Memorandum submitted by Mr Nick Bitel
1. Nick Bitel is a partner in Max Bitel
Greene a firm of solicitors specialising in Sports Law. Clients
include the Ryder Cup, Wembley National Stadium, PGA European
Tour, Wimbledon Championships, Racehorse Owners Association. The
firm is currently advising on the ticketing arrangements for the
2002 FIFA World Cup and previously advised on the Rugby World
Cup and hospitality arrangements for the Cricket World Cup.
2. Mr Bitel is also the Chief Executive
of the London Marathon, vice-chairman of STAR (Society of Ticket
Agents and Retailers), a member of the Major Events Steering Group
(has served as vice-chairman) and is currently the Chairman of
the British Association of Sport and the Law.
3. This memorandum represents the personal
views of Mr Bitel and is not meant to represent any of the organisations
of which he is a member nor the views of any of his clients.
4. An economic impact study carried out
by Leisure Industries Research Centre has shown that the 2000
Flora London Marathon generated over £63 million worth of
economic activity. It is not therefore surprising that the Government
has identified that the attraction of major sporting events to
Great Britain is an important object to be supported by Lottery
5. UK Sport's budget for major events is
about £1.6 million per annum.
6. At present, a body wishing to obtain
funding for such an event has to approach UK Sport which then
takes advice from the Major Events Steering Group. If the event
does not fall within the criteria then the organisers can still
approach their home Sports Council for funding. However, although
funding for events such as the Rugby League World Cup and the
World Judo Championships has come through this direction, the
very major funding required for the World Cup, World Athletics
Championships or the Olympics would have to come from Sport England
which retains the budget to be able to do so.
7. Thus the bid for the 2005 World Athletics
Championships was funded through UK Sport Lottery having been
through MESG but funding for the Stadium and the Championships
has to go through Sport England.
8. Apart from funding, Government support
is often required for major events in other areas such as legislation
(eg protection of Olympic marks, waiver of tax and duties on FIFA),
visas, work permits and guarantees. For instance FIFA requires
as part of the bid file a guarantee that visas shall be issued
"unconditionally to the entire FIFA delegation, the delegations
from the finalist national associations, the Official FIFA Partners,
the Official LOC Suppliers and the media representatives, regardless
of nationality, race and creed".
9. As well as funding support, UK Sport
also provides a limited degree of logistical help through its
flags and anthems library. It will also often require representation
on the organising committee as a condition of grant.
10. An important part of the funding of
major events is the packaging of tickets for hospitality and travel.
Very often the World Governing body controls the television and
main sponsorship rights leaving the local organising committee
with only limited sources of revenue. Ticketing income therefore
becomes central to the ability of the LOC to raise funds. As they
cannot sell sponsorship packages which include venue advertising,
the ticket then becomes central to the package of rights being
offered to the local sponsor.
11. A secondary market in tickets allows
non-sponsoring companies to effect ambush marketing by use of
tickets acquired on the black market and this severely restricts
the value of official sponsorship rights.
12. Section 166 of the Criminal Justice
and Public Order Act 1994 makes it unlawful in the course of a
business to sell a ticket without the organisers authority for
any designated football match. The Act also gives the Secretary
of State the power by order to extend this to any event for which
more than 6,000 tickets are sold.
13. On 24 April 1997, Jack Cunningham, the
then Shadow National Heritage Secretary said that "Labour
is committed to stamping out ticket touting" and that Labour
would use the existing powers to ban "ticket touts at all
sporting events where more than 6,000 tickets are for sale"
adding that Labour would work with major governing bodies in sport
and the police to implement a consistent crackdown on ticket touts.
14. The funding of any major new stadium,
such as Wembley, depends on the ability to raise funds from debenture
or private seat licence schemes. If there is a thriving black
market in tickets then there is no reason to purchase tickets
through such schemes. It is no accident that Wimbledon was able
to fund its new Court 1 development through debentures only after
years of legal action against unauthorised ticket sellers.
15. Despite the selling of tickets for football
matches being illegal, at the England v Scotland Euro 2000 qualifying
match, there were more than 4,000 unauthorised hospitality places.
Despite repeated requests to the police, no hospitality company
has yet been prosecuted for their continued flagrant breaches
for the Act.
16. Since the offence takes place at the
point of sale the decision to prosecute is taken at the local
level each time and there is no co-ordinating role or overall
authority. The result is that prosecutions are not undertaken
by forces which see only an isolated problem.
17. The result is that Britain has a reputation
in the world of sport as being a haven for the ticket tout and
unauthorised hospitality company. At any major sports event anywhere
in the world, British ticket touts are seen. At the Ryder Cup
in Boston in 1999, the main unauthorised hospitality was being
undertaken by British companies.
18. It is therefore recommended that:
18.1 The Secretary of State should exercise
his power to extend the ambit of the Act to all events for which
more than 6,000 tickets are sold; and
18.2 The Home Secretary should be directing
police forces to undertake prosecutions to enforce the existing
Lessons of the 2005 World Athletics Championships
19. As detailed above, there has been a
lack of co-ordination regarding this bid from the start. The bid
organisation made the bid without having secured a venue for the
event. MESG approved the funding of the bid event though it has
no role in later funding either the Stadium or the event itself.
20. UK Athletics cannot sign the contract
with the IAAF and at present no one can be found to sign it. UK
Sport and Sport England are legally not allowed to enter into
the contract. The GLA has insufficient funds to do so and requires
a Government guarantee.
21. Very often MESG has found that the National
Federation has secured the staging of an event but have little
organisational ability to then stage the event. The only weapon
at its disposal is to withhold funding but this then puts it in
the firing line for adverse publicity. There should be a greater
degree of control over the whole bidding and staging process rather
than leaving matters entirely to often poorly resourced (financially
and in terms of skills) national federations.
22. The actions of UK Athletics are a prime
example of the problems outlined in paragraph 21. It has secured
the 2001 World Half Marathon Championships, the 2003 World Indoor
Athletics Championships and the 2005 World Athletics Championships.
However, no LOC has been set up for either 2003 or 2005. UK Athletics
have no money with which to stage the events and have no personnel
that it can devote to staging of the events.
23. Lee Valley Regional Park is struggling
to find the funds to develop the Stadium and until the proposal
of funding from the London Marathon, which is still subject to
ratification by Trustees, there was no prospect of revenue funding
for the legacy use of the Stadium.
24. UK Athletics cannot set up the LOC for
the staging of the 2005 World Athletics Championships as yet.
They have no funding and without knowing who is to sign the contract,
there is no one to give legitimacy to an LOC. It seems remarkable
that the third biggest sporting event on the world calendar can
be secured without anyone having thought about who was going to
sign the agreement with the IAAF.
25. As the funding for the staging of the
event and the building of the Stadium is not coming through UK
Sport, it means that it was able to fund the bid, without knowing
whether or not the organisers would get the funding to actually
make the event happen. For the organisers it means that they are
put in a position of having secured the event without having to
have had their proposals scrutinised by the body (Sport England
in this case) which would ultimately be responsible for the funding.
26. The problem with securing revenue funding
for the legacy use of the Stadium is not an isolated case. The
Lottery requires evidence that what they are funding can survive
financially but is not prepared to contribute towards those costs,
either by endowment funding or annual grants. The result, as has
been seen with the Dome and many other major Lottery funded projects,
is that projects make unsustainable revenue projections when in
reality the projects are likely to have shortfalls.
27. In the case of athletics this is even
more pronounced. If any one looks at the examples in the UK of
dedicated athletics tracks, they all make substantial losses.
Athletics stadiums are expensive to upkeep but have virtually
no income. Promoters of athletics events usually want the stadium
owner to pay them for the privilege of hosting the event. Thus
Birmingham paid Fast Track £70,000 to be allowed to host
an event this year. The result is that Birmingham, Sheffield,
Crystal Palace and Gateshead all make losses and have to be supported
by local or central government funding.
28. It is therefore not realistic to expect
Picketts Lock to break even and the losses should be seen as the
price for having first class athletics facilities in that locality.
The only question is how are those losses to be funded. Normally
a facility is funded by the local authority as part of its provision
of leisure facilities for the local community, but this is not
applicable in the case of Picketts Lock which is intended as a
29. It is therefore recommended that:
29.1 There should be one central body for
the funding of major events. This body should evaluate and monitor
all aspects of the required grant funding including bidding, staging
and building of facilities.
29.2 Lottery rules should be amended to
allow for revenue funding, including endowment funding of required
29.3 The rules of UK Sport should be amended
to allow it to enter into staging agreements with International
30. In October, the MESG met in Manchester
and had a presentation by the local organisers of the 2002 Commonwealth
Games including a short visit to the new City of Manchester Stadium.
31. On the same site (Sportcity) as the
athletics stadium will be the indoor tennis centre (to be used
for the table tennis) and the National Squash Centre whilst the
National Velodrome is immediately opposite the site.
32. Members of MESG were horrified to learn
that the extension of the Metro was not to take place until after
the Commonwealth Games and that the plans for the transportation
to and from the site were not well advanced.
33. On a peak day, such as the 30 July,
athletics, cycling, squash and table tennis are all taking place
at the same time and yet there seem to be no plans as to how up
to 50,000 will be able to arrive at and leave the site especially
after the evening sessions.
34. The organisers spoke about park and
ride schemes and buses but did not appear to have any notion of
the resources needed for such transportation plans, had not identified
places for park and ride schemes and did not appear to have given
adequate thought to the space required on site for the buses needed
for these schemes.
35. This is to be contrasted with plans
for the 2001 Ryder Cup at the Belfry where Ryder Cup Limited have
contracted the car park at the NEC for a park and ride scheme,
have a massive bus parking and stacking area and will be running
special bus routes from hotels in the area. The Ryder Cup organisers
know from their experience at Valderamma and in the USA that an
efficient transportation system is central to the smooth running
of a major sporting event and that such a system is an integral
part of the design of the facilities.
36. Many of the complaints about the 1996
Olympic Games revolved around the inadequate transportation system.
Stories abound about bus drivers getting lost, poor quality buses,
and massive delays.
37. The List of Requirements for bidding
for the 2006 World Cup said "A detailed transport scheme
for staging the 2006 FIFA World Cup shall form an integral part
of the bid file . . .". It is a concern that in almost all
other events staged in this country, transportation is an after
38. It is recommended that:
38.1 Planning consents should not be given
for major facilities without outline approval of the transportation
system to be used in the staging of major events in the facility.
38.2 UK Sport, Sport England and other national
funders be encouraged to make it a condition of grant that transportation
plans be filed for approval with the application for grant.
39. Increasingly, an important part of the
funding and staging of major events is the provision of hotel
accommodation. It was one of the List of Requirements for the
bidding for the 2006 FIFA World Cup that in the bid file were
contracts in a specified form for accommodation which, inter
alia, fixed prices at certain levels and ensure FIFA was charged
only for those rooms actually used (ie no breakages charges).
40. The FIFA contract and accommodation
systems were designed by a British company, Byrom plc, which is
the world leader in accommodation for major sports events. Byrom
has been appointed by FIFA, Ryder Cup, Asian Games and many more
to provide accommodation services.
41. Despite the clear requirement in the
FIFA List of Requirements, the FA's bid file did not include contracts
with the hotels in the required form and as a result the FA received
a letter from FIFA saying that its bid was going to be ruled ineligible
as it did not comply with the basic requirements. It was only
at this stage, despite prior warnings, that the FA seemed to take
this issue seriously.
42. The laissez faire attitude towards accommodation
seems to be endemic amongst sports organisers in the United Kingdom.
Bids are made for major events, such as the 2003 World Indoor
Championships, without having secured contracts for the required
hotel accommodation. The result is that once the organisers are
seeking accommodation the hoteliers are aware of their success
in bidding and now have no pressure upon them to agree reduced
rates or to allow for breakages.
43. In many British cities hotel accommodation
is barely adequate for the needs of a major event and even in
London there is a severe shortage of rooms at the mid-price range.
Unless there is a greater degree of pre-planning hotel accommodation
becomes expensive and often difficult to source. All of these
problems could be easily avoided by adopting the FIFA model of
contract before major events are secured.
44. It is recommended that:
44.1 UK Sport and other funders be encouraged
to require the submission of an accommodation plan before agreeing
to fund bids for major events.
Role of DCMS
45. The actions of the Secretary of State
were of central importance in securing the award of the 2005 World
Athletics Championships for Britain. Without the guarantee given
to the IAAF, the bid could not have succeeded.
46. In the funding phase of the building
of the new stadium at Picketts Lock, DCMS are playing an important
role in co-ordinating efforts and in some cases in actually directing
the funding raising activities where other government or international
agencies are concerned.
47. When it comes to the selection of the
LOC, the role of the DCMS is less clear especially given the uncertainty
as to who will sign the contract as detailed above. However, it
is entirely possible that the choice as to who will chair, or
indeed be part of the LOC, will largely be made by others.
48. However, the main funding for these
major events, including the building of the facilities and the
staging, is directed by quasi-independent Lottery funders who
have had no part in the decision to support the event originally
and, of course, have nothing to do with the guarantee given by
the Government. The result is that despite DCMS's central role
in winning the event, it then has very little direct control over
the running of it.
49. The perception then arises that the
Government only takes a direct interest when matters are going
wrong. In this way the appointment of Ian McCartney in respect
of the Commonwealth Games and the grant given for the opening
and closing ceremonies are each seen as a response to a crisis.
It would surely be better if DCMS were seen to be taking a more
positive role within the organisation from the start.
50. The economic and cultural importance
to the nation of such a major event as the World Athletics Championships
is too elevated to be left to a semi-private LOC.
51. It is recommended that:
51.1 DCMS should have greater control over
the funding of major events, especially where they have only been
secured on the basis of a Government guarantee;
51.2 For major events which are secured
with a Government guarantee (such as the Olympics, FIFA World
Cup and the World Athletics Championships), DCMS should have greater
control over both the bidding and staging process;
51.3 For these events, part of the funding
conditions should be that DCMS has control/approval of the creation
of the LOC.