Fans in the ownership of Big Five leagues: lessons for better football governance

ABSTRACT

The objective of this paper is to analyse the ownership of the Big Five (Big 5) leagues in Europe, the effects of fans’ participation in the ownership of their clubs and how governance in European football can improve. The different structures used by fans to participate in the ownership of the clubs in the Big 5 leagues are analysed by showing the main features of ownership in the main leagues. The best practices of governance are identified, such as the protection of small shareholders, enhanced majorities for strategic decisions, two-tier boards with investors and fans, establishing fan representation by delegates or associations, and the limitation of voting rights or premium rights for seniority shareholders. Moreover, some flaws of the current structures should be avoided because these flaws hinder the raising of capital, increase the incentives to engage in risky management and reduce the incentives of fans to purchase shares.

Acknowledgments

This study comprises research findings carried out within International Laboratory of Intangible-driven Economy (ID Lab) of the National Research University Higher School of Economics’ Basic Research Program.

The authors thank Jeff Downing for proofreading the original manuscript.

Disclosure statement

No potential conflict of interest was reported by the authors.

Notes

1. La Porta, Lopez-de-Silanes, and Shleifer, ‘Corporate Ownership around the World’; Hansmann, ‘Ownership of the Firm.’

2. Giulianotti, R. Supporters, followers, fans, and flaneurs: A taxonomy of spectator identities in football.

3. Sanchez, L.C., Á. Barajas, and P. Sanchez-Fernandez. ‘Sports Finance: Revenue Sources and Financial Regulations in European Football.’

4. Hamil et al., ‘Recent Developments in Football Ownership.’

5. Sanchez, ‘¿Son compatibles el’ bolsillo” y el” corazón”?: el caso de las sociedades anónimas deportivas españolas.”

6. Baroncelli and Caruso, ‘The organization and economics of Italian Serie A: a brief overall view.’

7. Dauncey and Hare, France and the 1998 World Cup: The National Impact of a World Sporting Event.

8. Wilkesmann and Blutner, ‘Going Public: The Organizational Restructuring of German Football Clubs.’

9. Michie, ‘The Governance and Regulation of Professional Football’; García and Welford, ‘Supporters and Football Governance, from Customers to Stakeholders: A Literature Review and Agenda for Research’; Holt, ‘The Ownership and Control of Elite Club Competition in European Football.’

10. Brown, ‘Our Club, Our Rules’: Fan Communities at FC United of Manchester’; Crick, ‘Shareholders United against Murdoch.’

11. Williams and Hopkins, ‘Over Here’: “Americanization” and the New Politics of Football Club Ownership–the Case of Liverpool FC’; Ludvigsen, ‘Foreign Ownerships’ in the Premier League: Examining Local Liverpool Fans’ Perceptions of Fenway Sports Group.’

12. Coombs and Osborne, ‘A case study of Aston Villa football club.’

13. Hamil, Walters, and Watson, ‘The Model of Governance at FC Barcelona: Balancing Member Democracy, Commercial Strategy, Corporate Social Responsibility and Sporting Performance.’

14. Franck, ‘Private Firm, Public Corporation or Member’s Association Governance Structures in European Football.’

15. Walters and Hamil, ‘Ownership and Governance.’

16. Nauright and Ramfjord, ‘Who Owns England’s Game? American Professional Sporting Influences and Foreign Ownership in the Premier League.’

17. Rohde and Breuer, ‘The Market for Football Club Investors: A Review of Theory and Empirical Evidence from Professional European Football.’

18. Hamil et al., ‘Recent Developments in Football Ownership.’

19. Kennedy and Kennedy, ‘Football Supporters and the Commercialisation of Football: Comparative Responses across Europe.’

20. Llopis-Goig, ‘From “Socios” to “Hyper-Consumers”: An Empirical Examination of the Impact of Commodification on Spanish Football Fans.’

21. King, ‘New Directors, Customers, and Fans: The Transformation of English Football in the 1990s.’

22. Hamil et al., ‘The Corporate Governance of Professional Football Clubs.’

23. Acero, Serrano, and Dimitropoulos, ‘Ownership Structure and Financial Performance in European Football’; Sanchez, Barajas, and Sanchez-Fernandez, ‘Are Goals and Profits the Two Faces of the Same Coin?’

24. Sanchez, Barajas, and Sanchez-Fernandez, ‘Does the Agency Theory Play Football?’

25. Sanchez, Barajas, and Sanchez-Fernandez, ‘Price of Football Depend on the Owner of the Ball and the Unbalance of the Leagues.’

26. Watkins, ‘Cherries in the Black: AFC Bournemouth’s Journey from Bankruptcy to Rude Health under Supporter Leadership’; Brown, ‘Our Club, Our Rules’: Fan Communities at FC United of Manchester’; Cleland, ‘From Passive to Active: The Changing Relationship between Supporters and Football Clubs’; Kossakowski, ‘From the Bottom to the Premiership: The Significance of the Supporters’ Movement in the Governance of Football Clubs in Poland’; Bauers et al., ‘Club Members in German Professional Football and Their Attitude towards the “50 + 1 Rule”–A Stakeholder-Oriented Analysis’; Cocieru, Delia, and Katz, ‘It’s Our Club! From Supporter Psychological Ownership to Supporter Formal Ownership.’

27. Conn, ‘Clubbing Together.’

28. Martin, ‘Football, Community and Cooperation: A Critical Analysis of Supporter Trusts in England.’

29. Porter, C. ‘Clubs in Crisis: Supporters to the Rescue’

30. Sanchez, Barajas, and Sanchez-Fernandez, ‘Sports Finance: Revenue Sources and Financial Regulations in European Football.’

31. Hamil, ‘A Whole New Ball Game? Why Football Needs a Regulator.’

32. Fama and Jensen, ‘Separation of Ownership and Control.’

33. Aguilera and Cuervo-Cazurra, ‘Codes of Good Governance Worldwide: What Is the Trigger?’

34. Nauright & Ramfjord, ‘Who owns England’s game? American professional sporting influences and foreign ownership in the Premier League’.

35. Brown, ‘Not for sale’? The destruction and reformation of football communities in the Glazer takeover of Manchester United’.

36. Bi, ‘Integration or resistance: The influx of foreign capital in British football in the transnational age’.

37. Sanchez, Barajas, and Sanchez-Fernandez, ‘Sports Finance: Revenue Sources and Financial Regulations in European Football.’

38. The German rule establishes that an investor must support a club for more than 20 years to allow him to own the club. Bayer Leverkusen and Wfl Wolfsburg have been supported by Bayer and Volskwagen since their foundation. Vfl Hoffenheim has been supported by the founder of SAP since 2000, when the club played in a regional division.

39. Spanish law of Sport 10/1990 and Royal Decree 1251/1999.

40. Dietl and Franck, ‘Governance Failure and Financial Crisis in German Football.’

41. This is not the case in Spanish football, as the accounting standards are common for members’ clubs and stock corporations. Both also need to audit their accounts.

42. Giulianotti, ‘Sport Spectators and the Social Consequences of Commodification: Critical Perspectives Form Scottish Football.’

43. Cromme, ‘Corporate Governance in Germany and the German Corporate Governance Code.’

44. Adam, Bauers, and Hovemann, Inevitable Need for Change – Identifying and Removing Barriers to Supporter Participation in German Professional Football, Sport in Society.

45. Bauers and Hovemann, ‘The Regulation of Investors’ Influence in German Professional Football.’

46. Tobin, ‘Supporter Ownership as a Method of Football Governance: The Concept of a Supporters’ Trust and Its Operation within England and the Republic of Ireland.’

47. Cleland et al., ‘Supporters’ Trusts as Collective Action: Swansea City in Focus.’

48. Leah and Szymanski, ‘Making Money out of Football.’

49. Morrow, The People’s Game?: Football, Finance and Society.

50. See the papers by Benkraiem, Louhichi, and Marques, ‘Market Reaction to Sporting Results: The Case of European Listed Football Clubs’; Berument, Ceylan, and Ogut-Eker, ‘Soccer, Stock Returns and Fanaticism: Evidence from Turkey’; Bell et al., ‘Over the Moon or Sick as a Parrot? The Effects of Football Results on a Club’s Share Price.’

51. Zuber et al., ‘Investor-Fans? An Examination of the Performance of Publicly Traded English Premier League Teams.’

52. Gannon, Evans, and Goddard, ‘The Stock Market Effects of the Sale of Live Broadcasting Rights for English Premiership Football: An Event Study.’

Additional information

Funding

This work was supported by the National Research University Higher School of Economics [Basic Research Program].