Spirit of Shankly – Premier League meeting

On Friday 14th May representatives of the Spirit of Shankly Management Committee met with Premier League Chief Executive Richard Scudamore and some of his staff at their London headquarters.

The meeting had been arranged to address concerns of members of the Spirit of Shankly supporters’ union relating to the Premier League’s role in regulating ownership of Premier League Clubs and specifically the problems at Liverpool Football Club.

The Union had asked members to address their concerns directly to the Premier League and the meeting focussed mainly upon the questions that had been put by members.

It would be fair to say that Mr Scudamore gave a polite and positive hearing to the concerns and clarified a number of points about Liverpool FC while at the same time having to observe confidentiality relating to much of our Club’s affairs.

It was important for members to note that the Premier League is not as such a regulator of the game, but effectively a private members’ club owned by the twenty premiership clubs. The rules of that “members’ club” have been created by the owners of the clubs themselves with those agreed rules regulated by the Premier League staff headed by Richard Scudamore. Clearly this leaves the owners of clubs in the position to consider how to operate the league and the strength of any rules to be applied.

The meeting began with the Union representatives asking about the “fit and proper” test for owners and directors of football clubs. The questions that were asked related to Hicks’ previous conduct at Corinthians in Brazil, his current conduct with Major League Baseball and Gillett’s previous insolvency history and what relevance or consideration was given to them by the Premier League in their original consideration of the two and their ongoing role to regulate ownership of their Clubs.

Mr Scudamore made it clear that the “fit and proper” test was comparatively limited and focussed mainly upon criminal convictions and insolvency relating to football clubs. In fact the insolvency test was even more limited in that a director had to have been involved in the insolvency of a club twice before they failed the test (and it had to be related to a football club not another business). He also made it clear that it was an objective test in that as long as a prospective owner did not fail against the rule there was no subjective test of an owner to consider all round abilities, commitment and credibility.

The “fit and proper” test was being tightened up and there were proposals going before the summer meeting of the Premier League club owners. Mr Scudamore did not give details of those changes and made it clear that any changes could not be applied retrospectively to any owners. It was apparent that while the “fit and proper” test existed it really only reflected current UK legislation relating to ownership of any company (although extended somewhat to cover criminal convictions). For instance, Shinawatra at Manchester City had originally passed the test but it was only subsequent criminal proceedings in Thailand that saw the Premier League indicate that he had to relinquish control.

The workings of the fit and proper test were that if a Club was to change hands then the seller would indicate prior to any concluded sale that a prospective purchaser had to pass the test and normally this check (completed and certified by the purchaser themselves) was concluded in the ten days or so before a sale took place by the purchaser submitting their own certification to the Premier League who then checked its accuracy.

When asked about the leveraged buyout model that had been forced upon Liverpool FC despite the strong indications to the contrary given by Hicks and Gillett at the time, Mr Scudamore said that the Premier League itself was “owner model neutral” meaning that they took no role in how, and in what way football clubs were bought and sold (save for their fit and proper test). It was clear that the Premier League were unmoved about the models at both Liverpool and Manchester United. Additionally, conduct by owners in Liverpool FC’s case after purchase relating to assurances about the purchase model and stadium construction were wholly irrelevant to the fit and proper test and formed no part of it.

The Union representatives then moved on to talk about supporter ownership and whether the Premier League would consider enforcing supporter’s representation within the short term and supporter ownership (in part) in the longer term. Mr Scudamore made it clear that they had no inclination or plans to do this and despite the political parties suggesting future legislation he was of the view that such legislation was firstly unlikely and secondly impractical to enforce in light of current UK legislation and laws.

The UEFA licensing system that was due to come in over the next few years was discussed, particularly on the basis that as currently drafted it could allow clubs with benefactors owning them (Chelsea and Manchester City were mentioned) to have an advantage in being able to avoid its major implications. Mr Scudamore indicated that he felt that the licensing still needed more work upon it to make certain that it created a level playing field for clubs and did not achieve the exact reverse of what it was meant to avoid. He did say however, which has implications for Liverpool FC, that the plans focussed on a club’s revenues and not on a club’s debt particularly.

Mr Scudamore was well aware of the Union’s opposition to the current owners and clearly he knew Martin Broughton. He was unconcerned about our Chairman’s Chelsea connections but as a Bristol City fan, was somewhat taken aback when asked how he would feel if a Bristol Rovers fan became Chairman of Bristol City! While making no comment upon our protests he did make it clear that he supported the Union continuing to ask questions of the Club and seeking responses from them.

The major issue that the Union raised with him was that the club’s accounts had been qualified for the last two years. He was asked whether, in accordance with the Premier League’s own rules, this had triggered a review by the Premier League due to the concerns raised and of the risk of Liverpool FC not being able to fulfil its fixtures or being licensed by UEFA.

He indicated that the Premier League had looked into Liverpool’s accounts and had been satisfied that there was no cause for concern. He was challenged about the fact that Liverpool FC’s accounts had by common consent, shown that its interest burden could not be met from its revenues, and for supporters this circle could not apparently be squared. He reiterated that he was unable to talk in detail about the accounts but it was clear from what he said that the solvency test that they had applied looked at the assets over liabilities and that effectively the Club did have other options to service its interest payments before more serious difficulties occurred. In the Union’s view this was effectively the liquidation of playing assets.

Mr Scudamore was also asked to confirm the depth of their review of Liverpool FC and its holding companies. He said they had looked as far as they could under UK law (meaning the holding companies registered in the UK) but not necessarily as far as all of the connected foreign companies. He did say that all Premier League clubs gave access to their financial and other business information and that the Premier League used specialists to advise on what was reviewed within clubs’ accounts.

The meeting ended with the Union thanking Mr Scudamore for agreeing to meet and an indication that the lines of communication that had been opened might have a benefit for both parties in the future.