The Debare: Tax breaks for supporter-owned clubs
Supporter-owned clubs should receive tax breaks - that will solve football's crisis, says Andy Burnham MP. It won't save them financially, says Damian Wild.
By Andy Burnham
Every professional football club in this country is a cherished community asset, built on generations of local support. And yet, though local people are the moral owners, they are rarely the real owners.
Too many clubs are still run in the narrow, private interest of a few rather than for the wider benefit of the many.
It is my firmly held view that models of private ownership have failed football supporters and the interest of the wider game.
Except for the few that achieve success, the tensions between the needs of shareholders and supporters cannot be reconciled.
So, yes, I fully support moves to make football clubs owned by their supporters – mutual, democratic and not-for-profit organisations. This is the governance structure of Real Madrid and Barcelona and there is no reason why it can’t work here.
There is a strong case to make tax incentives available to encourage the growth of supporters’ trusts because we know they bring more community involvement and public benefit. We also know that they provide safeguards against misuse of funds and lock in assets so that clubs will still be around for the enjoyment of future generations.
Together with other interested MPs, I recently met the paymaster general Dawn Primarolo and put this case to her. I hope we may now have a dialogue with the Treasury about how plans can be developed around democratic, not-for-profit organisations.
Even without incentives, 100 supporters’ trusts have formed in the past three years, most with the help of Supporters Direct, the government-funded body set up to promote supporter ownership. Some own their clubs outright – such as Lincoln City, Chesterfield and York City – while others have a significant shareholding.
This shows that there is enormous interest in this concept and that it is an idea whose time has most definitely come. It is the antidote to a decade of greed and profiteering.
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A system of tax incentives could really take the supporters’ trust movement to another level of influence.
- Andy Burnham, Labour MP for Leigh, is chair of Supporters Direct.
Tax breaks are not the answerBy Damian Wild
Few football fans would take issue with the idea of more supporters’ trusts running football clubs. In a sport where the heart more often than not rules the head, the idea of fan-run clubs is irresistibly romantic. And with the right sort of professional input it can work.
But sentiment shouldn’t be allowed to hold sway over other, and equally important, notions. Consistency, transparency and long-term financial security matter, too.
Take the current debate over the controversial super-creditor rule that gives players first call on a club’s assets. Players aside, there aren’t many others who can see the logic of the position.
Even government ministers hint that they want to see the rule scrapped as it is inconsistent with wider policy that seeks to put all creditors on an equal footing in a clear and transparent way.
That’s why in this environment it is strange to listen to the clamour surrounding the issue of tax breaks for clubs run by their supporters.
As football attempts to get its house in order by becoming more business-like, special treatment would be a retrograde step and could leave clubs dependent on a financial boost that is unlikely to be sustainable.
That is not to quarrel with the idea of supporters’ trusts per se. For the right club in the right situation they may be the best vehicle (or even the only vehicle) that can ensure survival.
That said, just as the overly generous ITV Digital contract collapsed and threw the sport into turmoil, relying on tax breaks would see clubs swapping one crutch for another.
More football clubs than ever before are in financial difficulties. And until something fundamental gives – in the next few years, fans will have to be persuaded that a merger with a local rival might in some cases be the only thing that ensures a club’s survival – that number will only grow.
Supporters’ trusts might help ensure some clubs survival. But waking up to football’s financial reality is what will save the sport. Tax breaks are not the answer.
- Damian Wild is editor of Accountancy Age.