Football Clubs in England: Financial Sustainability

Part of the debate – in the House of Commons at 7:08 pm on 7 November 2022.

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Photo of Shabana Mahmood Shabana Mahmood National campaign co-ordinator 7:08, 7 November 2022

I thank the hon. Member for his invitation. I will certainly try to make time to get to his debate—I feel that there is a quid pro quo going on here; we are certainly keeping the Minister busy. He raises an important point that goes to the ethics with which football clubs are run. Fans turn up because they love their football club, and nothing should be promoted to them that results in their being duped by financial practices that might ultimately be found wanting. They should not be put in a position where they trust their football owners and their football leaderships and then end up losing money. Fans should not be taken advantage of, and everybody who is involved in football should be able to sign up to that.

In addition to financial uncertainty, Blues fans are contending with a home stadium that is in a dilapidated and sorry state. The Kop and Tilton Road stands have been closed for two years because their steelwork is badly corroded, meaning that significant works are needed to make them safe again. That would cost upwards of £2.5 million to complete. Despite being repeatedly assured that the stands would be fully operational again by the start of this year’s season, the works remain incomplete. The latest update from the club states that work will resume during the World Cup break in November and December, with an aim to finally complete all works in the summer of 2023. In the meantime, stadium capacity remains significantly reduced, slashing the number of tickets that can be sold and further depressing the club’s revenue.

The saga of the stadium gets worse. Following the club’s points deductions for recording excessive losses, Birmingham Sports Holdings sold its 75% stake in St Andrew’s stadium, the home of the Blues football club, to a British Virgin Islands-based company called Achiever Global in June 2021 to try to improve its accounts. The deal generated £10.8 million, but a news report at the time stated that most of that would be used to repay external Birmingham Sports Holdings debts, leaving a working capital of only £2 million.

According to the Football Supporters’ Association, more than 60 clubs have lost ownership of their stadium, their training ground or other property in the last 25 years. Clubs that lose ownership of their ground have also often been forced to relocate away from their home town, which was a serious concern for Blues fans when they learned of their stadium sale. In Birmingham City’s case, it complicates the offshore ownership structure further, making accountability about stadium repairs even harder to assign.