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The Mark Catlin column: Stop knocking football!

Bury had the recent unenviable long trip down to Exeter. On the journey down to Devon during Friday, news began to break of Portsmouth going into administration, and this news fresh on the back of the already shocking news of Rangers entering administration.

As we all know, when you travel to a game on a Friday, you get up Saturday morning and have time to kill. Well as I sat there reading the Saturday morning newspapers (which I never normally have time to do!), it struck me how each paper had a familiar theme running through them: complete negativity towards our beloved game.

I can understand perfectly how wrong it seems (and to be fair is in many cases) that football players, pulling up in Ferraris, Range Rovers, BMWs and other ‘super’ cars, will quite possibly be paid in full at clubs such as Rangers and Pompey, whilst the local butcher, baker, printer gets (if he or she is lucky) a small percentage in any pound raised by the administrator.

Add to this list the Exchequer, very often the largest of all creditors when it comes to administration, and backed by the government (for obvious financial reasons), football once again is under the spotlight to ‘get its house in order’.

Football creditors’ rule

During recent years, football has, in addition to the constant negative press slant, had to undergo a lengthy government enquiry into how it conducts itself, and is still the subject of an Inland Revenue challenge to the much derided football creditors’ rule.

This rule effectively gives preferential treatment in the event of administration to any football associated debts, over those of ‘normal’ suppliers or the Exchequer. On the face of the ‘evidence’ presented above, any sane person would find it difficult to argue against the fact that football is guilty as charged.

But I think I’m pretty sane and hope to convince any football knockers that as a business, and as an important industry sector, football should be extremely proud of its contribution, and not just from a financial perspective.

Football is an industry effectively covered under the umbrella of the Premier League, Football Association, and the Football League. Within these organizations individual clubs and national teams function. Like any association (telecoms/carpenters/plumbers/banking etc) individual businesses (in this case the clubs) function.

Football, like many sectors of the economy, has companies that struggle financially and need to enter administration. It’s not ideal, and I am not defending each and every club as some have quite clearly been mismanaged, but this happens in each and every sector of the UK economy, it always has, and it always will (‘it’s called capitalism baby’, some businesses succeed, other fail), so why single out football generally for unfair criticism?

Constant negativity

Plumbers, carpenters, builders, mortgage brokers, shops, you name any sector and there will be businesses that get into difficulties and need to enter ‘admin’. Football is no different, so why the need for a government enquiry into how football generally is run? Why the need for constant negativity and attacks from outside into an industry that;

1) Directly employs tens of thousands of people; players/managers/support staff/community staff/coaches at various age groups/back office staff/match day staff/bookkeepers etc.
2) Directly pays many hundreds of millions, if not billions of pounds each year in taxes alone; VAT/PAYE/Social Security/Business rates etc.
3) Indirectly employs tens of thousands of people in ‘support’ jobs; coach drivers/accountants/lawyers/agents/kit sales and manufacture/food/drink etc.
4) Indirectly these people then pay taxes on the money created by dealing with football clubs.
5) Contributes ‘spin off’ revenue to the local economy by way of; online and offline betting/local shops/bars/car hire/printers/catering/electricians/plumbers/police force etc.
6) Indirectly these businesses then employ people and so create even extra revenue.
7) BUILDS THINGS! I have bolded this because it has just created such an incredible amount of ‘outside of football’ employment and extra revenue for everyone, including the government I might add! How many new stadiums alone have been built over the last few years? How many clubs have had improvements on stadiums, new stands even? Wembley alone cost almost a billion pounds! The Stadium of Light, The Emirates, Cardiff City, St, Mary’s, KC stadium (to name but a few) - just think of the money that these projects have contributed to the UK economy as a whole on their own.
8) Is a global brand, envied around the world.
9) Brings in foreign investment. Billions introduced into the UK economy. Again, spoiled by a few ‘investors’ who did not have the revenue to back up what they initially promised, but on the whole substantial revenue brought into the UK economy. Whatever your views regarding foreign investors, there is no doubt that people like Mr Abramovich and Sheikh Mansour have injected huge sums (billions) into the UK economy.

Tax evasion 

In the case of Rangers, and allegedly also a host of other top British teams, clubs have (allegedly) been operating schemes to try and avoid tax. In my personal opinion this is wrong, but not illegal. In the past, businesses have, and continue to use various loopholes to limit the payment of tax, even members of the government past and present have used similar ‘legal’ schemes.

Almost daily I am bombarded with emails and letters from companies asking if I am buying a house (apparently I can buy an offshore company and let this company buy the house to limit the stamp duty), how to set a business up in X company’s name in Y country and get a salary there, do this, do that, all effectively to (so they claim) legally stop the Exchequer claiming tax from you.

If clubs have paid players under such schemes then the fault lies with the Inland Revenue and the government for not closing the loopholes, not the clubs for taking advantage (as do many other businesses) of the various schemes available (Vodafone’s 6 billion, yes six billion pounds, springs to mind).

In the specific case of the football creditors rule, Greg Clarke, our Football League Chairman, told a Parliamentary Select Committee that he came into the job believing it was “an outrage” but now realizes, as I do, that if it is changed, the very foundations of football could be at risk.

Golden eggs 

My personal opinion is that if the court rules in favor of the Inland Revenue in this case, then I have serious concerns for the immediate future of the game. Here’s an example; X club goes into ‘admin’ and cannot pay Y club, Y club owes Z club thousands who sold a player to X club. Z club gets no money and then goes bust itself; it will be the beginning of the end. In my (humble) opinion it is short-sighted by the Inland Revenue and they risk killing the goose that lays the golden eggs.

It is really tough on any business that does not get paid by a club in admin, but for the current greater good, at this point in time, the current rules need to stay. However wrong this may seem, if it is changed overnight, without consultation and support, then the current creditors owed money by Pompey and Rangers could potentially be joined pretty quickly by a host of other clubs.

As hard as it may seem of me, businesses generally do go into admin and in many other industries other businesses do not get paid - it’s a hard but factual statement. My day job is telecommunications, and we are constantly not paid by businesses going into admin, but we have to be responsible in allowing our debtors a credit line that we can live with.

Likewise, if a business allows a club to ring up huge credit, and does not control that debt, then they (sorry to be so hard) must take a small part of the responsibility for allowing the debt to get so high. The world and his wife knew that Rangers had problems, if they had been a client of mine then I am pretty sure our credit department would have kept an eye on their account.

Huge contribution 

Anyway, back to the main plot. A business that contributes literally billions of pounds, both directly and indirectly to the UK economy, creates hundreds of thousands of UK based jobs, asks for very little from the government in return, works tirelessly in their local communities to engage children, minorities, and the disadvantaged in sport, and engages people from all races, colours and creeds.

Perhaps most importantly, football gives millions of people, not just in the UK but around the world, incredible pleasure, has been the subject of a government inquiry that as a result now instructs and advises football on how to run businesses under it’s ‘umbrella’. Even worse, it is currently subject of an Inland Revenue court case that the people running football has told them categorically will undermine the very foundations and business model on which football operates.

When was the last time a football club took tax payers money (all £850billion of it!)? When was the government ever asked to guarantee investors’ money in football clubs? When did the government ever need to use taxpayers’ money to buy shares in a football club? When was taxpayers’ money ever used to pay bonuses for failure in football?

I am talking now of course about an industry apparently regulated by the government! I will not even go down the route of how much money the country as a whole is in debt, and guess what, I will let you in on a secret, the last time I checked, it is run by the government!

Personally, I would rather leave football governance to the people that have run it so successfully for the last 100 plus years. Knock our industry as much as you want, but I wish the country had grown as much as the game of football over the last 100 years! Trust me, under the leadership of Greg Clarke and the people around him, the Football League is fully aware of the problems football currently has, and is working tirelessly to limit them.

Salary cap 

From the bottom to the top, rules are thoughtfully being introduced to regulate how clubs operate. League Two has a recently introduced salary cap (the amount each club can spend on wages as a percentage of its income), League One is introducing a similar system next season, then it is hoped the Championship will follow this lead in the coming few years.

From the top, UEFA are introducing a similar system that will have a direct impact on not only European, but also Premier League clubs. There is no quick fix, but there will be a mid to long-term fix of the debt problem, of this I am sure.

I say again, football is not by any means perfect, I am not looking at the sport through rose-coloured spectacles, we do have problems. But I am personally very proud to be the director of a business in an industry that does so much good, and without doubt generates so much unpublicized revenue and employment for the greater good of the UK economy.

Each and every one of us, from directors, to managers, to staff, to players to supporters, in fact everyone associated with the beautiful game, should stand united in the defence of our game. And remember, the next time you read an article generally critical of football, just remember that there are two sides to every story!

By Mark Catlin, Bury FC director

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