Written evidence submitted by the Blue
and Gold Trust (King's Lynn FC Supporters Trust
FOOTBALL GOVERNANCE
This is a submission to the committee from the Blue
& Gold Trust (King's Lynn FC Supporters Trust)
It contains details of the recent history of the
club, how a greater level of governance in the game could have
saved the club from liquidation and how it could influence the
newly formed club in the future.
A BRIEF HISTORY
1. King's Lynn football club over the last thirty
years has gone from one period of financial mismanagement to the
next. There have been a couple of periods of administration, several
bailouts by local business people and then finally in November
2009 the liquidation of the club in the High court by the official
receiver on behalf of HMRC. The final debt that sunk the club
was for just under £80,000 owed to HMRC. This debt was the
tip of the iceberg with the club having soft debts of over £200,000
in director loans as well as many other debts to local companies.
2. The only people that knew about these financial
issues until it was too late to help were the Directors in charge
of the club. The common supporter and the newly formed Supporters
Trust asked on numerous occasions about the situation at the club
but were always denied any knowledge of the financial mess. The
supporters were finally told some of the story a few days before
the club was in court to be wound up. The Supporters did offer
to try and raise the money that was needed to stave off the winding
up order but the underlying soft debts that the directors would
not write off made any such action ultimately implausible.
The question is how would better governance within
the game of helped the Supporters of King's Lynn FC to safeguard
their club
3. Much stricter financial controls, bi monthly
accounts to the league that the club is in, illustrating that
amongst other financials that all tax affairs are in order and
up to date, with these being checked by impartial committees.
Late or non submission, proven untrue accounts or accounts that
show issues should face substantial punishments that may act as
a deterrent to clubs that are financially mismanaged. The issues
at King's Lynn FC were ongoing for more that a year, so the practice
above would have at the very least alerted the supporters to what
was going on. An extension of the quarterly HMRC reporting that
now exists within the Conference would be welcome.
4. Banning of soft debt from the game. Monies
given to the club should either be for shares (have a realistic
monetary value), in the form of a financially viable structured
loans or non repayable gifts. This would have meant that the saving
of King's Lyn FC in financial terms could have been a realistic
prospect. Clubs should only legally, be able to take on proven
viable levels of debt.
5. Supporter involvement at all levels within
clubs. This would lead to greater transparency within clubs. Football
clubs are at the heart of communities and should be used to bring
communities together. They should never be allowed to become a
business person's plaything. Rules should be put in place that
mean that supporters have to legally have a meaningful role within
the club with penalties against clubs that do not follow this
rule. This would mean that the supporters always play a role in
safeguarding their clubs.
6. A much stronger and rigid fit and proper person
test on directors at all levels of football. One of the directors
at the insolvent King's Lyn FC club had previously caused major
financial issues at a previous club he had been involved at. The
FA were very much aware of this but unable to deal with the appointment.
7. Any one of the above points of governance
had the potential to prevent the winding up of King's Lynn FC.
WHERE KING'S
LYNN FC IS
NOW
8. A new King's Lynn FC, this time with an added
"Town" to the name was formed in January 2010. The club
was formed after a bidding process with the local council (who
own the ground). The winning local business (the newly formed
Supporters' Trust submitted an unsuccessful bid) were verbally
encouraged to work with the supporters by the local authority.
A legally standing arrangement would have meant that the supporters
would have had to been involved.
9. Given that the club, run as a private company
failed again, and our view that the football club is a community
asset it would have helped us if we had been given a period of
exclusivity to buy the club if voted for by the community as a
whole. The Supporters Trust model and the aims that are listed
by all Supporters Trusts fit the public interest ideal and are
an ideal model of football club ownership because by their nature
they have to be run sustainably, are open and inclusive, have
community objects written into their articles and the Board are
accountable to their members. In summary the ideal framework to
ensure that the club was secure for the future. We were disadvantaged
because we didn't have enough time to raise money that the winning
bid could lay their hands on in the short time we had, despite
the current owners professing publically that they would look
to get their money back out of the club in the future. In contrast
whilst we had less money to begin with our ethos and rules are
markedly different stating that were the community to own the
club all the money we made would have had to be reinvested into
the football club or in pursuit of community objectives. "Right
to buy" would have helped, and resulted in our club being
in much safer hands.
10. At the current time the new owners have given
little cause for concern but the same issues of lack of supporter
involvement, transparency and how financial investment within
the club has been structured are still as prevalent now as with
the previous owners. The risk of what the future holds could have
been minimised with better levels of governance.
THE BROADER
PICTURE
11. Football clubs should be engaged in real
terms with the communities that they represent and should have
supporters actively involved. This should be enforced at a national
level with communities given the power to become owners within
their clubs if possible. The best interests of all parties involved
in clubs should be of paramount importance to ensure that football
clubs remain as the heart of the communities that they lie within.
12. Community ownership should be encouraged
by government, the relevant local authorities and the football
associations at all levels.
January 2011
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