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Fit and Proper Persons: What lessons can Sunderland fans learn from the situation at Wigan Athletic?

Wigan may be the victim of a gambling scam, the Dell Boys have invested in Southampton and Mark Campbell has been sniffing around Sunderland AFC again. Roker Report’s Rich Speight looks over the edge of the frying pan and into the fire that could await us this summer.

West Bromwich Albion v Leeds United - Sky Bet Championship - The Hawthorns
EFL Chairman Rick Parry
Photo by Mike Egerton/PA Images via Getty Images

A little over a month ago, Championship side Wigan Athletic were taken over by a supposedly wealthy consortium who promised to secure the future of the club. On Wednesday, after the failure of the money promised in that deal to materialise, the club was placed into administration and docked 12 points by the EFL.

Questions abound regarding how and why this has been allowed to happen, and EFL Chairman Rick Parry has been secretly filmed outlining rumours of a possible link between this unprecedented situation and a far-east gambling scam. Wigan were said to be a long long shot for relegation, and those taking who have put their money on that scenario happening will be quids in if the points deduction stands and the Latics join us in League 1 next term.

Parry and the organisation he leads must take their share of responsibility for this situation. They approved the takeover and in doing so tacitly accepted that the Hong Kong-based owners were fit and proper persons under the EFL Owners and Directors’ Test, which sets out the disqualifying conditions for those looking to take ownership of any of the league’s members.

The only certainty in this story is that the Wigan fans have done nothing to deserve seeing their club pushed down the football pyramid. They, along with the players and management, are the passive victims of the fact that legally speaking; football clubs remain little more than assets to be passed between groups of rich businessmen for their own personal gratification and gain.

Of Frying Pans and Fires

Sunderland fans quite rightly, desperately and almost universally, want rid of our current owners. But the question of who or what comes next lingers in the background of all of our discussions. The events unfolding in Lancashire over the last few days has made many people begin to sit up and think about precisely what it is that we are wishing for.

It’s clear that we can have absolutely no confidence in the EFL’s ability to protect our club from being thrown out of the frying pan and into the fire. Wigan’s fate should serve as a cautionary tale for Sunderland fans calling for #DonaldOut at any costs.

The Latics demise may not have been caused by the Covid-19 restrictions on mass gatherings, but the spectre of League 1 returning without fans in the grounds brings the viability of the business model of football outside the Premier League into sharp relief. Football is an industry in crisis and is in need of radical, root and branch reform.

Charlton Athletic v Sunderland - Sky Bet League One Play-off - Final - Wembley Stadium Photo by Tim Goode/PA Images via Getty Images

We and other financially stressed EFL clubs are extraordinary vulnerable to those with more maleficent intentions than have been displayed by the Madrox Partners. They at least have shown that they have a vested interest in our performance on the pitch, even if their gamble on Sunderland bouncing back out of League 1 failed spectacularly due to a combination of hubris and incompetence.

If Sunderland is today worth a fraction of what it was 12 months ago, they stand to lose money on any impending sale of the club. Yet CEO Jim Rodwell has claimed this week that the Madrox Partners have been living up to their obligations by injecting sufficient cash - along with 10,000 fans who’ve chosen to renew their Season Cards - to keep the club afloat during the Coronavirus crisis. Despite everything we know about the state of our club, we have not yet slipped into administration. Sunderland’s accounts have not yet been published, but football finance expert from Liverpool University - Kieran Maguire - is concerned about what skeletons may emerge.

The Championship, in which we as Sunderland fans expect our club to play, is a financial basket-case. Clubs in tier two are loosing on average over £400,000 a week.

So unless the next group or individual to come in for Sunderland are the kind of people who will not sniff at losing £100m over the next two or three years, promotion at this stage looks like a financial risk in and of itself.

Despite FPP Sunderland retaining ultimate control over our fate through its loan to Madrox Partners, which is secured against the club’s assets, the Americans look increasingly unlikely to take active steps to finally bring the club into their investment portfolio. They’ve done their due diligence and stepped back from the deal.

On Friday it was announced that Michael Dell’s MSD UK Holdings - the British arm of the US venture capital firm in which Glenn Fuhrmann, Robert Platek and John Phelan made their fortunes - have agreed to invest in Southampton of the EPL. And whilst this doesn’t necessarily preclude an eventual FPP-led takeover here so long as there is no link between the two investment vehicles, it surely signals that the EFL is a much less attractive prospect to Mr Dell’s associates than it was 12 months ago. Let’s hope this is not the case.

So Sunderland AFC is still up for sale and nobody can say for sure how the club is doing financially and, like Wigan fans, we have no control over who will come in next. Well-placed sources have confirmed rumours on fan forums and social media that Mark Campbell is once again sniffing around Sunderland; you may recall he failed to show he had the resources to buy us 12 months ago and these overtures can be easily dismissed but perhaps the most interesting element of the case study of Campbell’s failed takeover of Falkirk that’s circulating is the psychology of denial that overcame the Scottish club’s Supporters’ Trust last summer.

Despite the mounting evidence outlining of the fate of of Campbell’s business dealings and allegations regarding his personal conduct being put in front of them, the fans in charge of Falkirk accepted his assurances and pushed for the sale of the club to go ahead. His baseless promise of big money investment was simply too much to resist. They fell for his PR guff.

It is a cautionary tale, but not one that should discount the importance of the move to convert Red & White Army into a properly constituted Supporters’ Trust at the EGM on 23rd July. It only serves to highlight the risks we face in the coming weeks and months when interested parties will be seeking to ingratiate themselves with supporters in the hope of gaining our backing in their efforts to take over the club.

We, as a collective, need to ensure that the wool is not pulled over our eyes and that the prospect of a future without Madrox Partners in charge doesn’t blind us to the risk of the club being taken over by even less suitable individuals.

A New Deal for Football

The FSA has long been pushing for a stronger Owners & Directors Test and for clubs to be given special protected status as community assets with a value above and beyond that of an ordinary private sector business. Political support for reform of the governance of football is, on paper at least, almost universal. The Conservatives, Labour and Liberal Democrats all committed themselves at the last election to fundamental reform of how the game is run, but there’s no sign of anything beyond warm words about “new deals” and “levelling-up” coming out of Whitehall at present.

Despite the pledge in the 2019 Tory manifesto to offer support to football fans who want to take control of their clubs, the UK Government has thus far failed act to ensure the survival of ailing members of the EFL. The Conservatives seem to expect the Premier League, once it has concluded its business on the pitch, to bail out the rest of the professional game.

The Secretary of State for Digital, Culture, Media & Sport - Oliver Dowden MP - rejected the plans for a publicly funded Football Finance Authority put forward by Damian Collins MP and the Football Supporters Association, stating that “football should first look after itself”.

The Premier League is one of the UK’s most important export industries, and generates vast tax revenues through player wages and VAT (not so much through Corporation Tax, as very few clubs ever actually make a profit). Dowden’s notion - that the billionaire owners of the EPL football brands will reverse the trend of the last 30 years and ride to the financial rescue of their lower-league brethren - is a ludicrous piece of official hand-washing on an issue that they seem to believe has little support amongst the general public during a pandemic and the ensuing economic crisis.

Coronavirus - Wed Jun 17, 2020 Photo by PA Video/PA Images via Getty Images

It’s akin to expecting Tesco and Amazon to club together and bail out your struggling local Londis store for the good of the retail sector overall. It is simply not going to happen on a voluntary basis. And yet both they and we know that football clubs are not mere businesses, they remain significant cultural institutions in their communities and the game itself is England’s national sport. Football may be a private business but it is also a public good, and public goods are secured In the long term by public action, not private philanthropy.

We have seen evidence in recent weeks that the UK Government is not averse to bending to the needs of certain industries, particularly property developers when it suits them. The land upon which Sunderland AFC’s stadium (and perhaps even more so the Academy) sits could be considered to be worth many times more than our rapidly-thinning playing squad. Bury FC was destroyed by an owner who is brazen in his contempt for the fans of a historic sporting institution and his overriding interest in the real-estate value of Gigg Lane.

The Government will not act unless public opinion is against them. Perhaps it’s now time for Sunderland fans to press the elected representatives of all parties from our corner of the north east of England to raise their voices in Parliament and urge the Government to look again at what the FSA have proposed, before it’s too late.

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