Topic: Supporter Representation & 50+1 Voting Rights

[JackBauer]

How is there no financing involved? You are suggesting that FSG be stripped of over half of the voting rights. In a democracy, you cannot expropriate private property without compensating the owner. Do you think those rights are valueless?

[redmark]

How is there no financing involved? You are suggesting that FSG be stripped of over half of the voting rights. In a democracy, you cannot expropriate private property without compensating the owner. Do you think those rights are valueless?

On limited, specific areas of the club's basic identity: https://reclaimourgame.com/ - 'for instance: a change of competition or league; a change of home ground; a change of name, club colours or badge'.

Which of those do you think both impacts the owners commercial interests and should be their sole decision?

[Devon Red]

There's no financing involved.

To be pedantic that's not 'ownership' in the sense of clubs like Exeter City etc. It would certainly be very different to the Supporters Trust model. I just have no idea how we get there from where we are now. It sounds very 'cake and eat it'. Are there any examples of privately owned entities being forced to hand over majority voting rights without compensation?

[redmark]

Are there any examples of privately owned entities being forced to hand over majority voting rights without compensation?

As discussed, this would entail reclassification of football clubs as something slightly more than simple private property. But in theory, I'd be happy for owners to be able to claim compensation for demonstrable financial losses as a result of the implementation of majority voting rights. And no, a reduced Deloitte valuation isn't demonstrable losses.

[JackBauer]

On limited, specific areas of the club's basic identity: https://reclaimourgame.com/ - 'for instance: a change of competition or league; a change of home ground; a change of name, club colours or badge'.

Which of those do you think both impacts the owners commercial interests and should be their sole decision?

They all impact the owners' commercial interests, since they all relate to the fundamental nature of the business. The way company law works in most of the developed world is that such matters are exclusively in the purview of the company's management.

Your answer to that is this:

As discussed, this would entail reclassification of football clubs as something slightly more than simple private property. But in theory, I'd be happy for owners to be able to claim compensation for demonstrable financial losses as a result of the implementation of majority voting rights. And no, a reduced Deloitte valuation isn't demonstrable losses.

Again, that is fundamentally incompatible with basic property rights in a democracy. You cannot expropriate someone's property and make them demonstrate the scale of the loss before compensating them.

[classycarra]

They all impact the owners' commercial interests, since they all relate to the fundamental nature of the business. The way company law works in most of the developed world is that such matters are exclusively in the purview of the company's management.

Your answer to that is this:

Again, that is fundamentally incompatible with basic property rights in a democracy. You cannot expropriate someone's property and make them demonstrate the scale of the loss before compensating them.

The way company law works in most of the developed world is that such matters are legislated upon by the national government

[redmark]

They all impact the owners' commercial interests, since they all relate to the fundamental nature of the business. The way company law works in most of the western world is that such matters are exclusively in the purview of the company's management.

You missed the 'and'. Do you think a football club owner - without fan input - should be able to change the name of the club? Change colours? Move to another city?

Again, that is fundamentally incompatible with basic property rights in a democracy. You cannot expropriate someone's property and then leave it to them to demonstrate they're worse off as a result.

If they can't demonstrate they're worse off, how have I expropriated their property?

[Eeyore]

They all impact the owners' commercial interests, since they all relate to the fundamental nature of the business. The way company law works in most of the developed world is that such matters are exclusively in the purview of the company's management.

Your answer to that is this:

Again, that is fundamentally incompatible with basic property rights in a democracy. You cannot expropriate someone's property and make them demonstrate the scale of the loss before compensating them.

Please explain that to the residents of Anfield who saw the value of their properties plummet when the club tinned up their neighbouring properties. Those people were then threatened with compulsory purchase orders and lost tens of thousands of pounds.

[JackBauer]

The way company law works in most of the developed world is that such matters are legislated upon by the national government

Yes, of course, but national governments tend to respect things like property rights and (in most cases) the rule of law.

[redmark]

Yes, of course, but national governments tend to respect things like property rights and (in most cases) the rule of law.

We're not expropriating property. We're imposing restrictions on what the owners of that property can do with it unilaterally without agreement from their stakeholders.

[Zeb]

As said, on some issues clubs and leagues have already conceded that supporters should have a say of some sort - it's where the fan liaison officers have come from to appease MPs already looking at football's problems with governance and ownership. Making that consultation on significant issues a prerequisite of a licence to own a club really shouldn't be an issue. "I'm not buying this club if I can't move it to Dubai" isn't an owner you'd want anyway... Confusing proposals on the table and long term aspirations isn't helpful.

[diggerling!]

Yes, of course, but national governments tend to respect things like property rights and (in most cases) the rule of law.

Why are they constantly changing them then?

[classycarra]

Yes, of course, but national governments tend to respect things like property rights and (in most cases) the rule of law.

Then you've just contradicted your point.

Think you're tending to overdramatise the proposal.

[Trendisnotdestiny]

Spot on

Naysayers need to recognise how change comes about

The Labour government of 1997 had a manifesto promise to ban advertising all advertising of tobacco products. It finally made it into law in 2002 under the Tobacco Advertising and Promotion Act 2002. At the time right-minded people pointed out that it wasn't enough, and it wasn't. But big changes of complex systems have many cogs (of which, in this example, advertising is only a tiny cog).

In 2002 nobody thought that we were four years away from a complete blanket ban on smoking in public places in 2006.

It's all about building the groundswell, keep the support interested and the concerns public and prominent. Keep those people who want change interested, set out small measurable and achievable goals (without any distracting controversy - eg right now we need to work with Chelsea fans, so lets keep them on board while we have shared long term goals rather than divisive conversations about their owner) to work towards and then once complete move immediately onto the next coordinated goal.

The first objective is fans having a legal mandate to be involved in board decisions. This current government rightly has no fans here, but that doesn't mean we can't use them. There's bills in the next parliament that can have this goal or other similar modest goals, incorporated. In Tracy Crouch, a qualified referee, there's an MP that cares about football who can work on advocacy with people who won't listen to fans.

There are real opportunities to capitalise on at the moment. The ultimate objective may well be 50 + 1, or something similarly ambitious. Noone familiar with system change thinks this will happen overnight, but they are aware that it is possible if the right programmes of work and advocacy are followed. Don't let the daunting size of the ultimate goal distract from the fact that real change is achievable and can kick off a chain of reactions and other work that will make the ultimate goal look a lot more achievable a little time down the line.

[JackBauer]

You missed the 'and'. Do you think a football club owner - without fan input - should be able to change the name of the club? Change colours? Move to another city?

In principle, no on those matters, subject to what is meant here by "fan input". Which fans? All of them? A self-selecting clique?

But you're not suggesting "fan involvement" be limited to those three matters, are you?

If they can't demonstrate they're worse off, how have I expropriated their property?

Any attempt at expropriation needs to be accompanied by a good faith offer of compensation intended to remedy the loss. Unless I have misunderstood, you appear to be suggesting that these rights be expropriated without any compensation at all unless the owners can demonstrate such loss, and for good measure they're not allowed to refer to independent valuations for this purpose. You haven't said to whose satisfaction or on what basis.

[JackBauer]

We're not expropriating property. We're imposing restrictions on what the owners of that property can do with it unilaterally without agreement from their stakeholders.

Right, so it's worth less, because there is less that can be done with it.

[JackBauer]

Why are they constantly changing them then?

Company law is not "constantly" changed. It is occasionally modified and updated to reflect developments in commercial practice. The fundamental principles haven't changed in over a hundred years.

[JackBauer]

Then you've just contradicted your point.

Care to explain how? Please name a recent example of large scale expropriation without compensation in any western democracy.

[diggerling!]

Right, so it's worth less, because there is less that can be done with it.

How many legislative changes have been made as a result of Brexit and do they not have an affect on what can be done with these businesses? Is Brexit not happening because business owners are out of pocket?

[redmark]

In principle, no on those matters, subject to what is meant here by "fan input". Which fans? All of them? A self-selecting clique?

But you're not suggesting "fan involvement" be limited to those three matters, are you?

Any attempt at expropriation needs to be accompanied by a good faith offer of compensation intended to remedy the loss. Unless I have misunderstood, you appear to be suggesting that these rights be expropriated without any compensation at all unless the owners can demonstrate such loss, and for good measure they're not allowed to refer to independent valuations for this purpose. You haven't said to whose satisfaction or on what basis.

You're flipping between 'rights' and 'property'.
Expropriating rights - as in unilateral right to do whatever they want without regard to their stakeholders? Yes.
Expropriating property? No. If you think there's a demonstrable impact on the value of the property by the reduction in rights, that should be demonstrable.

There are plenty of precedents for regulation or restriction on what someone is allowed to do with their property.

On the first point, the longer list (not mine) was in the post you originally responded to, but glossed over those:  'for instance: a change of competition or league; a change of home ground; a change of name, club colours or badge'.

Yes, I suspect the 'for instance' may be omitting a few more - and some might even damage the financial value of the property, slightly. That should be up for discussion on the detail. But you can't simply assert that removal of unilateral rights is in itself an attack on property and therefore can't even be discussed as potential policy.

[diggerling!]

Company law is not "constantly" changed. It is occasionally modified and updated to reflect developments in commercial practice. The fundamental principles haven't changed in over a hundred years.

I'm not really bothered about company law because I would relieve the clubs of their 'company' status and have them operate under a new legislature, but if I was, I'd describe this as an 'occasional modification to reflect developments in commercial practice' (ie: the greed of the owners who have shown themselves unable to operate in the interests of their stakeholders and the wider game).

[redmark]

I'm not really bothered about company law because I would relieve the clubs of their 'company' status and have them operate under a new legislature, but if I was, I'd describe this as an 'occasional modification to reflect developments in commercial practice' (ie: the greed of the owners who have shown themselves unable to operate in the interests of their stakeholders and the wider game).

If the owners got fussy about having their normal corporate status respected, recent events seem to provide some evidence of corporate anti-competitive cartel behaviour...

[JackBauer]

How many legislative changes have been made as a result of Brexit and do they not have an affect on what can be done with these businesses? Is Brexit not happening because business owners are out of pocket?

Company shareholders have not been stripped of voting rights attached to their shares due to Brexit.

[Careca9]

I'm not really bothered about company law because I would relieve the clubs of their 'company' status and have them operate under a new legislature, but if I was, I'd describe this as an 'occasional modification to reflect developments in commercial practice' (ie: the greed of the owners who have shown themselves unable to operate in the interests of their stakeholders and the wider game).

There is one little problem with that as if you bring that in there will be unforeseen impacts for other entities such as businesses etc. They could then be open to same practise so that’s where you run into difficulties, could it be applied to a well run socially responsible company who happened to be on wrong side of a govt and I know the answer will be well I would restrict it to football clubs only but then club owners could challenge in the courts to say they are being treated unfairly compared to other entities and they would more than likely win. In my opinion and it’s only an opinion ffp and then an annual compliance review every year of owners for probriety would be a start, part of the review would be owners laying out their plans for upcoming year from commercial perspective to independent regulator but the plans have to be public ally available for viewing such as ticket prices, etc (not transfer policy as that’s too fluid and should be for manager and board anyway). That way owners plans are known in advcance so people can mobilise if An ill conceived item on table. If an owner drops to drop a bombshell on fans out of nowhere such as ESL then as you can’t force anyone to sell automatic huge points deduction and personal liability for fines (ie owners to pay not clubs) could be a remedy. Now that’s not a panacea for anything but might be a little start

[JackBauer]

You're flipping between 'rights' and 'property'.
Expropriating rights - as in unilateral right to do whatever they want without regard to their stakeholders? Yes.
Expropriating property? No. If you think there's a demonstrable impact on the value of the property by the reduction in rights, that should be demonstrable.

There are plenty of precedents for regulation or restriction on what someone is allowed to do with their property.

On the first point, the longer list (not mine) was in the post you originally responded to, but glossed over those:  'for instance: a change of competition or league; a change of home ground; a change of name, club colours or badge'.

Yes, I suspect the 'for instance' may be omitting a few more - and some might even damage the financial value of the property, slightly. That should be up for discussion on the detail. But you can't simply assert that removal of unilateral rights is in itself an attack on property and therefore can't even be discussed as potential policy.

It seems like the goalposts are being shifted here somewhat. I agree with you that imposing certain restrictions on what I can and can't do with my property isn't (necessarily) stripping me of my property, in the way that if I own a sewage treatment plant I should not be allowed to use it to pollute rivers etc. So saying that club owners shouldn't be able, for example, to move the team elsewhere absent some broader authority is not of itself an assault on private property.

However, that's not what is being suggested, is it? The proposal is for half of voting control over clubs to be ceded to some (vague, and undefined) "fans". That's very different. Voting rights attaching to shares have value in and of themselves. A share with voting rights is ordinarily more valuable than one without.

[diggerling!]

If the owners got fussy about having their normal corporate status respected, recent events seem to provide some evidence of corporate anti-competitive cartel behaviour...

Fudge, fudge.. they're the best we can do, etc..

[diggerling!]

Company shareholders have not been stripped of voting rights attached to their shares due to Brexit.

The effect is the same: certain 'opportunities' have been made unavailable to them against their will. And there's nothing they can do about it because the Govt thinks it's 'for the greater good'.

[redmark]

It seems like the goalposts are being shifted here somewhat. I agree with you that imposing certain restrictions on what I can and can't do with my property isn't (necessarily) stripping me of my property, in the way that if I own a sewage treatment plant I should not be allowed to use it to pollute rivers etc. So saying that club owners shouldn't be able, for example, to move the team elsewhere absent some broader authority is not of itself an assault on private property.

However, that's not what is being suggested, is it? The proposal is for half of voting control over clubs to be ceded to some (vague, and undefined) "fans". That's very different. Voting rights attaching to shares have value in and of themselves. A share with voting rights is ordinarily more valuable than one without.

No goalpost shifting - it is what it is being suggested (by me at least, I think, unless I've confused myself on the subject ).

The suggestion isn't for a supporters' 50+1 vote on every commercial decision - still less, day to day operation or normal club/team affairs. Only ones that impact the club's identity - examples above, but of course to be discussed and very clearly defined. I'd accept that some possible additions might impact property value to a very limited degree - off the top of my head, a potential partner or sponsor that the fans believe would damage the reputation of the club or run counter to the club's values/interests: say, a certain newspaper.

[socrates the sophist]

So let's say we get the 50%+1, how is that good for lfc exactly? We wouldn't be able to support the club financially and it needs outside financing to continue to compete. We don't really have any way to increase revenue except for a super league model. If we just spend within the club's means then we'll be 12th at best for a very, very long time. And then, you will be the ones choosing to furlough employees.

[redmark]

So let's say we get the 50%+1, how is that good for lfc exactly? We wouldn't be able to support the club financially and it needs outside financing to continue to compete. We don't really have any way to increase revenue except for a super league model. If we just spend within the club's means then we'll be 12th at best for a very, very long time. And then, you will be the ones choosing to furlough employees.

The discussion now isn't really about 50+1 ownership. I've asked for a title change .

Having said that - once the entire package of reforms which are being discussed were implemented, clubs should be sustainable and competitive without a sugar daddy.

[diggerling!]

There is one little problem with that as if you bring that in there will be unforeseen impacts for other entities such as businesses etc. They could then be open to same practise so that’s where you run into difficulties, could it be applied to a well run socially responsible company who happened to be on wrong side of a govt and I know the answer will be well I would restrict it to football clubs only but then club owners could challenge in the courts to say they are being treated unfairly compared to other entities and they would more than likely win.

Businesses would still be protected by corporate law. I don't see why imposing a new law on a football club which newly exists within it's own legal framework would mean that law would also suddenly apply to non-football clubs that operate outside that legal framework. To give an example, what's stopping people selling booze in greasy spoons when it can be sold in pubs? Because they're different legal entities (cafe's vs pubs) operating under different (licensing) legislation.

In my opinion and it’s only an opinion ffp and then an annual compliance review every year of owners for probriety would be a start, part of the review would be owners laying out their plans for upcoming year from commercial perspective to independent regulator but the plans have to be public ally available for viewing such as ticket prices, etc (not transfer policy as that’s too fluid and should be for manager and board anyway). That way owners plans are known in advcance so people can mobilise if An ill conceived item on table. If an owner drops to drop a bombshell on fans out of nowhere such as ESL then as you can’t force anyone to sell automatic huge points deduction and personal liability for fines (ie owners to pay not clubs) could be a remedy. Now that’s not a panacea for anything but might be a little start

The issue with FFP is that, in some areas, it's proved to be unenforceable. Mostly because, due to the corporate status enjoyed by clubs, EU competition and investment law applies and UEFA are constantly facing legal action. Remove the corporate status and the same laws won't apply.

I agree that there should be much better regulation and oversight but fear that, once again, as corporations, the clubs will be able to obfuscate and deny access using case law to enforce their position. We'd be relying on their good will unless it was legally enforceable.

[Devon Red]

The discussion now isn't really about 50+1 ownership. I've asked for a title change .

Good idea, it's a much more nuanced and interesting discussion without shoe-horning in the German model.

One thing I learned from my involvement with Exeter City Supporters' Trust is that 'fan ownership', even when the Trust literally owns a majority shareholding, is much more about long-term security than day-to-day running. In the case of Exeter City the Trust does not run the club, but they could prevent all of the fundamental transformations you mentioned. I suspect there are ways of achieving this without needing the actual shares. I don't know quite how, and I think JackBauer raises some important points, but creating safeguards is surely much more achievable than actual 'ownership'. It's a shift in language, but it's important.

[diggerling!]

So let's say we get the 50%+1, how is that good for lfc exactly? We wouldn't be able to support the club financially and it needs outside financing to continue to compete. We don't really have any way to increase revenue except for a super league model. If we just spend within the club's means then we'll be 12th at best for a very, very long time. And then, you will be the ones choosing to furlough employees.

If every other club had to live within its means, with strict controls on spending, I think we'd do better than 12th because of our manager, analytics and fans. But if we're only good enough for 12th, so what? Is Liverpool winning trophies really more important than the health of the club, the community that built it and the wider game? Should other clubs go bust so that we can be successful?

[classycarra]

Care to explain how? Please name a recent example of large scale expropriation without compensation in any western democracy.

You've moved the goalposts there, something you've just accused others of.

I am happy to explain how though.

You said:
"The way company law works in most of the developed world is that such matters are exclusively in the purview of the company's management."

Then you said "yes of course", agreeing with me when I said "the way company way company law works....is legislated upon by the national government"

Your agreement with my point on legislation contradicts your first statement primarily because of your use of the word "exclusively" first time round.

[Careca9]

Businesses would still be protected by corporate law. I don't see why imposing a new law on a football club which newly exists within it's own legal framework would mean that law would also suddenly apply to non-football clubs that operate outside that legal framework. To give an example, what's stopping people selling booze in greasy spoons when it can be sold in pubs? Because they're different legal entities (cafe's vs pubs) operating under different (licensing) legislation.
The issue with FFP is that, in some areas, it's proved to be unenforceable. Mostly because, due to the corporate status enjoyed by clubs, EU competition and investment law applies and UEFA are constantly facing legal action. Remove the corporate status and the same laws won't apply.

I agree that there should be much better regulation and oversight but fear that, once again, as corporations, the clubs will be able to obfuscate and deny access using case law to enforce their position. We'd be relying on their good will unless it was legally enforceable.

Take on board your points diggerling, I might be picking this up wrong but you are saying football clubs would be treatment as separate entity type to other businesses and sporting enterprises and the solution u propose would only be applicable to this entity type as you note similar to licensing for bars etc? Apologies If I have picked u up wrong.The one thing I don’t get with ffp not being applicable is how does the English and french top divisions in rugby have salary caps - to the best of my knowledge they have those in place and I know it’s know ffp but it’s not too far away from the concept, maybe it’s because all teams have to adhere to the same limit   is that the difference, would be greatful if someone could explain how those seem to be unchallenged for now. I know saracens got hammered punishment wise when it came out they had tried to circumnavigate the cap

[diggerling!]

are you saying football clubs would be treated as separate entity type to other businesses and sporting enterprises and the solution u propose would only be applicable to this entity type as you note similar to licensing for bars etc?

Yes, different legal entities have to meet different laws. It would be (imo) impossible to change the laws relating to businesses, so the answer would be to change the entity, or legal status, of clubs. Then you build a new legislative framework in which they operate. Some of that framework may overlap with corporate law, some will not.

In many parts of the world sporting clubs have a unique legal status to reflect their unique role in society, it's not some unattainable ideal. It often accompanies a requirement that they operate as not-for-profit organisations, which usually means the neo-liberals need to change their sheets, but doesn't seem to negatively affect the likes of Boca Juniors or the Green Bay Packers, both of whom operate in that way.

The one thing I don’t get with ffp not being applicable is how does the English and french top divisions in rugby have salary caps - to the best of my knowledge they have those in place and I know it’s know ffp but it’s not too far away from the concept, maybe it’s because all teams have to adhere to the same limit   is that the difference, would be greatful if someone could explain how those seem to be unchallenged for now. I know saracens got hammered punishment wise when it came out they had tried to circumnavigate the cap

Others may know more about the Saracens case but I think they claimed a salary cap was against EU competition law and lost due to a 'sporting exemption' claimed by the League. In other cases the sporting exemption has not been sufficient to override EU law. It's a very expensive minefield.

[JackBauer]

You've moved the goalposts there, something you've just accused others of.

I am happy to explain how though.

You said:
"The way company law works in most of the developed world is that such matters are exclusively in the purview of the company's management."

Then you said "yes of course", agreeing with me when I said "the way company way company law works....is legislated upon by the national government"

Your agreement with my point on legislation contradicts your first statement primarily because of your use of the word "exclusively" first time round.

Ah, right, I see where you are coming from. Allow me to clarify:

"The way company law works in most of the developed world is that such matters are exclusively in the purview of the company's management." - "such matters" here being the strategic decisions relating to the operation of the business. I believe the examples cited were which league to play in, where the club is based, and a couple of others. This is within the purview of the company's management, subject to compliance with applicable law. The latter point is so obvious that I didn't think it needed to be said. But strategic and operational decisions being under the control of a company's management isn't inconsistent with the ability of governments or legislatures to change laws.

[classycarra]

Ah, right, I see where you are coming from. Allow me to clarify:

"The way company law works in most of the developed world is that such matters are exclusively in the purview of the company's management." - "such matters" here being the strategic decisions relating to the operation of the business. I believe the examples cited were which league to play in, where the club is based, and a couple of others. This is within the purview of the company's management, subject to compliance with applicable law. The latter point is so obvious that I didn't think it needed to be said. But strategic and operational decisions being under the control of a company's management isn't inconsistent with the ability of governments or legislatures to change laws.

please allow me to get in on the condescension fun.

*ahem*

The definition of "exclusively" is so obvious that I didn't think it needed to be said.

The fact you've added "subject to compliance with applicable law" implies you realise now that it's not exclusively in the company's purview, even if you don't want to front up to misspeaking initially

[Careca9]

Yes, different legal entities have to meet different laws. It would be (imo) impossible to change the laws relating to businesses, so the answer would be to change the entity, or legal status, of clubs. Then you build a new legislative framework in which they operate. Some of that framework may overlap with corporate law, some will not.

In many parts of the world sporting clubs have a unique legal status to reflect their unique role in society, it's not some unattainable ideal. It often accompanies a requirement that they operate as not-for-profit organisations, which usually means the neo-liberals need to change their sheets, but doesn't seem to negatively affect the likes of Boca Juniors or the Green Bay Packers, both of whom operate in that way.
Others may know more about the Saracens case but I think they claimed a salary cap was against EU competition law and lost due to a 'sporting exemption' claimed by the League. In other cases the sporting exemption has not been sufficient to override EU law. It's a very expensive minefield.

Thanks diggerling appreciate the details re rugby union cap

[4pool]

This is like a classroom debate.

Many interesting points.

But at the end of the day, what one may want or wish for, is unlikely to happen.


Ciggy legislation was a health concern. And as the UK has National Health, which costs the government a bit of dosh, it was within their bests interest to save as much money on health care as possible. And had nothing to do with legislation giving ciggy smokers rights as to what ciggy companies could do.