Both of Bristol’s football clubs are owned by offshore companies. Should City and Rovers fans be concerned or simply grateful for the investment?
Photo credit: Alf Snaiper
Bristol Rovers and Bristol City fans may think that there’s nothing that unites the two clubs beyond an age-old rivalry, but they’d be wrong. As it happens, both clubs are registered in tax havens. For Bristol’s loss-making clubs, the tax advantages offered by Guernsey and Jersey will be of little benefit to their owners. The key issue at play is rather a lack of transparency, and fans being kept in the dark about the true state of their club’s finances.
The Jordanian banking Al Qadi family own Rovers through Dwane Sports Ltd, registered to Jersey. And the site of Bristol Rovers new training ground in Almondsbury is also owned offshore by the Al-Qadi family via a separate company. Meanwhile, Guernsey-based billionaire Steve Lansdown owns Bristol City through Pula Ltd, a company based in Guernsey.
“The real issue with offshore is fans don’t really know how much money the magic money tree has”
This sort of set up isn’t unusual in the world of British football. As many as 34 UK clubs were found to be financed by offshore companies, according to the Offshore Game, a project by the Tax Justice Network to investigate the offshore world in the beautiful game. Understandably, many City and Rovers fans are grateful that their clubs are getting vital investment. So why niggle away at these sorts of seemingly minor details, especially when it’s commonplace?
It boils down to football clubs relying on handouts from parent companies based in jurisdictions that don’t release their accounts in public. For the diligent fan, this makes it very difficult to understand how their club’s funder is fairing, or to notice any other company changes behind the scenes.
“The real issue with offshore,” says George Turner of the Tax Justice Network, “is fans don’t really know how much money the magic money tree has.” Turner adds that “clubs are living on life support, but you don’t know about the health of the machine.”
Cash crisis on the horizon?
Turner brings up Bolton Wanderers as a point in case. In 2015, the club came minutes away from being wound up due to being unable to pay taxes owed to HMRC. While poor performance on the pitch was flagged up as one reason for the club facing near financial shipwreck in recent years, it’s dependency on a secretive offshore creditor was also a crucial factor.
The Bermudan Trust behind the heavily indebted club triggered a serious cash crisis, and fans and staff were left in the lurch until it was nearly too late. “The real concern for clubs is where they are not making money, they are heavily in debt, and there is an offshore owner,” says Turner.
Both Rovers and City continue to make a loss every year. And as the Bristol teams have no spare cash, they borrow even more every year to meet their commitments. Although Bristol City revenue has recently grown by about 50%, in part due to the redevelopment of Ashton Gate and TV deals, they lost around £12million last year and had to rely on Lansdown’s funding via new share capital, according to business football blogger Swiss Ramble.
Meanwhile, company accounts for Rovers state that Hani Al Qadi confirms his intention to support the club for at least 12 months, hardly a long period of security, especially for a company in such debt.
There’s nothing to suggest that Lansdown or the Al Qadi’s are getting cold feet or are financially on the rocks. Public statements from both continue to reaffirm their support for the clubs. But as fans have learned elsewhere in the UK, just as a club-saving investor can come to the rescue, so too can they disappear.
In many ways, football clubs are stuck between a rock and a hard place, with funding opportunities few and far between. A key issue to figure out is whether these sorts of investments will build long term sustainability or just short-term inflated growth.
Are Bristol’s football clubs built on sand or is it all just part of the game?