Football Governance

Written evidence submitted by John Bentley (FG 71)

I am writing to you as Chairman of the Commons Media Select Committee before the Wednesday 26th January deadline with my personal views on football governance as a grass roots fan and hope that my small contribution will be of some value and support in your deliberations and future recommendations.

As a recently retired college and university lecturer in business studies, management economics ]and business ethics [2008], I still retain a professional as well as a personal interest in the field of business ethics across all sectors of the economy, not merely in sport or football.

I have broken my letter down into two parts and tabulated my points for ease of reading. In supporting some of my points, I have drawn on the article in "The Guardian" by Dave Boyle - chief executive of Supporters Direct dated 20th January 2011. Let me add here that I am not in any way a member of that organisation and have no dealings with Mr. Boyle. I do however, like many fans throughout the country, support their views.

Part One - Governance Issues

· Foreign Ownership of Clubs - This is particularly prevalent in the Premier League but is also found in the lower English leagues. Clubs that are structured as public limited companies with shares quoted on the Stock Exchange can, under existing company law be subject to take-overs. Premier League clubs such as Chelsea [ Russia], Manchester City [Saudi Arabia], Manchester United [USA], Liverpool [USA], Aston Villa [USA] and Blackburn Rovers [India] are examples of such ownership patterns that have grown with the establishing of the Premier League in the 1990's and the lucrative television rights deals with satellite and terrestrial broadcasters. The free market growth in foreign ownership of clubs has not always turned out to be the salvation of clubs.

· Debt Burden on Clubs - Some Premier League clubs like Manchester United have debts in excess of £700 million with excessively high interest payments. The Liverpool case under the co-ownership of Hicks and Gillette impacted on the team, the leaving of the manager, Rafael Benitez and a boardroom revolt and the plans for a new stadium still unresolved. In the case of Portsmouth, the foreign ownership was not only disputed between certain individuals [one of whom was never seen], but led to a financial crisis with the Royal Bank of Scotland demanding repayment or foreclosing the club. In the end, the club were docked points and were relegated into the Championship League. The financial lesson provided by Portsmouth is a warning to other clubs of the risks involved with foreign ownership.

· "Fit and Proper Person" rule - In Portsmouth's case, this lax regulation was flaunted. How could the F.A. and Premier League bodies approve a person to be a "Fit and Proper Person" to be the owner of Portsmouth F.C. when they never even met him or interviewed him to inspect his financial assets? In the on-going case of Leeds United in the Championship League, the secrecy concerning just who owns the club is another example of unacceptable weak levels of regulation. By hiding the true ownership, the club Chairman, Mr. Ken Bates is suggesting that the people involved are not fit to run the club.

· Laissez Faire Governance - On the issue of ground safety, it took the horrific disasters at Bradford and Hillsborough, Sheffield, to force the F.A. and League bodies to invest money in all-seater stadia following the Taylor Report. In short, it required government intervention to expose the shortcomings of the football authorities who had dragged their feet on the issue of ground safety for years. This was, and remains, in part, the result of the internal structures of the football authorities. In the recent cases of Wayne Rooney at Manchester United and Carlos Tevez at Manchester City, their money-orientated transfer requests were left to their respective clubs to deal with. There was no word or intervention by the Chairman of the Premier League, Mr. Richard Scudamore, on the issue of controlling the role of players' agents. This is another area of lax regulation and governance which is bringing the national game into disrepute.

· Need for a New Model of Club Ownership - With the weaknesses and potential on-going dangers of current football governance, some of which have been outlined above, as we move into the second decade of the new century, there is a growing call for a new model of club ownership. Quoting from "The Guardian" article by Dave Boyle, Chief Executive of Supporters' Direct, "...... FC United of Manchester have raised £1 in. in a community share issue via a one member, one vote cooperative. AFC Wimbledon was reformed by fans after their club was stolen from them. Exeter City's supporters trust picked up the pieces of a club in decline and it has now been promoted twice, with gates increased by 70%".

My local club Port Vale F.C. based in Burslem, Stoke on Trent, is run on democratic lines with a share contribution scheme for supporters - [contact Mr. W.A. Bratt, MBE., Chairman, PVFC], which has proven to be very successful. Boyle goes on to say that "Over the last ten years, we have helped fans form over 170 supporters' cooperatives across the UK representing over 250,000 supporters." Citing Arsenal as an enlightened Premier League club, Boyle states that there are benefits to a dialogue with supporters' groups, but that the sad reality in the majority of cases is that "..... the contribution of most chairmen is merely to highlight the need for supporter democracy through their own greed, mismanagement and, in some cases, criminality."

These are strong words, but they do have a resonance with many football supporters nationwide. On the continent, in Spain and Germany, for example, this new model of club ownership has been the chosen governance structure since the inception of their respective leagues. There is no chance of any foreign owner taking control of Real Madrid or Bayern Munich. As a result, there is continuity of ownership, financial security, a solid, loyal fan base and community involvement, all of which I would argue are essential for the future of the English game.

Part Two - Proposals

Having outlined a number of areas where I feel reform is needed, I list below a number of proposals for your committee to consider. In my opinion, it will not be sufficient to produce a report which makes only "recommendations" to the footballing authorities to get their house in order. Something stronger will be required if "greed, mismanagement and, in some cases, criminality", are to be rooted out of our national

game.

· Change the composition and voting rights within the main FA Board and its outdated Council. The proposal of Hugh Robertson, the Sports Minister, to introduce non executive directors to these two bodies should be a key priority. Non executive directors should also be mandated by government to the Premier League Board and that of the Football League also.

· Full legal disclosure of club owners should be made mandatory, with tough legal sanctions for non-compliance.

· The "Fit and Proper Person" rule on club ownership should be scrapped and replaced by a more robust investigative procedure - perhaps with a role for the Financial Services Authority, the Competition Commission and the Inland Revenue

· A mandatory 10% of shares issued by a football club should go to genuine football supporters with strict rules on share transfers.

In conclusion, the future popularity of football lies where it has always been - with its supporters. Many clubs at all levels have commendable involvement in their local communities, helping schools, disadvantaged people, the unemployed , the disabled and others. I urge you to consider this important social / ethical aspect in your forthcoming report. Football clubs do not enjoy a near monopoly on how people spend their leisure time today as they once did. There are many competing alternative leisure activities to choose from - cinema, theatre, concerts, etc. If English football is to compete with these many alternatives, maintain its popularity , and not suffer declining gates as a result of ever increasing admission costs, its governance should be fit for purpose in the twenty first century.

Accordingly, I present these issues and proposals for your consideration and wish you and your colleagues well in your deliberations. I look forward to reading your forthcoming report with much interest.

Yours sincerely,

John Bentley B.Sc. Econ., P.G.C.E., M.A.