Buried in amongst the sports pages in Scottish tabloids last week, overshadowed by Rangers’ boardroom battles and Celtics’ impending Champions League tie, was the news that the Foundation of Hearts has been named the preferred bidder of administration-stricken Hearts.
Under Vladimir Romanov, the Tynecastle side became a financial basket-case, regularly deferring players wages and tax payments until it slid into insolvency a few months ago. Under the stewardship and watchful eye of the fans that form the Foundation of Hearts, those who truly care about the club will now be responsible for its well being.
Whilst administration is certainly not glorious, it is interesting to note that in the UK, three out of the last four high-profile administrations (Portsmouth, Dunfermline, Hearts) were resolved or are about to be resolved by a fans buy-out of the club.
The reason for this is simple. Outside the Barclays Premier League, it is getting harder to turn a profit from a football club. Attendances are generally on the decline in the game, whilst wages are spiralling out of control. Therefore, businessmen seeking to turn a profit will not touch a British football club that has no hope of qualifying for Premier League riches. Anyone buying the average football club nowadays isn’t doing it for the money, but for the love of the club.
Obvious positives and negatives are instantly apparent. Whilst fans can ensure that the club is always put first and no money is sucked out of it in shareholder dividends, football supporters are notoriously fickle and generally lack any knowledge or interest in business. It is generally accepted that via bi-annual board elections of people suitably qualified and experienced to run the club, but also support it and put it first, these negatives can easily be overcome.
You do not need to look very hard to find examples of successful fan ownership. In the UK, the story of Swansea’s rise was excellently documented by the BBC recently. They are 20% owned by the Swansea City Supporters Trust. Two of the biggest clubs in the world, Barcelona and Real Madrid, are wholly fan-owned. In Germany it is a requirement for any team competing in the Bundesliga to have 51% minimum of the shares in the hands of the supporters. This was a measure introduced as part of the restructuring of German football many years ago, and as is evident by the Bundesliga bubble, it is a measure that is working well.
Insolvency is not, however, a pre-requisite for fans making an attempt to purchase their club and put it in the hands of those who treasure it. BuyRangers.org is a campaign launched by the Rangers Supporters Trust last December, at the time of the company’s flotation on the AIM stock market. The Trust is set to introduce a direct debit scheme allowing Rangers supporters to contribute monthly towards the ultimate goal of owning their club. How far away is their objective? Well, to put it in perspective, at current prices, were the 50,000 regulars who show up at Ibrox every week to subscribe, Rangers would be in the hands of the supporters in just three years time.
So, it appears Hearts will exit administration thanks to their fans stepping up to the plate once more. They are not the first club to be owned by those who live and breathe it, and if current trends are anything to go by, they won’t be the last. Fan ownership looks set to stay and play a prominent role in the make up of British clubs, especially those who suffer an insolvency event.