Through crowdsourcing of many kinds, people can support causes they are passionate about and, in the case of equity crowdfunding, even buy shares with voting shares, such that they gain a say in the operations of the organization or project they support. However, can people really fund and take charge of the things they are most passionate about?
“Amongst all unimportant subjects, football is by far the most important.” – Pope John Paul II
The amount to which a large share of habitants of European countries, and many more worldwide, care about their favorite football club can hardly be overestimated. Though how often do we read about mismanaged clubs in severe financial problems? Opportunistic behavior of the top management of clubs unfortunately is rather rule than exception in the industry of football, often resulting in a short term focus, immense amount of debts and, in turn, the decay or even the liquidation of a club. Whereas the often very rich board members and owners are simply replaced after such disasters and move on with their comfortable lives, the fans are left in grief over the loss of their great pride and passion.
There is hope. In the last years, some highly interesting and promising initiatives have taken place to redistribute a part of the control of a club to its fans. Due to financial mismanagement, from the 2009/2010 season onwards, the former British Premier League side Portsmouth Football Club was relegated three times in a row and the club found itself on the brink of extinction. But, in 2013, the fans injected 2.5 million pounds in their club, through a community share issue with partial ownership rights for each shareholder. The fans, essentially a club’s customers as they buy tickets and merchandise, saved Portsmouth and made ‘Pompey’ the largest fan-owned football club in the UK. The investing fans are united in the Portsmouth Supporter Trust (PST), which has to approve any major decision of the club’s board, such as the issuing of loan capital or venturing in acquisitions. While this yet is a beautiful example of what consumer involvement can do, last year a crowdfunding campaign backed by Portsmouth fans went a step further even. On Tifosy.com, a newly established platform with the aim to stimulate active supporter backings and decision rights, raised 270,000 pounds for Portsmouth to construct its first-ever club-owned academy, right in the heart of the city of Portsmouth.
The video below tells the great story of the Portsmouth fans’ actions.
Two fans of 3rd Bundesliga side FC Fortuna Köln had an even greater ambition. The plan they launched last year proposed that any Fortuna supporter could fund its beloved club and, in turn, gained a vote on a wide array of possible decisions, including whether or not to buy a particular player, realize an investment to the clubs premises or even to sack the first squad’s manager. Every pound invested represents one vote, and the fan opinions alltogether would decide which actions the club had to take. Unfortunately, this highly democratic, wisdom-of-the-crowd enabling, crowdfunding campaign did not reach its funding goal, but the idea might very well turn out an industry changing one in the long run.
The organization Supporters Direct promotes and researches the cause of the so-called Supporters Share Ownership. In their extensive 2013 report on this topic, the authors identify a rapidly increasing interest of both fans and politicians, whereas club owners and board members, the incumbent agents in this industry, display a fierce reluctance to venture in this kind of acquiring funds. To overcome this deadlock, the authors recommend policy makers to establish a Community Football Fund which would be created as a social investment intermediary capable of securing various forms of social investment to assist supporter ownership. Supporters Direct is paving the way for widespread supported ownership of football clubs, giving hopes to all those fans opposing the modern reality of football, where clubs are subject to the dangers of the few elite owners spending billions, those of the short term oriented, opportunistic board members and the investors who view players and clubs as mere investment vehicles.
Sooner than expected, we might witness crowdfunding radically transform yet another industry; the highly conservative, but yet so deeply cherished industry of football. Let’s make it happen!
– Niek A. van der Horst
Buy this team, April 2012, The Economist, accessible at: http://www.economist.com/node/21553493
Crowdfunding: Football’s 12th Man!, April 3rd 2014, FC Business, accessible at: http://fcbusiness.co.uk/news/article/newsitem=3057/title=crowdfunding%3A+football%26%23039%3Bs+12th+man!
Is fan ownership the answer to struggling football clubs?, November 27th 2013, The Guardian, accessible at: http://www.theguardian.com/social-enterprise-network/2013/nov/27/fan-ownership-football-premier-league
Portsmouth FC Academy campaign successfully raised £270,000, August 16th, Tifosy, accessible at: https://www.tifosy.com/en/campaigns/pompey-academy
Start-up-Netzwerk für Fortuna Köln, April 8th 2014, Kölner Stadt Anseiger, accessible at: www.ksta.de/koeln/crowdfunding-start-up-netzwerk-fuer-fortuna-koeln,15187530,28071496.html
Supporter Share Ownership, 2013, Supporters Direct, accessible at: http://www.supporters-direct.org/wp-content/uploads/2013/11/Supporter_Share_Ownership.pdf