(WFI) INSIDER can reveal the full extent of proposals blocked by the English Premier League (EPL) intended to enforce better standards of governance throughout the English game.
They include common standards for financial reporting, mandatory inclusion of English nationals on club boards to alleviate concerns over foreign ownership, and minimum standards of supporter and community involvement in clubs as part of their licensing agreements.
Premier League sources have told INSIDER that many of the reforms have since been implemented by the league.
The document – seen by INSIDER – was drafted in May 2009 under the tutelage of the FA’s former chairman, David Triesman, in response to a series of questions put forward by the former secretary of state for culture, Andy Burnham, to the FA, Premier League and Football League.
The FA caused opprobrium at the time, because – in its belated responses – it meekly referred the minister back to the answers given back by the other two bodies.
But last week Triesman – who was forced to resign in May last year after falling foul of a tabloid newspaper sting – told MPs inquiring into the state of English football governance that a detailed document answering the FA’s case was blocked by the Premier League’s members on the twelve man FA board.
“The professional game representatives on the FA board took perhaps a maximum of two minutes to say that the document should not be submitted and to issue a board instruction that a response should be made simply referring the Secretary of State to the wisdom of the professional league, and in particular the Premier League,” said Triesman.
The former FA chairman said that the blocked proposal contained “substantive measures” designed to tighten “the overall arc of financial regulation.”
“It was very apparent that we were in extremely choppy waters financially and that you could see very great football clubs with very long histories in severe trouble,” he added.
Triesman subsequently provided a copy of the 20 page document to the inquiry, which INSIDER has since seen.
The document advocates “limited changes which build on what already exists.” In it, the FA sought to address popular concerns about club ownership, debt levels and governance, as well as advocating a more proactive role for supporters in deciding the way in which the game is run. “The changes should build trust and reduce the areas of doubt that are sometimes expressed,” said the FA.
The most striking proposal in the document is the inclusion of agreed “debt ratios”, which is clearly designed to limit the likelihood of a leveraged buy out – such as that which occurred at Manchester United in 2005 and Liverpool in 2007.
The EPL has consistently refused to countenance bringing in rules that favour one way of financing a takeover over another. While the FA overtly strike a similar poise, saying it is for “those responsible for the company to manage the debt appropriately”, measures on debt ratios would clearly limit the possibility of a takeover financed in a similar way to the two north west giants. It seems highly unlikely that any club would be allowed to have debts equal to twice its annual turnover, as is currently the case at Old Trafford.
The wisdom of adopting other measures included in the document have since come to pass. Better standards of reporting on club ownership may have prevented the farcical situation at Portsmouth during the 2009/10 season, when one owner , Sulaiman al-Fahim, absconded after less than six weeks in charge, and doubts existed over whether another, the Saudi national, Ali Al-Faraj, even existed. Portsmouth ended the season relegated from the Premier League and in financial administration.
Who stopped Triesman?
The question on everybody’s lips after Lord Triesman’s appearance before MPs last week was who stopped him and why. After rounding on EPL chairman Sir Dave Richards – who was described as an aggressive bully – the assumption was that he had led the revolt against the paper.
But a source with knowledge of the FA board told INSIDER that Triesman was mandated to consult with representatives of the board when working on the proposals, but “instead went ahead and did his own thing” before presenting his case. The implication was that all board members disliked being dictated to.
The EPL is awaiting to be called to give evidence to the enquiry to make its case and has not commented on either Triesman’s allegations about Richards or the blocked document.
However, Premier League sources have privately expressed their frustration at coverage of the league over the past week, and say that many of the reforms in the vetoed report have been implemented following the fall out of the Portsmouth affair. In particular, reforms to the fit and proper persons test – now renamed the “directors and owners” test – require prospective club owners to meet with the Premier League board, and provide that they have funds to keep the club running for a year. Changes to financial reporting also require clubs to report on their ability to pay their tax bills.
The government inquiry is set to hear further verbal evidence on March 8.
Highlights from the FA’s blocked proposals for reform of football governance:
– A “common standard” for financial reporting by clubs on annual basis, with the information to be lodged with both the FA and the league in which the club compete. The FA proposed publishing these returns on its website.
– Better standards
of reporting on club ownership, with a range of penalties from disqualification of club directors or clubs to points deductions and fines.
– A review of measures to promote greater financial stability in football, including debt ratios – effectively a limit on how much a club can borrow.
– Lessening of penalties following an insolvency if supporters trusts are involved in the running of a club.
– Mandatory inclusion of English nationals on club boards to alleviate concerns over foreign ownership.
– Expanded club licensing requirements to include minimum levels of supporter and community involvement, investment in youth development, secure tenure of stadium, and open meetings.
– A review of the notorious “football creditors’ rule” which gives players and other clubs preference over other creditors in the instance of an insolvency.
– Greater levels of compliance reporting to the Inland Revenue.
– Expansion of the fit proper persons test, to include those individuals who have not been given a criminal conviction, but against whom “serious allegations” may exist.
Week in review
– FIFA Exco member Chuck Blazer struck out at the flawed World Cup bid process. He said that complaints about vote collusion between Spain-Portugal and Qatar were ignored, as were the lengthy inspection reports.
– The conduct of FIFA vice president Jack Warner was on the agenda of the ethics committee after allegations that he tried to sell 2010 World Cup tickets on the black market.
– Gordon Taylor, CEO of the English PFA, told MPs investigating football governance that “envy and jealousy” of the Premier League may have cost the country its bid to host the 2018 World Cup. Bid board member Paul Elliott said that not enough players were involved in the process.
– Football League chairman, Greg Clarke, told the same inquiry that clubs were approaching the “precipice” because of the debt crisis they faced and that government intervention would be necessary if they did not get their house in order.
– Brazilian footballer, Ronaldo, announced his retirement from football at the age of 34. The two-times World Cup winner has been plagued by injury problems for more than a decade.
By INSIDER’s James Corbett
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