Football Clubs in Administration

Oliver Colvile Excerpts

Wednesday 6th July 2011 Commons Chamber

[Oliver Colvile (Plymouth, Sutton and Devonport) (Con)]

I begin by thanking you, Madam Deputy Speaker, for calling me to speak in this debate, and by congratulatingthe hon. Member for Plymouth, Moor View (Alison Seabeck) on securing it. I hope that she and I have illustrated that Plymouth MPs can work together across the political divide when Drake’s drum starts to beat. It is apt that we should be having this debate today, because Plymouth Argyle, which is based at Home Park in my constituency, and has been in administration since March because it could not pay its tax bill, has at long last concluded its negotiations and is in the process of being bought—in the near future, I hope.

I will not pretend for one moment to be the greatest of football fans, but I am a member of the Plymouth Argyle fans trust. I cannot explain the off-side rule with any sense of certainty, but I do know how important it is for a city with a population of 225,000 to have a football club that plays in the Football League. Plymouthians are very proud of Argyle, but they are less enthusiastic about its directors, who have caused so much angst and about whom they have been forced to read so regularly in the Plymouth Evening Herald.

The green army, as Argyle’s supporters are known, will be relieved to learn that they might be watching professional football during the coming season. Although crowd sizes fluctuate, there is a real sense of community support for the club, the players and the back-room staff. When it was announced in April that the back-room staff were not being paid, the supporters formed the Green Taverners to raise funds to help those loyal employees. The city council acted with great sensitivity and speed and agreed to delay those employees having to pay their council tax until they had been paid their salaries. I have nothing but praise for Councillor Vivien Pengelly, the leader of the council, who acted with such speed.

Plymouth Argyle’s employees should never have been put in that situation. The directors at the time behaved irresponsibly. They thought that they could use the club to make money for themselves through a property deal. Property development is something that I know quite a large amount about, because before I entered this place I ran a communications company that helped developers regenerate land and managed planning for real weekends. Indeed, I retain an interest in the company, so I suppose I should declare an interest.

Betting on England winning the world cup bid and Plymouth being one of the venues for some of the matches, the Argyle directors came up with a proposal to develop the stadium and use green undeveloped park land owned by the city council—before discussing it with officers or local politicians. I fully support the leader of the city council, who made it abundantly quite clear so some time that this would not be possible. I very much hope that the other political party on the city council supports Councillor Pengelly’s lead.

Perhaps someone could explain to me why normally sensible business men leave their business brains at the turnstiles when they get involved in football clubs. They seem to think that they can be clever and play property deals with clubs. At Plymouth Argyle the ground was owned not by the club but by a third party. Indeed, I understand that under Football League rules the directors were allowed to assign their interests in central distribution rights, including proceeds from television coverage, to a third party, Mastpoint. Therefore, when the club went into administration and the back-room staff were not being paid, the Football League froze any money from central distribution rights and would not release it, because they were concerned that it could face a claim.

I ask a very simple question: is that fair? Is it morally right that small and medium-sized enterprises and clubs’ backroom staff should have to wait to be paid—and, potentially, have to take less than they are owed, despite supplying goods and services in good faith—when some sharp-suited developer is allowed to keep the proceeds of those central distribution rights? I do not think so. In recent times the bankers have been criticised for being paid their bonuses when others have had to go without, so why are owners of football clubs allowed to play loose and free with moneys that should be used to settle debts? There is a moral imperative here.

I understand that the Culture, Media and Sport Committee has been holding an inquiry into football governance, and I shall write to the Committee’s Chairman tomorrow, because I am very concerned that the central distribution rights, which include the proceeds from television coverage, should be made available to the club rather than going to third parties, so that organisations and people who are owed money can be paid. That needs to be investigated fully. I shall also write to suggest that clubs be required to have some insurance, so that if a club gets into difficulties, back-room staff and creditors are always paid.

This has been a difficult time for Plymouth Argyle football club, but I hope that the new owners will have learned a significant amount from what has happened, and will not try property development before running a successful football club.