Page last updated at 16:44 GMT, Tuesday, 7 October 2008 17:44 UK

FA's Triesman urges broad reforms

By Bill Wilson
Business reporter, BBC News, Football leaders' summit, London

As the current financial and economic turmoil has brought about a fresh appraisal at the way many industries - from banking to motor cars - are run, it seemed that top flight English football would remain a glittering exception to the new realism.

Lord Triesman
Lord Triesman is concerned about the way clubs are bought and sold

Boosted by multi-million pound TV deals, boasting international star players, and an ever-changing roll of billionaires wanting to add a Premier League club to their portfolios, it appeared the only way was up.

However a new sobriety is now gradually taking hold in the game, including what would not so long ago have seemed unthinkable in so many economic sectors - a call for better and tougher regulation.

Yet that is exactly what Lord Treisman, chairman of the Football Association and arguably the most powerful man in the domestic game, is calling for.

It is now time for more transparency in the game with regards to the finances of takeovers, Lord Treisman says.

Addressing the International Business Summit for Leaders in Football, held at Chelsea Football Club in London, he also calls for ownership rules to be toughened up.

Anxious supporters

Ownership by a tycoon is now seen as a double-edged sword, with the danger that owners are not necessarily transparent in their dealings, could plunge clubs further into debt, and could lose interest in their "trophy" assets at any time.

FIFA President Sepp Blatter
Fifa president Sepp Blatter says the English game is loaded with debt

"If the attitude is 'any buyer, in any circumstances, from anywhere' then the supporters will be very anxious," Lord Triesman points out.

"Our collegues from the Premier League will argue that a great deal of due diligence is done - if the [financial] information is there."

However, he also warns: "But the key point is, in the current period we are in... trust is not earned by saying 'I have got the business information and believe me it is alright'. That will not do."

Looking at the type of tycoons and business people looking to get involved in football club ownership, he says that the current "fit and proper" tests employed by both the Premier League and Football League, which focus on criminal convictions, are "too black and white".

He gives as an example the fact that Robert Mugabe, who has never been convicted, could own an English football club, whereas Nelson Mandela could not.

"I am concerned the tests are not working properly... they might not be as robust as they might be," Lord Triesman says.

"Whether [owners] are foreign or British, there needs to be a wider judgement than whether someone is inside or outside the law. There are other things that might be part of a test."

Not committed?

His fears come as part of a growing groundswell of concern that the finances of football are as precarious stacked as those in the wider financial world - despite the surface glitz and glamour.

Richard Scudamore
Richard Scudamore says TV rights are becoming more lucrative

For example, the ongoing credit crunch means Liverpool's American owners have put plans for a new stadium on hold, and Manchester United's sponsors AIG have just been bailed out by the US Government.

Furthermore, both clubs might find it hard to renegotiate their current loans when they have to be renewed.

Meanwhile, West Ham United United lost their sponsor when XL Leisure, in which Icelandic businessman Bjorgolfur Gudmundsson - who owns a majority of the club's shares - has an interest.

Perhaps that is why on Monday Fifa president Sepp Blatter depicted the English game as one overloaded with debt, dominated by four big clubs - Chelsea, Arsenal, Manchester United and Liverpool - and owned by wealthy foreigners who could walk away at any moment they choose.

Great debts

The dilemma for English clubs has been that if they are to continue to attract top players, pay high wages, and improve stadium facilities, they need to attract new capital - and increasingly the major source of that is coming from billionaires from abroad.

In the Premier League, nine clubs have overseas owners and another three - Newcastle United, Everton, and Tottenham Hotspur - are reportedly in the queue and up for grabs.

Some foreign takeover deals in the Premier League in the past few years - such as at Manchester United and Liverpool - have been highly leveraged, which means investors have borrowed heavily against their acquired asset.

Hence, there is an increasing amount of debt swirling around the the English game, and this is becoming an increasing concern for many, including Lord Triesman who believes there is real fear "a financial crisis or insolvency" which would cause serious harm to the game.

He points out that the Deloitte football business analysis of the 2006/07 season showed the top four clubs in England reported a combined 950m of debt.

"The latest estimate in the City yesterday was that the debts of English football as a whole has edged the 3,000 mark." he says.

Lord Triesman's concern is not only about the size of the debt, but about where chunks of football club debt pay have been parcelled off too as part of complicated debt packages.

Meanwhile, Mr Blatter worries that English clubs are being taken over by "people turning up with banker's guarantees who are not interested in football" and then they lose interest in the clubs and leave.

"What happens to the clubs then?" Mr Blatter asks.

More expensive

Yet, while top administrators grow increasingly fretful, one of the game's leading analysts takes a much more sanguine view.

Dan Jones is the man who compiles the annual Deloitte football rich list, which attempts to analyse the current financial state of the sport from the data that is currently available.

"As an overall number, the amount of debt in the Premier League may seem a big number, but there is more money in the game and sport generally these days, so we would expect the the debt figure to be bigger," he says.

Mr Jones says that the total debt across the 20 Premier League clubs for season 2006/07 was almost 2.5bn, of which 900m was "soft loans" or "benefactor funding".

He also observes that the debt levels are less than one year's income in the Premier League.

And Richard Scudamore, Premier League chief executive, believes that despite the credit crunch, the game of football in England has an optimistic future.

Mr Scudamore also says that when the next Premier League TV rights came up for negotiation, the amount of money will only go up.

Essential discussion

However, while the focus is on the top Premier League clubs and their ability to weather the global financial "storm clouds", Lord Triesman also wants to see a new set of values at the FA to treat the game as a cohesive industry with clubs of all sizes.

"It is not possible to only act in the interest of the biggest and richest clubs, despite what they rightly say about their global appeal," he says.

Neither, he points out, is it in the interest of the FA to only act in the interest of the "amateur game played in public parks".

Rather, he says, it is a matter of building trust and common purpose between all levels of the game. And it appears the message that a new, inclusive era is approaching seems to be getting through.

Sir Dave Richards, chairman of the Premier League, describes the "football industry is one of the most dynamic and high profile in the world.

"But it is essential people in our business take the time to... discuss the issues affecting our federations, associations, leagues, clubs and players," he adds.

"Only then can we grow our business for the benefit of all stakeholders into the next era."

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