Written evidence submitted by Hendon Football
Club Supporters Trust|
level of governance in England and Wales is gradually improving,
but much more needs to be done to properly regulate the game.
is having a detrimental effect on the game at both professional
and semi-professional games and can affect the competitive balance
of a league during a season.
Supporters Trusts are well placed to help a Football Club ride
out a crisis better than the individual ownership model, the Trust
suffers from certain financial penalties that can discourage community
Are football governance rules in England and Wales,
and the governing bodies which set and apply them, fit for purpose?
1. While some rules have been brought in at various
levels to improve the level of governance in football, it is my
belief that these offer little protection to Football Clubs themselves
from owners with goals that don't align with the club's. This
has been evident at two recent stages in Hendon Football Club's
2. In 1993, the club was owned by a Mr Victor
Green, who midway during the season was courted by Stevenage Borough
(then playing in the Isthmian League, a division below Hendon)
to invest at their club rather than into Hendon. As his plans
to renovate the ground at Hendon's Claremont Road ground were
stalling while awaiting planning permission, he decided his future
lay with Stevenage, but not before releasing the club's two star
playersGary Crawshaw and Simon Clarkon free transfers.
Both players soon signed contracts at Stevenage.
3. Two days after releasing these players, Victor
Green resigned as chairman of Hendon FC and sold his shares to
his wife, Elaine Green while hein an apparent conflict
of interestsjoined the board of at Stevenage Borough FC.
Elaine ran the club through to the end of the season before deciding
to sell her interest in the club, and with few interested parties
until the last minute, Hendon were only saved at the last minute
by local firm Arbiter Group PLC (a local firm who primarily traded
in musical instruments) on Monday 15 August 1994.
4. Not only were few questions asked by the football
authorities about the Green family's apparent conflict of interests
during the 1993-94 season, but Hendon were allowed to start the
season on Saturday 13 August, before any takeover had been agreed,
despite public knowledge that the club was liable to fold within
5. It is fair to point out that the Isthmian
League, and most other football bodies, have made significant
moves to resolving the latter situationusually now requiring
bonds of member clubs in trouble and suspending clubs until problems
are resolved as a matter of duty of care to other teams and players
(See Croydon Athletic, 2010).
6. However, I believe that that more needs to
be done to ensure that owners of football clubs cannot easily
get around the long standing rules preventing them from having
a significant interest in two teams or from taking assets (players
or otherwise) from one club to another as easily as they currently
can. In a more recent example, Graham Westley made a similar mid-season
move from being majority shareholder and manager at Farnborough
Town to manage Stevenage Borough, taking as many as seven contracted
players with him.
7. The Arbiter Group invested heavily in the
team at Hendon, as well as building a set of costly banqueting
facilities. However, unbeknown at the time to supporters, all
the investment in Hendon Football Club Limited was being put through
the accounts as a loan from the parent group. By the middle of
the 2000s, the football club had a liability of over £2 million
to the Arbiter Group who by now had moved in private ownership
and were no longer willing to fund the football club.
8. The company made clear to the supporters that
they would no longer fund Hendon FC and that their intention was
to work with Barnet Council (who owned the freehold of the club's
ground at Claremont Road) to sell the land for development, sharing
the receipts between council and the Arbiter Group Ltd. Arbiter
Group would then allow Hendon FC to be sold to any interested
group for a token fee.
9. With the help of Supporters Direct, supporters
of Hendon FC formed a Supporters' Trust and signalled their intention
to purchase the club following the sale of Claremont Road and
continue running it. Without going into full detail of the various
agreements that took place between the FA, Hendon Football Club
Ltd (the Arbiter Group), Barnet Council and Hendon Football Club
Supporters' Trust, suffice to say that Claremont Road is now owned
by a company called MontClare Developments and lying derelict,
while Hendon Football Club have been taken over by the Supporters,
albeit now homeless and unable to play in their community.
10. While the Football Association did their
best to request that Barnet Council and the Arbiter Group agreed
to provide a token sum to the Supporters' Trust before agreeing
the transfer of the football club's membership to the Trust, it
was plainly apparent they were unable to impose any conditions
to assist the Trust, nor prevent the owners from separating the
Football Club's primary asset from the club for their own benefit.
11. However, it is fair to say that Hendon FC's
case, while the process was delayed by their attempts at intervention
in the ground situation, the FA's membership committee were helpful
throughout the transfer of membership, as were the Isthmian League
and both London and Middlesex Football Associations.
12. As has proved the case at numerous other
clubs, a lack of transparency, lack of asset protection and lack
of accountability of owners to the fans, community and football
authorities has allowed debt to build and generate a situation
where the football club have been forced out of their community
to survive, and local people in a deprived area of London have
lost access to a community asset.
13. With more oversight of clubs from the governing
bodies and/or some form of licensing, as pioneered in the Bundesliga
with the Lizenzierungsordnung, some of these problems could most
likely be averted due to the danger of being denied entry into
competition while for most of the others, it would at least act
as some form of early warning system.
Is there too much debt in the professional game?
14. In terms of the professional game, I have
little evidence to offer. However, it is worth noting that wage
inflation in the professional game, partly fuelled by debt incurred
as clubs "chase the dream" has a significant impact
on wage demands at lower (semi-professional) levels.
15. Indeed, debt isn't solely a problem in the
professional gamemany non-league clubs have suffered for
similar reasons in recent years. A significant number of clubs
have become insolvent and entered administration with mounting
debt or folded as a result in recent years either partly or largely
as a result of high wage costs, For example, Hornchurch FC (2005),
Weymouth FC (2009), Lewes FC (2008), Leyton FC (2011), Kingstonian
16. In a number of cases, these clubs have been
forced to play severely weakened teams at very short notice mid-season,
distorting the league table where some teams had played a much
stronger side than others. For example, after jettisoning their
first team as their problems first mounted in December 2007, Leyton
lost 11-1 to home to Hendon and only managed to earn one point
out of a total of 16 that season in their remaining fixtures.
17. Indeed as outlined above, Hendon FC loss
of the facilities at Claremont Road is partially down to the unchecked
and mounting debt built by Arbiter Group Ltd/Plc, much of which
was down to overspending on wagesin the 1998-99 season,
Hendon spent their entire gate receipts (approx £28k) on
a single player's wages (Junior Lewis).
What are the pros and cons of the Supporter Trust
18. It is my belief that a Supporters' Trust
provides the most stable ownership model for a Football Club,
as the interests of the owners are unlikely to diverge from those
of the club itself and the community around the club. The model
rules drafted by Supporters' Direct ensure that a club cannot
be stripped of assets (such as their ground) for the benefit of
the owner, while it is in the interest of the fans not to run
up unsustainable debts as the club would most likely suffer sporting
penalties such as a points deduction.
19. The Trust also helps ensure that a club does
not become reliant on a single benefactor/director, benevolent
or otherwise, who may be the only individual with the power to
fund the club, yetthrough outside circumstancessuddenly
be unable to do so. Croydon Athletic FC suffered this problem
during the 2010 Pakistan Cricket Betting scandal, and both Gretna
FC suffered terminally in 2008. By contrast, as a Trust has to
have a board of a certain size by law and even if it encounters
funding problems, should consequently always be in a position
to at least function.
20. Indeed, in Hendon Football Club's case, it
is clear that had the Supporters' Trust not been formed, there
would no longer be a club at all as no "white knight"
came forward to take over and the attached youth setupalbeit
limited at presentwould most likely have folded entirely,
leaving youngsters without a team. Similarly, it has been particularly
noticeable from experience at Hendon FC that the emotional buy-in,
and community spirit fostered by supporters owning our own club
has encouraged more people to volunteer and help with fundraising,
administration and matchday activities.
21. Supporters Direct's original model rules
also ensure that the board is legally obliged to work in and with
the local community, to strengthen bonds between Club and community
and promote sport as beneficial to the local community. At Hendon
this has led to the Trust nominating a local charity, Rays of
Sunshine, as the club's charity and now directing funds from some
fundraising activities this way, while larger clubs have worked
with local junior clubs, assisted with Football in the Community
Schemes, or in Brentford's case have gone as far as to take on
the scheme themselves.
22. It is, however, clear that a Trust owning
a club is no silver bullet to all of the problems of other ownership
models: Notts County, for example, suffered from problems with
supporter pressure for investment ultimately leading to the Trust
selling the club and the recent abortive Munto/Quadbak takeover.
Similarly the Trust model has been slightly modified and used
to take-over, or run clubs without the emotional attachment normal
amongst traditional Trusts.
23. MyFootballClub.com experimented with this
model and took over Ebbsfleet United FC, but although they reached
31000 paid members by September 2008, only around 800 members
renewed by February 2010, leaving a large deficit in finances.
Similarly, Southill Alexander FC were formed by disaffected MyFC.com
members under a similar format to start the 2009-10 season, but
midway through their second season in January 2011 the club withdrew
from their league amid some acrimony.
24. As rewarding as running a semi-professional
football club is, it can also be somewhat difficult to balance
the books, even while running on an uncompetitive wage bill. As
such, it can be difficult to justify the funding of youth football,
particularly as the Club can often be denied funding from some
schemes available to other Youth Football Clubs based on the status
of the Senior team.
25. Similarly, it can be difficult to obtain
funding for larger schemes such as the building of a new ground
(FC United of Manchester), important for a homeless club to build
community linksIt would assist heavily if tax-breaks were
available to Community-based Supporters Trusts developing large
scale capital-schemes where a community benefit can be demonstrated.
This would help level a currently uneven playing field, where
individual owners can lend money to their clubs and borrow personally
at tax efficient rates.
26. Similarly companies owned as part of a wider
group have another tax benefit over Trust clubs, where the parent
group can offset tax due on their wider profits against losses
made by the football club. Due to the nature of Trusts, the effect
is again to provide a financial opportunity to other models that
simply isn't available to Trusts. Again, a corresponding break
targeted at assisting Trusts would help encourage community ownership.