All Party Parliamentary Football Group Inquiry into Football & Its Governance
Session 6: 8 December 2008
Members Present: Alan Keen MP (Chair)
Lord Faulkner
Mark Field MP
Mark Hendrick MP
Helen Southworth MP
Clive Betts MP
Chair: First, may I welcome everyone? I shall use the same phrase I have used each time in these inquiries: Members of Parliament are not looking to tell football how to govern itself. However, many constituents support, and most MPs represent, non-league clubs, so we have a responsibility to those people.
Our first witness is Lord Mawhinney. As you know, Brian, we do not have parliamentary privilege this afternoon, so the police could dash in at any moment and arrest any one of us.
Lord Mawhinney: I have just come from the Lords, and I believe that they are going to dispute that.
Chair: First, let me talk about this tie I am wearing. I am from Middlesbrough, so I am not a style guru. I usually put on the first tie that appears, which in the past three or four days has been the FA tie. I saw it this morning before I came out and thought I had better take that off, so as not to indicate any priority. I put this Barmy Army cricket tie on instead, and I think that all football supporters and executives qualify to be part of the football barmy army.
We are not here to disagree with people. What you have done at the Football League, Brian, has been wonderful, given that you have to deal with 72 chairmen of varying degrees of enthusiasm—I shall leave out all the other words I could use, because of the lack of parliamentary privilege. The job you have done at the Football League has, in a way, led the rest of football in the movement towards improvements in the running and organisation of the game.
Mark Hendrick MP: Welcome, Lord Mawhinney, to our proceedings today; as we well know, you are no stranger to these places. Let me begin by discussing the break-up of the Football League and the formation of the Premier League some time ago, when the great history of the Football League was thrown to one side and the spectre of Mr. Murdoch, big money and television taking over the game loomed. Many of the predictions that people made at that time have since come true. You will be aware that Phil Gartside, the chairman of Bolton Wanderers, has recently made some comments about the future of the Premier League. He has said that
“it is time to look at two Premier Leagues - Premier League One and Premier League Two…You could have 36 Premier League clubs split into 18 and 18 and that would also solve the problems of the winter break and supporting the England team. It would even everything out and it would make it more competitive”
He called for a debate on the issue. Has this been discussed with the Football League? What is the Football League’s reaction to those comments?
Lord Mawhinney: First, I should thank the Chair for inviting me. As a member of your august group, I shall try to remember to wear my Football League hat, rather than my all-party parliamentary group hat. It is a pleasure to be here, and I thank you for the courtesy of your invitation.
The answer to your question, Mark, is no; Mr. Gartside has not spoken to me about his idea. I do not agree with his idea and, at its previous meeting, the Football League board reaffirmed, again, that it does not agree with it. But what the Premier League does is, of course, a matter for the Premier League. My clear understanding is that although some clubs in the Premier League take Mr. Gartside’s view, it is not the Premier League’s view—you will be able to test that later, if you wish. He says that his proposal would solve that the problems of the mid-winter break and the England thing, but that is too simplistic a view to take seriously.
Mr. Gartside also said something else. Perhaps your second question addresses this—if so, may I anticipate it? He also said that the Premier League should be isolated from the Football League, because there shouldn’t be promotion and relegation. On that, I, like the Football League, am four-square with the Premier League: to use the phrase that Richard Scudamore famously used in public a few weeks ago, “Promotion and relegation is sacrosanct.”
Mark Hendrick MP: Just before this meeting, my local football club chairman told me that there has been no discussion with Preston North End on these proposals. Are you aware of any Championship clubs that have had any discussions with the Premier League on any of these proposals that Mr. Gartside would like to see implemented?
Lord Mawhinney: No. I am not aware of any formal conversations. Clearly, who the individual clubs talk to is a matter for them; they are not required to tell me who they talk to. One or two Championship clubs might have some sneaking sympathy with at least part of what Phil Gartside said, but it is not Football League board policy and I do not envisage it becoming so.
Mark Hendrick MP: Myself and a number of others saw the original breakaway of the Premier League as something about which to be greatly concerned. The gap that has opened up in wealth and, in particular, the TV money between the Premiership clubs and the Championship clubs—and the Football League as a whole— is of great concern. I, and many others, think that if Mr. Gartside’s proposals went ahead, they would sound the death knell for the Football League, because they would, in effect, be a takeover of the top clubs in the Football League in the form of the takeover of what would be the Championship. Is that your view too?
Lord Mawhinney: In my first press conference as Football League Chairman, which took place in January 2003—I start my seventh year on 1 January—I made it clear that I considered that I had been appointed to be the Chairman of a 72-club Football League. My perception has not changed in the intervening six years.
Chair: On the subject of reorganisation, I remember citing to you a wonderful quote from a journalist that was probably true at the time. This journalist had talked of the Championship, the sinking ship and the abandoned ship. I think you have improved things greatly since those days. How have the reforms had effect? I know that a number of clubs have got into real financial difficulty, but how do you assess the improvement since you took over?
Lord Mawhinney: In answering that, let me pick up on a comment that Mark made. I have publicly said many times that the gap between the finances of the Premier League and the Championship is uncomfortably large, and it creates tensions and pressures. There is no question about that. But in the next breath I want to say thank you to the Premier League, because under Richard Scudamore’s leadership we entered into the first solidarity payments that the Premier League has ever made to the Football League. Were we appreciative of that? Yes, we were, and I said so at the time. The gap constitutes a pressure in terms of the wages that players receive, because what happens in the Premier League does cause an element of a trickle-down effect to wage payments in our league, but life is full of pressures. We have a league to run, and we run it to the best of our ability. When we coined the phrase “real football for real fans”, many real people thought it a fairly good summary of what the Football League provides. So, there is a gap, but it is not the end of the world.
Let us consider where the Football League is today compared with where it was six years ago. The truth is that six years ago it was in big difficulty as a consequence of the collapse of the ITV Digital contract. I said at the beginning that we would focus on governance, on trying to improve the public perception of the League and, because we cannot compete on money, on the role that our clubs play in their communities. What happens in the towns and cities of this country every weekend is that the Football League clubs—this is also true of Premier League clubs, but they will speak for themselves—constitute the biggest demonstration of community in their communities. That happens week in, week out; everybody knows the commitment of fans to their local team. We have been examining governance, the public perception of the League and our role in the community. Consequently, we now have partnerships, and sponsorship and partnership money, that would have been considered impossible six years ago. Next summer, the League moves into a new three-year television contract and we are quite pleased that it is worth 130 per cent. more than what the clubs are getting this season.
Is there much to be done? Yes. Are there big issues that we are going to be addressing over the next six months? Yes. Have we focused on youth development? Yes, and we will be doing a home-grown policy—we hope it will be through the clubs—in 10 days’ time. I wish to repeat that Richard Scudamore and the Premier League—primarily—and Lord Triesman and the FA have been very helpful to us as we have improved and cranked up our youth development activities. You will have seen the statistic that 14 of the last England squad of 23 were products of the Football League youth development structure. It is a bit like politics: the agenda is never-ending, because when you address one issue and make progress on it, three other issues pop up—but you and I would not have it any other way, Alan.
Lord Faulkner: Brian, I would like to ask you a bit about governance, which you mentioned in your answers to Mark. In your six years as Chairman, significant changes have taken place, including the introduction of the fit and proper person test, the points deduction for clubs that go into administration and greater transparency in the payments to agents. Do you have an unfinished agenda on governance reform that you are willing to share with us this afternoon? What do you want to do in the next couple of years?
Lord Mawhinney: I do have an unfinished agenda, but if you will forgive me, I shall be slightly more cautious about discussing its content. I learned in this place—at this end of the corridor—that one talks to one’s constituents before one talks to the media, and I try to treat the clubs in the same way. We will have ideas over the next six months. Personally—I am speaking for Brian Mawhinney, so nobody else should get blamed and this should not be attributed to anyone else—I would like to see a sensible but better grip on the wages paid to our players. I, personally, consider that to be an element of unfinished business.
As you know, our organisation is small, so what we can do on vetting and the fit and proper person test is limited. Although we took the initiative and the situation is better than it was, it is probably not as good as it could be. We are examining whether we could tighten the test up a bit, but we cannot tighten it enormously because we do not have the resources to do so.
Let me put this matter in context. At that first press conference in January 2003, overwhelmingly two questions were asked. What on earth is a Tory MP doing in this job? I was told that I knew nothing about nothing. One or two football journalists, although probably not too many, still take that view; they probably don’t like politicians—they certainly don’t like Tory politicians. The second question was: how many clubs do you think you are going to lose between now and the end of the season? Because I am a sad person, I jotted down and added up afterwards the number of clubs that the journalists thought I would lose—I worked that out from their questions—and found that the average was eight. This is not hubris, but six years on we still have 72 clubs—that is the good news. We have had some difficulty in that a few clubs have lived beyond their means; frequently, that has been because they were not paying Her Majesty’s Revenue and Customs.
We generated a certain amount of excitement by penalising clubs that could not get a company voluntary arrangement by deducting points. If you are a member of the board and you have to impose a penalty in those circumstances, there are only two options—deduct money or points. There is not a lot of point in deducting money in a financial administration case, so we were left with points. We did it, in part, because we wanted everybody to understand that one of the most important elements of the Football League board’s job is to protect the integrity of the competition. If we do not do that, nobody else does it. Clubs are not in the business of protecting the integrity of the competition—that is our job—so we had to send a message that we were not going to allow people to get an unfair advantage, which undermines the integrity of the competition, by not paying their bills. Is the system ideal? No, it is not. Would I like to dream up a scheme whereby we did not have to go down the points-deduction route? Personally, I would like to try to find a different way. We have some thoughts as to how we might do that, and that might also be part of the continuing agenda. You will understand that, again, this is not something that I wish to talk about.
Lord Faulkner: It is self-evident to most people that there is a direct correlation between excessive payments to players and clubs getting into financial difficulty. Why have you not, so far, been able to persuade your clubs to accept a salary cap?
Lord Mawhinney: Because, ultimately, I am the chairman of a trade association; I am registered at Companies House as a director of Football League Ltd. We can have a unanimous board decision and the clubs can call an extraordinary general meeting and roll us over. In other words, I have to be able to persuade people to vote for something. Some kind people have said that I have persuaded them to vote for a number of things over the past few years that they are surprised we got them to vote for. I have not, thus far, succeeded in getting them to vote for this, particularly at the Championship level. The Championship is schizo on capping: some clubs are passionately in favour and a few are seriously not in favour of it. Thus far, I have not been able to get that resolved in a positive way, but I am not sure that we have reached the end of the road.
Chair: On that same subject, I, too, have doubts about salary capping. What about the suggestion that I have made a few times: that clubs should be allowed to spend only their revenue—gate receipts, and money from TV and merchandise sales—on revenue expenditure. That would do two things. First, it would stop clubs getting further into debt. I know that there is a problem with bad budgeting and results not turning out as expected, but this could be done on a three-season rolling programme, as opposed to having to use salary capping. Secondly, it would solve the problem that we examined more in our previous inquiry—it continues to be relevant—of very rich benefactors coming in and buying championships or trophies. Even if clubs can spend only their revenue income on salaries and other revenue expenditure, the big clubs would still win more than the clubs in smaller cities because they would get more gate revenue, but what about that as a limit?
Lord Mawhinney: The brutal answer is that I could not get them to vote for it. Whether it is good, bad or indifferent, they would not vote for it. This is too complicated. Where in what you have just postulated do directors’ loans fit in? When is a loan a sponsorship? Alternatively, should it be equity? I am not dismissing what you are suggesting, nor am I saying that it is a batty idea, but it flies in the face of the history of the Football League since 1888. Throughout the past 120 years, clubs have budgeted for a bit more spend than they were getting in income. I am told that in the old days they just sold a player each year and that made up the difference, and then they sold two players each year and that made up the difference. In a business that trades players—almost irrespective of legal contracts, as the outsider would see it—it is hard to get clubs to put their hands up to vote for a circumstance in which, even if they can trade players, the money that they get cannot be used to run their club. You may have the political skill to get clubs to agree, Alan, but I do not think I do.
Chair: I would include transfer sales in the same way—as revenue. We must move on.
Helen Southworth MP: Would you explore with us, Brian, what your priorities are for youth development?
Lord Mawhinney: I am happy to do so, although I am not quite sure what it is you are asking me.
Helen Southworth MP: Would you identify what things you think are particularly effective at the moment and what things you would like to see further development work on? What do you think is working? What do we have to move on?
Lord Mawhinney: I shall be as factual as I can. There has been a certain amount of heat and excitement on this subject, so let me try to cool it down a bit. The Football League spends about £40 million a year on youth development, about £30 million of which comes from our clubs. So anybody in any other organisation who wants to run Football League youth development has to answer the question: how do you plan to get the £30 million that the clubs put into this. There has been a deafening silence on that particular issue.
I paid tribute earlier to Richard Scudamore and, although I would like to spare his blushes, I wish to do so again. That does not bind him to say anything nice about me when he sits here, but I want to pay tribute to him because it is appropriate to do so. As part of our solidarity discussions, which wound up with this unique—I hope it is not a one-off—solidarity payment, we talked about refashioning the administration of the Football League’s youth development work. I am perfectly happy to say to you that I think it needed to be redeveloped. Both the quality and administration of it were open to improvement, so we set up a new Football League youth development trust, and we did something that the Football League has never done since the Premier League went off on its own: we offered a seat on that trust board to the Premier League. We also offered a seat to the FA and to the Professional Footballers Association. In other words, we reached out to the rest of the professional football family to say, “We are tightening up, we are improving and we are driving quality forward. We want to get away from arguments, so we ask all of you to join in this process, because if you do, we can probably have a less excitable future on youth development than we have had in the past.” I pay tribute to the Premier League and the PFA, which both immediately took up their seats, and to David Triesman, because when he became chairman and the previous chief executive left, he appointed Jonathan Hall, who is here today to represent the FA—a year late, but we are delighted at his appointment.
So, we have a new system in place with a new board, better quality, tighter administration and greater certainty that the money that is given to youth development will get spent on youth development. If other people want to help us enhance that programme even further, I should be happy to co-operate with them. But as Chairman of the Football League it is my responsibility to defend my clubs against unwarranted criticism that, at times, could be more credible than it has been thus far.
Helen Southworth MP: Could you outline for us some of your hopes for the development of girls’ football? It is the fastest growing sport and there is tremendous enthusiasm for it, and some really talented young girls play it. How are we going to ensure that they can star?
Lord Mawhinney: If I give you a straight answer to your question, will you undertake to tell me whether Lord Triesman is smiling or grimacing?
Helen Southworth MP: Do your own dirty work.
Lord Mawhinney: I would like to put my toe into the water of girls’ football. The Football League has made a proposal to the FA to undertake to run for it one of the competitions that it runs at the moment. I say “for it”, but I do not mean for it, because I do not mean that it will remain an FA competition. I mean that the FA will give us the responsibility for the competition and we will run it. That conversation is ongoing. Indeed—again, tell me whether he is grimacing—Lord Triesman and I are due to discuss it further later this week. I, personally, would like, slowly and gently, to put my toe in the water to see what the temperature is and what the response is.
One of the things that Football League has done is focused hard on families for the past few years. Through our gates have come about 1 million kids who have paid either nothing or a quid. We are concentrating on families far more than we have ever done before. Karren Brady, the chief executive of Birmingham City, made fun of me because of what I am about to say. I said at a meeting at which she was present that half the people in this country are female, somewhere between 10 and 15 per cent. of the people who attend our games are female and I would like to change that, to get more women attending Football League matches, and in an atmosphere and an environment that is conducive, because that makes them want to return. That is the big trick, as in politics, as you well know, Alan; you can get people to vote for you the first time, but getting them to vote for you the second time is the real success. I am happy that more women are coming to football matches, but I want that to continue. If we were known as the League that was starting to take an interest in women’s football, that would be advantageous. So those conversations are going on, although I cannot predict how they will end. Some Football League clubs would be quite enthusiastic about getting involved and a few probably would not, but that is my problem, not yours.
Helen Southworth MP: As a man with a passion for football, what would you like to see for women’s football? What success do you want to see for it?
Lord Mawhinney: Forgive me, but when I was a small boy, I was taught a Christian chorus that went something like this: once step at a time, dear Jesus. This is one such occasion for it. Let me encourage you, because I have two grand-daughters, aged 14 and 12, who play football—they are in the States, so they call it soccer— week in, week out, and I am not wholly immune to their influence either.
Helen Southworth MP: Finally, may I ask you about schools and the Football League’s relationship with the education system?
Lord Mawhinney: Schools are primarily the responsibility of the FA, so Lord Triesman will be able to talk to you much more authoritatively about that. At the moment, our relationship is more about schools coming to individual clubs; this is part of the community activity, rather than a more formal relationship. I think you will find that both the Premier League and the FA have more formal relationships than we do when it comes to schools.
Mark Field MP: I wanted to wind up by discussing a couple of things that have come up before. I ask this partly for my information, although I suspect that anyone watching us on Sky Sports will want to know the answer. The way in which points deductions take place seems, to many of us, to be slightly arbitrary. Luton lost 30 points, Leeds lost 15 last season and Rotherham and Bournemouth 17 points this season. Do you have a set tariff in place?
Secondly, I had understood that League 2 had an informal arrangement on salary caps. Without giving away any of your thoughts for the future of that, perhaps you could give us some indication of how well that has worked and what you have learned from it. Thirdly, when I had a quick look at the tables yesterday, I found that eight members of the Conference—nine, if Barrow are included—have formerly been members of the Football League. What is your connection with them? You mentioned that you have had 72 clubs since 2003, but obviously quite a few clubs have come in and gone out of the League during that time. What are your connections with what is very much becoming what would, in old-fashioned terms, be called a fifth tier—Division 5—of full-time football?
Lord Mawhinney: Let me take those questions in reverse order. Lord Faulkner of Worcester is a distinguished senior vice-president of the Football Conference, and he hosted the Conference’s annual Christmas lunch, at which I was a guest, this very day. So, we have good relations with the Conference. I think that Brian Lee is an excellent Chairman of the Conference, and I said so at the lunch—if he is behind me, I did not know that—and he and I now have regular meetings. We do not live in each other’s pockets, because we both have leagues to run. Our next meeting is in January. On the whole, I am encouraged by how often Brian and I are singing from the same page of the same hymn sheet. We have a bit of niggle occasionally about the state of the grounds of Conference clubs that are getting promoted to the Football League, and one or two of the Conference clubs that have been promoted grump a little because in earlier years Football League clubs got largesse from the Football Foundation to help improve their grounds and the largesse available today is less than it used to be. Those are the sort of ongoing issues that arise in the world of football, and they certainly do not constitute any threat to our improving relationship with the Conference, so that is all positive news.
Remind me of your middle question—
Mark Field MP: It was about salary caps and the fact that there has been an informal arrangement in respect of League 2 clubs.
Lord Mawhinney: Yes, we have an informal agreement among League 2 clubs, which have all voted to maintain a 60 per cent. salary cap. The agreement is probably in its third season, and the clubs have all kept below the 60 per cent. The arrangement also operated in League 1 for two years, and those clubs all stayed below the 60 per cent. I think I am right in saying that they all still are below the 60 per cent.—or, at least, they were the last time I was briefed. However, they became upset because the Championship would not implement such an arrangement, so they asked why they should do it. Yet they remain below the figure. The greater pressure has been on the Championship because of the aspiration to get into the Premier League, as you will understand. What we have is working well and comfortably at the moment.
May I put on the record, for the umpteenth time, the fact that of the 30 points deducted from Luton, we deducted 20 points and the FA deducted 10? The Football League did not deduct 30 points. Different arguments led to a points deduction in both cases, so our deductions have ranged from 15 to 20 points. That is a fairly narrow band for the four clubs, and we took our steer for the most recent three from the Leeds case, where, as you know, we were examined legally at a tribunal, and it found in our favour in every respect, including costs—that was a relief to the other 71 clubs. So the 15-point deduction was established, we were legally entitled to make the deduction and the other three cases have all involved deductions of around that figure. May I mention that Luton Town’s administration was their third one in 11 years, and so we took that into account?
Chair: We have overrun by quite a bit because of the vote in the House. I believe that Mark Hendrick just wants to come back on one particularly focused question.
Mark Hendrick MP: Lord Mawhinney, you will be aware, given that your Football League offices are in Preston, that as well as having a Football League club—Preston North End—the town is home to the National Football Museum. Obviously, the object of today’s exercise and many other inquiries that we undertake is to examine the future of football, but I am greatly concerned about football’s past and the heritage of the game. You talked about the largesse of the Football Foundation; indeed, the Museum has been a beneficiary of that largesse over a number of years. Just over a year ago, the Foundation made it clear that it was not going to continue to support the Museum in the same way and that the football family itself would have to come together to support the Museum.
As you know, the Museum hosts the crown jewels of football memorabilia; it has the FIFA, UEFA, FA collection and Football League collections, which add up to a collection unrivalled anywhere in the world. More recently, the FA, the Premier League, the regional development agency and the Department for Culture, Media and Sport have all given strong indications that they will support that heritage of the game. I know that the Football League was invited, as it has been in the past, to sit on the Museum’s board, but, to date, it has refused to do so. Do you see the Football League paying its respects to the heritage of the game by having some involvement with the Museum in the future and showing the same commitment that the other parts of the football family have shown?
Lord Mawhinney: My answer is probably going to disappoint you a little. Now that we have a new Wembley, I think that serious consideration ought to be given to setting up the Museum there. After all, Wembley is the home of English football and it has plenty of space. I shall not break the confidences of FA board meetings that I attended as a member, save to say that this is an idea that your football world is not hearing for the first time from my lips today. Richard and I have also talked about this before. If there is a case for having a Museum, is there a case for having it at Wembley? If it were at Wembley, it could be included as part of the Wembley tours and a percentage of the price that people pay to go on those tours could become a revenue stream for the Museum. As you have rightly pointed out, the Museum can do with all the revenue streams it can get. I am not likely to commit scarce resources, which will get more scarce over the next two or three years because of the economic circumstances, to this, and I do not believe my board is either. If it were down to me—this does not tie anyone else down—I would hope that the FA would call together a group of people who would seriously examine the pros and cons, without prejudging the matter, of transporting the Museum from your constituency to Wembley.
Mark Hendrick MP: We have discussed with the FA a permanent display and a permanent Museum at Wembley. Some 90 per cent. of the exhibits at Preston are not on display, and given the locations of Manchester and Liverpool, as well as Preston, is there a case also to be discussed about distributing the exhibits around the country and having a permanent presence at Wembley too?
Lord Mawhinney: Logically, if it is difficult to finance one, it is more difficult to finance two. So I think we probably ought to have one and finance it as well as we can. I understand the point you are making. If I had responsibility for the Preston Museum, I would try—
Mark Hendrick MP: The National Museum.
Lord Mawhinney: The National Museum at Preston. If I had responsibility for it, I would try to get more mobility into a lot of the things that are in it. But that is not my responsibility.
Witness: Richard Scudamore, chief executive of the premier league.
Chairman: Thank you for your time and for what you have done, Richard. You are another example of how English football is governed better than football anywhere else in the world. If there is ever any disagreement between this panel and you, it is usually because you have done your job for the people who own the 20 clubs in the premier league so well. We have to look outwards, to people who support people football in the football league and beyond, and to supporters of clubs like the one I support, which struggle to get into the top 10 because of the people with the big money at the top. That is the only overall disagreement that we might have, but we know that you are a proper football supporter—you support Bristol City, and they are even worse than my team. Do you wish to make a statement to begin with?
Richard Scudamore: Thank you for the opportunity to speak and to submit the work that we submitted some time ago. We begin from the premise that the game is in pretty good health, which is a good starting point for the discussion. We welcome this kind of opportunity because we think that there is a degree of media ignorance about the level of governance and scrutiny, and about the rules and the way in which football is organised. Therefore, any such public debate is good, because it is an opportunity to talk about the facts about what goes on rather than some of the misinformation that abounds.
Why do I say that we are in good shape? Obviously, premier league attendances are strong. Despite the current economic climate, we are seeing average attendances at within 1,000 of the all-time peak—the number is about 35,000 as opposed to 36,000. Without getting too mathematically complicated, Manchester United have played two fewer home games than this time last year, which alone alters the league average by 500, because of the size of their stadium. If they play two home games and catch up, the league would be within 200 of the average from previous seasons. Aggregate attendances are about 360,000 every weekend. Over the year—this is despite what was said earlier, that football as we know it ended in 1992—Mr. Brian Mawhinney can proudly talk about the fact that the league is the best attended in the world. Its attendances have also grown at a huge rate since 1992.
Generally, in terms of attendances, football is in good shape, but it is not only about attendances. Football is at the heart of communities. This year, some 1.5 million people will actively take part in a community scheme associated with one of our clubs. In your opening remarks, Alan, you kindly credited me with looking after my own clubs, but we are proudest of the way in which we look after everybody else, in terms of the investment that we have made in the football foundation and redistribution. Brian will, with the new TV deal, generate something like £280 million or £290 million for his clubs in the next three years but, in the next three years, we will give some £190 million to football league clubs. As you know, we have already put something like £140 million or £150 million into the football foundation since it was started. In itself, that generates some £600 million-worth of facilities. In its recent report, Deloitte talked about the value of our community schemes and work, and said that it was worth about £120 or £125 million a year. When I joined the football league in 1998-99, the turnover on our accounts was about £124 million so, we will give the entire turnover of the league in 1998-99 away this year.
We very much stand by the submission that we made in May, which seems a long time ago. You received it on 30 May, a week after Hull City beat Bristol City in the play-offs to get into the premier league. That was the week in which Hull City were condemned by every media and football pundit. Everybody who was interested in football took a look at that game that day and said, “They’ll be straight back down”, and they started the season as the bookie’s favourites to do so. In a sense, their performance this year points back to my original comment that we are have a good, interesting season, and that the game is generally in good health.
Much more unites the football authorities than divides us. The tripartite relationship between my colleagues Lords Triesman and Mawhinney and me is generally good. The media will make a lot of the divisions between us, because that is partly how we are held to account, but the media pressure also throws us back into a room to sort things out. There is a good deal of co-operation between us. It is enshrined in all our constitutions. The Football Association is the 21st shareholder of the premier league and, along with the football league, we have a golden share in the FA’s constitution. Therefore, there is an inter-dependence—there is no such thing as independence in football, no matter where you are or how you operate—and there is a good deal of co-operation between us.
Obviously, the FA board, post-Burns, has been restructured, and the premier league is represented on it. The professional game board manages the affairs of the professional side of the business. Those of us at executive level meet our FA and football league colleagues every other Friday morning to discuss the operational issues that we share. As I said, much more unites than divides us.
Basically, our raison d’etre, as Brian said, is to be a trade association. We have an association of 20 clubs, but we do not run, own or manage any of them. However, it is interesting that, since 1992, clubs have looked to the league to be more of a trade association, even though we play in other competitions and do not own the clubs. We are merely a competition in which the clubs play, and they play in others, such as the FA and league cups. However, they look to us to act as a trade association, which is how we have been able to impose a high degree of self-regulation.
One of the big things that I want to draw to your attention to is the rule book of 1998-99, which was my first season. In it, there are 76 pages, and 342 rules. I would ask you, if you are going to take this inquiry seriously, which I know you will from the time that you are giving it, to read the rule book for this season, because it will educate you on how much the league is governed. Ten years on, there are 326 pages and 777 rules, so the idea that we are not interested in moving governance and self-regulation on is a fallacy. There have been huge developments in the rule book, which you can see by the thickness of the book—it is not all pretty pictures and it is not a difficult read.
Where have the rule changes come from? There were 14 rules governing the finances of football, and there are now 81, covering things such as insolvency, directors’ reports and licensing criteria. It is true that our clubs cannot be in debt to Her Majesty’s Revenue and Customs, or to each other—it is not possible because of how they are licensed and the rules. In the past 10 years, we have also introduced the power to deduct from clubs’ central payments anything that they owe to anybody else, be it another football club or creditor, or player or football employee pension schemes. There can be no default on any of those schemes, because our rules allow us to deduct the money at source and make good those commitments, which we have done only rarely.
There our whole new sections in the rule book on the customer charter, which relates to how fans are treated and how we make commitments to fans and supporters, which was a product of the taskforce that Lord Faulkner will know well. There is also a whole new section on the safeguarding of children, which involves the Criminal Records Bureau and scouting. The section on arbitration was tested in summer 2007: our rules went all the way to the High Court, where their robustness and compatibility with the Arbitration Act 1996 were proven. There is also a significant addition in the fit and proper persons test.
The odd idea that seems to be slipping in is that the premier league is laissez-faire, but the truth is that it is not. Since 1998, we have had 53 cases go to a formal commission, which are convened when the board believes that the offence is more serious than we have the power or ability to deal with on a summary jurisdiction basis. That was a fine of £10,000, but it is now £25,000. From the beginning of the 2006-07—over the past two seasons—55 rule breaches have been prosecuted by the board in 32 board meetings, which is an average of 1.7, or nearly two, cases per meeting, where discipline has been administered because clubs have breached the rules.
We have a trade association, and the rule book reflects the agreement that was reached between the 20 member clubs on how they behave towards each other, which perhaps distinguishes it from the FA rule book, which governs how the whole of football operates and things that happen between us. The rule book also reflects FIFA’s rule book which, as you know, governs the global game, how the game is played on the pitch and how players move between countries and the international dimension.
We think that the premier league is competitive. Some 42 clubs have been in the league, so it is not static. Someone said that the conference clubs give a wider dimension than the 72 clubs of the league and premier league. I do not feel that we have only 20 clubs; in fact, we have a much wider group, including clubs that aspire to the league and those that have been with us from the beginning. Some eight clubs have taken part in the champions league, and 21 clubs have gone on to take part in UEFA competition. Basically, it all boils down to the fact that, no matter how we run the league or how the clubs are run, only one club can win it, and three get relegated. It was ever thus. Let us hope that it stays that way.
Chairman: You said at the beginning how impressive the management and governance of football are in this country. I have seen the amount of money and how it is used at grass roots—an all-weather pitch opened in the most deprived estate in my constituency earlier this summer, which will do an enormous amount of good. I have a slight concern that more of the premier league clubs are owned by people who have come into the game for financial reasons rather than because of their love of football—we are getting towards 50 per cent. of the clubs being owned by financiers rather than people who came into the game for football reasons. What argument will you use to them when they become a majority that it is a good thing to give money to the grass roots? Mark is interested in the history of football, as we all are.
Richard Scudamore: First, I do not necessarily agree with your assumption or assertion that a majority of owners have bought in for financial reasons. Most of the recent new owners actually have huge financial backing and have bought in, I think, for a different motive: namely, prestige and some sort of ego-based motive, which are very different. Without going through all 20 owners, and analysing why they are in the game—
Chairman: What argument would you use?
Richard Scudamore: I can only speak as I find. I have been in the job for 10 years, which is quite a long time in sports administration. I find that those people have bought in because of what we are and our tradition. They come from different regimes—the American owners, for example, come from a regime under which sport is under tighter controls from the centre and the commissioners of the sports. They have bought into the premier league for what it is, because of its excitement and worldwide reputation. To go back to your original point, I am not sure that they have bought in for the financial or profit motives.
There are various motives for buying clubs, but all I can say that we have found that the new owners retain executives who are experts and who understand the detail, to run the clubs. They buy in because of the excitement and competitiveness of our league, and because of the way in which it promotes itself throughout the world. Therefore, they are buying into that tradition, not only for profits, which is your concern. I can only give you my sincere, honest answer on how I have found things. Since 1888, English football has not always been blessed with people who own football clubs for entirely the right motives. It was ever thus, but all I can say, from my experience, is that the motives of the new owners have been good.
Lord Faulkner: I should like to ask you about some evidence that we took from an MEP about the number of home nationals playing in the premier league. I know that you are familiar with the debate, and I believe that there is a real disagreement between the premier league and the FA, and the premier league and the Government, on the issue. We were told that, in Italy, 7.3 players in every 11 are Italian; in Spain, 6.9 out of 11 are Spanish; and in the Bundesliga, 4.9 out of every 11 are German. In England, there is an average of 3.9 English players in every 11, which is a very much lower proportion than in the countries I mentioned.
Should we be concerned about that? Do you think that it is having a weakening effect on the English national team?
Richard Scudamore: First, on the weakening of the England national team, barely one year ago, I was at Wembley when Croatia beat us 3-2. The headlines the next morning were as predicted. Steve McClaren got most of the blame, but we got the next biggest heap of blame for the reasons that you described. Now, we have won all four of our qualifying games, and suddenly Mr. Capello is the messiah, but nobody is writing that it is down to the premier league and how good it is with development. I do not expect that, but that is the reality of life.
Our assertion has always been that the best English players will come through and play against the best in the world. Therefore, the quality of English players, over time, if they are well-managed, which we believe they are at the moment, will come through. If you look at the performance of our teams—not only the first team, but the under-21s, under-19s and under-17s—you will see that they are doing extremely well, as are the ladies. We believe in quality, and it is difficult to argue for protectionist measures that do not dumb-down that quality, as it were.
We are not concerned about the ratio per se, but we are always concerned about the intellectual and financial investment in youth development—that is strong among the clubs. We believe that only way to move the ratio back up is to produce our own talent that is good enough to compete with players that we can get elsewhere. We will not stop getting players from elsewhere. When you are as good as our top clubs are, it is a thin market. The market for players who can make a difference at Chelsea, Manchester United, Arsenal or Liverpool, is thin, so there will inevitably be some purchases from abroad. However, more players should come through as a product of our youth development schemes. We are genuinely encouraged by the talent—numbers of players coming through and being taken on first-time contracts—that is coming through from the academy system, although you can make statistics tell whatever story you like. The system has been in full flow for only nine years, and it takes a while, but we think that the players are coming through.
Lord Faulkner: With the growth of foreign ownership of clubs and the recruitment of more foreign managers, do you not think that the chances of the good English youngsters getting into a premiership side is much less than it was, say, 10 years ago?
Richard Scudamore: The reason why the chances are less is not attitudinal, but down to talent. The only reason why the chances are less is that, to get into one of our first teams, you have to be that much better, relative to everybody else. I am not sitting here to apologise for the quality, speed and skill levels of the football that we now see. I also do not apologise for the fact that the football that we have created is of huge interest around the world. Wherever you go in the world, you find people who want to watch our football. Why? Because people—not just me—consider our football to be the most exciting and interesting to watch. That is the nub of it as far as we are concerned.
Mark Field MP: I appreciate that this inquiry is about the governance of the game and that not all areas of it should be governed although, as a Conservative, I am in favour of light-ish touch regulation on quite a lot of things. What are your views on salary caps? The argument for salary caps is going to get bigger as the global credit crunch takes hold. Do you think that too much of the money in football—especially the huge amounts of money in the premier league to which you referred—is going directly to the talent? Does it worry you that only one side a year can win the league? That has always been the case, but it seems that very few sides really can win the league? There is the big four, and only three clubs have won the premier league in the past 13 years. I would guess that that is unique in any 13 years in the history of the old football league. Like everyone, I rejoice that Hull City are doing so well and I am sure that they will breath a sigh of relief when they get to 40 points—they are still 14 points off that—but the reality is that no one expects them to be a contender to win and, realistically, the same applies this season to Aston Villa, Everton and others.
Richard Scudamore: On the salary cap, it is true that since 1888—Lord Mawhinney referred to this earlier—people have been paid to play football, and people have used money as bragging rights to attract better talent. If one factory owner paid more than another to attract talent, they had bragging rights—it was ever thus. In my positive moments—when we look at the television money that has been generated since the league began—we talk about income. It is sobering that the professional football wage bill almost entirely tracks the amount of TV money. It is true that whatever income is generated gets spent. The amounts are not only directly proportionate, but almost exactly the same. Whatever we have generated in TV money—it is about 60 per cent. of the total turnover of the league—has been spent on wages, so there is a direct correlation between income and wages.
Salary caps are difficult when there is such a range of incomes. I was in the room when Alan asked Lord Mawhinney about legitimate turnover. It becomes difficult to apply a salary cap, whether in absolute or percentage terms, because the range of turnover in our league is £40 million to £230 million. Therefore, if you first define “legitimate income”, and then apply a percentage of it, you completely lock-in the natural order.
Mark Field MP: You have institutionalised it.
Richard Scudamore: Yes, you have.
Also, Manchester United’s income is the largest in our league, but it is in some ways a product of the period 1958 to 1968—the period following Munich and before they won the European cup for the first time—when they became nationally and globally popular. Their £230 million income is a product of something that started in 1958, and it continues. If you lock a percentage of that turnover in as a wage bill, you would give the club a huge advantage for ever, based on history. In my view, you cannot, from 1888 to 2008, have a free market generate the current size of clubs and then, all of a sudden, take the drawbridge up and lock-in the natural order.
Mark Field MP: I am not necessarily suggesting a salary cap along those lines.
Richard Scudamore: The other method is to use the cap as a fixed amount or some variant. However, what amount do you fix for a club on £230 million turnover and one on £40 million? You could not seriously fix the amount at £40 million for a club that can generate £230 million, because it would make you hugely uncompetitive with the rest of Europe and the world. That creates all sorts of interesting comparisons with my American cousins, because they run their sports differently. However, they do not have to play outside America. The 32 franchises play in cities that would rank somewhere in the UK’s top six cities by size; we play our entire league within 250 or 300 miles of each other. What is the average distance between franchises? When we look at the north-west, where Mark’s constituency is, we see, counting just our league, the Wigans, Blackburns and Boltons, and there are two Manchester teams and two Liverpool teams, and Preston are knocking on the door, so there could be a great concentration, which makes things difficult, complicated, and different from the American situaiton.
Mark Field MP: And Burnley, just in case there are Burnley fans here.
Richard Scudamore: The notion of the salary cap, because we do not live in glorious isolation, is difficult. However, there is a natural restraint on wages—income. The wage bill, collectively, has just about tracked the money from the TV deals, certainly since the inception of the premier league.
We come back to the idea of competitiveness all the time. One benefit of being in the post for 10 years is that I have seen a number of regimes. I joined when Manchester United had won the league three times. Everybody told me that that was that, and that they would win it for ever. Then Arsenal came along, and had the unusual, unbeaten season—I do not think that I will ever see that happen again—after which people said that they were invincible and that they could go on winning for ever. Then Mr. Abramovich went to Chelsea. They won it twice, and everybody said that they would win it for ever, but Manchester United bounced back to win it a couple of times.
Again, I do not apologise for the fact that, probably, realistically, right here, right now, knowing what we know, having just watched Aston Villa nick three points yesterday afternoon, only four teams could win the league this season. However, there is the prospect of other teams breaking in. As the clubs become more sophisticated and incomes generate and grow, and as the clubs develop, there is a law of diminishing returns for the bigger clubs. In other words, if one of the top four clubs generates another £5 million, their ability to convert it into points and playing power is much less than if Aston Villa, Everton, or another club just below them, generate extra income. Therefore, buying players at the top level and finding managers who can generate consistent success is difficult.
The real competitiveness test is whether any game that you watch is a foregone conclusion. I believe that one reason why the game is in such good shape this season is that you can predict with certainty the result of hardly any games. Arsenal can beat Manchester United and Chelsea, but they have lost to Stoke and Hull at home. It is unbelievable, because pretty much any club can take on any other in our league and beat them on a given day. That is the real test of competitiveness. It is not necessarily about who wins the league all the time.
Chairman: I think that you fixed the unpredictability of this season in your mind before you came to this inquiry.
Helen Southworth MP: Will you outline your aims of youth development, and say what you want to see in the next couple of years to build on some of the successes that you talked about?
Richard Scudamore: Following on from what Brian said, I do not think that we should be at all hair-shirted or defensive about youth development in this country. There is one group of people out there to whom youth development is far more important than any administrator or, with respect, the all-party football group: namely, the clubs. They are at the leading edge, because they want the best coaching, sports science and medical facilities. We do not necessarily need to lead them.
Lord Triesman will speak for himself later, but one problem that you might see manifest itself in the media is the little squabble about how we improve youth development, but we have some fantastic exponents of it at our clubs. In a sense, we believe in relatively small government when it comes to youth development, and in allowing the clubs to fly. We do not think that we should dumb them down, as it were, because they have the greatest incentive to produce the talent, and they have always led a quality agenda.
It would be pretty impossible for me to sit in my office in Gloucester place and surround myself with men or women in suits or nice outfits who could do a better job than Arsene Wenger at his club or Liam Brady at his academy. In fairness, you could pick any one of our academies, including football league academies, because they are not the sole purview of the premier league. The absolute experts are out there doing it. The task for us is finding a way to allow the clubs to keep the quality agenda moving on. How do you share best practice, and how do you allow clubs to have a look at what others are doing and copy things? How do you ensure that all those things are happening and that we are able to sustain a qualitative approach, and how do you move the quality agenda on? I would not be so bold to suggest that we have that expertise at the centre; rather, it is out there at the clubs. We should be proud of that and look to harness it.
Middlesbrough—your club, Alan—have a fantastic youth development facility. It is a question of us ensuring that they have what they need, be it coaching expertise, manuals or training courses. We need to facilitate moving forward, but I do not think that we should be out there trying to homogenise or standardise youth development or to emasculate it, because I think it is in very good shape.
Helen Southworth MP: What about girls football? The leadership that the premier league can give in that is demonstrable. What are you hoping to do to build on that?
Richard Scudamore: I am very candid. As you well know, centrally, at the premier league, we do not manage any aspect of women’s football. I would have some support for the suggestion that Brian made—it is great to come along to these things to listen and learn from what is happening at the FA and football league—that the football league could take some lead in the organisation of women’s football, and I think it would be good. The idea was new to me.
However, through the foundation, we invest heavily in women’s football and the development offices that are in the counties. If you like, there is an emotional and philosophical bind to women’s football, but we have not been charged by our clubs to take responsibility for it at premier league level. That is not to say that we do not encourage it or that we do not want it to happen, but, as I said, I would be interested in following up Brian’s idea of using the league, which is very good at organising competitions and giving things impetus, to move things on.
Chairman: I should like to pay tribute to Helen because, as we all know, it was on her initiative that the Select Committee on Culture, Media and Sport looked into women’s football. Before representatives of the Football Foundation arrived to give evidence, they announced that they could not give money to any club unless they have a girls’ team.
Helen Southworth: I must say that that was down to my girl constituents who were coming to see me to tell me that they wanted to be footballers when they grow up.
Chairman: When you consider that Helen’s best-known local football club is Warrington Wolves, it gives you some idea how much a Back-Bencher can have an effect on a subject.
Mark Hendrick MP: I shall start by asking you what I asked Lord Mawhinney on the two premier leagues proposal from Phil Gartside. You mentioned the £40 million to £230 million gap in turnover in the premier league. I agree that the premier league has been a success since the breakaway in 1992, but there is nothing to suggest that football would not have increased its revenue or that the game would not have flourished under one league. What are your views on Phil Gartside’s remarks? Will that debate continue, or is it a straw in the wind?
Richard Scudamore: As I said earlier, we are a trade association with members, each of which has a different view. In my 10 years in the premier league, I have been able to predict, almost with certainty, people’s views about the state of the league, and there are usually 20 different views at any one time. There is a pretty much perfect correlation between views and league position. The club in 20th place, whoever it is, will have the same view of the relationship between the premier league and the football league.
We have the debate to which Phil Gartside contributed around our table and in informally in boardrooms. Those discussions happen all the time. I know that groups of championship clubs often get together to talk about premier leagues one and two, and that they talk to colleagues at the lower end of the premier league. I do not think that that hurts or that it is unhealthy, but I know that Phil would acknowledge that he is not expressing the view of the premier league. My job is to take 20 different views and express what I think is the mood of the clubs at any one time. The central premier league view does not necessarily reflect precisely any one club’s view at any one time.
In answer to your question, Phil is entitled to his views. I do not think that it hurts the debate, but it is not currently the collective view of the premier league.
Mark Hendrick MP: Finally, is the idea that there should be no relegation from either a two-tier premier league or a single-tier league a flier?
Richard Scudamore: Again, it would be attractive to some if the trapdoor was not there, especially clubs that are staring down at it. However, I must say, “Not on my watch, guv’nor”, because the idea of no promotion and relegation is anathema to me, as I think it is for football fans. We are a pyramid, at the top of which the premier league proudly sits. Theoretically, you can start a club and work your way through the pyramid and get not only to the premier league, but go on and take your chances in European competition.
One of the fascinating things about the champions league this year is that CFR Cluj will play Chelsea tomorrow night. Hardly anyone in this room has ever heard of them, but suddenly they are on the world stage.
Mark Field: And Hockenheim will be there next year.
Richard Scudamore: Indeed, the way things are going, Hockenheim will be in the competition next season. That is what it is all about. How does that happen? It happens because of the pyramid and promotion and relegation. I will fight, while I have breath and while I am in charge of the football league, to keep promotion and relegation alive—
Mark Hendrick MP: Did you say football league?
Richard Scudamore: I meant to say premier league.
Mark Field MP: No territorial ambition?
Chairman: I have more than one reason for casting a kindly eye on Bristol City, but I am not sure that I will be able to support their promotion in case you change your mind about promotion and relegation when they get to the premier league.
We had Kevin McCabe at an earlier evidence session—we had to be pretty cautious because of legal restrictions at the time—but I think Iain Duncan Smith got him to admit that he thought that if Sheffield United had beaten Aston Villa or Everton, they would not have been relegated. He said that West Ham are one of the old guard, so they were favoured. Within legal restrictions, can you tell us anything about the Tevez affair and the problem of ownership by third parties?
RS: Let us leave the technical issue of ownership by third parties aside for a moment. I can tell you that the rule book is the rule book. The idea that the premier league administered a lenient discipline on West Ham has become almost like folklore, but that is really only part of the story. The truth is that the premier league board, with me as chief executive, under the rule book, had only a summary jurisdiction that allowed us to fine a club up to £10,000, as I said. We can now fine clubs up to £25,000 which, given some of the economics, is not a great amount of punishment.
If we think that an offence is more serious, we can turn the matter over to an independent commission, which is what I have done for 10 years and what the rule book envisaged. The commission consists of a panel, the people on which are wholly independent of the clubs. We always appoint a QC or other legally qualified person to chair the commissions, and they are assisted by two others, who may or may not be legally qualified. They will be eminent people whom you will know, such as David Gent or Sir Stuart Timperley. They will be people who are acknowledged around the game as being sensible.
When there is a commission, people sit and independently assess what should happen, and they are given the full scope of the rule book and the full range of available sanctions. In West Ham’s case, when it came to it, the commission decided to administer a fine—it was the largest ever fine in English football—of £5.5 million, and not to deduct points. In a sense, the premier league prosecuted West Ham, and the board did exactly what the rule book says we should do.
The rule book is agreed by the 20 clubs. It is interesting that you had Mr. McCabe here to talk to you, as I am sure you found, but when the case had just been heard in summer 2007, the other clubs were adamant—we can all have our view about whether West Ham got the punishment that they deserved—that the rule book is the rule book, and that the processes determined in it should happen.
Our rule book says that West Ham was the only party that could appeal the decision—the board could not, nor could the other clubs. It also allows someone who believes that there has been a breach of contract—as I said originally, there is a contract between the 20 member clubs—if it does not like the outcome, to take it to an arbitration board. The arbitration section in the book says that you can arbitrate such things, and our rules are consistent with the 1996 Act. Sheffield United, even though they had been relegated and they were technically not a member, claimed that there had been a breach of contract between them and West Ham, and took the matter to arbitration. The panel, which was chaired by Sir Philip Otton, with Nick Rendell on one side and David Pannick, who is probably recognised as the most eminent administrative lawyer of his era, on the other, sat and heard the case. It said that, although it might not have made the same decision as the original commission, it could not find that the sanctions were not within the scope of those available. Therefore, that arbitration, which Sheffield United forced against the premier league for the way in which we used the rule book, found not only that the commission had done nothing wrong, but that the premier league bringing the case and the subsequent action was proportionate in a difficult set of circumstances—let us not kid ourselves about that.
Sheffield United, not satisfied with that, then challenged the decision of Philip Otton, Pannick and Rendell and went to the High Court, which said that the arbitration rules have been applied perfectly properly, and that it could see nothing wrong. As the judge said, there was no way that he was going to say that the administrative lawyers had got it wrong.
The premier league’s job is to administer the rule book as it is defined. You may argue about the fact that there is no board appeal against a decision, or you might have a view on set tariffs such as points for some offences, but that is not how the current rule book is set up and not what the 20 clubs wish to do. You asked the question in the light of what Mr. McCabe said. He said the situation would have been different for a bigger club. However, in my time at the premier league, we have administered the rule book for big and small clubs alike—it does not matter to us. In fact, in my job, you do not see big and small clubs; you just see names and rules that have been breached.
Lord Faulkner: Is not the problem that you have your own law for dealing with your clubs, and that you come to conclusions that are inconsistent with decisions taken by other bodies in the game? You heard from Lord Mawhinney about the points deductions that the football league imposes. I expect that we shall hear about different sets of penalties that are imposed by the FA. When you have a club moving from your competition to another, you must accept that the inconsistency of the treatment of clubs casts doubt on the credibility of your league.
Richard Scudamore: You cannot actually mix or cross offences. Most of the points deductions in the football league in the past two years have been for insolvency. If a club in the premier league suffers insolvency, there is an automatic, summary nine-point deduction, so the rules are consistent between leagues. However, the football league, did not have a basic rule for third-party ownership. I was trying to avoid going back to the original offence. Rule U18 said that you cannot enter a contract that gives the ability for one party to influence the playing affairs of a club. Interestingly, whether West Ham, in signing those players, actually broke the rule, has never been tested legally. We claimed that it did. It went to the disciplinary hearing and West Ham pleaded guilty, so we have never tested the rule. Some of our clubs do not even think that the rule was designed for, or was meant to apply to, the offence that West Ham committed.
In answer to your question, there has to be consistency if clubs in either the football league or premier league are insolvent, but it is more difficult in relation to some of the more subjective rules—certainly, the multiple interest rule is subjective. You can only give it to an independent, eminent and well-qualified commission. Probably the two highest-profile decisions—the West Ham-Tevez decision, and AFC Wimbledon’s move to Milton Keynes—that the public think that an independent commission got wrong in football in the past 10 years were both taken by completely independent people with no executive influence. Most people in football thought that that the latter decision was odd, but it was done perfectly properly by independent, legally qualified people with no influence from the executive.
Chairman: Thank you very much again, Richard, for your time, and for what you do every week for football. We know that you want the same as us, so let us hope that we can keep the balance between the rich owners and the football supporters.
Richard Scudamore: Thank you.
Witnesses: Lord Triesman, Jonathan Hall.
Chairman: David and Jonathan, thank you very much for giving us your time. As well as being football supporters, some of us are still playing. We know that you are football supporters. I was at Wembley at the Carling cup final when Spurs and you looked quite pleased. As Richard, who has just finished giving evidence said, football supporters want the right thing. I wish to thank you for what you have done already for the FA. Helen and I and members of the women’s taskforce saw an enormous difference at the first meeting that we attended after you took over, and we know that you had something to do with that. Others tried hard, and we thank you for bringing women’s football into focus. Do you want to make a statement?
Lord Triesman: Thank you very much for what you said—I appreciate it very much. I am really pleased to have the opportunity to see you today. I think that I fit your criteria very well. I am the luckiest fan in the world because I get to hold this role as well as being a football fan. I hope that our documents address the issues that you want to cover in the inquiry.
In May this year, we published our vision for the next four years. I can summarise that by saying that we want to be a winning organisation. We want that from the level of Club England, our team that fortunately is now doing well under an extraordinary manager. We want the FA to be as good as it can possibly be in all the levels of football, including the grass roots. We want football to be the country’s favourite sport, parts of which are growing hugely fast. The more that it grows, the more that we can see evidence of people, particularly youngsters, attending to their health and education and having a sense of self esteem. It does all of those things for boys and girls, and we want to be trusted to lead the whole of the sport in the right way.
Jonathan’s appointment is crucial, and I am delighted that he is here and that everyone has the opportunity to meet him. We have the unenviable task of trying to be a bridge right across the sport—from the grass roots to the exceptional levels of attainment that Richard Scudamore’s league has unquestionably reached and the extraordinary attainments in the football league. We have to try to bridge the lot. That is not always easy and we do not always see eye to eye, but it is none the less true to say—as both Brian and Richard have said—that the things that bind us together are a vast amount stronger than anything that might, on a day-to-day basis, be the subject of a good discussion, by which I do not mean a meltdown or a catastrophe. In fact, it is quite the contrary, and good debates often lead to thinking about what we want to do in the future. Thank you for giving me the chance to make those few remarks.
Mark Field MP: Thank you, David. Your words say something about the powers of football optimism that a follower of Tottenham Hotspur can give himself. You can regard yourself as the luckiest man alive.
I could have asked the two previous speakers what I am about to ask you. To the outsider, someone who is not necessarily a soccer doyen or is not a keen football fan, the structure of our game seems confused in at three least organisations. At times, their responsibilities seem to overlap between the FA, the football league and the premier league. How does it work in other leading European countries, such as Germany, Italy and Spain? Can we learn any lessons for the governance of our own game from the strengths of our system as well as its weaknesses compared with what goes on elsewhere in Europe?
Lord Triesman: That is a very testing first question, and I shall do my best to answer it. Indeed, Jonathan might have some comments too. There are differences throughout Europe. Some of the big associations run essentially as single entities. It may be that the regulations under which they run are as a consequence more seamless, if that is a proper way of describing them. In this country, we have developed historically, and we have some remarkable competitions that are run with huge success. In many ways, the differences have reflected a segmentation of the football market as much as anything else.
It is possible to bring together the different groups, even if people come to the board of the FA with particular interests, and to achieve as much harmony as possible across all the arrangements, including the grass roots. That means that all of us—not least me—on occasions have to say that we shall park our presuppositions at the door and take part in discussions at which different interests will be expressed, but in a collective way, and see whether we can reach a conclusion that we consider to be best for the whole of the game.
Mark Field MP: Do you think that the British structure caters better for the grass roots than is the case elsewhere in Europe?
Lord Triesman: It increasingly caters better for the grass roots. The work of the Football Foundation has been very important in ensuring that the infrastructure and resources at the grass roots level, such as the pitches that people play on and the training facilities, has improved. That has an all-sport feature, too. However, there is a huge amount still to do and too many of us still see football being played on a park where there is glass in the grass. The Foundation has done a lot and, over the next few years, we will be spending about £400 million on grass roots football. That may be the single biggest injection of money into the sport that there has ever been. I am proud of that, and I think that it will continue to make a real difference.
It is certainly true that part of the difference will be made because of the professional game, with the generation of television revenues and so on, will make a contribution, too. A good deal of common thinking has taken place in that area about what is needed. I am very ambitious for it, and I want to do a lot more.
Chairman: I now wish to talk outward to the media. It was said in the previous inquiry that MPs did not have any power to which my response was that all we want to do is to give people who care about football a chance to put their views at a pre-eminent level. It is up to the media to generate the debate to let people who care about the game feel that they have a say in it. I also want to repeat what I have said many times: I do not believe that MPs should be allowed to run the country, never mind football!
Mark Hendrick MP: Welcome to the Committee, Lord Triesman, in your new hat as FA chairman—we have known each other for some time in other guises.
A good deal of criticism has been levelled at the football authorities for permitting clubs to be taken over by foreign owners, but it does not identify the reason for such opposition to foreign ownership. To date, there is no evidence to suggest that clubs owned by foreign investors suffer more insolvencies or failures in governance than those that are domestically owned. Over the years, we have all watched local clubs being bought and sold by dodgy local business millionaires and now dodgy billionaires are coming into the game, and buying and selling football clubs—clubs that were looked at previously as a possible source of profit. The idea of profit has been given up now, and the acquisitions of clubs that are in the Premier League are seen by billionaires almost as fashion items. What is your view about foreign ownership? Does it threaten the game in any way?
Lord Triesman: I should like to make a point that Mark Field and others have heard me make a number of times. I have no difficulty with foreign ownership. The reality is that we live in an economy where British citizens buy businesses overseas, and people from overseas buy businesses in Britain. It is critical that clubs should be owned by people who embrace the history and the values of football, and who want to see the clubs succeed. We shall not get into the naming names game, but I can think of people who have not been the best custodians of English football clubs, yet who have been English through and through. I also know some in the new generation of owners whose commitments to their clubs are exemplary. They would express exactly the values that I cherish about the development of the kids in the club, about the club remaining competitive and about it being at the heart of the community. I cannot see what foreign owners could be said to have tried to do that would distort those values.
Lord Faulkner: How far does the FA still have to go in establishing the governance arrangements for the game as a whole, which it needs? You have obviously made huge progress in the past year—Jonathan’s appointment is proof of that—but for the FA to be truly the governing body of the game, quite a lot of progress still has to be made.
Lord Triesman: Well, I have just a couple of sentences after which I shall happily turn the question to Jonathan. There would be advantages if we could get across a range of the same regulations that apply to the different major bodies in the sport. That would give clarity. It would not diminish anyone’s authority, which is obviously important and everyone, including those who report on the sport, would understand it better if there were a level of consistency. It would be quite sensible, for example, if the whole of professional football had the same fit and proper persons test applied to it. That would be intelligible. There is some work that is really well worth doing: it does not arise from competitiveness between the elements of football, but rather a desire to behave coherently.
Jonathan Hall: I assume, Lord Faulkner, that by “governance”, you mean one of two things. Perhaps I can deal with both. First, I think that you are touching on governance and regulation of the game, but it is also important to focus on the second issue of corporate governance. On regulation, I echo all that Lord Triesman has said, but it is important to recognise something that Richard Scudamore mentioned, namely that we start from a pretty good place. When we consider English football as a whole, we realise that it is pretty well regulated. That is not to say that we can rest on our laurels and that we can be complacent as it is incredibly important that we review with our colleagues in the leagues the regulation as a whole.
We undoubtedly need to have a closer look at some areas—Lord Triesman mentioned the fit and proper persons test. It was introduced primarily in respect of financial regulations and having people who were fit and proper to regulate in the financial sense. Recent discussion and debate, however, has gone broader than that and has concentrated on whether people have a sense of what a football club is about, and a sense of the relationship between the clubs and their communities. Of course, we should consider what might be done on that.
Corporate governance is equally important. The FA obviously has historical reasons behind its establishment, which are not dissimilar to other sports governing bodies in the country. The relatively recent review by Lord Burns looked at our structures of a corporate governance nature. Being there before and after, I certainly feel that we have made some important positive steps forward on the corporate governance side, which is important, because we need to ensure that we get our own house in order and ensure that we are fit to govern and do all the things that we want to do on the regulatory side. I am sure that, in two or three years hence, we shall look at the structures and say that further improvements can be made but, at the moment, we have made some real improvements on that front, too.
Lord Faulkner: Do you think that it matters that the Burns recommendation on the number of independent directors has not yet been fully implemented?
Jonathan Hall: We have to take small steps at a time. The introduction of an independent Chairman, who is sitting alongside me today, is certainly a major step in the right direction. It is important to take stock of the situation, and look and see how it works. So far, it is working extremely well and long may that continue. It is something that we need to have a further look at on the back of Lord Burns’ recommendations at some point in the future. We should be open to that.
Chairman: David, can I ask you about one of the initiatives that from my point of view did not get anywhere? Richard Scudamore was given a difficult time by the Culture, Media and Sport Committee over the 39th game. I said that I would have been more supportive of the 39th game if the money from that game was to go to the development of football in developing nations. However, it seemed as though it was designed to get more money into the premiership clubs. If anything, Richard disagreed with that because he said that the competition was already skewed slightly and that the 39th game would not skew it any further. However, it seemed as though the premiership was trying to grab more money. Surely we should be looking out towards the rest of the world. What are your views?
Lord Triesman: There are a lot of games, including pre-season games, when prominent clubs from England play outside England. Those games are often accompanied by coaching clinics. The popularity role of the clinics, which England also have when they are travelling, is enormous. The premier league can best comment on its good causes work, but to my knowledge it does considerable work. My comments at the time were really about the symmetry of competition. That was my concern. I suspect that, as time has gone by, the sense around the world of the benefits of any financial contribution that might be inward going rather than outward going have been better appreciated. However, that does not answer the problem that I have tried to identify and that I, Richard and others have had a good discussion about over the months.
Chairman: What about the quota system? We met a representative from UEFA at our previous sitting and its definition of six-plus-five is that six players have to be home grown, which would mean that Fabregas would qualify. We have had an informal meeting with FIFA and its definition is that there has to be six players on the pitch at any one time who are qualified for the national side. What do you think about both systems? Would they be a good thing?
Lord Triesman: The FIFA six-plus-five proposition, although it commanded a lot of support at the FIFA Congress in Australia earlier this year, does not seem to be coherent in terms of European law. I have expressed that view to FIFA. I understand what it is trying to achieve, although it is not a way of achieving such an outcome, and I understand what UEFA wants to achieve, too. I am concerned that we must generate enough players who are eligible to make it into England teams. It would not be the case that everything would suddenly collapse. We may find that, in one or other position, you have a rather shallow base at any one time. Obviously, that must be a matter of concern.
I entirely understand the argument that, if we have a fantastically competitive league and fantastically competitive players from all around the world, the English players who would be eligible would have to compete adequately to get into the premier league and many champions league clubs to succeed. However, I still have an anxiety that, unless it is economically as attractive to develop young English, who are eligible players from the beginning and take them all the way through as it is to bring in youngsters from other countries, it would be easier to bring in youngsters from other countries. I just want to ensure that the clubs are fantastically successful, and that the England team is successful in the long term. I completely accept the argument that that is to do with the development of youth players, and that that is a long-term prospect, but I am quite keen to see as few barriers in the way of that development as we can achieve.
Mark Hendrick MP: On that point, I asked you earlier about foreign ownership. Clearly, it is bringing in huge amounts of money into the game. We have only to look, for example, at Manchester City, who have now become the richest club in the world. Obviously, their money—theoretically, at least—could attract any player in the world at any price. It might be an unusual example as City has a good youth academy and is a good a youth champion, and it wants to do both, but is there not a temptation for many other foreign-owned clubs that have brought in lots of foreign capital for youth policy to be swept away?
Lord Triesman: I hope that that will not be the case. If we consider the young players at Chelsea, for example, we will see that there is good development. Some of them are beginning to mature. Whether they will get all the way through is an interesting question, but that might be to do with the character of the competition that they face. I have not spoken to the new owners of Manchester City, so I cannot—and probably should not, in any case—comment on it. I have not spoken to owners from other countries, such as those of Portsmouth, Aston Villa and Manchester United, who start off with the proposition in their minds that they do not want to see good England eligible players come through.
I am saying that, within the system as a whole, it is sometimes easier to find a very good group of kids from the former Yugoslavia, who already have attractive skills, when we bear in mind the long haul of producing some of our own kids who can do that. I understand why international bodies are focused on the question, although I am not sure that they have come up are right solutions. I am inclined not to rule out the discussion of most things that are at least legal—the six-plus-five proposal does not quite seem to fit the category—but we will not harm ourselves by having a good discussion about the possibilities.
Helen Southworth MP: Can I ask you a bit more about youth development? Do you think that we are as effective as we could be in identifying potential stars early enough so that, by the time they are getting to the ages of 15 or 16, they have had a good grounding?
Lord Triesman: In the recent past, we have concluded that we have not been as good as we could have been. There are several reasons for that, and I should not like to prioritise one over another. One reason is that we must develop more really good coaches. We do not get good kids in any subject if they do not have good teachers, so having good coaches is important. The FA has a particular responsibility for coach development, and we have to shoulder our part of that responsibility. Secondly, I am eager to see coaching become a qualified profession in the fuller sense. The notion of having a really good, reliable basic standard, and continuous professional development is fundamental—we do not want to be over-rigorous, but we need an appraisal of where you are going and whether you are going in the right direction—as is knowing whether we are going in the right direction. Such a sensible approach applies to working with kids in any discipline.
Thirdly, we have recognised—as we would with any group of kids—that the teaching and coaching must be age specific. There is no point in asking someone who is much more used to dealing with 17 or 18-year-olds to work out how to deal with a six, seven or eight-year-old. We have learned those approaches and are now putting into place systems to achieve such outcomes. Despite some of the recent comments that have been made, it is entirely possible to do that in a strong partnership with the professional game. As both Brian and Richard rightly said, the professional game has a strong interest in such a system succeeding.
We can then begin to see how the bits of the jigsaw fit together. For me, the glue between the bits is a professionals developing with professional standards, in the sense that a professional must always be kept up to the mark.
Helen Southworth: What about geography? In the north-west, we like to make sure that there is every possible opportunity for our kids to become stars. Will you make sure that the regions are as effective as possible?
Lord Triesman: We have to. When we were trying to work out what was necessary—Jonathan might have comments to make on that—a number of meetings were held regionally. I have a map in my office that marks the whereabouts of every academy, centre of excellence and where a women’s team is being coached. Like everyone with such maps, we can see the areas where we wonder whether our reach is as good as it could be or what needs to be done to get greater reach. What we should not do is to say that we are pretty good some parts of England, and who knows about the rest of it. We must reach all the areas.
Helen Southworth MP: What about girls’ teams? The taskforce has been a huge step forward, but we are starting from a lower base.
Lord Triesman: You were right when you pointed out earlier that it is the fastest growing sport in the country, and I think that it is the second-fastest growing in the world. We concluded that we should, first, try to ensure that relatively young girls have every opportunity. Secondly, when they think that it is right and when the women’s sport help to conclude that it is right at particular ages, we should experiment with mixed teams but not, as the committee has been at pains to emphasise, so that the development of women’s teams suffers as a result. A balance must be achieved.
Thirdly, we have agreed to spend an additional £5.25 million on the development of women’s football beyond what we have spent in the past, with a number of key projects in mind. A small group within our board is looking after—I take part in the discussions, too—the development of an elite women’s league, which is extremely important. It would almost certainly mean that we would need to change our rules and that we would have to play in the summer, which would be much more conducive to that style of football.
There would also need to be a central contact for a number of players. With the American league now opening up, we do not want to find that our best women players go off to play in the States because they would be paid to do so, while they would not be paid here.
I am very glad that Lord Mawhinney mentioned his proposal. Brian, I and others will want to talk about the ways in which we can develop the sport more generally and how the key architects in the profession game in partnership can help to develop it. That will raise intricate questions about the time scales of competitions, who is sponsoring them, and so on. I will not go into the intricate discussions that I have had but, potentially, they could be incredibly fruitful.
Finally, I am keen on exploring whether we can add some real zest to women’s football at universities. The age group at universities is right, about 52 per cent. of young people at universities are women, and universities often have fantastic facilities and good pitches. The idea that we cannot do much more in that strikes me as barmy. I am keen to work with the sports authorities at universities as well. It will not be like America, because their university sports are a different proposition, but we can do some of those things.
Helen Southworth MP: What do you hope for out of London 2012?
Lord Triesman: A great Olympics for London, of course. I want to see GB teams playing football. It has been possible in other sports to overcome the issues between the different home federations and associations. I cannot for the life of me think that it would be right that people who want to deny athletes the opportunity to play football in their own country in the Olympics. We will work hard with Scotland, Wales and Northern Ireland to achieve that, but my bottom line is that we will have teams.
Lord Faulkner: That will get reported in the papers tomorrow!
Lord Mawhinney made reference to the relationship between the football league, the conference and the lower levels of pyramid with regard to ground facilities. We all accept that there is room for improvement. One of the ways in which the grounds could be improved is if the Football Foundation, of which you are now a member, were to re-establish a fund through the Football Stadium Improvement Fund to allow the ground improvements at the lower levels of the game to be properly grant aided. Can you use your endeavours as a Football Foundation member to encourage that? Furthermore, do you think that there is a strong case for improving the facilities for disabled supporters at football grounds? There is evidence that standards are very patchy.
Lord Triesman: The first thing that I am about to say may disappoint you, given the question. I have had to step down as a trustee of the Football Foundation, but largely because of the work that I am doing on the 2018 bid. However, it was a very intriguing, if short, period of involvement. The football stadiums part of it is still live and working, although obviously it has worked through some of the categories that needed the most radical improvement first. I have here the new trustee, so he might be a good deal more up-to-date than I am, although it is a recent appointment.
Jonathan Hall: Extremely recent.
Lord Triesman: It is important to ensure that we are assisting in every way that we can to improve grounds in the pyramid so that movement up and down, which comes with playing ability and winning points, is successful. It is always argued that it is expensive to ensure that grounds really do answer the questions of the fans who happen to have a disability, but rather unashamedly I am not very worried about that argument against it. I can see no good reason why we should say that it is okay for some fans, but not okay for fans with disabilities. We have work to do, and we must continue to have a discussion and to find funds from whatever source—stadium or foundation—to achieve that aim.
Mark Field MP: Given that number two on your major milestones is to bidding for the 2018 world cup and your comments about a team GB at the Olympics, would you consider a GB bid given that both the world cup and the recent european championship have gone to joint associations—Japan and Korea, and Austria and Switzerland? I am sure that you are having discussions with the Department of Culture, Media and Sport, but what can we as parliamentarians do to maximise our chances of winning the bid?
Lord Triesman: I started with a hard question, and it looks as though I shall finish with a hard one. We gave serious thought to the geographical basis of the bid and concluded that we were best to bid as England. It is not always popular with the international bodies to have joint bids between different countries. One reason why it can be a bit testing for us in the United Kingdom is that our friends—and they are our friends—are very jealous of their histories and do not want to find that they have been wound into a single system in which they would lose their identity and feel that they were compelled to become part of a UKFA. I understand that from the point of view of their history and traditions.
We will carry on as we are doing. The key issue is that no country, including us, has a right to host the Football World Cup. Countries earn that. They have to demonstrate to people that they are capable of living up to their expectations. The world cup is a cup for the world: it is not a cup just for the country, although countries look for the privilege of hosting it. If all of us in our work—I say this as a parliamentarian myself—abroad and when we are talking to people can demonstrate our willingness to hear people’s expectations and their views on what would make a really great festival of football in 2018, people would understand. We must be attentive and understand in a way that perhaps we have not always done in the past. We hope to earn the privilege on merit and that must be our approach. We need to good outreach diplomacy in the right spirit.
Chairman: I recall the North Koreans playing three first-round games at Middlesbrough. The local fans took to that side so strongly that 3,000 of them went to support them when they played in the quarter final at Everton—as I recall, they were 3-0 up against Portugal before Eusébio pulled back the deficit and knocked them out. The tie between North Korea and Teesside still exists. Can I suggest that we use that allocation of loyalty in different areas in the country to other international sides? It might help us to attract the bid here.
Lord Triesman: Alan, that is a good point, for several reasons. Strong memories do come up from past experience and have a real impact. We are an extraordinary country given all the communities that are here and people’s passion. That is a strong argument for a cup for the world, in that people from every community can get huge enjoyment from seeing all kinds of teams. We will need to demonstrate not only after—if we are lucky enough to win the right—but all the years leading to the world cup that we can reach those communities in terms of football opportunities for boys and girls, and that we want to do more in the world.
We have been running an international programme that reaches throughout the world now for more than eight years. It is strong in Africa and, whether we win or not, we will carry on—that will not change, because it is the right thing to do. However, when people talk of legacy, they should find a different word that means doing such things in the years beforehand, let along promising to do them after the event. That is the way that some countries have approached competitions.
Chairman: I still have concerns about the gravitation of resources to the top clubs and the difference in the predictability of results, as Mark has mentioned. I know that Richard has done his best to make it unpredictable. He did it on purpose before the inquiry! The Premiership has been better this season than the last few years, which is why I am concerned about the gravitation of resources.
Perhaps I am old fashioned, but we used to feel a close connection with our clubs. I still feel that at Middlesbrough because Steve Gibson is a local man, but I cannot see that Manchester City fans will feel that they are is part of the club following the change in ownership. Can you just touch on those issues?
Lord Triesman: There is obviously a lot of solidarity and money moving from the top of the game to other parts, not least in parachute payments. I suppose that everyone who wants to see all parts of the game prosper would like to see more money flowing, although that would be very difficult. The people who are responsible for their own welfare in their own clubs in the premier league are bound to take their own decisions. I should like to feel that the whole of football was more secure financially, mainly because when I look at clubs much further down the scale and consider the issues that hit Rotherham, for example, relatively recently, I do not think that they are just businesses. They mean a vast amount to people in their towns, so I obviously want it to be possible to generate new revenues.
Incidentally, there are sources of new revenues. I cannot see a good reason why the gambling industry should make use of football as a basis for gambling and make no contribution to it, for example, so there are potential sources of income and I should like to see them assist clubs throughout the whole spectrum. My reason for thinking that is not different from your point, Alan, and my point about Rotherham. The fact that clubs have existed for a century or more is not an accident, but about a local, enduring passion. Each club, as a business, is, in a way, a monopoly. I am totally impartial these days, but I will not suddenly start supporting another club because I become slightly irritated by the club that I have supported since I was a small child. That will not happen. There is where we lock-in if we have a passion for the game. For those reasons, it is extremely important that we do all we can to ensure that communities continue to feel the way that they do about the clubs.
One reason why communities feel fantastic about football league clubs is because of their outreach work. That generates and regenerates the passion and sentiment. Of course, I want that to be in place all the way through football. If we ever reach the point at which people are pretty indifferent even to a big club that has always been their passion, it would be a tragedy.
Chairman: I wish to end the session by thanking David and Jonathan, and everyone else who has contributed on the panel. As I said at the beginning, the governance of football is probably in better hands today with Brian, Richard and you, David, so thank you very much for spending time with us. I finally appeal to the media: we just want the debate to go on. The media, particularly the TV companies, present football brilliantly, but we want more debate on the future of football and how it will all fit together.