Football Governance

Steve Rotheram Excerpts

Thursday 9th February 2012 Westminster Hall

[Steve Rotheram (Liverpool, Walton) (Lab)]

That is a tall order, Mr Havard. It is a pleasure to serve under your chairmanship this afternoon. I was not a member of the Select Committee at the time of the inquiry into football governance, but it is reasonable to argue from the tone of the Committee’s report and the Government’s response that the topic has been debated in a good spirit, and I wish to continue that. I am in the unique and fortunate position of being the only Member of Parliament to have two premier league football clubs in my constituency—Everton and Liverpool. I cut my parliamentary teeth leading a well-attended Westminster Hall debate on this very issue way back in September 2010.

Before I begin my speech in earnest, I want to take the opportunity to echo the comments by the Chair of the Select Committee about Alan Keen, and to send my condolences and, I am sure, those of right hon. and hon. Members on both sides of the Chamber to the families of the 75 supporters who were killed recently at a football stadium in Egypt. No matter which club we support, we are all part of the wider football family, and that loss is a football tragedy as well as a human one.

Football is one of our country’s undoubted successes, and we are the home of the beautiful game. We are also the home of the best and most competitive leagues in the world. Children from around the globe are dreaming about the chance to play football at Wembley, the Emirates stadium, Stamford Bridge, Goodison Park, Anfield, and perhaps even Old Trafford. Wealthy tycoons are dreaming of the Premier League promised land. They are attracted to English football as a way of investing their money and seeing the best players in the world play for their clubs to an extent not seen in other countries.

Despite the merits of other leagues such as the Bundesliga, La Liga, Ligue Une and Serie A, it is the premier league, and even the championship, that attracts international investors, because they continue to offer the best that football has. Roman Abramovich and Sheikh Mansour bin Zayed al Nahyan are the only two owners with an unlimited pot of money, and who are capable of injecting copious amounts into their respective clubs. Today, some clubs, such as Tottenham, are plcs and listed on the stock market. Others, such as Manchester United, Chelsea, Liverpool, Blackburn and Sunderland, are owned by professional sport investors. Others seem to be owned for the prestige—for example, Fulham, which is owned by Mohammed al Fayed. My hon. Friend the Member for Rutherglen and Hamilton West (Tom Greatrex) may speak about that.

However, some takeovers reinforce the point that football clubs are simply economic entities to be bought and sold like any other commodity, which completely neglects the broader social impact that clubs have in their local communities and beyond. The result for many clubs in recent times has been to chart a course that is perilously close to the brink. Portsmouth, which I think we will also hear about, ran up debts totalling £119 million, and it is still far from fiscal safety. Southend United and Cardiff City recently managed to pay their debts just before the taxman’s axe was wielded. Several other clubs have suffered administration, such as Southampton, Darlington, Crystal Palace, Wimbledon, Hornchurch and Scarborough. Leeds United, which was probably the biggest victim of all, was allowed to play in the Football League despite no one knowing who owned the club.

In 2009, the all-party group on football found that the group most under-represented in the game was those who should have the most say—the fans. One of the biggest problems with football governance is that at most levels of the game those who pay for it are excluded from the decision-making structures in clubs, leagues and even governing bodies. In pursuit of a global phenomenon, which we have achieved with the Premier League, we failed properly to regulate our national obsession.

I do not pretend that there is a simple answer, but a major problem that needs to be addressed is the fit-and-proper-person test, to which the Chair of the Select Committee has referred. It is an absolute sham. If it were not, the majority of aforementioned clubs would never have been in the position they were because of owners who abused the system and played fast and loose with football clubs that are the pillars of communities across Britain.

[Mark Field]

All too often, clubs in appalling financial difficulty grasp at the nearest straw like a drowning man. There may be only one individual who can save the club, but they may not pass the fit-and-proper-person test in a meaningful way. However, if the choice is that person or the club going bust, one understands why the former choice is made, albeit one that leads to other difficulties further down the line. How does the hon. Gentleman envisage getting round that problem if the alternative is for a club to go bankrupt and to spiral out of the league, as has happened to several former league clubs in recent years?

[Steve Rotheram]

That is exactly the point, and I am sure that my hon. Friend the Member for Hyndburn (Graham Jones) will talk about his beloved football club, and the fact that that happens too often for the problem not to be tackled. That is exactly what the Select Committee set out to do—to consider what recommendations we could suggest on a non-party- political basis to ensure that the football authorities have to take cognisance of such issues, and include football fans in the governance of their football teams.

We cannot pretend that one size fits all, because it does not. We need a proactive approach to redress the imbalance in football governance, an imbalance that has seen some owners and directors of football clubs using them like playthings that can be thrown aside when they become bored, while the fans—the lifeblood of any club—are pushed further and further away from the decision-making process. A more inclusive approach would probably not be universally popular among football’s elite. Indeed, I spoke to one senior representative of a football club who said that he did not want the lunatics to run the asylum. I am a bit fed up with seeing fans given the rough end of the stick. They are treated by some club owners as an irritant or a problem, yet they are expected to be part of the solution when those errant owners disappear, leaving the club in financial crisis.

Supporters Direct is leading a new initiative that I think deserves more focus. It builds on the ideas and recommendations made by the Committee and on the Government’s response regarding the implementation of a new licensing framework that is impartial and independent of the reformed FA board. I welcome the changes to the FA at board level.

It is crucial that impartiality is maintained because that will ensure total transparency, which, we will all agree, has been missing from the FA for some time. We must, however, give credit where it is due, and there have been welcome introductions since David Bernstein’s appointment. I hope, however, that the chairman of the FA will not rest on his laurels, and that he will do something about the current ludicrous situation that allows football managers to profit from the sale of players. Regardless of what has happened over the past 24 hours, that immorality remains, and if ever there were a conflict of interest, that is it.

There are two dimensions to the licensing framework proposed by Supporters Direct:

“Promotion of financial and social responsibility, and balancing of the supporting, commercial and social objectives of clubs.”

and

“To ensure that clubs and their assets are protected for current and future generations.”

Supporters Direct has stated:

“The framework for supporter and community engagement should provide rights for supporters on behalf of the community subject to conditions…Rights would be granted to a ‘Fit and Proper Supporters’ Trust’ for engagement with their clubs.”

Engagement would increase according to the degree of development of the “fit and proper” supporters’ trust. If such a measure were implemented, it would give fans a voice at the top table.

I believe that football fans would use the opportunity to nominate a trusted supporter to make informed decisions—it is the big society writ large. I am aware of some football clubs that would hold an election and offer season ticket holders, as well as club members, the opportunity to vote for a candidate on the basis of a quasi-manifesto set of pledges.

Supporters Direct has stated:

“The co-operative ownership of football clubs via supporters’ trusts thus offers huge benefits not only to the way that the game is run, but also to local communities.”

Although I recognise that there will always be a tension between financial and social returns, the football world is starting to realise that a greater balance needs to be struck. We are starting to see a yearning for the greater involvement of supporters in football governance not only in the UK, but across Europe.

Another proposal is for the reformed FA board to consider ways to increase the number of ex-footballers in boardrooms. Such a move would appease the grumblings of many fans who believe that directors are not “football people” but are out-of-touch businessmen. That is currently the case at Blackburn Rovers, a club that is rich in history and has fantastic loyal support.

Despite becoming a global phenomenon with a worldwide audience, football is not immune to external forces outside the control of its internal market. Lessons must be drawn from disasters such as the global financial crash. All bubbles have the potential to burst. Football needs a regulatory framework and a governance structure that is as transparent as reasonably practicable.

I am confident that there is the political will in the Chamber and the Department for Culture, Media and Sport to make progress. I hope that that continues, and that the Minister will take on board the strength of feeling on this issue.

--- Later in debate ---

[Dr Thérèse Coffey (Suffolk Coastal) (Con)]

It is a pleasure to serve under your chairmanship, Sir Roger, and that of Mr Havard, the previous Chair, who probably prefers the oval ball, but accepts that the round ball game—the beautiful game—touches all four nations of the United Kingdom. I am delighted that three of those nations have been represented in the debate at some point.

I thank other Committee members. For a football fan, this was a fabulous inquiry. The hon. Member for Liverpool, Walton (Steve Rotheram) was a bit gutted not to be on the Committee at the time. However, he should take credit for having been part of the main inspiration for the inquiry in that seminal debate in Westminster Hall some time ago. I hope that he is proud now to be part of the Committee that was able to put the report to the House for consideration.

There is no question but that football is probably our most successful export. I appreciate that Sepp Blatter thinks that the Chinese invented football, but I firmly believe that it is the English version of the game that has gone around the world. Indeed, we seem to be importers of talent nowadays, but our game is no worse for that. The extent of professional football here goes far beyond anything we saw in Germany, in terms of the number of teams and the quality of football, as the right hon. Member for Bath (Mr Foster) mentioned. That is reflected in the fact that we have had such success in European competitions.

Success perhaps eludes the three lions. Of course, we all hope to put that right in 2012 in Poland and Ukraine, and in Brazil in 2014. But as I will mention later, that is one reason why the Committee felt that it was important to do something about football governance.

I will try not to repeat too many things that my hon. Friend the Member for Folkestone and Hythe (Damian Collins) said and I will try to develop a few different points, but I echo his tribute to David Bernstein. I ought to say that I am parliamentary fellow to the FA at the moment, so this is not being done in an attempt to get free tickets for any game, or anything.

I was looking at the evidence from 29 March 2011, when the Committee visited Wembley stadium to take evidence from the FA. At that time I brought up the issue of governance and Fabio Capello’s contract. All I can say is that David Bernstein’s responses that day gave me confidence, as did his actions, in respect of exactly what happened with the captaincy of England—and in the situation in the past 24 hours.

David Bernstein has persuaded the council, the shareholders and other board members to bring on two new independent non-executive directors. That has happened and already they are making a contribution to the board. Give credit where it is due, despite the fact that he is a Manchester City fan. As we all know, we can be very tribal in the main Chamber, but we are all here for the greater good of football.

[Steve Rotheram]

Does the hon. Lady agree that the FA still needs to do more to become fully inclusive? An FA board needs to reflect all society and include, for instance, people from different socio-economic and cultural backgrounds and minority ethnic groups and perhaps even women.

[Dr Coffey]

Of course, one of the new independent directors is a woman, which was a little bit of a surprise, but I was delighted that a lady with a pedigree at Millwall is already making a contribution at the highest level of the game. Kelly Simmons is in charge of the national game and does a great job working with communities.

A lot has been said about the ownership of football clubs and financial fair play. I was keen to ensure that the model of a significant owner was not condemned as a particularly bad thing. I say that because that is one reason why we are able to have so many clubs throughout the country. I do not want to come across as patronising, because I was born in Wigan and grew up in Liverpool and have always believed that it was working man’s philanthropy. Others ensure that their theatre keeps going or donate to the Royal Opera House and there is no greater thing than to keep a local football team going. I do not pretend to be an Ipswich fan. I always want them to do well. But whether it is Marcus Evans at Ipswich Town or the infamous Delia Smith, saying, “Come on, let’s be having you,” up at Norwich, it is important that people invest in something that is critical to their community.

Everyone is worried that the huge amounts of money coming in have skewed the field somewhat, and financial fair play will go a long way towards addressing that. I am impressed that the owners of Manchester City have basically put equity into their finance, as opposed to loans—that is a good thing—and it has to some extent shaken up the premier league. However, when the rules are introduced we must ensure that there are no loopholes, which we saw in Germany, when okay money has not been invested—a €100 million sponsorship deal for a particular team was the way of getting money in, and it went straight through to the profit and loss.

--- Later in debate ---

[Clive Efford (Eltham) (Lab)]

I congratulate the Select Committee on the report. I join the Chair of the Committee in the tribute that he paid to our friend and former colleague, Alan Keen. I believe that our former colleague David Cairns was also involved in the inquiry when it started, although sadly he passed away before the report was written.

This is an extensive and detailed report on the future governance of football. It would have been better if we could have had this debate in the full knowledge of the response of the Football Association, but given what has gone on over the last couple of weeks in football, it has given us an opportunity at least to pass some comment on what has been going on. For my part, I pay tribute to the Football Association for showing strong leadership on these issues and particularly on the issue of racism in football. Its leadership has been exemplary. The international football bodies could learn from the way the FA has dealt with that issue. It has acted in the best interests of football, and I sincerely wish it all the best in selecting the best replacement as England manager. If that means that the FA has to take time in doing it and allow people to finish current contracts, it should be given that time to do what is in the best interests of the England football team.

This report and debate give us an opportunity at least to set out the will of Parliament to the Football Association ahead of its response to the report. They allow us to say what we feel about football governance and what we think the FA should respond to. We all have a responsibility to face up to the many challenges that the report highlights. That applies to us all, from the FA at the top, through its executive and the council, to the county FAs. I say to the people in those particular bodies that they have to look to themselves to review the vested interests highlighted in the report, because unless all of us together, as one community of people who love football, are prepared to take on the issue of change in the governance of football, the changes that we need will not come about. It will also require the other governing bodies, the Premier League, the Football League, club chairmen, managers, players, the dreaded agents and, of course, the fans. All of us together have an opportunity to set out a course that will resolve the problems that face our national game. We can begin to work together to take on the tough choices over the future of governance and finance to democratise our game and bring it closer to the fans.

Football is our national game because it is played in every community the length and breadth of the country. Football teams are part of the communities in which they are based, whether it is Manchester United, at the very top of the game—it is one of the biggest and most highly recognised clubs in the world—or Darlington, in the conference league, which is struggling to survive on what is, frankly, a pittance compared with what is paid to a premier league agent, player or manager or the receipts that those clubs get from TV rights. Darlington was saved from complete closure only by a couple of fans, who at the last minute were able to raise £50,000 to buy more time to save the club. Without them, there would be no club to save.

I spoke to my hon. Friend the Member for Darlington (Mrs Chapman) yesterday about the fight to save Darlington football club. The reason why she is not here speaking on behalf of her local community is that she has had to return to Darlington to try to bring together all the different parts of her community that are fighting to save Darlington football club. I urge everyone here to get behind her and the local community—those people who bought that extra time to try to save Darlington football club. Everyone needs to work together in the best interests of the club. Something that we can do here today with the debate and the response to the Select Committee’s excellent report is to put the case for change that will prevent a situation like the one that has affected Darlington football club from arising again.

One of the best examples that I can point to of a local community-based football club is AFC Wimbledon. If we consider its history, notwithstanding the speech from the hon. Member for Milton Keynes North (Mark Lancaster)—I make no comment on Milton Keynes Dons or any criticism whatever; I wish them all the best, except for when they are playing Millwall—we have a club that started from scratch in the local community. When Wimbledon moved to Milton Keynes, it virtually just moved the management structure and a bank account—what was left in it, that is—but the heart and soul of the club clearly stayed with the local community, which exemplifies my point about football clubs being part of their community. We have a remarkable story from what was left of the club: five promotions in nine years and back in the Football League. That just shows what fans can achieve when they work together to support their club and to help in its management and running.

Even some of the mighty clubs are vulnerable in this current climate. We have heard about Leeds United—I will not dwell on it—and Portsmouth. Their experiences testify to some of the pitfalls in football today. Even Manchester United is not beyond controversy over its finances. The green and gold campaign is not just about a dispute with the club’s current owners, but came about because many fans were shocked to discover that, despite a very successful season in 2009, their club would have been in deficit had it not been for the sale of Cristiano Ronaldo for £81 million. Manchester United Supporters Trust is the biggest in the world. Who is to say that even the mighty, internationally recognised Manchester United might not end up a fans’ co-operative some day in the future? If it can happen to Manchester United, why not to other clubs?

The Spirit of Shankly is another group of supporters who were in dispute with the then owners of their club. Its ultimate aspiration, which is still on its website, is to own Liverpool football club. Recently, we have seen the dispute between Chelsea fans, who hold the ownership of Chelsea football club, and the owners, who want to get that ownership back and possibly move the club.

I pay tribute to the hon. Member for Portsmouth North (Penny Mordaunt) for her contribution to the debate. I was alarmed to hear that the administrator would not speak to the local community. I would like to know what the Football League is doing to ensure that the administrator talks to the local community and the fans about trying to save the club.

The problems at Portsmouth are an example of where things are going horribly wrong in our game. Mr Antonov’s bank, Bankas Snoras—I have not made up that name—applied in 2006 to operate banks in the UK, but was turned down by the Financial Services Authority. It was suggested that the bank had repeatedly given incomplete and inaccurate answers to the FSA. The FSA’s website states:

“Bankas Snoras was likely to fail to deal with the FSA in an open and co-operative way.”

Yet in 2011, Mr Antonov was allowed to take over Portsmouth football club. If the FSA had that degree of concern about the financial matters of this individual, it must have been written large for others to ask questions about his suitability to own one of our large football clubs.

Such a case highlights our concerns that due diligence is not taking place and that there are not sufficient fit and proper person tests. Something should have alerted the Football League or the FA to that person’s history, and they should have considered whether the purchase was in the best interests of the club or the game. I do not make that point to ask for an inquiry or to blame somebody for that decision, but we have the right to demand that the governing bodies go back and look at those cases. They should put their heads together and learn from such experiences. They should establish a set of criteria that will try to prevent such sales from happening again.

My hon. Friend the Member for Hyndburn (Graham Jones) made a powerful contribution about Blackburn and vividly described the gaping holes in the administration of our national game. He set out how one of the biggest clubs in the premier league fell foul of the financial regulations and the investigations that are carried out by our governing bodies prior to people taking over clubs.

As the hon. Member for Folkestone and Hythe (Damian Collins) said, under the current regime it is too easy for people to hide the real owners of our football clubs. It is coming out loud and clear from this debate today that that is simply not acceptable.

The report is unequivocal in its condemnation of the issues relating to club ownership. It referred to “startlingly poor business practices” and “unacceptably low” levels of transparency. It is clear that football has begun to move in the right direction to protect the future integrity of the game, but more needs to be done. The UEFA financial fair play regime is a step in the right direction, but we need to remind ourselves, as the hon. Member for Cities of London and Westminster (Mark Field) pointed out, that 56% of debt that is held by football clubs in Europe is held by our Premier League.

The pursuit of survival in the top flight is forcing clubs to over-extend themselves. The slightest hiccup in their cash flow, and they are in serious difficulties. Meanwhile, those clubs with owners with seemingly bottomless pits of wealth can be run with eye-wateringly high losses, which is simply not sustainable. Although we cannot resolve this matter overnight, our debate today, the Select Committee report and the responses from football’s governing body can make a start on addressing the problems that we face. Too many clubs hit a financial brick wall when they run out of money or simply when their financial backers run out. We must move to a system in which clubs have to balance their books, otherwise the current form of our game will not survive.

Every club has links with its local community. Every Member present can provide examples of their clubs doing excellent work within the local community. They may be dealing with young people or trying to tackle antisocial behaviour. I am not just talking about Football League clubs, but clubs at much lower levels. Indeed, clubs at the lowest level have armies of volunteers who go out every Sunday morning or Saturday afternoon to run the line, organise football matches and engage hundreds of thousands of young people up and down the country. Football is right at the heart of our community and something that we all hold in high regard.

It is also members of the local communities who gather outside football clubs when those clubs are in trouble. Who commits their hard-earned cash to save their club? It is always the dedicated fans from the local communities. They are the ones who desperately fight for the survival of their clubs when the chairman or executives have long gone. They do that not just because they feel passionate about their teams, but because of the place that football occupies in the heart of communities up and down the country—from the local pub team to the professional clubs. Fans respect the work that their local clubs carry out in the community, and it is at the heart of what they want from their clubs in the future. From supporters’ trusts to fans’ representative bodies, such as Supporters Direct, the common desire to enhance links between clubs and local communities is right at the heart of what they want to achieve. Fans are the community and they are the future of the clubs; they are fans at the professional grounds and they are the coaches and managers at the lower levels of the game. It is essential that everyone at every level of football respects that fact. Fans are looking to the sports governing bodies to give them more influence over their clubs, with a licensing system that is regulated from above, from the FA down, but is monitored by fans who can be the eyes and ears of the system, and police it at local level. For that, they need access to information, and resources.

[Steve Rotheram]

On access to information, people are probably aware that Everton football club and its supporters are going through a troubled time. Everton football group—Trust Everton—is trying to raise money to purchase Everton’s training ground at Finch Farm. If the FA adapted appropriately, and gave power to supporters, they could access the very information that they need to help their own football club.

[Clive Efford]

That is absolutely right. I could not agree more with my hon. Friend. What we want from governing bodies, who support Supporters Direct, is not just to hold meetings when fans can investigate decision-making processes at their club, and the decisions made, but the opportunity to interrogate the board members. If they identify something that is going wrong, they should have the means to raise that at the most appropriate level. We are not asking just for a fan on the board, or for a meeting every year when fans can come along and ask questions. We want to know what the governing bodies will do and how they will respond when fans ask questions and receive answers that cause them concern. If we do not empower fans, and allow them to investigate the sort of things that my hon. Friend the Member for Hyndburn described about Blackburn, how will we ever have an early-warning system? The fans are the early-warning system to tell us what is going wrong at a club.