The ongoing chaos regarding the potential takeover of Leeds United by convicted fraudster Massimo Cellino represents another cautionary tale in the barely regulated world of British football. It is one of weak resistance; of the sport’s governing bodies failing in their duties to resist the aggressive approaches of those less than desirable individuals intent on possessing a stake in the English game’s relatively monied estates.
As lawyers for Cellino last week sought to sack Leeds manager Brian McDermott — in spite of fact that their client had no authority to issue that directive — the decision by the Football League to countenance this move appears as farcical as it sounds.
McDermott, initially instructed not to attend the home win over Huddersfield Town, was, it seems, subsequently reinstated to a position from which he was never lawfully removed. Prior to that he had already overruled an obvious attempt to undermine his position by refusing to accept the presence of Gianluca Festa, a Cellino ally (understood to be the Italian agriculture magnate’s preferred managerial alternative), in the dugout for the recent Ipswich fixture.
The question of ownership at Leeds has long been a tender one. Former Chelsea chairman Ken Bates secured a 50% share prior to the commencement of administration proceedings in 2005. In 2011 he increased his interest to 72.85%. The seller in that transaction was the mysterious offshore entity so scrupulously analysed by the Guardian’s David Conn. It was a line of questioning which piqued the infamously capricious Bates to the point where he banned Conn and his colleagues from receiving credentials at Elland Road (a restriction no longer in force).
A year later, the club was sold again. Within months the new owners, GFH Capital, were seeking further investment. This distinct whiff of penury was far removed from the reassurances granted to fans following the conclusion of negotiations between Bates and the Dubai-based equity investment firm.
Facing an imminent winding-up petition, GFH are intent now upon ridding themselves of a white elephant and Cellino is all but confirmed as the willing beneficiary of their need for expediency.
That he should now be ‘subject to Football League approval’ suggests an exposure to assiduous levels of scrutiny in line with the grave undertaking that is the stewardship of a professional club. In actuality, the League’s weak Owners’ and Directors’ test is a mere formality. Significant concerns relating to Cellino’s suitability notwithstanding, his efforts will almost certainly end in success.
The Cagliari supremo is a notorious and controversial figure in Italy. Found guilty of fraud in 1996, he was convicted once again, in 2001, for false accounting. His punishment for the latter offence: a 15 month suspended sentence. Cellino has also had an historic dispute with the Cagliari municipality over the re-building of a stadium for the team and in 2012 impetuously relocated their home ties from Sardinia to Trieste. Last year, Cellino was arrested and charged with embezzlement of public funds granted for the stadium construction.
It is not difficult to understand why the man known as the ‘King of Corn’ in his homeland is attracted to Leeds United. For all its travails, and lowly place on the food chain, United has maintained at least some of its image as a proud old pillar of the footballing landscape. A one-time Champions League semi-finalist, it still attracts large crowds to its aged but impressive Elland Road stadium. With sizeable and sustained investment, going alongside a crucial return to the rarefied air of the Premier League, there is potential for prosperity.
Leeds supporters have experienced a fair proportion of problematic guardians — though under Cellino the Peter Risdale era might not look so horrifying — but surely the record cited above would disqualify any generic bidder from coming close to buying any other kind of operation? Remarkably, the Football League sees no problem and is already talking business.
The extent of its due diligence is laughable. The procedures reasonably expected of high-end transactions play no part in the aforementioned assessment, better known as the ‘fit and proper test’. It is based on an abstract investigation of the candidate as he or she stands before the League at that very moment. As in criminal proceedings, those making the decisions are loathe to delve too deeply into past issues though such reticence is bizarrely inappropriate given the sums of money and relatively complex issues at hand. Indeed, under the law in England and Wales, Cellino’s criminal convictions are deemed spent. This unwillingness to view matters subjectively, to study a person’s background, financials and other outside factors renders the test meaningless. Any wily businessman is able to shuffle his affairs — particularly his money — in order to conform.
The Premier League operates a similar, if somewhat stricter, screening process. Its effectiveness, however, at scrutinising the bad eggs is debatable. Premier League chief executive Richard Scudamore has openly stated that a prospective buyer must not be spurned “simply because we don’t like the cut of his jib”. Funnily enough, it is for precisely this reason that unqualified candidates should be turned away.
It was through this net, of course, that Venky’s slipped. Arguably the worst owners to have darkened the door of English football, their tenure at Blackburn Rovers has been, without any shadow of a doubt, an unmitigated disaster. Responsible for a regime characterised by deceit, rank incompetence and gut-churning negligence, Venky’s have proven themselves undeserving of any association with the Lancashire club.
A cursory study would have revealed murky intentions and a crippling power structure, supported, in clear contravention of good practice, by an influential agent. Disturbingly, the Premier League deemed all of this acceptable, convinced of the Indian poultry giants’ fiscal worth.
Subsequent cost-cutting and penny-pinching have suggested that Venky’s are rich but not Premier League rich. Almost from the moment of their arrival they set about destroying a club once known for its reliably unexciting stability — the motivations behind such actions remain unclear. Their craven efforts to dismantle internal safeguards were ably assisted by ex-first team coach Steve Kean. An over-promoted novice, he replaced the respected Sam Allardyce and gleefully oversaw two seasons of woeful team performances. Dissenting senior professionals were weeded out only to be replaced by younger or inferior players. Relegation was predictably sealed in his first full campaign.
Kean’s abilities were clearly unsuited for top level management but he endured thanks to an unquestioning loyalty to his distant, near mute patrons. In exchange, Venky’s (running their new enterprise, after a fashion, from India) kept him in place despite his deficiencies and a poor relationship with both truth and reality. Fan opposition to his continued employment might have reached a fever pitch but he was propped up, nonetheless, by an orchestrated media campaign painting him as a serious manager and a dignified victim of circumstance.
The deployment of clownish Malaysian pundit Shebby Singh as a ‘global advisor’ proved the depths of Rovers’ fall; an event pointing to the ludicrous state of affairs at Ewood Park. Singh did eventually manage to dispatch the odious and immovable Kean, but he was a symptom rather than a cure.
Singh now works out of Venky’s Indian headquarters, though his exact purpose is as vague as ever, and with parachute payments dwindling to £16million in the next two years, the owners’ minimal attention will certainly wane accordingly. The situation may have steadied under the stoic Gary Bowyer — taking over in 2012/13 from the disastrous double appointments of Henning Berg and Michael Appleton — but the damage was done long ago. The financial outlook is frighteningly bleak.
The fit and proper criteria also failed to halt Thaksin Shinawatra’s Manchester City takeover in 2007. Even a questionable history of corruption and human rights abuses stemming from his period as Thailand’s Prime Minister was insufficient to spook the Premier League. The post-purchase meddling by Cardiff City’s Vincent Tan has called into question the Football League’s decision to validate his role as benefactor. That said, he is a genuinely wealthy man whose commercial nous, like so many others, has simply abandoned him following the acquisition of a football club.
Domestic ownership is no great panacea either. Craig Whyte’s clearance to control an institution like Rangers, by the powers that be in Scotland, is still difficult to believe. His central part in its demise is just as breathtaking. On the other hand Mike Ashley, while irritating Newcastle United fans with his silent indifference, made the grade thanks to genuine wealth and a genuinely outstanding business record. In essence an owner may do with his property as he wishes. The authorities’ failures rest in allowing unsuitable candidates to pass through the door.
By contrast, John W. Henry’s rescue of Liverpool from the loathed duo of George Gillet and Tom Hicks provides a fine example of serious foreign investors improving the fortunes of their chosen clubs. The successful interventions at Manchester City (post-Shinawatra) and Chelsea speak for themselves.
Positive lessons can be learned from America where the highly centralised league structures allow for searching analyses of those wishing to buy into a major sporting franchise. Granted, con man John Spano did manage to inveigle his way into holding legal title of the New York Islanders in 1996 by exploiting the NHL’s formerly paper thin systems of control. Professional hockey, along with Major League Baseball, the NFL and the NBA now wields considerable power when it comes to deciding who may or may not join the party. In 2010 the NBA even stepped in to save the New Orleans Hornets (now Pelicans) from bankruptcy. It is this kind of pragmatism that shames the ineptitude displayed on this side of the Atlantic.
It is perhaps premature to damn Cellino before his time at Leeds United has begun. He is a known quantity, however, responsible for a trail of underhand dealings and unbecoming behaviour in the infamously volatile waters of Serie A. Quite why the Football League considers him worthy of a place in their ranks is beyond comprehension.
So long as the money in the national game continues to flow freely, there will be insalubrious prospectors nibbling at the opportunities for profit.
Changes must come.