As big business continues to dominate the football landscape worldwide, fan ownership is a concept that is becoming an attractive proposition for some of the game’s supporters.
Too many examples abound where clubs have plunged to devastating depths after millionaire owners have grown tired of their plaything and jumped ship, or been found guilty of fraudulent dealings.
The A-League has had its fair share of ownership mishaps itself, so could fan-controlled clubs ever become a reality in Australia?
The A-League is still at an early stage, and any suggestion that a current club could be majority-owned by fans in the next 10 years may just be a lofty pipe dream.
But is there at least a possibility of clubs creating Supporters’ Trusts, which in turn would control a percentage of a club and have an increased say in its governance?
After attending FC Union Berlin’s match against RB Leipzig in the 2. Bundesliga last weekend, which featured extensive Union protests against their opponent’s owners, the idea of fan ownership in Australia raised its head.
Union Berlin have about 12,000 members who collectively own 51 per cent of the club. This, of course, is common in Germany, through its much heralded and publicised 50+1 rule. But Union, further promoting itself as the shining light in fan ownership, also offers fans the opportunity to buy shares in the Stadion An der Alten Försterei.
The rule isn’t without hitches however, and Germany’s model isn’t perfect. Clubs still go bankrupt and teams such as Bayer Leverkusen and Wolfsburg are largely controlled by their investors – Bayer and Volkswagen respectively.
RB Leipzig, meanwhile, are entirely owned by Red Bull and have reportedly only about 300 members, all of whom are exclusively connected to the energy drink’s headquarters in Austria. The DFL allowed them entry to Germany’s second division only because the 50+1 rule lies on shaky legal ground. But that’s what Union fans were protesting about.
Considering the contrasting governance of both clubs, and the passionate opposition to RB Leipzig among most German fans, what do Australian supporters prefer? Is it too obvious and presumptuous to assume that they would fall over each other for fan ownership?
Or are we just happy enough to have a functional league, content to let FFA and millionaire owners worry about financial sustainability?
The A-League still has a lot of work to do to ensure clubs aren’t bleeding money, but why can’t Supporters’ Trusts begin emerging in order to contribute funds as well as increase fan input?
From little things big things grow, right?
Fan bases in Australia would have to take a dramatic jump to even flirt with the possibility of complete ownership, but with the help of local businesses a start could be made. Melbourne Victory or Western Sydney Wanderers are the best standing candidates. With their large following and membership numbers, could they dip their toes into part-ownership?
Say 10,000 fans committed $200 per year for a Supporters’ Trust membership, that’s $2 million. Even at $100, which isn’t out of a passionate football fan’s budget, there would be a $1 million windfall. It’s not enough to run a football club, but surely enough to own a percentage and become contributing stakeholders.
There are examples outside Germany where fan ownership has been successful, the most recent and publicised example being Portsmouth. Fraudulent and chaotic managements led to three relegations in four seasons and two bouts of administration for the seaside club. But the Pompey Supporters’ Trust and 11 local businessman stepped in to launch a takeover in 2013.
They now stand as the biggest English club to be owned by fans and are attracting gates of 16,000 in League Two. That’s on par with Queens Park Rangers, who play in the EPL under the direction of Malaysian millionaire owner Tony Fernandes.
Exeter City are another example in England, and they boast the second-longest serving manager in the professional divisions, Paul Tisdale, who’s been there for seven years. Just a short distance away from Australia, Yokohama FC are the first Japanese club to be solely owned and operated by supporters. They are almost 15 years old and compete in J. League 2.
MLS club Seattle Sounders, meanwhile, based their ownership model around Barcelona’s socios system, where every season ticket holder has a vote in major club decisions. They also have the power to kick out their general manager.
It could be a fruitful system in Australia, allowing fans to increase their say in the running of A-League clubs. They could scrutinise club decisions, as well as hold FFA to account for its governance of the A-League.
Links with grassroots football would also inevitably grow, as people in the terraces would be keen to promote local talent.
A core fan group, with a number of local businesses could even potentially takeover an A-League club. It’s not entirely out of the realms of possibility. But are there enough passionate football fans in Australia to make such a pipe dream a reality?
Admittedly the A-League has a salary cap and the competition isn’t in danger of producing a Paris Saint-Germain or Manchester City. We aren’t at the mercy of billionaire owners buying trophies, but we’re still at the mercy of millionaires who may pull the plug at any moment.
Fan ownership is therefore something Australian football could and should work towards, starting with the emergence of Supporters’ Trusts. The next question, however, is whether or not FFA would be open to the idea, and how they could bring it in.
How much power a Supporters’ Trust would hold would have to come down to a case-by-case basis, but there’s no doubt that empowering and including supporters can only help grow the game, if we’re not talking about commercial growth.
Tapping into the unique passion that lies in every football supporter could help transform the game in Australia and bring it back to the people.
Fussball ist unser leben
Roar Guru
It's happening. Today it's being reported that 35% of MVFC equity ownership is being opened up to the public. Although I should add the story has been poorly written with obvious errors relating to the cost of a minimum parcel of shares. Source: http://www.news.com.au/sport/football/fans-offered-to-buy-stake-in-melbourne-victory-with-a-stake-going-for-as-little-as-500/story-fndkzvnd-1227077084872
Leonardo
Roar Guru
Great story, thanks AZ. Buy what does that mean now to the fans in terms of the value of their shares, as those who have invested their money and what say do they have in the running of the club?
AZ_RBB
Guest
http://www.portsmouth.co.uk/sport/pompey/pompey-clear-debts-1-6326146 - amazing news!
AZ_RBB
Guest
FYI NPL Grand Final, Bonnyrigg v Metro Stars at Lambert Park, NSW at 4pm this Saturday. Not sure of any web stream information. But I'm almost certain it will be streamed live.
Paul
Guest
I dare say that the main business of the listed company is the Leagues Club at Red Hill, not the team.
mattq
Guest
agree 100%
Leonardo
Roar Guru
Equity financing by the sale of an ownership interest to raise funds for business purposes is an excellent idea for football clubs or any business really. Football fans are very passionate about their club and would add a great deal of interest to their involvement with the club and its running. A giant initial public offering of even say 30% would be running into the millions for a club like MVFC or even SFC or BR. Its a fantastic way to raise capital interest free and provide the club with a surge in investment and improvements across the board. At the end of the day the club doesn't have to pay back the money raised, just the value of the shares at redemption. So if its a great success no problems, everyone wins. If its a failure, still no problem for the club, they have used the interest free money and the ones who get their fingers burnt are the fans and not the club. If the shares are worthless the club pays back virtually nothing. Wait a minute, is that a good idea? Like anything in business, there is a risk involved and the investor needs to be prepared to take that risk, but be lured by the potential returns. I don't think the A-League is at that level yet, where it can offer returns that are better than even bank interest. So at this point in time the winners would be the clubs and the losers would be the fans.
AZ_RBB
Guest
Add to that, nearly 7k attended a practice match between MVFC and SFC today in Hobart. Ended in a 1-1 draw thanks to a late equaliser by MVFC.
AZ_RBB
Guest
Nothing to do with anything on here but throw it in regardless. Bonnyrigg have defeated Palm Beach and Adelaide's Metrostars have defeated South Melbourne to qualify for the NPL Grand Final. Bonnyrigg have won the right to host the final next weekend. I think kick off will be at 3pm on Saturday. Keen to see NSW win the title for the second year running. But where has this form been in the FFA Cup?
Jack Russell
Roar Guru
The Broncos are currently valued at $25 million on the ASX, which is very very small for a listed company. Given they're miles bigger than any A-League club it does show that it's probably a waste of time and money talking about listing.
Adrian none
Roar Rookie
Fussball You can buy many English Champ league clubs for lmuch ess then $33 M Nice wirte up about Germany football and some of it model, But I don't think most Australian Football (Soccer) fans know how lucky A-league is to have salary cap and no promotion and relegation systerm in place ... it not about fans owning 51% or not...it about a team like MVFL having revenue of $14.4 million , and spend less then 40% of this on player wagers.. Also, i think there a reason why Man City has brought into two team in MSL and A-league (promotion and relegation) means you can invest into long term thinking
Bondy
Guest
Fuss Interesting read (£380,000www.telegraph.co.uk/sport/football/teams/manchester-united/11121741/Cristiano-Ronaldo-could-return-to-Old-Trafford-but-Manchester-United-will-have-to-pay-140-million.html ). I dont know if it could happen financially but I could see Ronaldo going back to Utd he had fond memories there ...
Swampy
Guest
A fans ownership model might work for a smaller franchise in Australia. Canberra or woolongong would be prime candidates I'd have thought. Perhaps even a third Melbourne team (which would give it a differentiation from the two incumbents). However the Barcelona model works for three completely different reasons - they have been successful over a long period, secondly, they are held up as an icon of the state of catalunya by their local supporters - ownership in barca by the Catalans is an important statement of their wish for independence from Madrid and thirdly, whilst membership revenue is very reliable Barca are able to negotiate (as are Real) their own deal for TV rights. La liga does not revenue share (thus the huge imbalance in la liga between barca and real and all the other teams). In essence, barca is not a relevant model for the A League. -- Comment from The Roar's iPhone app.
Ben of Phnom Penh
Roar Guru
I agree, though a shareholders' charter underlines for the directors as to what that interest entails. This is how various "ethical" companies and funds work. If the shareholders vote to change the charter then fine, however they subsequently risk the FFA pulling their licence. This is no different from any owner. One big issue though is the extra cost of compliance for ASX listed companies.
IanW
Guest
I think you'll find that those specifics conflict with ASX listing requirements. You can certainly list a footy club on the ASX - the Brisbane Broncos are on the ASX, with the majority of shares being owned by News Ltd. The West Coast Eagles were set up as Indian Pacific Pty Ltd, with the aim of listing as well, but that didnt happen for a variety of reasons.
Alexander Mitchell
Roar Pro
In which case I apologise. It simply seemed convenient that you were there for the only game that Union were receiving publicity for.
Ben of Phnom Penh
Roar Guru
Yes, though this interest can be determined through a shareholders' charter and other instruments which define the shareholders' interest in terms of the broader footballing landscape.
Janek Speight
Expert
You doubt I was there? Well, I was and I hold a Dauer Karte. Thanks for reading though, Alexander
IanW
Guest
The problem with being publicly traded as a Pty Ltd is it puts a legal obligation on the directors to act in the interests of shareholders. Not the club. Not the code. Shareholders.
rusty0256
Guest
Very rare of course but there appear to be 5 football teams that are publicly listed with shares that can be traded. On the face of it it seems a great way that fans and major investors alike can 'buy into' the club they love. Not sure if this would ever be possible or viable given the rather small total valuations of even our biggest A-League clubs (perhaps Fuss can give his learned opinion on this?) but here are the ones that do exist. http://www.therichest.com/sports/soccer-sports/5-football-clubs-listed-on-the-stock-exchange/