. Some success is necessary to build and sustain a football culture and identity. PSG fans may be disappointed to be runners up in the Champions League, but they are happy when they hear the Champions League music on a Tuesday night in anticipation of watching their club go toe to toe with Europe’s best. It is on these nights that the streets of Paris are filled with fans, when friends get together to watch the game and celebrate or console one another, and feel a deep sense of connection with their beloved club. As clubs grow their brands, it increases the popularity of football in general too. People from all over the world become fans of the country’s league. This not only helps the club, but also increases revenue for the football associations themselves.
  • Secondly, the influx of capital is good for the city. The new owners want to make sure they are well liked by the fans because they need them to purchase tickets and fill up the stadium during every game. Richer owners means there is money available for more charitable initiatives by the club as well as some infrastructural development. They often build playgrounds and sports infrastructure for the community to build a good reputation, and this in turn helps keep children occupied with sports, instead of getting distracted with more harmful habits. They build world class academies so the youth can have access to the best coaches in the world. Even if many of them do not make it to their own club’s team, they can go and ply their trade in other clubs with their newfound skills, like Joshua King did even if he did not make the cut at Manchester United. This allows for many kids, who come from difficult socioeconomic backgrounds to achieve a comfortable life and support their families. Marcus Rashford’s mother worked 14 hour shifts and still could not manage to feed her son 3 meals a day, yet today he reportedly earns around £200,000 a week and takes care of his mother. Stories such as this are only possible due to massive investments in the community, and these investments are made possible when new richer owners come in to the picture. You may have qualms about how some of these owners made their money, but make no mistake, their investments in these clubs help many people in unimaginable ways, and that cannot be ignored.

By: Mubarrat Wassey – Debate Instructor at QatarDebate

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