Football Clubs (Governance)

Hugh Robertson Excerpts

Wednesday 8th September 2010 Westminster Hall

[Steve Rotheram]

I absolutely join my hon. Friend in paying tribute to those supporters. I think that we ignore football fans at our peril. It is not just about Manchester United or Liverpool, or the other big clubs. Bees United acquired a 60% stake in Brentford football club in 2006, which made Brentford, who are in league one, one of only two Football League clubs to be majority-owned by their supporters. My hon. Friend mentioned Sheffield Wednesday; I think that it was Brentford who enjoyed a resounding victory over Sheffield Wednesday at the weekend.

As I have said, no discussion on this subject would be complete without reference to the Spanish and German models of club ownership, which I suspect are feared and grudgingly admired in equal measure by the corporate football world in the UK. Both Spain and Germany boast thriving, long-established equivalents to our premier league. Clubs in those two leagues exist in a culture of mutual or co-operative club ownership. In both leagues, it is a matter of civic pride that top-flight football clubs should be controlled or owned by their supporters. Spain’s FC Barcelona, which is the “big daddy” in this respect, is routinely held up as a utopian ideal of football club governance and is structured as a co-operative society owned by some 170,000 members, with a democratically elected president—and Barcelona do not do so badly, generally. It is a case of “horses for courses”.

[The Minister for Sport and the Olympics (Hugh Robertson)]

I have been listening carefully to the hon. Gentleman. However, it is only fair to say that Spain has an entirely different model for distributing television revenues from Britain. Spanish clubs negotiate TV rights individually and they go directly to Barcelona and Real Madrid, so the majority of TV rights and therefore the majority of TV money goes directly to those two big clubs, and the smaller clubs underneath them, which constitute the larger Spanish football family, suffer accordingly. By contrast, here there is collective negotiation for those TV rights, putting British clubs on a very different financial basis.

[Steve Rotheram]

I hear what the Minister is saying. I myself do not think that the Barcelona model or any other model is a panacea. I am not suggesting that, all of a sudden, the fans of every single football club will go out and seize control of their clubs in a revolution, but regarding the way in which clubs such as Barcelona are structured, the argument cannot be made that those structures make them less likely to be successful.

As I was saying, it is a case of “horses for courses” and it would be naive to suggest that we should simply adopt the Barcelona model or anything else off the rack. Clubs such as Barcelona are long-established products of their respective cultures, politics and histories, and there is little evidence that their ownership models would prove suitable, or even desirable, here in the UK. It would be equally naive to suggest that supporter ownership or control of major clubs in the UK would prove to be some kind of panacea. Teams will always have lousy seasons, as my team did last year. There will always be controversy surrounding management decisions, many clubs will intermittently struggle financially and there have been failed, or at least unworkable, experiments in supporter ownership before now.

A useful lesson that might be drawn from those experiences, and from the European models that I cited earlier, is that mutuality alone is not enough. Mutuality must be coupled with effective business practice and regulation. Supporters fully appreciate that. Manchester United Supporters Trust has declared that

“we have neither the desire nor the intention to run the day-to-day affairs of the club. A club like United should be run by professionals whose experience and expertise will ensure its success.”

Such a sentiment should allay the fears of those who view supporters as little more than a bunch of amateurs who wish to take over the show, or lunatics taking over the asylum. Supporters are not stupid—they want and recognise what is best for their club. The point is not to establish some type of cure-all for the systemic problems in the game’s governance but to seek ways to make that governance fairer, more robust and more fitting for a global sport in the 21st century.

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[Barbara Keeley]

And those from much further afield. The constituents who have contacted me are also members of the Manchester United Supporters Trust. They have become disillusioned with how their club is being run and are concerned about the state of the national game. They think that football must start to be regulated properly and have its governance reformed.

Many Manchester United supporters in my constituency are greatly concerned that their club is now the most heavily indebted club in the world, after a hostile and highly leveraged takeover by the Glazer family in 2005. My right hon. Friend the Member for Salford and Eccles (Hazel Blears) touched on the debt situation of that club. Prior to the takeover, the club had no debt at all. It now services debts in excess of £750 million. Although the club is still reporting a healthy operating profit, the money is not necessarily going into improving the club; it is being spent just on servicing the debt. The 2009 report by the all-party group on football points out that supporters paying off the debt in such situations do not even have a tangible influence over the direction of the club. As with Portsmouth’s situation, the longer-term future of the club is no longer assured.

That level of debt and uncertainty has a clear impact on supporters. Many feel that the decisions made by controlling interests in the club in the boardroom do not demonstrate long-term commitment to the club and its supporters. That is why dissatisfaction sometimes breaks out and there is a sea of green and gold instead of red at big matches at Wembley. My constituents rightly feel it is time for dedicated football fans to be given some sort of stake in the clubs that they and their families have helped to build over many years.

Football clubs are an integral part of the community, and their ownership and financial management should not just be dealt with through company law. Indeed, I remember when Manchester United behaved as if it was part of the local community in Trafford, where the club is based. When I was a Trafford councillor, a young David Beckham came to open a new centre for young people leaving care. Members of the team made visits to schools to read to children during reading weeks and the players were much more involved in the community that was home to their club. That changed and the players started to be seen more as a corporate resource. Prices for tickets and kit increased dramatically and players’ salaries soared. It has become much harder to see clubs such as Manchester United as part of our local community.

There should be stronger regulation to ensure that those owning and running football clubs understand their wider responsibilities to the community. Football clubs should not be run on the basis of massive debt, which can threaten the stability of both individual clubs and the health of the game as a whole. At the moment, the game has clear laws enforced by referees and assistants on the field. However, off the field, it is like trying to play a game with hardly any pitch markings, unclear laws and no referees. That is why, off the field, various forms of financial crisis are appearing all over the place—from Cardiff City to King’s Lynn, from Chester City to Southend, and from Manchester United and Liverpool to Portsmouth. We could say that governance in the football industry is no better than the governance of the banking industry over recent years.

There is plenty of legislation on football, but it is directed at the fans—for example, on all-seater stadiums, football banning orders and controls on drinking in sight of the pitch. What about some legislation to constrain what goes on in the boardroom? Legal models from elsewhere could be adapted to work in England and Wales. We have heard about examples from Germany, but there are also examples in France, the United States and Canada. Spain already has a national sports law that establishes a statutory national sports council and a special company status of sporting limited company. That law is not perfect—I understand that the Spanish Parliament is considering reforming it—but it does give a clear legal context for professional and amateur sport and recognises the unique characteristics of professional sports clubs. Will the Minister say whether he has considered or intends to consider other models of governance for professional sports clubs?

[Hugh Robertson]

Does the hon. Lady want me to respond now?

[Barbara Keeley]

The Minister can do so when he is summing up, given the number of hon. Members who wish to speak.

It may also be time to consider the tax regime that gave financial incentives to leverage buy-outs, such as the takeover of Manchester United by the Glazers, and whether such tax breaks are any longer appropriate.

Supporters and fans need the Government to take action to improve the governance of football in this country. The Sports Minister made commitments to do that, but more recently he seems to have softened those commitments, saying:

“We’ll give football the chance to sort itself out first by seeing how they plan to reform over the summer, and if it doesn’t work then the Government will step in. We need to take a serious look at reforming the governance and structure of football in this country.”

Will the Minister tell us today what plans the Government have after the summer to step in and take action, and when does he propose to start?

On fans owning their clubs wholly or in part, I believe that ordinary company law is insufficient because football clubs are not ordinary companies, which is shown by the fact that they are called clubs. That is how most of them started: they were clubs that were rooted in their local communities, not profit-making entities. They trade on the name, history and traditions of the city and the community they come from. They are unlike other businesses and should be treated as such. Football clubs are unique, and their sole purpose should not be to make profit for one individual or company at the expense of their fans and the wider community.

I will finish by saying that one never hears of anyone wanting to have their ashes scattered on the car park of their local supermarket or business park after they die. However, fans do want their ashes to be scattered in their football clubs. That is why football clubs are different.

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[The Minister for Sport and the Olympics (Hugh Robertson)]

Before I start, Mr Robertson, may I pay tribute to the work done by the hon. Member for Bradford South (Mr Sutcliffe) in this and so many other areas across the sports spectrum? This is the first time I have had the opportunity to do so, because questions were not asked directly during the first round of Culture, Media and Sport questions. The hon. Gentleman had a good innings as Minister for Sport, and many officials in my Department rate him highly. I thank him for his contribution.

I congratulate the hon. Member for Liverpool, Walton (Steve Rotheram) on securing this debate. He reiterated, as he did in his maiden speech, his views about the current ownership of the club that he supports—Liverpool—and his desire for supporters to have a greater role in running football clubs. The twin aims of greater supporter involvement in running football clubs and the reform of football governance are shared across the political spectrum and are, as the hon. Gentleman correctly said, part of the coalition agreement. However, I have to tell him that, although the issue is widely agreed in this place, it is not entirely shared in the wider football family. There is a battle to be fought to convince the football family of the merits of this case.

I will deal in a moment with various points raised by hon. Members, but before we get into that, it might help if I say that developments at Arsenal football club have been some of the most encouraging in recent months. I intend to meet that club urgently to examine precisely how we can encourage other football clubs to put in place a similar scheme. If one thing that anybody has said to me or that I have read about this matter has stood out in recent months, it is a quote from Arsenal’s chief executive—an enlightened, able individual—who said:

“I think we are moving into a post-materialistic world.”

That is an interesting phrase, which sums up my approach to football. People who think that football can be run solely and completely as a business have got it wrong. Of course there are business elements in football—it has to be run properly; nobody in this Chamber would deny that—but it is a business with a social conscience. Football is an important part of the lives of the many millions of fans who turn up to watch and play the game, or who follow it casually in the newspapers or on television. Everybody involved in the game ignores that at their peril.

[Mr Watts]

May I caution the Minister against seeing a solution for the rest of football in the example of Arsenal? The owners of Arsenal want to protect the club from the sort of people who have taken over our club, and Manchester United. It is not a typical example and we need to be cautious about that.

[Hugh Robertson]

Absolutely. Here we get into the problem with the process. It is pointless for me to pretend that there is a one-size-fits-all solution. If there were, I am sure that it would have been implemented in the past few years.

The Spanish model has been cited at length this morning, but, as has been said correctly, two clubs sit at the top of La Liga and they have huge financial resources because they negotiate their own television rights. Hon. Members asked about Spanish sports law. I asked about that a month ago and was told that there were so many faulty aspects to it that the Spanish are now trying to re-regulate. The Spanish model is not always a great example, although some aspects of it might be relevant. We are not starting from the same point as many of the Spanish clubs.

As a young Army officer in the middle of the siege of Sarajevo, I remember saying, “I wish this was different, because this is a disaster.” Someone replied, “You can’t deal with a situation you wish you had. You have to deal with the one that’s in front of you.” That is the problem.

[Mr George Howarth]

The hon. Member for Cities of London and Westminster (Mr Field) mentioned the difficulties in dealing with privately owned clubs, particularly at premiership level. The one negotiating chip is the ownership of the fixtures list, with all its consequences in relation to television rights. Is the Minister prepared to consider that?

[Hugh Robertson]

To be honest with the right hon. Gentleman, whom I know well, I am prepared to consider any sensible suggestion that will move this discussion on. What he has mentioned is part of a much wider debate that many sports are having about betting rights and image protection. There are considerable problems with betting rights, because if a levy were taken from the bookmakers they would simply move offshore. Many Opposition Members who represent constituencies where bookmaking is a big thing would notice that. The shadow Minister will have scars on his back from that debate.

[Cathy Jamieson (Kilmarnock and Loudoun) (Lab/Co-op)]

I agree with the point about one size not fitting all. Will the Minister return to a point made by a number of hon. Members about the future of Supporters Direct, which has surely been the key to capacity building for supporters’ trusts, enabling them to find the right business model? The co-operative and mutual business model has been successful, and not just in football.

[Hugh Robertson]

I am happy to deal with that point, which relates to points made by the hon. Member for Bradford South. Let me reassure the hon. Gentleman and the hon. Lady that the approach taken on either the wider governance agenda or the funding of Supporters Direct is no different from the position that the hon. Gentleman was negotiating at the end of his time in office.

The strength of this morning’s debate lies in its representing the feeling throughout the House that something needs to be done. It is useful because it allows me to go back to the football authorities, put pressure on them and tell them that we had a Westminster Hall debate that was better attended even than those on the Independent Parliamentary Standards Authority. This debate is a pretty good weather vane, showing the strength of feeling on this issue. I am determined to make progress and to push ahead with both the wider reform agenda and football supporters’ involvement.

It all comes back to the issue affecting every Member of Parliament in their constituency surgeries: there is a moment when they face somebody and ask, “What exactly do you want me to do about this?” There are a number of possible outcomes; some might work well for one club, but not for another. Many suggestions were made by hon. Members today and we might follow up on the issue of a tax concession, but no hon. Member in this Chamber will need reminding about the state of the nation’s finances. Currently, six demands for taxation breaks for sport are sitting on my desk, including subs for junior sports clubs—[Interruption.]

[Mr Sutcliffe]

indicated assent.

[Hugh Robertson]

The shadow Minister is nodding; he has been through all this. Other demands include corporation tax exemptions for sports governing bodies, so that they can invest in the grass roots; tax breaks to entice international federations back to London, so we can increase our influence; and a levy on the betting tax—and so it goes on. I am determined to ensure that the money that we have as a Government is targeted on getting more people, particularly young people, playing sport. That remains my overriding priority. However, I will consider the demands that have been made.

[Jason McCartney (Colne Valley) (Con)]

I am lucky that Huddersfield Town, the football club that I support, which is on the edge of my constituency, is owned by a local businessman who is a lifelong fan. Social conscience is important. Last season’s shirt sponsor for Huddersfield Town was the Yorkshire Air Ambulance charity. More than £100,000 was raised for that charity and for an academy. However, not all football clubs are so lucky; we have heard about Liverpool, Manchester United and others.

Please will the Minister push forward on considering how the Government can intervene? I do not have total confidence in football’s governing bodies at the moment. There are issues to do with fit and proper persons and with transparency. The manager of Manchester United cannot even be made to fulfil his media obligations. Please continue pushing forward, to see how we can intervene and ensure that all clubs can have confidence that they are being run as well as Huddersfield Town is.

[Hugh Robertson]

The trouble with debates such as this is that they quickly turn into a basket of issues. We have not even touched on the 2018 bid, which I am sure all hon. Members will support and is the Government’s top priority.

I thank the hon. Member for Liverpool, Walton for instigating the debate and I thank all hon. Members who have taken part in it. The governance reform agenda and how we secure greater involvement for supporters are both issues that I am—

[John Robertson (in the Chair)]

Order.