Alan Pattullo: With debts of £300 million, Barca model of ownership not so clever

Barcelona have been described as the poster boy for co-operative football and they might well be – if you want your football club to run up debts of more than £300 million.

The Rangers Supporters Trust is pushing for an ownership model involving a consortium of fans and businessmen, following this week’s plunge into administration. The information elicited from the press conference hosted by the club’s administrators yesterday further pushed the case for the fans taking over. After all, they surely couldn’t do a worse job than Craig Whyte?

Barcelona’s is the ownership structure most often cited as being desirable. There are more than 170,000 members – or socios as they are termed. This number has nearly doubled since 2003 in what Barcelona termed was ‘el Grand Repte’ – the Big Challenge. The club desperately needed further funds. Such investment can only be raised by either increasing the membership base or increasing the club’s commercial revenues.

Barcelona’s success on the pitch has masked the train-wreck that their finances had become by 2010, when the club were forced to take out a €125m (£104m) loan just to be able to pay the player’s wages and ease other cash-flow issues.

Despite being reigning European champions for half of the year, the club lost €83m (£69m) in 2010 and then €21m (£17.5m) the following year. Such a desperate pursuit of success can be the product of seemingly egalitarian business models too. Indeed, the need to appease fans, each of whom owns a portion of the club, can almost be more intense in such circumstances.

Former President Joan La Porta’s tenure has been described as “relentlessly commercial”. His answer to the debt problem was to sign world stars, such as Ronaldinho. David Beckham was another player whom he promised to bring to the club as he campaigned prior to his first term as president.

In the summer of 1999, after Manchester United supporters had beaten off the attempt by Rupert Murdoch to buy the club, one United supporters’ group leader, Andy Walsh, talked of “rolling back the plc”. However, more than a decade on they are now more firmly in the grip of a single family than ever, hence the need for the formation of United FC by disaffected fans.

It’s fairly straightforward to go from a private members’ club to a public limited company. However, it’s more difficult to go from a public limited company to some sort of co-operative.

Stirling Albion managed it on the back of then owner Peter MacKenzie writing off almost £1.3m of loans. His generosity was the key to fans taking ownership of the club. Alas, it hasn’t been all sweetness and light since that day in 2010 when Stirling became the first Scottish club to be wholly owned by the fans, after the Stirling Albion Supporters Trust agreed a £300,000 deal to clear debts and make a one-off payment to MacKenzie.

Paul Goodwin was a driving force behind the move but stepped down from the board last year, due to a difference of opinion with the Trust. According to Goodwin, there are two main issues with fans’ ownership. “You can’t pick your bedfellows,” he said. “And what it doesn’t do is bring in any money.”

While many proved willing, there was not necessarily any expertise on the board. “I had a ten-year plan but you were talking to people who did not even understand the basic principles of running a business,” he added.

“If I was trying it again, I would follow the Bundesliga model, which is 50 per cent fans and 50 per cent business partners,” says Goodwin. This is a concept that clubs such as Dundee and Livingston are edging closer to adopting.

As for Rangers, it might also be a way out of what is clearly a desperate situation for Rangers. How the club might wish it had stayed in the hands of those who could be termed gallant, as the early founders have been described. But in this day and age, such a model where ownership is shared out between members proves to be a better idea in theory than practice.

“I think it would be hard,” said Robert McIlroy, a Rangers historian, yesterday. “I mean, what are we really talking about? 50,000 fans becoming members? What would be the annual subscription? That’s the first question. You’d have to set the membership fee at a reasonably high level, which might disenfranchise a lot of fans. Maybe it would have to be £1,000. How many could afford that? There are plenty who could but I could not see that working in today’s age, I really don’t. I sometimes wish football clubs were still private members’ clubs.

“But I think those days are long gone.”

Even former Rangers director Paul Murray’s concept of broader ownership would be reliant on a board of directors that acts on the behalf of the members and manages the club with an agreed business plan, although he is likely to require one or two significant investors. The idealistic notion of fans’ owning 100 per cent of the club could be out of reach, although sheer survival is the primary aim at present.