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Publication - Research Publication

Supporter involvement in Scottish football clubs: consultation analysis

Published: 30 Jun 2016
Part of:
Arts, culture and sport
ISBN:
9781786523051

Analyses the responses to a consultation on supporter involvement in influencing, governing, bidding for and buying professional football clubs in Scotland.

63 page PDF

679.8kB

63 page PDF

679.8kB

Contents
Supporter involvement in Scottish football clubs: consultation analysis
8. Views on Defining Assets, in the Context of Making a Law to give Supporters Rights in the Decision-Making or Ownership of their Football Club

63 page PDF

679.8kB

8. Views on Defining Assets, in the Context of Making a Law to give Supporters Rights in the Decision-Making or Ownership of their Football Club

Background

Whilst the majority of clubs within the SPFL are companies limited by guarantee, the structure is complex and it cannot be assumed one entity owns all the assets.

Each football club will be constituted in such a way as to meet their own needs, but the administration process of a number of football clubs has highlighted the often complex inter-relationship of these with many being undertaken by separate companies established in their own right.

Defining what is a football club in relation to the specific assets and liabilities is sometimes challenging, yet clearly important if a single business entity is to be sold.

Question 6: What are your views on defining assets, in the context of making a law to give supporters rights in the decision-making or ownership of their football club?

466 respondents addressed this question including 20 of the organisations and 446 individuals. There was general agreement over the importance of defining assets clearly in the context of supporters becoming involved in influencing, governing, bidding for and buying their clubs.

Views on ensuring assets are defined

A recurring view was that clarity over assets would promote transparency in ownership which was essential in the context of involving supporters in decisions over their club.

"...would assist parties in any sale in understanding the value of relevant assets" (Stirling Council).

"If supporters are going to invest finances it's only right they are fully aware of the whole investment" (Individual).

However, it was recognised that such clarity can prove difficult to establish and many challenges to defining assets were identified by respondents:

  • The great variety of corporate structures and asset ownership models existing, making a "one size fits all" approach impossible.
  • Constantly changing models of asset ownership.
  • Creation of arms-length independent companies.
  • Part-ownership/asset leasing arrangements.
  • The social and cultural dimension of football clubs which sets them apart from traditional businesses.
  • Assets of value to the club may not be tradeable - "what some clubs may determine to be an asset might be ignored by others" (Individual).

One shared understanding emerging from many of the individual responses was that assets are defined as routine in standard business accounting reports, with asset registers freely available and this should be the case with football clubs. Some respondents remarked that they did not fully understand the question, as defining assets is simply part of usual business practice.

For those holding this view, a key issue was to ensure clubs disclose their assets and the ownership arrangements for these. Legislation to this effect was called for by a few, with shareholders listed along with reasons for another party owning a paticular asset. One individual respondent requested that all football clubs provide the SPFL and Scottish FA with details of their assets and liabilities and the ownership of these as a requirement of registration. A local government respondent recommended that details of assets be published on a club's website.

"There should be an obligation on clubs to declare who owns what and that this should be a matter of public record" (The Celtic Supporters' Trust).

Other respondents, in recognition of the challenges they foresaw in defining assets, considered that further assistance on this matter would be beneficial. Options identified included:

  • Establish an expert working group to provide guidelines and explore the need for legislative underpinning.
  • Look elsewhere where there are already models of fan ownership, to see how assets have been defined.
  • Football authorities to agree who owns what.
  • Conduct independent evaluations of football clubs to ascertain a clear picture.
  • Seek legal input and/or independent people to assist with defining assets.

Perceptions of what constitutes "assets"

Many respondents attempted to clarify what they perceived to be football club "assets" irrespective of who owns them:

  • stadium/training ground and associated buildings/estate
  • players
  • branding/badge/strip
  • merchandise/marketing deals/sponsorship packages
  • staff
  • identity
  • history/achievements/trophies
  • club name
  • equipment
  • shop/retail outlets
  • social club/membership
  • membership of league
  • car parks
  • intellectual property/non-tangible assets
  • manager
  • separate operating organisations such as academies
  • office
  • hotels
  • cash in the bank

A few respondents also highlighted that liabilities and outstanding loans should be taken into account when considering assets in the context of supporters being involved in decision-making and ownership of their club.

Although such attempts were made by many respondents to define the scope of assets, the issue of value of assets was perceived as challenging, with some respondents questioning whether these held a consistent value, or the extent to which value was affected by circumstance. For example, was a match/training stadium of the same value if a football club no longer played there?

Other questions to emerge included whether assets defined as such by a club were actually tradeable and capable of sale.? Whereas some respondents focused on tangible assets in the context of this question, others emphasised that assets should be defined in an intellectual sense rather than simply a physical sense, for example, the name of the club and its social impact were amongst assets perceived to fall into the "intellectual" category.

Conceptual frameworks on clubs and assets

Views amongst many individual respondents were divided conceptually on whether clubs and their assets are one and the same, or whether clubs are separate entities in themselves and are distinct from companies and tangible assets. Some respondents appeared to have views which fell between the two camps.

At one end of the spectrum were those sharing the view that, with few exceptions, the club is the company and the company holds the assets relating to the club. Under this model the club and assets are joined and cannot be separated; assets cannot be split and sold off individually; the club always retains ownership of its name, history, trophies, human and physical resources; the football club is indistinguishable from the company that owns it.

At the opposing end of the conceptual spectrum were those who perceived assets and companies as potentially separate from football clubs.

"The assets being entwined with the football club/playing side has beleaguered almost every club that has had this problem. Infrastructure, stadia, training grounds and other properties should be totally separate to the club...."

Some respondents specified that, whilst fixed assets required to be defined as they are tradeable and separable from the club, there is no need to attempt definition of what was perceived as cultural property such as a club's motto and badge which are owned by the club.

Overall, views were very mixed and sometimes confused on the issue of how to define assets in the context of making a law to give supporters rights in the decision-making or ownership of their club.

Views on holding companies

A few individual respondents took the opportunity to provide their arguments against holding companies in the context of football club ownership.

These generally were along similar lines that holding companies muddy the picture on who owns what and that they provide the opportunity for hiding and masking clear lines of ownership.

Calls were made for much clearer and transparent distinctions between what constitutes a club and what separates them from their respective holding company.

A very small number of respondents appeared to support specifically the separation of assets into a stand alone entity, keeping these distinct from the operation of clubs with the financial risks attached to this.

Summary of key points

There was general agreement over the importance of defining assets clearly in the context of supporters becoming involved in influencing, governing, bidding for and buying their clubs. However, many respondents also considered such clarity difficult to establish due largely to the extensive variety of corporate structures and asset ownership models across football clubs.

Many of the individual respondents shared a view that assets should be defined as routine in standard business accounting reports and that these will be freely available. Others recommended seeking expert advice on how to define assets.

Where respondents indicated what they perceived as football club assets, most commonly identified were: stadia and training grounds; players; branding; merchandise/sponsorship packages; and staff.

A recurring view was that even if the scope of assets can be defined, their value may not be readily identified due to fluctuations according to circumstance.

Views were divided between those perceiving clubs and their assets to be inseparable; and those who envisaged clubs to be separate entities, distinct from tangible assets and companies.

A few respondents called for greater clarity over the relationship between clubs and their holding companies.


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