APPENDIX 2
Memorandum submitted by Manchester City
Council
INTRODUCTION
1. This memorandum has been prepared on
behalf of Manchester City Council. It covers the following issues:
(i) The requirements laid down by the English
Sports Council (now Sport England) which a new national stadium
for sport, was required to meet;
(ii) The process which led to the announcement
that Wembley should be the new national stadium for sport; and
(iii) The continuing requirement for a national
stadia strategy which promotes the maximum possible legacy for
sport.
The Council would if invited be pleased to amplify
the contents of this memorandum in oral evidence to the Committee.
THE REQUIREMENTS
FOR A
NATIONAL STADIUM
2. In December 1994, the City Council suggested
to the Millennium Commission that the provision of a major new
stadium in England would be an appropriate project to celebrate
the new Millennium. Manchester was then bidding for the 2002 Commonwealth
Games, and wanted to explore every opportunity to secure funding
assistance towards a facility which would not only be a key venue
for the Games, but which would also become a new dynamic part
of the nation's sporting infrastructure. While the Commission
agreed to fund stadium proposals in Scotland and Wales it referred
the issue of an English initiative to the Sports Council for their
consideration.
3. In April 1995 the English Sports Council
wrote to a number of organisations, including Manchester City
Council, explaining that in co-operation with the Football Association,
the FA Premier League, the Football League, the British Athletics
Federation (now renamed UK Athletics) and the Rugby League it
had been decided to identify the requirements for a national stadium/stadia
for England. Proposals were invited by 14 July 1995, and submitted
proposals had to conform to a range of detailed requirements which
were laid down in a series of papers circulated by the Sports
Council in April and June 1996.
4. The invitation left open the possibility
of more than one stadium being agreed although in practice the
requirement for an 80,000 seat capacity stadium with a permanent
athletics facility left little doubt that one single stadium would
be the favoured option. The presumption also seemed to be that
a discrete ownership and management structure for the stadium
should be developed involving the key stakeholders, with income
in the main to the captured from ticket sales and rental agreements
to be entered into with each of the National Governing Bodies
(NGBs). The documentation also made clear that the competition
would be overseen by a Project Steering Group consisting of representatives
of the NGBs, but that the final decision would be taken by the
Sports Council on the recommendation of that Steering Group. The
intention was that initial proposals would be evaluated by the
end of September 1995 with a view to preferred project(s) being
announced shortly thereafter.
5. On 31 October, the Sports Council, following
consultation with the NGBs, decided to shortlist two locations
for the national stadium: Manchester and Wembley.
6. At all stages of the competition, the
Sports Council's objectives remained consistent. ". . . To
establish a national stadium capable of hosting events at international
and national level for rugby, football and athletics". The
design and construction ". . . should result in a state of
the art stadium, of a standard which is consistent with its intended
purpose as a world-class, flagship, national sports stadium for
the three sports".
Other requirements were that:
(i) The stadium should have a minimum public
seating capacity of 80,000 for football and rugby league, and
55,000 for track and field athletics.
(ii) Each of the eventholders must enter
into legally binding arrangements with the bidder to use the national
stadium for a period of 20 years for all flagship events.
(iii) Football, rugby and athletics must
be given priority over all other sports and sport generally. Olympic
and world events should not be prevented or hindered from being
hosted at the national stadium and should be accommodated on reasonable
terms.
(iv) All ". . . event run-ups, landings
and other (athletics) facilities shall be of such a quality as
to be available and capable of being used. . . at all times of
the year". A similar requirement was placed on the "warm-up"
facility (a 400m six lane track) which had to be provided adjacent
to or within the national stadium.
The flagship events which had to be accommodated
by the stadium are shown in Appendix 1[1].
It will be seen that a total of eight different events are indicated
for athletics.
7. Consistency in the definition of objectives
did not, however, extend to continuity of evaluation and bidding
procedures. Major and fundamental changes were made to the procedures
which dramatically altered the basis of the competition.
(i) Between April and June 1996, football
and the other NGBs withdrew from the Project Steering Group, and
Manchester and Wembley were obliged to negotiate directly with
those bodies. The Sports Council were to play no substantive role
in any of these negotiations, which materially contrasted from
their position in April 1996 when they indicated that they would
act as the regulator of discussions between bidders and the NGBs
so that both bidders would be given a fair and equal opportunity
to present their proposals. The original intention also was that
both bidders would present bids for consideration by the Sports
Council based on their discussions with the NGBS. The changes
meant that only one bid, effectively selected by the NGBs, could
be seriously considered by the Sports Council.
(ii) The leadership role in the selection
of the National Stadium was effectively passed to football. They
"would negotiate with both bidders, select their preferred
bidder and settle, in principle, heads of terms with that bidder
alone". Football's approach to these discussions was laid
out in a guide to the Commercial Negotiating Process produced
in August 1996. This made clear that football would select its
preferred bid according to ". . . What is advantageous and
in the strategic interests of football". Football also made
it clear that it would not ". . . publicise or discuss with
any party the basis of its selection decision".
In Manchester's view, what was originally a
public and transparent process suddenly became a private competition
led and controlled by football with no clear or effective rules
laid down. The Sports Council made clear that it could not control
or regulate football's attitude to bid selection. Indeed, the
framework document it finally produced in June 1996 setting out
its requirements was submitted ". . . to each of the eventholders
for information purposes only in order to facilitate discussions".
It was also made clear that agreement with the eventholders was
a pre-requisite to selection.
8. All of these changes were introduced
without any consultation with the bidders. The Sports Council
had abandoned its role as regulator of the negotiations between
the bidders and football, and had, for all practical purposes,
delegated to the NGBs in general and football, in particular,
the choice of venue for the national stadium.
9. Football's decision that the national
stadium should be located at Wembley was endorsed by the other
NGBs, and then by the Sports Council in December 1996 which also
announced substantial funding support for a stadium in Manchester
for the 2002 Commonwealth Games.
When football publicly announced its decision
on 21 October 1996, it indicated that ". . . Significant
issues remain to be resolved to the satisfaction of football before
a final submission goes to the Sports Council". Presumably
all of these issues were resolved to the satisfaction of football
and the Sports Council prior to the final announcement.
THE MANCHESTER
PROPOSALS
10. Manchester was never persuaded that
a single national stadium for sport was deliverable or was in
the national interest. The delivery of a perfect design for all
three sports in such a large stadium was always a very ambitious
objective. Manchester was, in addition, less than convinced about
the effectiveness of any management and ownership structure involving
such diverse governing bodies, and therefore the capacity of such
a structure to deliver the priority required for all three sports.
11. Manchester proposed in its initial submissions
to the Sports Council a number of options. In addition to a single
national stadium option to comply with what was understood to
be the preferred strategy, a two-stadia option was proposed which
assumed that a national facility predominantly for football, would
be located elsewhere, almost certainly in London and that a 65,000
seat stadium in Manchester with or without a permanent athletics
facility would also be provided. In the event only Manchester's
national stadium option was evaluated by the Sports Council and
other bodies, and it was this option which Manchester was invited
to develop further alongside the proposals submitted by Wembley.
The 65,000 seat stadia options which would co-exist with a national
stadium in London or elsewhere were therefore rejected.
12. The second stage of the competition
process was a particularly unhappy time for Manchester. We could
not establish a serious dialogue with football who had no intention
of considering Manchester's bid on equal terms with Wembley. In
late November/early December 1996 the then Leader of the Council
(Graham Stringer MP) asked the then Chairman of the Football Association
for a meeting almost on a daily basis for over two weeks. He was
advised that a discussion with the Chairman was not thought appropriate.
The Sports Council appeared to give encouragement to football
to meet Manchester and although two meetings were held no serious
discussions took place. Football appeared to have made its mind
up to support Wembley at a very early stage and the second stage
of the competition was, in Manchester's experience, wholly unsatisfactory,
unnecessarily wasteful and expensive.
13. This outcome was not unexpected, however.
Manchester objected to the Sports Council in the strongest possible
terms about the fundamental changes in evaluation and negotiation
procedures which the Sports Council agreed at football's behest.
Indeed, Manchester seriously considered taking legal action against
the Sports Council given the late changes and the way it considered
they would undermine transparency, openness, and equal and fair
treatment, which Manchester saw as being crucial before any decisions
could be taken on the deployment of public funds. The Council
invited the Sports Council to attend meetings with football in
an observer capacity during the crucial stage of negotiations
to ensure full and fair treatment. This invitation was rejected.
The Council was persuaded to remain a participant in the competition
largely as a result of the intervention of the then Chairman of
the Sports Council, Sir Rodney Walker.
14. During the latter stages of the competition
Manchester was forced to submit two bids—one to football,
and the other to the Sports Council after football had decided
publicly to support Wembley. Both bids were similar.
— The provision of an 80,000 seat stadium
with a closing roof and a permanent athletics capacity with retractable
seating and associated facilities including a "warm-up"
track.
— Capital costs of the facility were
estimated at "£194.4 million. The City Council agreed
to guarantee 10 per cent capital funding and the debt financing
for the residue of the funding to match the Lottery Grant.
— Land for the stadium etc was to have
been provided at nil cost to the project.
— No capital financing was sought from
any of the eventholders. Manchester proposed a share of gate receipts.
The financial projections put forward both to football and the
Sports Council showed that the Manchester stadium would have generated
an operational profit of over £8 million by Year 5. By that
time football as the major eventholder would have retained £11
million, and all commercial and broadcasting rights.
Manchester considered at the time that the commercial
terms offered to football and the other eventholders were highly
advantageous, and that the overall proposals submitted represented
the best value for sport. Recent events have confirmed this to
be the case.
THE CONTINUING
NEED FOR
A NATIONAL
STRATEGY
15. Manchester is deeply concerned that
having secured the national stadium, Wembley is now shown to be
incapable of achieving the key objectives which had been consistently
laid down for such a facility by the Sports Council. A number
of questions now present themselves for consideration both by
the Government and the Commmittee.
(i) Why was football ever allowed to lead
the negotiations with Manchester and Wembley, effectively determine
the location of the national stadium and then lead the process
of implementation? Because of its investment role it effectively
became judge and jury in acting for itself and achieving the best
deal for football, and ultimately to determine where public funds
should be deployed.
(ii) Is a £100 million grant justified
to support a national football stadium—a facility effectively
controlled by a governing body which in sporting terms has unparalleled
access to commercial and private funding?
(iii) What efficiency in public costs will
be achieved by the Sports Council which in addition to providing
substantial funding support for Manchester and Wembley now has
to find more resources to support a national facility for athletics?
(iv) What long-term legacy for athletics
will be created by any development at Twickenham, the home of
rugby union, which Manchester understands is now being closely
considered?
(v) Why is it necessary for London to be
put forward as the host city for the World Athletics Championships?
(vi) Indeed, is it government policy to assist
only those bids for world class events which are related to London?
These are critical questions which go to the
heart of the activities of different agencies involved in the
administration of sport in this country, and the role of government
in developing a robust national strategy which has international
standing and credibility.
16. Manchester would put forward a number
of views to contribute to the debate on these issues.
(i) Football should never have been given
the leadership role on the national stadium. It is bound to act
only in its own commercial interests, and was, and remains, incapable
of balancing its own interests with wider sporting interests not
the least being the use of a stadium for athletics. The present
position now is that Lottery Sports Fund grant has for the most
part been used to acquire Wembley Stadium from Wembley plc with
football becoming the operators of the stadium mainly for its
own events. It is submitted that if such a bid had ever been put
forward in 1995 the Sports Council would have been bound to reject
it on public interests grounds alone.
(ii) A two-stadia strategy should have been
agreed in 1995-96, with Manchester being awarded a 65,000 seat
stadium with a permanent athletics capacity. This would have maximised
the legacy for sport, particularly athletics, and achieved greater
efficiency in public sector costs. Before the second stage of
the competition was completed Manchester had informal discussions
with the then owners of Wembley in an attempt to secure support
for such a strategy. These discussions could not be pursued because
football was not under any circumstances prepared to guarantee
any flagship event to Manchester—thus underlining completely
that body's inability to balance commercial interests with public
benefit. Indeed, beyond the announcement of the Wembley decision
football again refused to support the operation of the Manchester
stadium through the allocation of even a few events.
(iii) Even without football's support a two-stadia
strategy was still achievable. Manchester City Football Club (MCFC)
had indicated their strong interest in becoming anchor tenant
of the newstadium in 1995-96. Arrangements could have been agreed
with all the parties to accommodate athletics as part of an integrated
"sport city" complex of world standing, with MCFC assuming
role of operator of the stadium.
(iv) Manchester believes it is unacceptable
that London should be regarded as the only city to host world-class
events. Indeed, the World Athletics Championships need not be
hosted in London. The IAAF is one of the few sporting organisations
in the world which has demonstrated its capacity to award the
event consistently to non-capital cities—Seville, Gothenburg,
Stuttgart are recent examples, and Edmonton will host the next
event in 2001. The previous President of the IAAF did, it is true,
favour London, but like many other of his views, these are not
necessarily the policy of the present leadership of that organisation.
In any event, the most urgent priority for athletics must surely
be to develop a legacy for that sport. No physical legacy will
be captured by promoting "one off" initiatives just
for a several day event in the year 2003 or 2005.
The construction of the Manchester stadium is
now underway and will be occupied by Manchester City Football
Club in 2003 after the Commonwealth Games. No permanent athletics
capacity is planned. Indeed, over £170 million of public
funds are now committed at both Manchester and Wembley with no
long-term capacity at either site to stage an athletics event.
17. In Manchester's view this situation
is the clearest possible manifestation of the inability of sporting
bodies to determine effective national strategies. These can only
be determined by elected governments, who are able and willing
to balance national and public interest with the self-interest
of individual sports. It is failures such as this which have contributed
significantly to Britain's lack of influence in world sport, and
must be rectified if Britain is to have any prospect of hosting
the Olympic Games in the future. At the present time, a successful
bid is little more than a fanciful and remote possibility. The
BOA's view that the credibility of an Olympic bid is substantially
strengthened by the size and quality of a stadium simply reinforces
this perception.
CONCLUSIONS
18. The Committee's inquiry is welcomed.
Manchester believes that important lessons must be learnt from
the national stadium experience:
— National strategies for major sports
stadia like everything else must be the direct responsibility
of Ministers and governments. Before the competition for the national
stadium was mounted a clear policy framework balancing national
and public interest with the aspirations of individual sporting
organisations should have been produced. This would have taken
fully into account the realistic needs of sport, sports development
throughout the country, government policy to bring more world-class
events to this country and the fact that the only world-class
multi-sports event ever hosted by England was actually to take
place in 2002 with the Commonwealth Games. The framework would
also have given clear guidance at the outset on the role of key
sporting bodies—whether in particular they were simply eventholders
or where football is concerned eventholders as well as major investors.
— Bids for Olympics or for other world-class
events are not the sole responsibility of sporting bodies to determine,
most of whom have no influence whatsoever in the administration
of world sport. Bids increasingly succeed for world-class events
because of strong central and local government leadership—this
is evidenced by the 2002 Commonwealth Games and the bid now being
mounted for the World Cup. Any bid for a world-class event should
be linked to a national sports strategy, including investment
in facilities to maximise the legacy for sport throughout the
country. If a bid bears no relationship to sport development priorities
then it does not deserve to succeed, and even if it did, the impact
upon the nation would be minimal.
— The full and direct responsibility
for strategic policy development where sport is concerned should
lie with Ministers, leaving organisations like Sport England responsible
only for operational delivery, including the disbursement of Lottery
Funding but within a framework of clear and effective strategic
policy which has been endorsed by Parliament.
— The national stadium debate and the
competition process has been muddled by lack of transparency and
the undue influence of football in determining the allocation
of public funding in its own interests. National sporting prestige
has been damaged. The importance of the 2002 Commonwealth Games
being a resounding national and international success cannot be
over-emphasised. Government leadership of the 2002 Games is now
assured but every effort must continue to be made to ensure that
national organisations play their fullest part in ensuring their
success, and in so doing ensure that national credibility is restored.
January 2000
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