Sugar-daddy or supporters - who do you want to run your club?

Source: Telegraph

By Paul Kelso July 23rd, 2009
Paul Kelso is the Telegraph's Chief Sports Reporter.

Who would you prefer to own your football club? A well-meaning group of supporters committed to ensuring that the club survives in perpetuity, or an anonymous investor with deep pockets ready to pump money into the club in return for a profit, but offering no guarantee as to their long-term intentions?
At Meadow Lane, the new home of Sven Goran Eriksson and venue for the most remarkable story of the close season, supporters who battled to save their club from the wreckage of a previous glitzy buy-out have just chosen the latter.
Their decision is, at face value a blow for the supporters’ trust model, a system of ownership that many believe offers clubs, particularly those in the lower leagues, an alternative to boom-and-bust and the reliance on sugar-daddies and investors whose motives are not always transparent.
Until last week Notts County was owned and run by a trust. It took control of the club in 2003, rescuing it with the help of a local benefactor from an 18-month period in administration that threatened its existence.
As is usually the case with supporter-led takeovers it was a long and gruelling battle, led by highly committed individuals who were successful only because of the support of fans locally and around the country, many of who dipped into their own pockets to save the club.
The trust inherited a mess of unpaid debts and unhappy creditors, most of the dating from a previous takeover led by American journalist Albert Scardino, husband of Dame Marjorie, chief executive of the Pearson Group that owns the Financial Times, whose brief sally into English football was well-meaning but ultimately unsuccessful.
As is often the case the supporters were the last people standing, and set about rescuing what they could from the wreckage. Adopting the trust model, a system of mutual ownership intended to give supporters a democratic voice in the running of their club, they tried to make the most of a bitter inheritance.
It has not been an easy road, with the strain of running a club burdened by debt eventually causing divisions between trust members and a public falling out between factions within the club. In this climate the arrival of Munto Finance, whoever they may be, waving a bank guarantee, was too good to resist and an overwhelming majority of trust members voted to accept their offer.

In a remarkable show of faith the trust handed over its 61% stake in the club for nothing, as well as writing off a £170,000 loan, the product of a thousand collection buckets and fundraisers.

On the face of it the decision to choose anonymous financiers over collective ownership is a blow for the trust model. Dave Boyle, chief executive of Supporters Direct, the body that promotes mutual ownership of clubs, says the underlying reasons are football’s crash-and-burn economics.
“The difficulty we have with most of the clubs that have become fully trust-owned is that many of them are picking up the pieces after a disaster,” he says. “Those that have started from scratch like AFC Wimbledon and FC United are doing brilliantly, but others like Chesterfield, York City, Exeter City and Notts County have inherited a basket case and that is tough.
“Exeter City were lucky, they drew Manchester United in the FA Cup and that gave them a windfall that cleared the debts and gave them a fresh start. Others have not been so fortunate, and the reality is that trusts often have to spend the majority of their time dealing with the mistakes of previous regimes. That can take its toll, so it is not a surprise that when individuals come along offering a way out they are tempted, but investors are generally not charitable.”
Critics of the trust model will cite Notts County as evidence that collective ownership can never compete with clubs run by executives working in a more traditional business structure. Boyle counters that the two are not mutually exclusive.
“We have always said our favoured model is Trust-owned, professionally run. Supporters should own the club and then find the best executives they can afford to run it. That remains the ideal for us. It offers clubs sanity and stability at a time when there is unease about the way money is affecting the game.”
At Meadow Lane they are about to discover first-hand which model works best.