For sale: the Premiership (cont.)
Posted: Friday April 27, 2007 2:41PM; Updated: Friday April 27, 2007 4:04PM
We were told, again, that the money was not important to him. Business is business, a "market" price had to be paid, but, Liverpool sources said, Moores was only concerned with ensuring the club went to people who would guide and govern it to future success, while preserving the traditions and dignity that Liverpool had maintained under Moores and Parry. Parry said that when the deal was done, it was "the worst day of David's life" -- despite that incredible return -- because the club had gone to new owners.
Many owners of Moores' generation bought a majority stake in their club long before the Premier League breakaway and the emergence of satellite TV that made the clubs such lucrative assets. Martin Edwards' father, Louis, was a Salford meat wholesaler and Manchester United fanatic who bought his first shares in the 1950s, then bought more and became chairman in the 1960s, though he appeared to love only the involvement. Louis seems never to have regarded United as a financial investment until the late 1970s, when his meat business was in trouble.
Martin, public school educated, grew up with United as a family business. In 1989, he agreed to sell his shares for £10 million to the improbable Michael Knighton. When that deal fell through, United floated on the stock market instead, and Edwards made money from his stake by selling it in chunks. By 2002, when he sold most of his remaining shares to Scottish mining entrepreneur Harry Dobson, his total takings from the shares, which originally cost the family around £1 million, came to £93 million. His dividends and salary over more than 20 years came to several more millions.
Doug Ellis, who finally took his leave of Aston Villa last August by selling to American Randy Lerner, the billionaire former chairman of the MBNA credit card company, made £29 million in total from his involvement in Villa. He bought his large stake in 1982, just after Villa won the European Cup, for somewhere under £500,000. Ken Bates, who bought the financially clapped-out Chelsea for £1 in 1982, received £17 million from selling the club to Abramovich in 2003.
At West Ham, Terry Brown hit the jackpot at the end of last year by selling his shares in a club on the skids to Icelandic businessmen Bjorgolfur Gudmundsson and Eggert Magnusson. Their remarkable £85 million valuation of West Ham meant that Brown was paid £33.4 million for his 7,392,000 shares. Charles Warner and Martin Cearns, descendants of the two original founding families of the Hammers, received £17.9 million and £7.8 million respectively for their stake in the club.
Noades sells up
Ron Noades, who sold Crystal Palace to Mark Goldberg for £17 million during the last bout of frenzied club share-shuffling in 1997, finally sold the club's Selhurst Park ground, too, at the end of last year. The price of £12 million, paid by a London property company that the club's present owner, Simon Jordan, said was acting as his nominee, took Noades' earnings from selling Palace to £29 million.
Other club owners are lining up to sell out. Sir John Hall and his son, Douglas, are known to be keen to sell their shares in Newcastle, although Freddy Shepherd, the other major shareholder and chairman, opposed recent takeover attempts and seems inclined to hold on. Manchester City say they are "in talks" with unnamed American investors.
The fierce "not for sale" protests by Manchester United fans against the 2005 takeover by Malcolm Glazer and his Florida-based family turns out to have created a misleading impression. It seemed likely that supporters generally would be hostile to their beloved clubs, temples of local belonging, falling into the hands of speculators from overseas.
United fans first organized in the mid-1990s to oppose steep ticket price rises, heavy-handed stewarding and the decline of atmosphere at the increasingly commercialized Old Trafford. The campaign was lifted to sophisticated heights in 1998 to fight the proposed £625 million takeover by BSkyB.
That battle, which they ultimately won, was influenced by, and in turn influenced, wider moves to understand the roots and hearts of the clubs, and rediscover the idea that their structures should reflect the sense of popular belonging that they embody.
The supporters' trust movement can be said to have been born in 1992 in a pub, the Butchers Arms, where Brian Lomax and three other disaffected Northampton Town fans gathered for a post-match grumble about the state of their club under a chairman they bitterly resented. Lomax conceived a plan to form an association of fans who would pay into a fund to help the club, but not part with any money except in return for shares.
"Throughout football history, fans have given themselves, and money, to the clubs, but ownership has stayed with a few directors who too often ran it in their own interests," Lomax explained. He became the first elected director of the Northampton Town trust, and served on the club's board for seven years.
In the late 1990s, the campaigning United fans, and those of other clubs disaffected by their directors making fortunes while imposing wicked price increases on the supporters, came together with Lomax to call for fan ownership of clubs. The Labor government recognized this as a progressive argument and agreed to set up Supporters Direct. This organization, which Lomax now chairs, aims to help fans set up trusts, build a stake in their clubs and have a say in the running of them.
It would be fair to say that before the 1990s, the majority of fans did not think about such things as the corporate structure of their clubs -- most were probably unaware that they even were companies, owned by shareholders. But the sudden attack on what felt like the communal soul of the game -- cheap entry, terraces, directors who didn't make big money out of the clubs -- led many fans on journeys to discover what had led to this.
The clubs, they learned, were mostly started in the 1880s by groups of friends interested only in playing the game. The Church was instrumental in encouraging them, because of the benefits it believed sport could bring to inner-city lads. The clubs became companies after the FA sanctioned professionalism in 1885, and the Football League was formed three years later.
The intention was to protect the clubs' founders from personal liability for the expenses, and also to raise new money to help build grounds. Fans flocked to the grounds and claimed the clubs as "theirs," loyalty pledged for life, although the "clubs" were in fact companies by then, and the chairmen, invariably local businessmen, were usually also the major shareholders, having bought up the shares in a financial crisis or boardroom coup.
The history of the game supports the gut instinct of many fans that these men were supposed to remain true to their own descriptions of themselves as "custodians" of the clubs, and not make money out of them. The FA imposed rules on the clubs' constitutions that prevented directors being paid salaries and limited shareholders' dividends.
They were to serve the clubs, the governing body insisted, not line their bank accounts with "revenues." In the 1990s, when Manchester United, Aston Villa, Newcastle and others floated on the stock market, they bypassed those long-standing rules. The shareholders looked to make fortunes, and the FA said nothing. This current bout of takeovers is delivering that bounty, the payoff to a generation never much loved -- Moores, perhaps, apart.
Yet, except for that Manchester United campaign, fans have not protested about any of this. Liverpool fans generally feel that they need the new stadium or will fall terminally behind, that Moores truly loved the club, and that Hicks and Gillett have made the right noises so far about not ripping them off. Many Villa fans had resented Ellis for all his time in charge and the Holte End has resounded to approving chants of "USA! USA!" since Lerner arrived with plans and a much higher class of PR.
West Ham fans sang their funny song to Magnusson, the former owner of a cookie-making company: "If you made a lot of money out of biscuits, buy our club." Many seem to resent the money Brown has made, but welcome the Icelanders' investment. Around the English game, there is little suspicion of the new owners for the money they intend to make.
The American invasion may seem an astonishing development, especially to other European football cultures whose clubs are still intact, as supporter-owned institutions. In England, though, the fans are not revolting. Now it is like following an industry in the Financial Times, with straightforward reports of clubs' accounts, the discussion concerned only with which club will be next.
To subscribe to World Soccer Magazine, click here.