Nicholas Birch in Istanbul -

All things considered, it was a decent end to 2006 for Turkey's nervous stock market, up far closer to the 40,000 level than most had dared to hope for. If there was one place the general optimism didn't seep into, it was the country's four listed football clubs.

Top of the league Fenerbahce is maybe the exception, as its shares have only fallen 2.4% since the season began in August. But Trabzonspor closed 2006 down 6.6%, Besiktas down 22.4% and Galatasaray a disastrous 24.8% lower.

What's got into them? Ask managers at multi-billion-dollar US investor QVT Fund LP, and they'll tell you corporate mismanagement.

A minority shareholder in Fenerbahce Sportif AS, the trading arm of the football club of the same name, QVT had to take legal measures in 2005 to prevent the firm trying to change its articles of association.

This time around, it's Fenerbahce's biggest rival Galatasaray that's giving the investment fund headaches.

In debt to the tune of an estimated $130m (Turkish club finances are a closed book), the football club has for some time been searching for a new source of income. The directors of the club could have sold some of the hugely valuable land they own; instead, they opted to merge the club itself with its publicly-owned trading arm, Galatasaray Sportif AS, in which QVT owns a stake.

Owner of 9.5% of shares in the run-up to the September shareholders meeting where the merger decision was taken, QVT was understandably up in arms, since its investment was about to be sadlled with the debt. The fund claims it wasn't even allowed in to vote on whether the merger between club and trading arm should go ahead.

"This is dictatorship, the management should resign," QVT's chairman, Angelo Moscov, said on December 8 during a visit to Istanbul in order to take the club to court.

Since the storm broke, QVT has steadily increased its stake in Galatasaray Sportif, so it clearly expects to win its case. But it's the legal uncertainty surrounding many of these clubs that's behind the drop in football shares, says Sinan Goksen, research director at Ekspres Invest, a brokerage.

Goksen says that with the exception of Besiktas, these publicly-owned companies are separated from the football club itself, so they enjoy the revenues from the sale of TV rights, souvenirs and sponsorship rights, but are shielded from the expenses normally associated with running a club from the huge transfer payments on players. "Add debts in and you've got a different ball game," he says.

Putting in the fix

If a handful of minority shareholders were the only ones unhappy about the way Turkish football is going, then few in the game would be worried. Yet the reality is that everybody in Turkey is displeased with the situation, especially since the latest match-fixing allegations surfaced late November.

In the dock this time is Fenerbahce's chairman, Aziz Yildirim, who was accused on prime-time television of offering $400,000 in bribes to ensure his team won the 2001 season.

With a half-hearted investigation ongoing, it's not clear how true the allegations are. But nobody doubts the depths of corruption in the country's football.

"If we followed the Italian example and relegated all the dirty teams, we'd have no Premier League next season," reckons Mert Aydin, editor of the football magazine 442Turkey, referring to the referee-bribing affair that ended with Juventus being dumped from Italy's Serie A league last year.

"Rumours of corruption are so widespread that nobody in Turkey believes matches are won on the pitch any more," says Mehmet Demirkol, one of the country's best-known football analysts.

Demirkol thinks public cynicism is destroying the game, just four years after Turkey's World Cup third-place finish boosted the sport's popularity to all-time high.

So does Ertan Ozerdem, CEO of the TV channel with Turkish league broadcast rights. Ozerdem says his TV channel has spent $700m on football and expects a quality product. "Club managements are spoiling the product."

A massive economic crisis was what it took to clear up Turkey's banking sector. Turning the country's football around is going to be much more difficult, thinks Tugrul Aksar, author of two books on Turkey's football economy.

Why? Because "in Turkey people haven't yet realised football is an industry in need of good management."

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