What is the Fit & Proper Persons Test (& Does it Work)?


In 1981, the Football Association scrapped
Rule 34 from its laws of the game. The stipulation ensured that no director or
owner of a football club could be paid a salary of dividend for their ‘custodian’ role.
Since that watershed moment, the acceleration of English football’s capitalistic tendencies
has been exponential. In 1992, the breakaway Premier League was
formed so that established clubs would not have to share as much of their revenues with
the lower divisions. Then came the connected booms in media rights and sponsorship as the
Premier League nailed its early distribution and marketing strategies. The influx of money into the sport has generally
translated to player wage inflation, although without the FA’s Rule 34 it became apparent
that clubs were at a bigger risk of being manipulated by their owners for profit. This
fear, coupled with the fact that loss-making at club level in the 1980s and 90s had been
habitual, led to lobbying against the FA for improved regulation. In 1997, Sir John Smith,
former Deputy Commissioner of the Metropolitan Police, recommended a test on shareholder
suitability in a report commissioned, but later dismissed, by the FA. In 1999, a Labour government emergency unit,
the Football Task Force, reached the same conclusion. In 2003, an Independent Football
Commission, imposed on the reluctant FA by the Labour government, called for the enforcement
of “proper corporate and financial governance.” The FA, Premier League and Football League
finally agreed to lay down regulations vetting the background of owners in 2004, naming it
the Fit and Proper Persons test. There are variations of the test, dependent
on which governing body regulates the club in question. Nevertheless, each test aims
to: 1) prevent anyone who holds a criminal record
from owning or directing a football club, 2) protect football clubs from people who
do not have the long-term business interests of the club, and.. 3) prevent anyone who lacks integrity from
becoming an owner or director of a club. A possible owner or director who has undergone
the test will be disqualified if he or she is found to have: an unspent criminal conviction
of fraud or dishonesty, in the United Kingdom or overseas; been declared bankrupt; been
declared unlawful to act as a director of a UK-registered company; been a director of
a football club that was declared insolvent more than twice; been banned form a sport
ruling committee, accredited association or other regulator; breached FA rules on betting;
or been, or still is, on the register of sex offenders. Originally, the test applied to people who
wished to become shareholders of more than 30% as well as directors of football clubs. In 2009, though, Richard Scudamore announced
amendments would be made to the Premier League’s test to sync with UEFA’s licensing standards,
expanding the ‘fit and proper test’ to any shareholding of more than 10%. Since its inception, there have only been
a small number of public cases of individuals failing the test. In 2009, Stephen Vaughan, then owner of Chester
City, was the first to be barred after his involvement in a £500,000 VAT fraud case
while a director of Widnes Vikings rugby league club, although he merely transferred his shares
to his son. In 2012, Craig Whyte, the controversial character
who sent Rangers into liquidation 10 months after purchasing a controlling stake, was
found to have failed the test following an independent inquiry by Lord William Nimmo
Smith. In a different vein, former One Direction
boy band member, Louis Tomlinson, and his business partner, John Ryan, failed the test
in 2014 having raised only £757,000 of the necessary £2m needed to complete a takeover
of Doncaster Rovers. While the introduction of a Fit and Proper
Persons Test is in no doubt beneficial for the sport’s integrity and financial health,
it has not been without a significant amount of criticism. A primary issue with academics is the scope
of the regulation, with its focus limited to ‘integrity’ and ‘financial’ aspects. In Jonathon Michie and Christine Oughton’s
2005 review into the corporate governance of football they found that the test ‘failed
to address the sociocultural importance of clubs more generally’. This is most plainly
illustrated by neither the words ‘fan’ nor ‘supporter’ being present in any of
tests’ stipulations. In a similar vein, the fact that the Premier
League and Football League are the bodies that enforce the Fit and Proper Persons Test
seems flawed when it comes to regulating governance. Both sporting organisations have a clear economic
motive as business entities. Attracting the richest owners to invest their
personal wealth into the English football pyramid would likely increase the quality
of the competition, which, in turn, will attract more consumers and commercial ties. Therefore,
there is a conflict of interests between economic incentives and protecting supporters. Sean
Hamil, a lecturer at Birkbeck University on the Economics of Football, stated in a Government
report session: “The job of the leagues is to run two successful leagues. It is not
to govern football.” As it happens, the test is ineffective at
scrutinising its stated aims, let alone the social responsibility aspect. The example of Portsmouth FC is particularly
prevalent. One of the owners in that four-year period was Russian entrepreneur Vladimir Aleksandrovich
Antonov. In 2009, his Lithuanian bank – Snoras – was barred from trading in the UK by the
Financial Services Authority (FSA) for failing to provide necessary information. Nevertheless, the Football League allowed
him to purchase Portsmouth FC in June 2011. Five months later, Antonov had stepped down
after his holding company, Convers Sports Initiatives (CSI), was placed into administration.
Portsmouth FC would also enter administration in February 2012. The Football League later defended its actions,
stating: “the steps taken by the Football League were based upon evidence of proof of
funding, together with related business plans. It appears that the evidence was at best misleading
and possibly fraudulent with the league not being alone in accepting this evidence.” Thaksin Shinawatra’s purchase of Manchester
City is another egregious case. The business tycoon and former prime minister of Thailand
had been ousted by a military coup in 2006, following allegations of corruption and human
rights abuses. Despite this, and several warnings from Human Rights Watch, Amnesty International
and Transparency International, Shinawatra passed the Premier League’s ownership test
and the City board accepted the purchase in June 2007. According to Birkbeck University lecturers,
Geoff Walters and Sean Hamil, ‘Scudamore proclaimed that the League was unable to prevent
an individual who faced criminal charges from an unelected military government from owning
a club’. A few months later, however, Shinawatra was found guilty of corruption by a democratically
elected government and a warrant for his arrest was issued. The Thai millionaire sold Manchester
City to Abu Dhabi United Group, making a profit of £20 million in less than a year. The high-profile cases of the Glazer family
purchase of Manchester United and Tom Hicks and George Gillet’s purchase of Liverpool
are more complicated. Both parties used a controversial purchase method called a Leveraged
Buyout (LBO), where essentially the cost of purchase is paid by loans against the future
value of the asset, ultimately burdening both clubs with substantial debts. While this is
by no means illegal, it is an incredibly risky strategy and in the case of Liverpool nearly
saw them go into administration before Fenway Sports Group stepped in (2010). Shortly afterwards, and despite contrary evidence,
Richard Scudamore argued that the club was ‘never at any risk’ of going into administration
due to a number of interested parties, also adding that the Premier League was powerless
to prevent “another Hicks and Gillet happening”. Accrington Stanley chairman, Andy Holt, who
is particular critical of the state of lower league football finances on Twitter, told
the Totally Football League Show recently: “I think it’s a disaster. It’s a bit
like me breathalysing you tomorrow morning and expecting you to not be on the beer tomorrow
night, driving your car back from a party. It doesn’t predict any future behaviour,
and it doesn’t control any future behaviour. So there’s absolutely no point in it…

67 thoughts on “What is the Fit & Proper Persons Test (& Does it Work)?

  1. hey, guys, I'm early so I wanted to remind everyone to wash your hands w soap and generally stay sanitary to try and ward off coronavirus. stay safe everyone, we're gonna get thru this together.

  2. The test is a joke. So many clubs have suffered because of bad owners

  3. Owen Oyston was literally put in prison for rape and was still allowed to own Blackpool FC for another 23 years

  4. 0:08 well certain internet people would have a very different approach to this very term itself

  5. So, technically, Himmler was a fit and proper person to run a football club. All joking aside, The Premier League is, seriously, the one true shining bastion if Thatcherism remaining.

  6. Admit it , every EPL club wish to have Roman Abramovich or a Saudi Billionaire as owner

  7. Congratulations for reaching 700k subs🎉🎉🙌…. Keep up the good work..

  8. 0:09 Interesting rule, and there's a bunch of sites that focuses on that rule. Must be an important one. Gonna do a quick research on that

  9. I agree- it shouldn't be the task of the premier league to police the premier league ownership test. Leveraged byouts should also be banned.

  10. You know where clubs dont fail to address their sociocultural importance: Latin America. They are so against capitalism that many of them are non profits lol. Above all, we should remember that our desire for tribal belonging is as old as our desire for sugar. We cant get rid of them, so consume them in moderation and dont blend your identity with any organization with more members than Dunbar's number.

  11. I think it's interesting to see whether big money has influenced the way football is being played by the teams on the field, i.e has the game changed essentially to secure more wins and revenue for the owners?

  12. can you do videos on:
    hopp and the bundesliga protests
    impact of coronavirus on football
    why are so many og top 6 clubs doing poor and are in transition?
    chinas football revolution
    class of 92 and salford city

  13. No Athletic = Higher quality, less rushed, with fewer mistakes, content.

  14. 3:00 is it just me or is the UEFA badge a ringer for the Bayern Munich badge. I think we should be told….

  15. Portsmouth were failed twice by the Premier League and the EFL by allowing awful owners to takeover! This included Al Fahim with no money, and even an owner who may of not even existed (Al Faraj). Owners who only took over to get money back from previous owners.

    Second time us the fans had to rescue our club and nursed it back to health, then we were given the vote on selling the club to our current owners who have kept the same sustainability as the fans did.

    Winning the League Two title on the last day of season a few years ago was an emotional high, like we had just been given an all clear after years of illness.

  16. I was expecting to see Kronke is a criminal and a warrant of his arrest has been issued so he sells the club but good video

  17. Wrong, the test worked just as intended. It was supposed to make it look like the FA were doing something about the problem without actually restricting the purchase of football clubs.

  18. Talking about: ”the club wasn't at risk for administration” Hicks and Gillet nearly ran the club into the grave. Absolutely terrible

  19. Funny you upload this a day after my team charlton have started having management problems

  20. Just on protecting supporters – from what exactly? Supporters have interests in tandem with the owners, that of their team winning. My local uni team in Leicester City, which loves its owners. Man City owe the ADUG for making them a great team, as do Chelsea Abrahamovich. Owners have literally saved clubs with investment at times. And as the case of West Ham proves, supporters will without any impetus whatsoever blame the board for a club's issues anyway. Gold and Sullivan have spent lots of money on great players and it is on the field that the support is being let down by substandard performances. The only thing the board could be being blamed for is by sticking by Pellegrini, a stubborn donkey of a manager. Aside from that, they've helped West Ham, not hindered it, and teh stadium change even may be seen retrospectively as a good move in years to come. Yet the fans blame them anyway because it's easier to blame a dull financier than the star players who are actually at fault. For this phenomenon, check Woodward at Man Utd, the Kroenkes at Arsenal (though Edu and Sanllehi are clowns and their management is notably poor but they're not being blamed so) and Bartomeu at Barca. Their actions are fine but because of player worship they're blamed because reasons. So how are owners meant to ever please fans unless they pander to them? Fans should respect that the owners are, however hard it is to admit, more important in a PURELY immediate financial sense for the sustainability of their club and that owners' actions aren't always wrong. And owners are serving the interests of supporters, they're not subdued by the owners, far from it.

  21. Failed completely for Bury. Just look up Steve Dale and the many businesses he had go bust and you'll see how bad it is.

  22. How do the Glazers still own United then. Smh. they'll drive my club to the ground 🙈

  23. Speaking as a Birmingham fan, the test completely fails to address competency levels. You can tick every box that the EFL sets out, yet still be clueless idiot. Situation we are in now with our owners

  24. I don't understand how it's legal for someone like the Glazers to buy a club for 600m with an entire loan, whilst using the club to pay out that loan, with the owners not actually investing properly into the club. Is that not just essentially buying a club for free?

  25. "does it work" nope, if it did then Abramovic, Glazer, Mansour would never have been allowed to own their respective clubs.

  26. What about Evangelos Marinakis and Nottinham Forest ? In Greece he is accused of smuggling 2 tons of heroin with one of his ships Since then 9 people named as whitnesses have died eiter in Greece or Turkey and 2 judges have refused to take the case (one of them has emmigrated to the US) He is also accused of being the main man in a match fixing ring But this Escobar-like guy didn't fail the test So is the test a failure?

  27. Funny how this comes out 2 days after Floyd Mayweather said he’d buy newcastle

  28. You cant do a video about the short fallings of the fit and proper persons test, and not once mention the set of fans that have lost the most because of it, bury. Yet large segments on man u and liverpool who are getting monsterous investment and are doing more than fine? C'mon

  29. Da fuck D'you mean the Prem couldn't control who does doesn't own a club?
    You mean they can't just say no?

  30. The Dai siblings failed the Premier League's fit and proper persons test when trying to buy Hull City, so they bought Reading as they could pass the Football League's test. We don't know why they failed the Prem's test or what changed in less than a year

  31. In this video you failed to mention that a HAIRDRESSER was allowed to buy Birmingham City for £80m… but that was totally within the rules… until he was sent to prison for that money being dirty. At least the people who purchased the club after him were 100% legit………ohhh wait!

  32. Mental that people such as the glazers, Mike Ashley and Steve Dale have been allowed to buy football clubs.

  33. No it doesn't, if it did work the scum that is Ken Anderson would never have been allowed to buy Bolton Wanderers and take the club to the verge of extinction.

  34. Absolute joke rule. Just look at Bury, Birmingham, Blackburn, Blackpool, Charlton, Leeds, Coventry, Oldham, Macclesfield, Portsmouth or Bolton. Any I missed

  35. Wtf at rule #2 new owners buy the team then sell the players for a profit!?!??!!?!??!

    Yet this ok and is in the "best interests of the Club???"

Leave a Reply

Your email address will not be published. Required fields are marked *