Labour’s Proposals For Fan Ownership – Are They Credible?

The Labour Party’s commitment to legislate for partial fan ownership published today by Clive Efford, Shadow Sport Minister, is admirable for its intent but worryingly short on detail says Mike Dyer, Director of Portsmouth law firm Verisona Law .

Dyer said that “there is a tendency to think of Football Clubs as being somehow different from any other business organisation.” In many respects, perhaps they are, but the underlying fact is that they are companies and as such bound by Company Law in the UK.

The proposals do not seem to address the fact that fundamental changes would be required to the Companies Act 2006 surrounding (in particular) Shareholder rights.

For example, the proposed right for a Supporters Trust to appoint and remove Directors whilst only being a 10% Shareholder represents a significant departure from the present legal position.  As the law currently stands, a Shareholder with only 10% of issued shares would not have such a right unless there is a Shareholders Agreement in place (a document setting out various terms between Shareholders and regulating the voting rights on certain issues).

Without such an Agreement, a 10% Shareholder will be unable to pass the necessary resolutions to give effect to this “right” without new Company Law legislation.

I sincerely hope this proposal is not just a poorly considered populist vote catcher – but if it is to be treated as credible then significant further detail of the proposal is needed.

Mike Dyer

Director, Verisona Law

Football – A Political Agenda

As we draw closer to a General Election I was reminded about a head line that once appear in the nations favourite (?) newspaper way back in 1992; ‘it’s the Sun that won it’ the self obsessed daily once famously proclaimed!

Maybe this time however, the headline will be ‘it’s MUST that won it’?

As we nudge ever closer to a General Election the political cat fighting has began. In last week’s budget we were given an outline of cost savings and tax hikes that would help pull the country out of recession and reduce the deficit. Pretty uninspiring stuff from a man with funny eyebrows!

But then all of a sudden, after someone had bothered to read the red book, it emerged that there was a special clause in there aimed at protecting foreign footballers from the 50% tax on income should they reach the Champions League final at Wembley in May 2011. This was apparently at the request of Gerry Sutcliffe, the Sports Minister to help protect sport in the UK. Apparently, Madrid won the right to host this year’s final because of the low tax on earnings in Spain.

But that’s not the end of the story.

Oh how we laughed when Gordon Brown was refused a spot on Match of the Day by the BBC! Well in a shrewd piece of political chess, the Labour Government has obviously targeted football fans as a key demographic for its election campaign. Gordon Brown hanging out with the lads…well spotted the BBC.

Instead of boring us to death with the usual health care proposals, education, education, education promises and keeping very quiet about defence spending, they are taking advantage of a subject that really does matter – Football!

We all know of the very well publicised disputes over football club ownership. The Supporters are rising up and shouting extra loud at the way in which football is being run and in particular how their clubs are being run (into the ground in extreme cases!). The depth of the feeling amongst fans runs as deep as the financial troubles of Portsmouth.

And now Labour has seized the initiative, and put fans ownership of football clubs at the top of the political agenda. A political manifesto that includes proposals to give fans trusts the ‘right-to-buy’ up to a 25% stake in their club should it become available was greeted with as much joy as it was skepticism.

Are they going to tear up corporate law just so a bunch of disgruntled Gillingham fans think they can run the club better than the current owners?

For too long we’ve been casting covetous eyes at Barcelona. Held up as the idealistic model of club ownership that can one day be repeated across the footballing empire.

Barcelona, we love you!!!

But is it right that football should become a political agenda or even and election winner? I have my reservations, but at least it makes any election campaign worth following for a while.