Post by QPR Report on May 12, 2009 6:53:30 GMT
The Guardian/Owne Gibson - Premier League unveils new 'fit and proper persons' test
• Club ownership under tougher scrutiny
• Debt levels will also be monitored
The Premier League yesterday unveiled a new "fit and proper persons" test and promised more transparency over club finances and ownership, as part of a package of measures drawn up in response to government calls for the game to "reassess its relationship with money".
Under new controls modelled on Uefa's licensing system, clubs could be banned from transfers, forced to sell players or forced to sell assets if they fail a new "going concern" audit. The Premier League's chief executive, Richard Scudamore, said new rules would also force clubs to make public any shareholding of more than 10% and to declare their ultimate ownership.
"It's very hard to argue that clubs aren't effectively 'owned' by a much wider group than those that happen to legally own the shareholding," he said. "We should know and the public should know and the fans should know who owns their club."
Clubs are already forced to disclose those details to the Premier League board, but it will now make them public as part of a raft of proposals designed to reassure government and fans that it is taking concerns around the financial sustainability of the game seriously.
The Department for Culture, Media and Sport said it was "encouraged" by the Premier League's 30-page submission, which was approved by the 20 clubs and will be voted on at their next meeting. The DCMS will put pressure on the Football Association and Football League to submit responses by the end of the month.
However, the culture secretary, Andy Burnham, is likely to be disappointed that the Premier League's response fails to deal explicitly with the question of whether leveraged buyouts, such as the Glazer family's purchase of Manchester United in 2005, which loaded the club with £667m in borrowings, are harming the game. That was one of seven questions he asked the governing bodies to address last October.
"Acquisition debt is only available to those whose assets are worth lending against in the first place," Scudamore said. "Clubs have been managing debt for 20 years. They are also able to adjust their cost base."
The Premier League has been at odds with the FA over the issue since last autumn, when the FA chairman, Lord Triesman, warned that the debts of some top clubs were too high. "The word 'debt' is like an onion," said Scudamore. "The minute you start to strip off the layers, your eyes start to water because it gets harder and harder to grip, because it's complex. The people best qualified are directors of companies, accountants, banks."
The new financial measures, modelled on the Uefa licensing system and designed to assess whether a club is likely to remain a going concern for the duration of the coming season, will act as a last resort if other new measures fail to act as an "early warning system".
Clubs will be forced to demonstrate that they have no ongoing debts to Revenue & Customs or to other football clubs. The majority of Premier League clubs already pass the tests .
The overhauled fit and proper persons test, to be applied to all directors or those with a stake of more than 30%, has been widened to ban any prospective owner who has been convicted of any crime with a sentence of more than one year, as well as the list of so-called "honesty" and "football" offences that automatically attract a ban. Scudamore said the Premier League had examined overseas sporting bodies and the regulation of banking, defence and media in drawing up the new rules.
The robustness of the league's fit and proper persons test has risen up the agenda in recent years as overseas owners have multiplied. The debate coalesced around the former Manchester City owner Thaksin Shinawatra.
The debate over the future of the game is being played out against an ongoing battle between the FA and the Premier League. "We are working on a detailed response to the secretary of state's questions," said an FA spokesman. "The content has been discussed at board level and will be discussed again later this month. We have the whole of the game to consider, not just one area."
Today, the Premier League will unveil its answers to Burnham's questions over competitive balance and home-grown talent. It is expected to suggest a variation on the existing Uefa rule for its club competitions that a certain proportion of each squad must be composed of players developed in England.
www.guardian.co.uk/football/2009/may/12/premier-league-owners-debt-andy-burnham
David Conn/The Guardian
Premier League proposals fall short of Andy Burnham's ideal
With their pernickety suggestions about owners and debt, the Premier League body-swerved the major issues
There were some modest, sensible, pernickety proposals from the Premier League yesterday, but the overwhelming feeling they left was that the heart of the matter had been body‑swerved.
Back in October the culture secretary, Andy Burnham, had asked seven specific questions of the Premier League, Football League and the Football Association, but he did so within a passionate conference speech to Supporters Direct, in which he argued that football clubs truly belong to their fans (not, the implication clearly was, to investors). He said the game as it is now, is so thoroughly commercialised, risks "losing further touch with its traditional supporter base" and called on football to "reassess its relationship with money".
The Premier League, in reply, went nowhere near that far. Instead, it buried its head in the detail. You do not need to make an accountant joke to note that few in football's traditional supporter base will be leaping out of their seats at the news that the auditing of clubs is about to be improved.
Give the Premier League its due, though; at least independent accountants are to look at whether clubs are carrying too much debt and certify that they are able to complete their fixtures, in line with Uefa's licensing system. The "fit and proper person test" is to be improved a little: people will have to prove they are not convicted crooks before they take over a club and not, as things currently – remarkably – stand, once they are already in charge.
Yet Burnham asked for more. He wanted the league to consider "the amount of debt used to finance a takeover" and "whether that debt is 'sustainable' and in the wider interests of the game". That was obviously a reference to the takeovers of Manchester United and Liverpool by north American investors who have borrowed a staggering £1bn altogether, then loaded that debt onto the clubs. That part of the question was studiously avoided by the Premier League yesterday.
The fit and proper person test, in truth, is there to protect us from a risk we are extremely unlikely to face. The real issue is that clubs are vulnerable to people who might exploit them, asset strip, or, simply, not have a clue what they are doing. The proposals do not address that broader question.
These, overall, are technocratic suggestions by a league and its clubs which have become more professional and responsible in their attitudes over the years, but they fall short of Burnham's plea for them to reassess their relationship with money, in the wider interests of the game.
www.guardian.co.uk/football/blog/2009/may/12/premier-league-owners-debt-andy-burnham
• Club ownership under tougher scrutiny
• Debt levels will also be monitored
The Premier League yesterday unveiled a new "fit and proper persons" test and promised more transparency over club finances and ownership, as part of a package of measures drawn up in response to government calls for the game to "reassess its relationship with money".
Under new controls modelled on Uefa's licensing system, clubs could be banned from transfers, forced to sell players or forced to sell assets if they fail a new "going concern" audit. The Premier League's chief executive, Richard Scudamore, said new rules would also force clubs to make public any shareholding of more than 10% and to declare their ultimate ownership.
"It's very hard to argue that clubs aren't effectively 'owned' by a much wider group than those that happen to legally own the shareholding," he said. "We should know and the public should know and the fans should know who owns their club."
Clubs are already forced to disclose those details to the Premier League board, but it will now make them public as part of a raft of proposals designed to reassure government and fans that it is taking concerns around the financial sustainability of the game seriously.
The Department for Culture, Media and Sport said it was "encouraged" by the Premier League's 30-page submission, which was approved by the 20 clubs and will be voted on at their next meeting. The DCMS will put pressure on the Football Association and Football League to submit responses by the end of the month.
However, the culture secretary, Andy Burnham, is likely to be disappointed that the Premier League's response fails to deal explicitly with the question of whether leveraged buyouts, such as the Glazer family's purchase of Manchester United in 2005, which loaded the club with £667m in borrowings, are harming the game. That was one of seven questions he asked the governing bodies to address last October.
"Acquisition debt is only available to those whose assets are worth lending against in the first place," Scudamore said. "Clubs have been managing debt for 20 years. They are also able to adjust their cost base."
The Premier League has been at odds with the FA over the issue since last autumn, when the FA chairman, Lord Triesman, warned that the debts of some top clubs were too high. "The word 'debt' is like an onion," said Scudamore. "The minute you start to strip off the layers, your eyes start to water because it gets harder and harder to grip, because it's complex. The people best qualified are directors of companies, accountants, banks."
The new financial measures, modelled on the Uefa licensing system and designed to assess whether a club is likely to remain a going concern for the duration of the coming season, will act as a last resort if other new measures fail to act as an "early warning system".
Clubs will be forced to demonstrate that they have no ongoing debts to Revenue & Customs or to other football clubs. The majority of Premier League clubs already pass the tests .
The overhauled fit and proper persons test, to be applied to all directors or those with a stake of more than 30%, has been widened to ban any prospective owner who has been convicted of any crime with a sentence of more than one year, as well as the list of so-called "honesty" and "football" offences that automatically attract a ban. Scudamore said the Premier League had examined overseas sporting bodies and the regulation of banking, defence and media in drawing up the new rules.
The robustness of the league's fit and proper persons test has risen up the agenda in recent years as overseas owners have multiplied. The debate coalesced around the former Manchester City owner Thaksin Shinawatra.
The debate over the future of the game is being played out against an ongoing battle between the FA and the Premier League. "We are working on a detailed response to the secretary of state's questions," said an FA spokesman. "The content has been discussed at board level and will be discussed again later this month. We have the whole of the game to consider, not just one area."
Today, the Premier League will unveil its answers to Burnham's questions over competitive balance and home-grown talent. It is expected to suggest a variation on the existing Uefa rule for its club competitions that a certain proportion of each squad must be composed of players developed in England.
www.guardian.co.uk/football/2009/may/12/premier-league-owners-debt-andy-burnham
David Conn/The Guardian
Premier League proposals fall short of Andy Burnham's ideal
With their pernickety suggestions about owners and debt, the Premier League body-swerved the major issues
There were some modest, sensible, pernickety proposals from the Premier League yesterday, but the overwhelming feeling they left was that the heart of the matter had been body‑swerved.
Back in October the culture secretary, Andy Burnham, had asked seven specific questions of the Premier League, Football League and the Football Association, but he did so within a passionate conference speech to Supporters Direct, in which he argued that football clubs truly belong to their fans (not, the implication clearly was, to investors). He said the game as it is now, is so thoroughly commercialised, risks "losing further touch with its traditional supporter base" and called on football to "reassess its relationship with money".
The Premier League, in reply, went nowhere near that far. Instead, it buried its head in the detail. You do not need to make an accountant joke to note that few in football's traditional supporter base will be leaping out of their seats at the news that the auditing of clubs is about to be improved.
Give the Premier League its due, though; at least independent accountants are to look at whether clubs are carrying too much debt and certify that they are able to complete their fixtures, in line with Uefa's licensing system. The "fit and proper person test" is to be improved a little: people will have to prove they are not convicted crooks before they take over a club and not, as things currently – remarkably – stand, once they are already in charge.
Yet Burnham asked for more. He wanted the league to consider "the amount of debt used to finance a takeover" and "whether that debt is 'sustainable' and in the wider interests of the game". That was obviously a reference to the takeovers of Manchester United and Liverpool by north American investors who have borrowed a staggering £1bn altogether, then loaded that debt onto the clubs. That part of the question was studiously avoided by the Premier League yesterday.
The fit and proper person test, in truth, is there to protect us from a risk we are extremely unlikely to face. The real issue is that clubs are vulnerable to people who might exploit them, asset strip, or, simply, not have a clue what they are doing. The proposals do not address that broader question.
These, overall, are technocratic suggestions by a league and its clubs which have become more professional and responsible in their attitudes over the years, but they fall short of Burnham's plea for them to reassess their relationship with money, in the wider interests of the game.
www.guardian.co.uk/football/blog/2009/may/12/premier-league-owners-debt-andy-burnham
