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Keeping the right company

Published: Friday 13 January 2006, 8.01CET
Football is more than ever a big business - and clubs are very attractive properties for rich investors. But taking over a club is not so easy in all parts of Europe. Paul Saffer reports
by Paul Saffer
Published: Friday 13 January 2006, 8.01CET

Keeping the right company

Football is more than ever a big business - and clubs are very attractive properties for rich investors. But taking over a club is not so easy in all parts of Europe. Paul Saffer reports

There are few more common truisms these days than to say that football has become big business, and it is hardly surprising therefore that, more than ever, big businessmen are interested in investing in the game.

Portsmouth purchase
The latest high-profile example is England's Portsmouth FC, where Alexandre Gaydamak, son of flamboyant Israeli tycoon and Beitar Jerusalem FC owner Arkady Gaydamak, has become co-owner with incumbent Milan Mandaric. But in another major footballing nation even a Roman Abramovich would find taking over a club a difficult process.

Vision Europe
UEFA itself noted the issue in its recent Vision Europe document, setting out its agenda for the future of European football. It says of clubs becoming commercial outfits: "Such changes were often made for good reasons for those imposing the decision, but not always with good results for football." Indeed, UEFA states its preference for a club owned collectively by its supporters. However, UEFA's only current regulation in this matter stops sides controlled by the same group or individuals both playing in the same European competition, brought in after the investment company ENIC took control of a number of European clubs including AEK Athens FC and SK Slavia Praha at the turn of the decade.

Free-market culture
That puts the matter in the hands of national bodies, and even among the biggest countries, the difference in approach is varied. Arguably reflecting their liberal business culture, England and Italy impose relatively few restrictions. In Serie A, Spanish businessman and ex-Real Madrid CF president Lorenzo Sanz was recently linked with the outright purchase of Parma FC and Juventus are floated on the stock exchange. In the Premiership, Gaydamak was of course following in the footsteps of another tycoon of Russian origin, Abramovich, and though many Manchester United FC fans opposed the American Glazer family's takeover, no rules prevented it.

Directors' test
An English Football Association (FA) spokesman told that they concentrate on regulating directors, the day-to-day custodians of a club, rather than shareholders. "We have a 'fit and proper person test'; a set of criteria that directors need to fulfil - they are not allowed to have been convicted for a range of financial or honesty-based offences or been suspended by a business or sporting body." In contrast to elsewhere in Europe, English sides have been allowed to become limited companies since the 19th century, protecting shareholders from creditors, and clubs now floated on the stock exchange are already regulated by financial bodies. However, the Supporters Direct organisation is attempting to enable more English sides to come under the community ownership suggested by UEFA.

Spain too does not have particular regulations restricting club ownership, and only Madrid, Athletic Club Bilbao, FC Barcelona and CA Osasuna belong solely to their members. France, meanwhile, does not have limits on ownership as such, but the DNCG (national control and management committee) has wide powers to monitor club finance. Set up in July 1990 after a series of scandals, the DNCG contains league and French Football Federation representatives alongside public accountants, and can relegate teams - such as Olympique de Marseille in 1994.

German approach
However, the German approach is very different. Only in 1998 could teams even be part-owned by a commercial company, and even now more than 50 per cent of a club's shares must be in the hands of members, with the club formed as an 'association'.

A Bundesliga spokesman explained: "We have a strong tradition of 'associations'. They can form companies or at least transfer the first team and youth team into companies, but the majority of shares must be held by the association that forms the club. It safeguards clubs from what could happen in England - one person could take over a club and then lose interest in the club, or transfer all his debts to the club." It also ensured that one club cannot become far richer that their rivals - and monopolise the best players. "We regard it as an acceptable rule which protects the integrity of the competition. It has been a long tradition in Germany," the spokesman added.

Perhaps these differences are unsurprising; UK commercial law, for example, has a far lighter touch than that in Germany. Abramovich himself said he was attracted to Chelsea FC in part because English clubs "are easier to buy". But as Premiership sides continue to receive cash injections that Bundesliga teams can perhaps only dream of, the new investors would do well to remember the special place these clubs hold in their communities and among their fans, even if they do not hold the democratic power that German regulations protect.

Last updated: 13/01/06 18.01CET

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