Ken Skates recalls the painful memories of humiliation that confronted Wrexham FC

March 24th, 2012

The minute-by-minute unfolding of events at Glasgow Rangers football club when one frankly unbelievable past financial mistake is soon trumped by the very public announcement of yet another is at the same time both tragic but not altogether unsurprising.

So many clubs have similar stories to tell, including Darlington, Stockport, Chester, Bournemouth, Bradford, and Derby. The list of much loved football clubs that have made crazy financial decisions which have defied not only business sense but any logic whatsoever, goes on and on. Even as I write this I’m watching the painful TV pictures that accompany the sad news that Port Vale have now formally entered administration and are fighting for their very survival.  It seems every team including much loved Welsh clubs like Rhyl and Barry Town have danced with death over recent years and faced a dogged battled just to stay alive.

Yet herein lies the paradox. Taken as a whole, there has never been as much money in football as there is flowing into the game today. Yet more and more clubs have got into increasing levels of debt and difficulty. The explosion of cash in the game has seen clubs take bigger and more audacious financial risks, in some cases mortgaging their very future existence, with the problems they face getting proportionally bigger and bigger too.

Though Glasgow Rangers is a club that evokes little sympathy, to see an important institutional pillar of any community be put at such mortal risk is heart breaking.  Such cases bring back all too uncomfortable and painful memories of the public humiliation faced by my local team, Wrexham FC in recent years. The near misses, the torturous periods of administration and the agonising flirtations with outright extinction are too numerous and frankly too painful to catalogue again here. Suffice it to say that this is yet another example of a team with so much history that nearly disappeared into oblivion because of the previous disastrous decisions taken by individuals in charge of the club.

We cannot go on like this. The risks clubs take and the appalling financial mismanagement we see at all levels is a growing concern. I have no magic remedy, but there are two things I would like to see happen.

First, I would like to see greater recognition of the important historic and cultural importance of clubs to our communities. Fans cherish the rich heritage of all our Welsh football clubs dearly and they are important parts of the cultural and community fabric which need to be better protected. In the same way that we safeguard important architectural monuments or historic buildings for future generations through listing, perhaps it is time to consider looking to give better legal protection to our football and other community sporting clubs. We should acknowledge that they are assets whose legacy and memories need to be secured in order to hand them down to future generations as part of our shared history.

Second, we need to think more clearly about the governance of our football clubs and the sort of decisions they make. One only has to look at the success story that is Swansea City to see how out of the ashes of the struggle to save the club in 2002 the changes that were made then to the way the club was governed helped it not only to survive, but to flourish.

Today, some 20 per cent of the club is owned by the Swansea City Supporters Society Ltd and it is achieving great things. Having fan representation on the board has meant decisions are often taken with an eye firmly on the long-term interest and stability of the club rather than the short-term need to chase the pound.

Changes such as these are too often derided as an unnecessary and burdensome restriction on the potential of a club to succeed. However, with Swansea having gained four promotions since fans took on a more pronounced role in the running of the club and with the team now looking odds on to survive their first season in the Premier League, with a new stadium to boot, the argument that a different model of governance can impair a club’s prospects on the field looks rather thin. What are the chances Portsmouth fans might be looking enviously at such a model as they begin to face the consequences of a second administration in as many years?

In Germany the structure and rules that govern club ownership and management provides a more sustainable base for the overall health of the game. The underpinning principle of the Bundesliga model is the 50+1 rule. This is where a minimum of 51 per cent of the club must be owned by club members, making it more of a sporting association rather than a business. It ensures significant opportunities for private investors but prevents them from taking overall control of the board and ultimately the direction of the club.

Alongside this are the rules of governance, the ‘Lizenzierungsordnung’ which regulate the finances of clubs, control the levels of debt that they can mount up, and imposes restrictions on the amount of money that can be spent on player’s wages.  Failure to comply with such rules can lead to the club’s licence being taken away and the team not being able to participate in the league structure.

There are problems with the German model and there are limits to how much of it can simply be transplanted to a football, business and political culture that is very different. Nonetheless, there are simple and salutary lessons we can draw. Whatever happens, we need to put our community football and other local sporting clubs onto a more stable financial footing and ensure that we have more than dusty old memories of a rich Welsh sporting history to pass on to our children.

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Ken Skates is Labour AM for Clwyd South

3 Responses to:“Football clubs that face oblivion”

  1. Geraint Talfan Davies says:

    Amen, Ken. But interesting how we look with envy at the German (European) model of ownership, and regret that “there are limits to how much of it can simply be transplanted to a football, business and political culture that is very different”. An American political/business approach that not only tolerates but also seems to laud inequality has been allowed to infiltrate football at the highest level. I doubt that fans or the wider public think there is anything inherent in British circumstances that make some German solutions inappropriate or unattractive. The one thing the recent years of crisis have shown is that the general public’s values are closer to Europe than America. That is certainly the case in Wales, but I suspect it’s also true of large parts of England.

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  2. Howell Morgan says:

    A very good analysis of problems with football clubs, but the same has happened to Welsh regions/former great clubs that were ‘bedrock’ for producing top players. The professionalisation of any sport is dramatic, and we haven’t seen the end of crises in Welsh rugby.

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  3. Tredwyn says:

    The pathology of sports management in this country is all our own. The Americans run their football in a more sensible way; they don’t control corporate governance like the Germans but the bottom clubs each year get first pick of the best college players that year. Talent is made to circulate and even-up competition. Quite unlike our own premier league where winner takes all. As for Swansea, I don’t belittle the role of the supporters but enormous credit must go to the chairman and key directors who have run the club well, insisting on continuity of style and coaching staff even when forced to change managers. Very different from Cardiff City. The trouble with Welsh rugby regions is no-one goes to watch them so they have no money. Gates are pathetic, barely a quarter of football gates in Swansea and Cardiff. For all the hype, rugby is a minority game in Wales and suffers accordingly.

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