Centre for Finance and Investment Annual Debate at Heriot-Watt University

L-R: Stephen Morrow, Ann Budge and Mike Mulraney

The Centre for Finance and Investment (CFI) held its 5th Annual Debate on 23 October. The debate examined the subject of fan ownership of football clubs and asked the question: "Can fan ownership rescue Scottish football?" The audience consisted mainly of practitioners from the local financial community, people from the world of professional football, academics, students and alumni.


The Principal, Professor Steve Chapman, welcomed attendees and Professor Ian Thomson, Head of the Department of Accountancy, Economics and Finance, introduced the speakers: Ann Budge, Chair and Chief Executive of Heart of Midlothian Football Club; Andrew Adams, Professor of Finance at Heriot-Watt University; Stephen Morrow, Senior Lecturer in Sport Finance at the University of Stirling; and Mike Mulraney, Chairman of Alloa Athletic Football Club. Ann and Stephen spoke in favour of fan ownership while Andrew and Mike set out the opposing view.

Ann Budge outlined the problems that needed to be addressed in Scottish football, namely poor attendances, lack of finance, financial mismanagement and insufficient young players coming through. She stressed the importance of football clubs living within their means and how fan ownership could facilitate this. Fan ownership was "not only desirable but also inevitable" given the falling number of wealthy individuals wishing to buy football clubs. She highlighted the significant benefits of fan ownership for Hearts and the success of the model not only in Europe but also in the Americas. Ann acknowledged, however, that fan ownership is not necessarily the right model for all clubs. She concluded that if the model is to be successful, all parties must work openly and cooperatively.

Andrew Adams argued that it would be difficult for many clubs to establish a fan-owned structure but assuming that one had been created, a number of problems would need to be overcome. These included: bureaucratic and slow decision-making; the dilemma of both representing a broad range of interests and efficiently achieving objectives; generating sufficient revenue to fund the essential activities of the club; the risk of members being called upon to provide extra funds, possibly at short notice; and supporter-owners may not properly represent the wider body of ordinary supporters. He thought there was a good chance that fan ownership would save Hearts but fan ownership by itself could not rescue Scottish football.

Stephen Morrow stressed that there is no one right model for all football clubs. Different models will work for different clubs. He raised concerns over the abilities of a number of owners seen in Scottish football in recent years, arguing that "for every Mike Mulraney and Geoff Brown, there is a Vladimir Romanov and Craig Whyte". He suggested that the market for football clubs has changed and no longer suits 'traditional' buyers. Fan ownership unlocks 'human capital' that can be very valuable to a football club. Fans are extremely loyal to their club, and this can lead to a sustainable ownership model. Supporter-ownership puts a responsibility on those supporters to moderate expectations so that they are aligned with the reality of a club's financial situation.

Mike Mulraney argued that the "50%+1" rule which appears to ensure fan ownership and control in German football, was not as successful as commonly reported. Local businesses, government and sponsors have a significant influence over the clubs and mask their financial problems. He also raised doubts over the success of the fan ownership model at Real Madrid and Barcelona, believing that the Spanish government had waived taxes approaching one billion Euros for their two premier clubs. He thought that the biggest problem in Scottish senior football over the last 15 years had been the state of 'civil war', although the situation had improved with the introduction of the SPFL. He stressed that it is not important whether the fans or an individual owns a football club, it is only important that the club is run well.

The presentations were followed by a question and answer session. Themes discussed included: the large number of clubs going into administration in the UK in stark contrast to the situation in Germany; whether fan ownership increases the number of "home-grown" first team players; ticket prices and attendances; valuation of football clubs; supporter-owned club constitutions and principles of governance; whether supporters themselves should bear some of the responsibility for the problems; cultural diversity in football; social aspects of football clubs; accommodating business people wanting to invest in fan-owned clubs; and changes in the nature of the football media.

At the beginning of the evening, attendees were asked, by a show of hands, whether they agreed that fan ownership could rescue Scottish football. The vote was "yes" 55, "no" 41 and "maybe" 10. The vote was repeated at the end of the evening with the result "yes" 36, "no" 54 and "maybe" 16.