EFL ownership conundrum: As 93 per cent of fans say more can be done to protect clubs and MP calls governance structure 'unfit for purpose', what can change to prevent damage being caused to our teams?

  • A number of EFL clubs' fans were at war with their teams' owners last season
  • Leyton Orient, Coventry, Charlton, Blackpool and Morecambe all struggled
  • EFL's vetting process has repeatedly been called into question as a result
  • But changing the owners and directors' test might not be as easy as it sounds
  • 93 per cent of supporters think governing body could do more to protect clubs 
  • Sportsmail examines what can be done by the EFL to calm fans' concerns 

A Sportsmail survey today reveals 93 per cent of fans feel EFL clubs are not protected from bad owners and a large number are concerned about the future.

At the end of a turbulent season in the lower leagues, and with the focus on ownership within football more intense than ever before, the governing body has once again defended its safeguarding practices.

But stories of decline, division and chaos at Leyton Orient, Coventry, Charlton, Blackburn, Blackpool and Morecambe have led to supporters becoming increasingly vocal in their concern over the existing vetting process.

Charlton fans have held a number of protests against the owners of their club

Charlton fans have held a number of protests against the owners of their club

Blackburn supporters have made their opinions on owners Venky's heard in recent years

Blackburn supporters have made their opinions on owners Venky's heard in recent years

Blackpool has been divided by a huge rift between the Oyston family and fans

Blackpool has been divided by a huge rift between the Oyston family and fans

The EFL - formerly known as the Football League - is often disregarded in favour of the bright lights of the Premier League but its three-tier system boasts many clubs of tremendous pedigree.


European Cup winners Nottingham Forest and Aston Villa both finished in the bottom half of the Championship last season and 28 of the EFL's 72 teams - more than a third - have had experience of the English top flight since the Sky Sports-funded revolution of 1992.

The league proudly boasted of sky-high attendances in 2016-17, with more than 18million people going to games over the course of the campaign - the most since 1959.

Yet among fans there appears to be a very real uncertainty about what the future holds.

And now, Damian Collins MP - the recent chairman of the House of Commons culture, media and sport select committee - has waded into the debate, saying the EFL are 'apologists for the status quo'.

Damian Collins MP has called the EFL governance structure 'unfit for purpose'

Damian Collins MP has called the EFL governance structure 'unfit for purpose'

Charlton and Coventry fans threw rubber pigs on to the pitch in protest against their owners

Charlton and Coventry fans threw rubber pigs on to the pitch in protest against their owners

Collins' comments come after the Mail survey illustrated just how worried supporters are for the state of the sport in the divisions below the Premier League.

The poll shows that:

  • 93 per cent of fans believe the governing body does not do enough to protect their teams from bad owners
  • More than 40 per cent are concerned about the direction of their club under current ownership
  •  Nearly three-quarters say the EFL does not look after fans of its member clubs
  • 70 per cent of supporters do not believe the league's fit and proper persons test is satisfactory

The results are not surprising, given how many negative headlines emerged from the lower reaches of the English football pyramid in 2016-17.

Protests have been a regular occurrence at Charlton, where supporters feel alienated by the regime of owner Roland Duchatelet, and Blackpool - where an ongoing stand-off between Tangerines fans and the Oyston family has led to attendances dipping dramatically.

COULD THE EFL DO MORE TO PROTECT CLUBS FROM BAD OWNERS (Ave %)

Yes: 93.02

No: 2.16

No opinion: 4.82

Advertisement

Leyton Orient's demise, from the cusp of the Championship to relegation to non-League, under the stewardship of Francesco Becchetti - a disaster story littered with tales of staff being forced to leave their homes due to unpaid wages and winding-up orders dragging the O's through the courts - struck a chord nationwide prior to the recent takeover by Nigel Travis, while Blackburn have become the first Premier League champions to drop into the third tier, under the stewardship of Venky's.

Comparatively, Morecambe - whose estranged former owner Diego Lemos promised the world, delivered nothing and disappeared on November 17 without a trace, leaving wages unpaid and the club under a transfer embargo - have got off lightly.

The EFL have consistently stated their role is one of a 'competition organiser' and queried the subjective nature of the phrase 'bad owner' but Collins believes more must be done to guard clubs from similar fates.

'I don't think the EFL has demonstrated capability to deal with the problems of clubs being run in a poor way by negligent owners,' he told Sportsmail.

Blackpool chairman Karl Oyston has been heavily criticised by supporters of his team

Blackpool chairman Karl Oyston has been heavily criticised by supporters of his team

Indian brothers Balaji Rao (left) and Venkatesh Rao of Blackburn owners Venky's

Indian brothers Balaji Rao (left) and Venkatesh Rao of Blackburn owners Venky's

'I've been disappointed with the response of the EFL to these problems and it's clear the FA don't have the power to intervene either so I think fans are rightly becoming increasingly frustrated that there's no one who can represent them and act on their behalf.

'I think the current structures of the game are not fit for purpose to ensure good governance at club level.

'The Football League should recognise that these changes are required and should actually be advocates of those changes. Instead they seem to be apologists for the status quo.'

HOW CONCERNED ARE YOU ABOUT YOUR CLUB'S FUTURE UNDER CURRENT OWNERS? (Ave %) 

Very concerned: 28.58

Slightly concerned: 17.76

Unconcerned: 19.73

Excited about the future: 33.66

No opinion: 0.27 

Advertisement

The EFL has taken steps to address discontent among supporters, notably liaising with the government's expert working group on football supporter ownership and engagement to introduce two meetings between fans and club boards as a membership requirement this season.

While many clubs have embraced the new policy, though, it is unclear whether or not it has been universally adopted - the League intends to ask its members how it was incorporated over the course of the summer.

However, the image of reactive governance, or at least a lack of proactive governance, continues to blight chief executive Shaun Harvey and those at the top of the organisation.

Much is made about the EFL's fit-and-proper-person test, which all potential directors and owners must submit for approval prior to becoming involved with a club.

According to the six-page document's criteria, the 'individual must have no unspent criminal convictions, been disqualified as a company owner and not have been subject to insolvency matters'.

Coventry fans take to the pitch to protest against their current owners SISU

Coventry fans take to the pitch to protest against their current owners SISU

Similar scenes have been seen up and down the country over the course of recent seasons

Similar scenes have been seen up and down the country over the course of recent seasons

The test applies at the point of purchase and will only be reapplied if there is evidence of illegality. Only two people - former Birmingham City owner Carson Yeung and former Rotherham United director Dennis Coleman - have been removed once in position.

Collins says it isn't fit for purpose. He wants a test similar to that used by Ofcom to award broadcasting licences, which assesses the applicant's previous behaviour in business and is also ongoing.

'If that requires a change in the law then I think football authorities should come forward and request that,' says Collins.

DO YOU BELIEVE YOUR CLUB'S OWNERS CARE ABOUT FANS? (Ave %)

Yes: 58.67

No: 34.75

No: opinion 6.58

Advertisement

'I'd be the first to champion the idea of parliament moving to such legislation in order to put the fit and proper persons test in a much more robust statutory setting.'

The matter was discussed at the EFL's summer conference in Portugal this month, with members resolving to toughen up elements of the test, including the extension of its disqualifying conditions to encompass criminal conduct abroad, regardless of conviction.

However, there is no simple fix.

Sports lawyer Daniel Geey, who specialises in football takeovers and sporting corporate practice, said that the governing body can only do so much to combat 'bad owners'.

'I almost think that you can't really view the ODT (owners and directors' test) in isolation because usually bad owners are deemed bad owners because they are running the club into the ground financially,' said Geey.

Charlton owner Roland Duchatelet has rarely visited The Valley during his tenure

Charlton owner Roland Duchatelet has rarely visited The Valley during his tenure

Shaun Harvey, chief executive of the EFL - who query the use of the term 'bad owner'

Shaun Harvey, chief executive of the EFL - who query the use of the term 'bad owner'

'There are a variety of regulations that are in place to ensure that a club runs more sustainably and what the ODT is trying to do is ensure that a certain calibre of individual - someone that is objectively measured at the point of entry - is or isn't doing something they shouldn't have done criminally or from a bankruptcy or insolvency perspective or because of their past behaviour.'

Geey's opinion reflects the official stance of the EFL, who have been resolute in their defence of the checks and balances required of potential directors, and he said he is 'yet to see any particular workable additions' to the fit and proper test.

'It's very difficult to measure how successful a person may be in a particular job or in a particular company apart from their deeds and actions,' he said.

DOES THE EFL LOOK AFTER FANS? (Ave %)

Yes: 7

No: 71.91

No opinion: 21.09 

Advertisement

'And you're going to have situations where perfectly legitimate people make mistakes and continue to make decisions which negatively impact on a football club.'

So what can be done to at least reassure fans that owners of their clubs will always be held to account?

One approach, according to Bryan Jackson of Johnston Carmichael Chartered Accountants would be for teams to appoint extra directors at non-executive level.

Although it would be impossible to enforce this on a compulsory basis, Jackson - who was the court-appointed administrator of Portsmouth and Hearts during the two clubs' troubled pasts - says it's 'difficult to see the downside'.

He said: 'Having directors with a mix of external skills who not being burdened by the day-to-day detail in being able to advise in an independent way. Considering the nature of the football industry I believe the addition of non-executive directors to the board would be good in adding another layer of corporate governance. The costs are not normally prohibitive and sometimes they are honorary positions.'

Another on-pitch protest by Coventry fans during last season's clash with Sheffield United

Another on-pitch protest by Coventry fans during last season's clash with Sheffield United

Until recently, Francesco Becchetti was the hugely unpopular owner of Leyton Orient

Until recently, Francesco Becchetti was the hugely unpopular owner of Leyton Orient

Another option, which has been called for by groups including Supporters Direct, is the appointment of fans onto club boards.

Again, this is not readily enforceable in law - though both the 2015 and 2017 Labour election manifestos proposed legislation to give supporters' trusts the right to hire and fire at least two company directors and be entitled to purchase shares upon the sale of their club.

A Supporters Direct spokesman said fan directors could 'provide localised expertise' as well as holding owners to account.

HOW SATISFIED ARE YOU BY THE WAY YOUR CLUB IS RUN (Ave %) 

Very satisfied: 26.54

Satisfied: 33.86

Unsatisfied: 14.55

Very unsatisfied: 24.2

No opinion: 0.85 

Advertisement

'It is clear that the ODT could be more harshly enforced albeit we recognise it will never be possible to identify all potential bad owners upfront and that is why Supporters Direct would like to see a comprehensive club licensing model in football,' said the spokesman.

'Owners are custodians of their clubs and should be required to prove annually that they are following more stringent good governance guidelines, acting with financial integrity and with a view to long term sustainability.

'Many businesses benefit from independent directors, clearly football could do the same, even looking to supporters directors to provide localised expertise.'

At an event co-organised by Supporters Direct and the Football Supporters Federation last weekend, member fan groups passed three motions relating to ownership, governance and the fit and proper test.

They included calling on the EFL, FA and National League to unify their three separate tests into a unilateral assessment and adding extra levels of scrutiny into the financial affairs of prospective owners .

To the football authorities' credit, a number of measures have been introduced in recent years in an effort to protect clubs from financial mismanagement, including the application of cost control financial fair play rules in the Championship and salary cost management protocol in League One and League Two.

Furthermore, in a statement confirming the acquisition of Reading by Yongge Dai and Xui Li Dai in May, the EFL stressed that the new majority shareholders 'had agreed... to a number of additional reporting requirements including enhanced financial monitoring' - though what exactly that means remains unclear.

However, financial controls are only one of the fans' many concerns and, as the Sportsmail survey revealed, supporters remain unconvinced.

Carson Yeung is one of only two people to have been removed from a directorship of an EFL club following the reapplication of the owners and directors' test

Carson Yeung is one of only two people to have been removed from a directorship of an EFL club following the reapplication of the owners and directors' test

The EFL did not feel our poll - which was completed by 7,316 fans online, representing 63 clubs - was representative of the views of all 72 teams but stressed that the owners and directors' test has rooted out 'many potential owners who fall short of the criteria' in the past.

They declined to comment on exactly how many had been prevented from taking a position of power over the past five years, in line with their official policy of not discussing individuals who take the test.

A request for interview with chief executive Harvey did not bear fruit but an EFL spokesman told Sportsmail: 'Statistics can of course be interpreted in many different ways, but surveys are rarely fully representative of a club's fanbase, or indeed of the views of all 72 clubs of the EFL.

'The issue of ownership is never straight forward, but as a competition organiser, we will always be open to engaging with clubs and supporters when issues arise. Indeed, our work with the Government Expert Working Group on Supporter Ownership and Engagement has been central to the introduction of EFL regulations that ensure club owners and executives meet representatives of club fan bases at least twice a season.

HOW TRANSPARENT DO YOU FEEL YOUR CLUB'S OWNERS ARE WITH FANS? (Ave %) 

Very transparent: 21.75

Moderately transparent: 32.64

Not very transparent: 19.56

Not at all transparent: 26.03 

Advertisement

'However, how do you define a bad owner? It is a subjective question whereas the responsibility of the EFL is to assess an individual's suitability to own a club in an objective manner. The owners' and directors' test evaluates an individual's suitability against set criteria, while we also use independent experts to investigate any potential issues that may surround an individual or company looking to acquire ownership.

'We made amendments to further strengthen the criteria at our recent AGM and have agreed to consult with clubs during the 2017-18 campaign to have a detailed look at the current provisions in the regulations and whether they remain appropriate both prior to a purchase and once an owner is in control.

'How far that goes will never be far enough for some, but our regulations must present clubs with the freedom to make individual choices regarding their ownership and allow those in control the flexibility to run a stable club with opportunities for progression on and off the pitch.

'It is rarely recognised that we have turned down many potential owners who fall short of the criteria and remain encouraged by the fact that, overall, clubs across the three EFL divisions are in robust financial health.

'We will continue to offer all of our clubs whatever practical assistance is available to us in order to protect the integrity of the EFL's competitions and ensure that clubs are operating in a fair and competitive environment.' 

THE OWNERS AND DIRECTORS' TEST: WHAT IT COVERS 

Sportsmail has obtained a copy of the most recent owners and directors' test (ODT), used to vet potential directors of its 72 clubs.

THE REQUIREMENTS 

Applicants for the ODT are asked to confirm a series of statements relating to five key criteria.

Those criteria are: Associations between clubs, disciplinary matters, criminal matters, company disqualification matters and insolvency matters

Association between clubs: Applicants must confirm they are not involved with another EFL club without the necessary dispensation.

Disciplinary matters: Applicants must not be subject to a ban or disqualification from a sporting body or a professional body such as the Law Council, and they must not have breached any relevant football betting prohibition rules.

Criminal matters: Applicants must not have unspent convictions from a UK court relating to 'a dishonest act, corruption, perverting the course of justice, serious breaches of the 1985 and 2006 Companies Acts and ticket touting'. They must also not be registered sex offenders or subject to a football banning order.

Company disqualification matters: No one who is disqualified as a director can pass the ODT.

Insolvency matters: Applicants must not be subject to an individual voluntary arrangement (IVA), bankruptcy, debt relief or administration orders, and may not have previously been a director of either two clubs which suffered unrelated insolvencies or one club with two unconnected insolvencies.

THE PROCESS 

The applicants sign a declaration, which is counter-signed by a representative of the club.

They must also submit their full name, full residential address, date of birth and a list of all their current directorships worldwide.

Applicants have to provide documentation to prove their identity - either a passport or a national ID card as well as a utility bill, bank statement, council tax letter or driving license. 

Advertisement

The comments below have not been moderated.

The views expressed in the contents above are those of our users and do not necessarily reflect the views of MailOnline.

We are no longer accepting comments on this article.