UK Football: Independent Football Regulator (IFR) Called to Act
By Will Kennett, LLM, University of Limerick, Republic of Ireland
Introduction
Dejphon Chansiri. Steven Rosen. Helmy Eltoukhy. Of the three names, many thought David Hogan and the IFR would have been looking at Chansiri’s stewardship of Sheffield Wednesday FC as one of their first acts; however, Rosen and Eltoukhy’s consortium conundrum for Sheffield United FC (United) appears to be that.
Kick off
Two years ago, United were sold by a consortium, United World, to a consortium, COH Sports, for approximately £110 million (around €128.4 million). Rosen and Eltoukhy became co-chairs of the club, taking over from Prince Abdullah.
This money was not fully paid to United World, with an initial sum followed by two instalments agreed upon. The first instalment was paid late and subject to a statutory demand, and COH Sports were wound up at the High Court in August, still owing United World £35 million (around €40.8 million) from the second. The hearing, ironically held on a Wednesday, reportedly lasted 10 seconds, with neither Rosen nor Eltoukhy present. Kieran Maguire, the football finances commentator, called this absence “an effective acceptance of the debt.” Does this mean the owners of a club in the Championship have been wound up over unpaid debt related to the club’s purchase?
Not necessarily. In June, COH Sports transferred ownership of United to 1919 Partners, a Delaware-based corporation, with the club announcing them as their new parent company. It is unclear whether this transfer of ownership was cleared by either the English Football League (EFL) or the IFR, but the club emphasised their financial soundness, and that all was well behind the scenes.
At the same time, Timothy Ryan, a philanthropist from Ohio, joined the board of directors of United after time on the club’s Strategic Advisory Committee since January. The statement, announcing Tim Ryan, amongst others, was “part of the long-term commitment to Sheffield United by COH Sports.” Clearly, much has changed in the five months from 21 January to 22 June. The key personnel page of United shows no sign of him.
Foul Play
As pointed out in the UK Guardian newspaper, Rosen could be stood down as owner and/or director due to COH Sports being his second insolvency event, which is against EFL rules. A 2023 bankruptcy of US medical manufacturer Invacare occurred whilst he was a director there.
There is precedent for the EFL penalising a club where their parent company has entered into administration, with Southampton FC given a points deduction and being held to be “one economic entity”.
However, it will likely be argued that COH Sports were not the parent company of United at the time of their winding up. Equally, this seems to be an issue entirely outside the control of United and the category of malfeasance that the IFR was brought in to prevent: owner actions adversely affecting United itself.
It is unclear whether the sale from COH Sports to 1919 Partners was greenlighted by either the EFL or IFR, or whether there was a sale at all. Given that they still owed United World £35 million (around €40.8 million), was it even theirs to sell? Ryan’s suitability as a director also appears to be unconfirmed by any relevant body.
The lack of communication from ownership to fans will also draw the ire of the IFR. Statements from United on the change of ownership at group level attempted to play down its importance. Prince Abdullah, former owner of United, in one of his statements, commented on the lack of communication from COH Sports, whilst attempting to settle their dispute out-of-court, also alluding to the possibility of United facing sanctions.
Yellow Card? Red Card? Play on?
On the face of it, Rosen appears to be the prime candidate for a proverbial sending off by the IFR. This category of stewardship seems to be the very kind that the IFR is here to end, whilst exemplifying the limitations of the EFL system as, ultimately, they greenlighted COH Sports’ purchase from United World in 2024.
Eltoukhy, as his partner, would also be in line for some investigation, with just the one liquidation on his record as opposed to Rosen’s two. He would have been involved in the decision related to COH Sports transferring ownership of the club to 1919 Partners, given his statement in support of the move.
At the very least, Tim Ryan should be scrutinised by the IFR, along with the group level ownership structure of United and the role of the EFL in clearing COH Sports’ purchase from United World in the first place. It must be a line in the sand moment regarding what the EFL knew when, how the club and Ryan responded to the inevitable inquiries from them, and why they took the actions (or inaction) that led to the present situation.
What is not in doubt, however, is the IFR statutory basis for getting to the core of the issue, as reiterated in a statement to The Sheffield Star newspaper:
"The IFR can assess an incumbent owner's honesty, integrity and financial soundness under its Owners, Directors and Senior Executives regime, should it have grounds for concern.”
With the owners, directors and parent companies facing a realistic prospect of disqualification, the question turns to what happens to United: do Prince Abdullah and United World step back in?
As pointed out in a recent club statement, the club under Abdullah was subjected to a points deduction due to missed payments. If not them, then who? CEO Stephen Bettis has been in the role for 10 years and is the final member of the United board of directors.
A points deduction? If so, how many? Any deduction would impact United and not address the outstanding £35 million (around €40.8 million) owed by Rosen and Eltoukhy. It could also harm the prospect of any sale materialising.
The IFR will take their time and not make any decisions quickly. After that, it is likely that any decision will be appealed and/or resisted. The EFL may wish to act too. The importance of the decision for the IFR and English football cannot be overstated. If foul play is found, it must be stamped out.
Over to you, Mr. Hogan…
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