Nothing shows working people’s emotional, less rational side than the passion and depth of support millions demonstrate for ‘their’ team. Consequently, few things are more important to a community than the survival of ‘their’ clubs, especially amongst growing insecurity, displacement and isolation born from terrible economic crisis. Yet, these clubs have never been so poorly run, out of touch, or in danger of extinction. To date politicians have offered sympathy and echoing sentiments but few radical interventions. Worse still, it’s the institution most identified in the public mind with failing, useless, out of touch politicians who’re increasingly the catalyst for doom – the Inland Revenue is professional sport’s grim reaper.
Labour can’t afford to ignore this. First, if they do some Tory will beat them to the big idea. Second, it is mostly Labour’s market. After the 1997 election only a handful of the league football clubs were in Tory seats. Rugby league remains a working-class game even where it tries hardest to expand (south Wales, south and east London) and even after 2010, half of Premiership union clubs play in Labour or Lib Dem constituencies.
If Labour is to demonstrate it can do more than talk about representing the aspirations and fears of ordinary working people then it must propose radical intervention to save ‘our clubs’. It can do so whilst delivering a stronger supporter voice, reclaiming the genuine meaning of ‘club’ and promoting sustained community investment by owners.
The solution is rooted at the source of public anger and anxiety – the Inland Revenue and VAT. Most clubs have no money left for VAT. In 2009-10, 16 of the 20 Premier League clubs recorded debt totaling nearly half a billion. Only one of the 20 had debt of less than £10m. The Football League is plagued by the same disease, yet recently applauded clubs for agreeing to limit annual losses to £5m per annum by 2015-16 when its members will have £2bn of debt. Super League has long had a strict turnover linked salary cap but 10 of its 14 clubs currently lose money with three having been in or facing administration this year. English rugby union clubs mostly run at a loss with London Wasps facing potential meltdown. In lower level rugby oblivion looms large as chasing the dream creates ridiculous stories of £30k plus salaries for reserve prop forwards in the third tier where paying crowds rarely make three figures. Meanwhile, growing a sustainable professional club in another sport as an Olympic legacy looks like economic insanity given falling sponsorship and TV revenues.
So let’s put the value added back into VAT. Our society can’t afford the emotional cost of losing these ‘clubs’. Instead Labour should propose waiving VAT for professional sports clubs who meet key conditions.
First, clubs must prove they’re sustainable businesses at least working towards breaking even with measures focused on turnover. A strict cap on player’s salaries, reducing to 50 per cent of turnover would be a condition of the VAT break.
Secony, a minimum 25 per cent of turnover should be reinvested into community based activities. Models exist for this. The London Broncos Foundation supports school- and community-based coaching, dance groups, adult touch rugby programmes on inner-city estates, disabled sports and an educational centre at The Stoop accessed by gifted and talented local students.
Thirdly, clubs must have members with affordable membership fees – free with season tickets or no more than a matchday ticket. Members must have a genuine voice in all key club matters: ground development, ticketing, merchandise and sales, and community projects. Somewhere close to 50 per cent of board voting rights seems reasonable with members being encouraged to own a minimum of 33 per cent of their club.
It would require inspection, from around 30 independent experts drawn from community engagement and supporters groups, aided by financial auditors and sporting authorities for the maths bit. Grants to sporting authorities should link into their obligation to police/protect the VAT breaks. Local authorities can be directed to support the approach. Awards would be granted to the best community schemes. Sponsors would be attracted back to community-based successes. More tangible community engagement would make councils and sports bodies more willing to invest for the longer term in struggling or expansion clubs.
Arguing to allow badly run and irresponsible businesses off their tax duties may seem an odd Labour position. But this is about the bigger picture – leaders standing up for ordinary people by making businesses more accountable and proactive in their communities for social good whilst also showing parliament is useful and in-touch.
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Dean Rogers is a national officer with the PCS union and a season ticket holder at London Broncos
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