Football Governance - Culture, Media and Sport Committee Contents

Examination of Witnesses (Question Numbers 110-147)

Gordon Taylor and Paul Elliott

15 February 2011

Gordon Taylor: Brede Hangeland has been ill throughout the night and he has had to apologise for his non-appearance today. I hope you will understand.

Chair: Thank you for that. In which case, may I welcome to the second part of the session this morning, representing the Professional Footballers Association, Gordon Taylor, the Chief Executive, and Paul Elliott, who is a PFA Trustee. We send our best wishes to Mr Hangeland and hope he recovers soon.

Q110 Mr Sanders: A similar question to the last session: how robust do you think the English Premier League and Football League pyramid structures are?

Gordon Taylor: By robust, do you mean how can they protect the existence of the clubs, bearing in mind what we have talked about with the debt?

Mr Sanders: Is there a danger of fragmentation? Are they secure?

Gordon Taylor: Considering, I suppose, they started with 12 clubs in 1888 and it never ceases to amaze me—bearing in mind the economic difficulties we have had in the last few years—how many full-time clubs we have in this country. It is unique in the whole world to have 92 full-time clubs and, in addition, in the Conference as well, over half those clubs are full time. We have the highest aggregate attendances, we have the highest number of full-time players, so it would be a little perverse of me to say it was not robust.

But, of course, we have probably never had a time like this—I have been involved as a player and administrator through very difficult times. The 1980s were terrible times, both for health and safety reasons, principally when the Government got heavily involved, and since that time, of course, with the advent of satellite television and the back-up sponsorship, the game has never had more income. On the other hand, it has never had more debt and so we have that dichotomy. But I like to think when the PFA puts what assets it has at risk when we try to help clubs through financial difficulties—probably two-thirds out of the 92 clubs have had financial difficulties over the last few decades.

I never thought we would see clubs in the premiership have problems but, in actual fact, you can name just on the fingers of one hand the number of clubs who did go out of existence and then, of course, even some of them have restructured, got back, and we have seen the likes of Accrington Stanley and Aldershot come back. We should not underestimate the great strength of football in this country and these islands, which is quite unique, and how much a part of our social fabric they are. So if you said, "How robust are they?" I would have to say they have met some big challenges. Those challenges in the 1980s were met with the help of politicians and the legislators, together with police and local authorities.

Those tragedies convinced me that sometimes football—if you remember, I think the Prime Minister at the time blamed football and football blamed the Prime Minister but the answer to those problems came about by excellent co-operation between everybody involved in the game and then also supporters that got themselves properly organised, Government, police. There was no interaction between the different police forces. I couldn't believe it. At the time, they wouldn't give information, and since that time there now is a national information network. When people said, "You will never defeat the bad behaviour or the hooliganism at football, you will never defeat the racism at football", I have seen football come together with help from people like yourselves and do precisely that. So there are times when, it has not just been robust, it has been quite positive with regard to social life in this country, not least of which, of course, is its social responsibility programme that is bought into by both clubs and players.

Q111 Mr Sanders: You mentioned debt. How serious a problem is debt in the English game?

Gordon Taylor: Debt is a serious problem for all of us in the world and nobody is more aware than you are of the debt we have got ourselves into. I think part of the problem is I have noticed it has been so much easier—I get involved in the local citizens advice bureau at Blackburn and Darwen and I have seen the massive increases in debt, the way that we have allowed people to run up credit cards, to run up debt. On a bigger scale that has been done by the banks as well so it was almost inevitable. Football is not an oasis from what is going on out there in society. It reflects it. So if there is debt out there, there is going to be debt in football. In dealing with it, you have covered the football creditors rule and you seem to think that is particularly special to football, as though we are looking for some actual special vested interest. It was done with the purpose of trying to keep a club in existence and its importance to a community and to try and make sure that the supporters, who didn't run the club, weren't discriminated against and that the players who had signed in good faith suddenly didn't find their contracts not worth the paper they were written on, and to try and make sure that a club could not win a cup competition or a league on the back of players whom they couldn't afford to buy or pay. We never had any objection, of course, because we are all taxpayers, to the Inland Revenue being a preferential creditor. I think it is just since they have not been allowed to be that, because of European legislation I believe, that that particular rule has come under attack.

Q112 Mr Sanders: Has the number of clubs where the PFA is helping to meet players' wages increased or is it roughly the same number that there has been over the last 10 years?

Gordon Taylor: Of course, we did have Portsmouth and we have had a number of clubs just of late. It has definitely helped since both the Football League and the Premier League implemented a better relationship with the Revenue and tighter controls from the centre, which is what was needed.

Q113 Mr Sanders: Has the number of clubs you are helping gone down or has the number of clubs you are helping gone up?

Gordon Taylor: It has gone down, albeit Portsmouth was a massive amount of money compared with some of the lower Football League clubs. It is all proportionate. Sometimes £50,000 or £100,000 could cause a Football League club to really struggle, whereas with Portsmouth in the Premier League you were talking millions, as we were with Leeds when they were in the Premier League. What we do in such a situation is ask the players to hold together, not to walk out of the club. If they don't get their wages they would normally be totally free agents to walk out. We asked the players, as we did with Bristol City 30 years ago, to try and hold together and agree to defer their monies until the club got out of its financial problems. Having said that, there were many in the league at the time, before the Premier League was formed, who said, "Let them wither on the vine. It's natural evolution." I didn't think so, because I am a great believer in the history and tradition of the game and many great clubs now in the lower divisions have an illustrious history and vice versa, and that is the nature of sport.

Q114 Mr Sanders: I think most football fans would be very supportive of that view. But as a professional body, at what point do you take a decision, "We can't keep paying these players' wages"? Do you have a formula that says, "We can do this for four weeks and if X doesn't happen that's it", or do you just make up your mind with each individual case that comes before you?

Gordon Taylor: It's not a cavalier approach. We have lawyers, we have accountants who will go to the club and look through the books and see whether it is possible to save it and try and work with them to look at what measures we can use to save it. We don't have infinite reserves with the PFA. In fact, the majority of our funds are charitable funds for hardship, accident and education, so we need to be quite careful on that. We are a lender of last resort. We try to encourage the players to defer some of their monies for a period of time during which we hope the club can get out of trouble, and I have to say for the most part that has worked.

Q115 Mr Sanders: Are you currently lending to any League club at the moment?

Gordon Taylor: At the moment there are one or two.

Q116 Mr Sanders: Have Plymouth Argyle approached you?

Gordon Taylor: Yes, Plymouth have approached us and Plymouth is a club we are looking to help at the moment and working with the players to try and do our best to keep that alive, because we don't have too many clubs in the south west and, goodness knows, we need to keep them alive. You go down on your holidays and the youngsters there, they like the Manchester Uniteds and Arsenals but they also relate to the local club. I think it is important that we do all we can to keep Plymouth alive; and you think it was Michael Foot's team, wasn't it?

Mr Sanders: Indeed.

Q117 Dr Coffey: On debt, you made a submission about gearing being required in all industries. Is there an element here that leveraged buyouts are a poor way of trying to own a football club or is it simply that the tax incentives on a leveraged buyout are perhaps better for financing a club than the all upfront cost of putting in equity?

Gordon Taylor: Are you referring to my reference to America? We have had certain problems in this country where there has been big leveraged buyouts of some of our major clubs—

Dr Coffey: Yes.

Gordon Taylor: That situation would not be allowed to happen in the USA where, as you know, they have different franchises and at times they even move cities and towns. That doesn't happen in this country; maybe just once.

Q118 Dr Coffey: You have made some very interesting comments about liquidity.

Gordon Taylor: I mentioned a limit of 20%, where they talk about a limit of 20% of leveraged debt, yes. Without being so specifically involved, I am aware Manchester United need to keep being successful because there is a big amount of debt and likewise Liverpool found it hard to service their debt.

Q119 Dr Coffey: I have a personal perspective about limiting gearing as well, which would be sympathetic to your general perspective, but you talk here to some extent about one of the things to follow from Germany may be about the liquidity. As a former accountant, the one thing you can guarantee is a forecast is always wrong. How do you feel that is working?

Gordon Taylor: None of us can see into the future but I think we do, at times, need to pay respect to Germany, and not just because they keep beating us at times in international matches. They did have a time when they didn't achieve the international success that they wanted to and they had a root and branch approach, to youth development. There is good co-operation between their national association and the Bundesliga and they set standards for trying to make sure that a club could, as we have heard before, at least say they had a balance sheet that could keep them in existence, to see them through the season and the next season. They have tried different approaches. They have emphasised the priority, which is good, of having full stadiums. They have managed to lower ticket prices and not affect them badly financially and have full stadiums.

You can never just transplant a culture. Germany is different. Holland, for a small country, does tremendously well internationally. You can look at best examples of other countries. Not too long ago, France was the best example for youth development and bringing it through. Now that has moved to Spain and then you see the predominance of Barcelona and Madrid, which is not necessarily healthy, bearing in mind they do monopolise success in that country because those two clubs have their own individual television agreements, which we don't have that in this country.

It has needed support from Parliament at times to have a collective deal on condition that the Premier League does give a very significant amount of money to grassroots and, of course, also to the Football League, albeit in the Football League we have almost replicated the problem with the Premier League. There was a time when one club probably had more money from television than all the clubs of the Football League and now the Championship is almost becoming a Premier League division 2. So we are finding the way they split their money—80% to the Championship, 12% division 1, 8% division 2—is almost now making it hard for division 1 and 2 clubs to stay in the same ballpark.

Q120 Mr Watson: Could I ask you about the role of agents? Currently players' agents are paid by players and clubs. Do you think clubs should be allowed to pay players' agents?

Gordon Taylor: What has become quite apparent once we had Lord Mawhinney with us was that to be transparent with regard to what clubs paid agents, for the Football League initially and then to some extent in the premiership, is the massive amounts of money. When you think of the battles the PFA had to get any share of television rights for its members who people paid to see and sit down and watch at home, and that that money goes into charitable causes and community programmes and anti-racism programmes and help for old players, the PFA's share of that is a drop in the ocean compared to what has been paid to agents. They have become very much a part of the game used by clubs. This isn't for me to beat them on the head. FIFA tried to regulate them and could not; it was put in the hands of the national associations. We thought we were making some progress with transparency and the full knowledge for the player and the club of what offers had been received and what monies had been received. Now it looks as though it is going to be open house again.

I am just reminded, the more you try and look into agents, there was an inquiry into American sport as to whether they should be governed by national law, state law or by the sport itself. One of the classic quotes was that they found quite a number of agents had first class degrees from Harvard and Yale but there was quite a significant number who had just had the third degree from the local police. They are in a world that is very difficult to control. They are attracted by the money in the game, like they were involved in the film industry and the pop world.

I thought we were making some progress with that transparency and regulation and exams and monitoring by the FA but it looks as though it is going to be open house if we're not careful. If you are talking about financial propriety in the game, the transfer system can be a vehicle for abuse because of the vast amounts of money and the money that goes on what is called magic roundabouts. Unless you get transparency with all the people involved in a transfer, and these days of third party ownership of registration, some players have about five or six agents involved—so it's no use me saying it is a clear transparent world. It is a murky world and the game and FIFA needs to keep a grip on that and, of course, FIFA needs to keep a grip on a few other things of that direction. But it is not a time for letting go of a compliance hold on agents. It is a time to be probably tighter than ever.

Q121 Mr Watson: So if FIFA and the national bodies have failed in their obligations to regulate agents, do you think the Government would need to step in?

Gordon Taylor: It is like I was saying about the Government stepping in: you probably have enough on your plate with legislating on criminal law and everything else without football agents. Far be it for me to say, but sometimes it is as a result of Inland Revenue inquiries and our national media. They can do a job sometimes if there has been corruption. I think they are either in the game or they are out of the game. If they are in the game then they need to be under some form of control. I referred you to the problems of the 1980s when everybody was passing the buck and it was only those problems of safety and violence and other problems were addressed by a combined approach. That approach needed legislation from this House and, of course, closed circuit television was massive, but many other areas were brought into play that were a good sign of how football could work together with Government.

Q122 Mr Watson: I am going to put a question to you that I am sure you have heard many times before. It has been said that players' high wage demands are responsible for the level of debt that clubs carry. Would you like to address that assertion?

Gordon Taylor: Last Friday afternoon I was answering questions, because the former Archbishop of Canterbury—I think it was George Carey—said it is up to the bankers and Liverpool players to help Liverpool. I always find myself on the back foot. The game is about players. It is the players whom people pay to watch. I don't think anybody goes to see a film and complains about Brad Pitt's wages, or perhaps I should talk about a new potential Oscar winner's wages, and the same if you go to an Elton John concert or a Take That concert. I have never heard a fan yet say, "It's terrible the money they get." It is a question of they either pay it or they don't.

I am amazed at the money that television pays football but, on the other hand, football has been good for television. The price is higher than what you would necessarily want to make sure people who are unemployed could go there but they seem to keep people coming. It is a very short career; an average eight-year career. We lose 50 players a year with permanent injury. People seem to forget that they pay over half their money, in spite of the fact—and a limited number of players have image rights and because they have an image in their own right, particularly the Beckhams, of course, and maybe the Wayne Rooneys, but that's a very small percentage. The vast majority are on a pay-as-you-earn system and will be paying more than half the money back to the Treasury.

It is not for me to say but when you talk about bankers getting bonuses, people seem to forget if they get the bonuses over half of that is going to come back to the Treasury. It is the same with footballers. I just think every labourer is worth his hire. They don't hold a gun to clubs' heads; they never have done. When in the past out of about 70 clubs where there has been financial problems and there were no wages on time and those players could have walked out for free and got another club, they held together for the sake of the club. At times they don't get acknowledged for their loyalty. When everybody says they were loyal in the old days, I'm not having a go at the players before the maximum wage was removed. They were loyal because there was no incentive to move, because if you moved to another club you were on the same wage. It is only since the likes of Bosman has happened that there has been a greater mobility--an average probably three years at a club now.

Q123 Chair: Paul, you had a very distinguished playing career; what is your view on that?

Paul Elliott: I think football is like a lot of other businesses insofar as always the top half or the top 1% always earn the big money. Whether you are playing basketball, baseball, or tennis, it is all relative. Footballers are getting commensurate to their values and what they bring, because ultimately they drive the values. Everybody fills stadiums, whether it is 75,000 at Manchester United every week down to 60,000 at Arsenal and so on, to watch the best people and the entertainers. Football is a global sport and I have to endorse what Gordon was saying. I myself as a player, having played at the various highest levels, was one of those players who came out of the game through injury.

The PFA has been very instrumental in that because we talk about the 1% but are we talking about the 95% of kids that come into the game at 16; at 18 they don't even get a professional contract. Less than 5% of those are still in the game at the age of 21. So we are talking about the ones who are at the outstanding level and the risk of injury is extremely high and their average lifespan within football is from eight to 10 years. As a former footballer, I suppose every now and then I have a thought at the back of my head, "Maybe I should have sued my mother and father because the timing wasn't quite right." But realistically, as a professional footballer, I wish footballers all the best because I have heard of stories where things have gone wrong for many of them and they have been bullied out of football clubs. They have not had the support that they would have liked to have had, for young players. I think it is so important. There are so many intangibles—that is the point I am trying to make—at all levels of the game, so those that get to the very top and stay there, they are very dedicated, they are very focused, they make a colossal contribution back into the community. They set up their own foundations and they have a tremendous consciousness about what is going on in this country.

I think that is exemplified if you look at the PFA and the 4,000 existing members that they have but also about 50,000 that they serve outside of the game and over the last two years over 25,000 community visits all over the country in a number of areas: crime, drugs, anti-racism. So, everyone wants to talk about the salaries, and I understand that, but equally, as well, you have to look at the other areas where they make a commensurate positive contribution, too.

Gordon Taylor: The PFA doesn't work just for what is good for players and see a club go out of existence. We are one body that has been determined to try and keep clubs alive. We are obviously conscious that they not only employ our members but many other people as well. Everybody talks about salary caps and it is about wages of the players. The game is about the players, but a club like Manchester United manages to attract some of the finest players in the world and yet, of course, keeps its salary levels to below some 50% to 55% , I believe, and manages to manage perfectly adequately.

Q124 Mr Watson: Can I ask about the governance arrangements to provide new protections for the pressures that modern players find themselves under? They are not just on the back pages for what they do on the football pitch. They are on the front pages for their private lives. They are in the financial pages for their financial arrangements. Do you think the current governance arrangements in football adequately protect players and is there more that can be done to give them support?

Gordon Taylor: What we are finding in this day and age is probably young men who are a little bit cocooned. You have heard about youth development and a club can approach a youngster virtually in the cradle now, from eight and nine and all the way up to 16 before they can join a club full time. That worries me a great deal because there are so many things that can happen with growing up even before they have reached adolescence.

As Paul said, all I know is that of the 600 who join at age 16 we will lose 500 by the time they are 21. Those youngsters are disillusioned, their parents are disillusioned; they need picking up, they need looking for alternative careers. We provide that but if there is going to be a lot more emphasis and money spent on these nine, 10 and 11-year-olds and the 16-year-olds, we want to see a better success rate, otherwise there has to be a much better exit route, that these youngsters are guaranteed a career outside of football as well, otherwise there is going to be a big wastage and a great deal of disillusionment.

In cocooning them, every youngster they get is told he is going to be the next John Terry, David Beckham, Wayne Rooney. Their parents are convinced and, of course, life does not work like that. It is a good thing but the PFA has taken on the responsibility of educating them, together with the Football League and the Premier League. Life skills--the more money these youngsters have, they can have problems, addictive problems. So, it is life skills. It is preparing them psychologically. There is a lot more effort given to psychological care of these youngsters and the pressure on them. I am not saying they would swap it, it is a great life. But exactly what you say, it needs a lifestyle programme and clubs need to accept that if they are going to spend thousands of hours on trying to make them footballers, you can't succeed with every one and there has to be a great deal of time and effort on trying to keep them as human beings and contributing, because football is such a short career even if they make the grade.

Q125 Mr Watson: How many of your members have told you they thought they had their phone hacked?

Gordon Taylor: Right, that is a bit of a switch. I'm not sure what that has to do with the governance of football but the fact of it is that the media, as you know full well, this Committee, is interested in all the lives of footballers because they are the new celebrities. I mentioned film stars and pop stars, but probably footballers and the likes of David Beckham and his wife get on the front page as much as the back page. Let's just say I am aware of very intensive media scrutiny of them, as you will see when people are encouraged to tell tales about footballers and are offered payment for it. It is part of that life skills programme that we try and give to our youngsters to make them aware of what is happening away from the pitch on a 24-hour basis, to be very mindful and to be careful.

Q126 Mr Watson: So the responsibility to protect privacy or for players to conduct themselves and take extra precautions to protect their privacy would lie with the PFA or with the—

Gordon Taylor: No, the PFA can't be responsible for everything. Every individual is responsible for himself to some extent. But there are parents there, there is family there, there is his club there. The club and the manager are a big influence because they are at that club every day, and a lot of clubs do. Some people say footballers don't associate with the supporters like they used to and it is perhaps not surprising because they feel quite exposed and vulnerable because of that stronger world from the media and the stronger pressure.

Q127 Mr Watson: Have you given guidance to members on how to guard against phone hacking, or would that be a club responsibility?

Gordon Taylor: Well, both really. It's both. It is a responsibility of the club and the individual, any advisers he has in lawyers, and also from the PFA as well, yes.

Q128 Mr Watson: Did David Beckham have his phone hacked?

Gordon Taylor: You have to ask David Beckham that.

Mr Watson: Has he told you that?

Chair: I think we are going to move on. This is not an inquiry about phone hacking

Mr Watson: No, it is about governance of football and that we need to protect the privacy of footballers.

Gordon Taylor: Certainly when he was so-called "kidnapped" the cameras were there, weren't they, so—

Mr Watson: So it is possible?

Gordon Taylor: Everything is possible these days with the technology we have, isn't it?

Q129 Jim Sheridan: I apologise because I will have to leave soon as I am meeting the Speaker. Gordon, you referred in your opening comments to the question of racism in the game in the 1980s and 1990s. I would like to put on record my recognition for what Paul did in Scottish football in trying to address the question of racism in football. It is not perfect but a million times better than where we were before Paul came. Perhaps this is a naive question, Gordon, but millions of workers depend on trade unions recognising or negotiating on their behalf. What is the difference between footballers simply because of the money they earn? Just finally, I know that you said that the major grounds are full and no one is twisting their arms to go in there but I would argue that there are an awful lot of people at a lower income level that are excluded from the game, particularly the top game, because of the prices.

Gordon Taylor: I agree with you and I get very worried at the priority of professional sport. We need supporters and we need them live and if our grounds are not full there is nothing worse coming over on television. When Italy had a situation where it had individual clubs doing individual TV deals and they showed so many live games virtually of every club, that then affected the attendances and to see big empty spaces, suddenly television is not quite as interested, neither is the armchair supporter. The atmosphere is not there. That is the one of the areas with our community programmes that we have tried to make sure they look to accommodate the unemployed, particularly those less fortunate members of a local community—it is not just a business but within that business concept and knowing they have to break even—to try and make sure the stadiums are full and make sure we educate a generation of youngsters, if they are not playing the game, to at least be watching the game in the future, otherwise we have no divine right to be the major spectator sport or participant sport. So I do agree with that.

Jim Sheridan: I think at a previous session we were told that the—

Gordon Taylor: Sorry, a lot of clubs are mindful as well, to be fair, and will give special reduced prices for different graded games.

Q130 Jim Sheridan: We were informed that not many young people come through the gates—I think the average age was 45 years or something.

Gordon Taylor: I think part of the price of television is the fact that everybody could rely on a 3 o'clock kick-off on a Saturday afternoon or perhaps one midweek game and that has gone. So it is a lot more difficult.

Q131 Jim Sheridan: Why can't trade unions do what the agents already do and so keep the money in football?

Gordon Taylor: I am all in favour of that. The only thing is sometimes when we have been asked by parents—and we have handled many top-quality stars of today when they were youngsters—they get door-stepped and they get offered things that the PFA couldn't do because it would not be within the rules, which is a bit in line with what you were saying with your experiences in Scotland, I think.

Q132 Paul Farrelly: I just have a couple of questions going back to agents and who makes what out of player transfers is as important for the reputation of the game from the infamous quote, "Cloughy likes a bung". Paul, as a player, do you feel uncomfortable that agents can, without disclosing it, take a cut from both sides of the deal? Would you, as a player, feel that they are necessarily acting in your best interests or their own in that situation?

Paul Elliott: It is an interesting question. I think you can either look to yourself personally, because during my own career I always negotiated my own transfers because I made it my business to get myself educated and understand about the business. Therefore, I was always confident enough to represent myself. So, in that scenario, from my perspective it is hypothetical.

Q133 Chair: Is that still done or would all Premier League players now essentially use agents?

Paul Elliott: I think there are a lot of players who obviously have agents and I think there are a lot of very good agents there that serve their clients very well indeed. Equally, I think it is reasonable to say that there are players there that don't necessarily need an agent but would have an accountant or a lawyer, because obviously they are very intrinsic skills that are very important. Possibly a player would not understand the legality of a situation but certainly when it comes to understanding their own values and what they are worth, I think most players are very comfortable to articulate that and don't necessarily need a third party to do that.

Q134 Paul Farrelly: Are there any requirements at the moment for an agent to disclose to a player what, if anything, he is getting from the other side?

Gordon Taylor: Yes, there were. That is what I was referring to. We have made some progress and it was that they needed to give full information of the different offers they had had from different clubs: the offers made, the wages along with the transfer fee. That is when we felt we were making some progress, but now it has gone back a little bit. Having said that, in this country we felt we were making progress, so whether we could do that on our own remains to be seen. If we do it on our own and other countries don't do it then it will be said to be impossible because of the nature of international transfers. But the points you make are very valid, how you can properly act for both the club and the player in the same transaction, but, of course, that has happened and agents have been paid by both parties.

Q135 Paul Farrelly: I am asking because this is about governance and governance is all to do with reputation in the game. In the City of London it is frowned on but not necessarily unusual for people to take fees from both sides, but the Takeover Code, for instance, will enforce disclosure. The Guy Hands case with EMI in court recently, most of the controversy was about taking a cut from both sides. But do you think disclosure is enough?

Gordon Taylor: I think transparency and disclosure is enough, and from that point of view that is the case with most things in business.

Q136 Paul Farrelly: What about penalties then to make it worthwhile people being truthful in their disclosures?

Gordon Taylor: That needs a good compliance unit. Everybody said, "Why don't you monitor it at the PFA" and this and that, but it is such a world. It involves almost a fulltime squad. The banks obviously got in big trouble, didn't they? There was supposed to be the Financial Services Authority. They were fulltime. So you definitely need a fulltime unit looking at the activities of agents. But, as I say, it is mainly at times of re-signing contracts or a transfer from a club. Part of the problem that FIFA has not grasped the nettle of is there was a great uncertainty over the validity of transfer fees. This was part of the discussions.

We were involved with the Worldwide Players Organisation, FIFPro when Andy Williamson referred to the European Commission and FIFA and transfer fees and the fact that it is quite unusual for a player to go for more than the value of his contract, and that happened. So, as a result there is a great opportunity for corruption with transfer fees and that is probably the time when there should be the most transparency, particularly with the registration of a player at a club in certain countries in South America, for example, whereby the value of a player, his registration, is owned by a third party who is prepared to put some money into the club on a short-term basis. But, of course, when the player's value increases, that value is all down to this third party. In that instance, in the Tevez and Mascherano case, it looked bad from the start and it never got any better. I think that is one area where the game needs to be properly governed because, you are quite right, the transfer system is one that needs to be transparent and illuminated because the opportunities for corruption with the amounts of money involved are very big.

Q137 Alan Keen: I just want to make a point. I think we were in danger before of people comparing footballers with bankers. It is not the players who decide how much money they are paid; it is the club who have their contracts. The bankers are using, in many cases, our money to pay themselves. So there is no comparison to players.

Gordon Taylor: Well, especially now we own quite a few of them, don't we?

Alan Keen: Yes, but we are still not making decisions, the players are not making decisions—

Gordon Taylor: No, exactly; that is what I said. They don't hold a gun to the club's head and if they did, if they don't have the money they shouldn't be paying it.

Alan Keen: But the bankers are paying themselves. They are making the decisions.

Gordon Taylor: Yes.

Q138 Alan Keen: It is difficult enough for a committee like this to talk about regulation even within this country, so it is even more difficult to talk about the international game as a whole. While we have the opportunity to have you in front of us, I just wondered how you feel. You say you feel a great responsibility to players throughout the world. We are told all the time how proud we should be, and we are, of the Premier League but how much damage are we doing to the game of football internationally by attracting the very best players here? When FIFA made the decision to place the World Cup in Russia they obviously are trying to do that, and set aside any dubious reasons they may have, because they want to extend the game internationally. What concerns do you have, both of you, as looking after players in this country, about the gravitation of the wealth that affects the international game?

Gordon Taylor: Yes, I understand. I think it would have been better if FIFA had come out and said. They would have saved us a lot of money if they had said, "The purpose of holding a World Cup is to try and take it to countries that have never had it", albeit I think we've done enough since 1966 to justify holding it when you look at the efforts we have made with our stadiums, our safety, our diversity programmes.

Having been president of FIFPro, the international players' association, sometimes the feelings and the perception of the culture and characteristics from different countries—as you will be aware on your international visits—is quite true and I think the fact is there is a great deal of envy and perhaps jealousy at the success of the Premier League, as was witnessed when you saw the backlash with wanting to take the 39th game to the rest of the world. FIFA gets its money from international games, it needs a healthy World Cup and it will say a lot of things but one of them is, "We have far too many games" and then organises its own World Club Cup competition because that is what they have never been able to match, that is why they are very much involved in international football.

It is natural for FIFA to want that, in any sport it is natural to want it, and as an administrator it is not good for there to be a monopoly on success by fewer and fewer clubs and fewer and fewer countries. So the very fact that some of these countries are losing their players to here makes it very cosmopolitan here and with foreign owners as well it means they are not necessarily going to work for what is best for English international football because their first priority is their clubs. That is one of the problems with the Football Association because, while it took us 100 years to get a seat on the council of the FA, it is run by the amateur game and the professional game and there is no accommodation whatsoever on its main board for either the PFA, the LMA—the League managers with their experience—or the supporters' organisation and that, I find, is quite offensive when you think of the initiatives we have brought into the game that I have talked about and that you are well aware of.

The fact is that every other country in the world of football actively encourages its former players who are prepared to stay in the administration of the game. You look at France, Spain, Germany; they have been very actively involved and they have been a force for good. From our point of view that has not happened and that is one area where we can learn a great deal from the rest of the world. The world perhaps has been looking at us and seeing how cosmopolitan we are. We have more players for World Cups in our league than any other country in the world. That is really going to be hard and what I find is every sport has a duty to encourage its youngsters to aspire to become that next generation of top class footballers but the squad of players available for England has been getting smaller and smaller.

In the same way that the Premier League now are saying the more hours spent on learning how to become a footballer, you'll become a better footballer, the same as you would a musician or what have you, we are having more and more youngsters and players from abroad and less and less players qualified for England. It must impact on the success of our international team. That has been one of the disappointments of my life in football because I love England to do well. I think there is no reason why you can't have a healthy club competition, as we do, and have success for England as well and much more proportionate, considering we are the wealthiest football country in the world.

Q139 Alan Keen: One final question. You mentioned the LMA and you have made great strides towards trying to create a career structure in the game for former players. We all understand a new manager wanting to bring in his right-hand man, that is the coach, when he gets a new job and push the others out, and sometimes they bring in a team of six or seven when they come in. Can you say more about how along with the LMA you are trying to do that and the attitudes?

Gordon Taylor: I feel it is sad when suddenly a club's results mean that staff depend week to week on those results. I was hoping that with a good youth development programme all the staff could stay in place but the fact is, of course, they move the manager out along with his staff these days and I think that is unfortunate for consistency. Another area is, no matter how much we talk of investment in youth development and academies and centres of excellence, the fact is between 18 and 21 there is a glass ceiling that they can't break through and they won't break through unless there is some security of tenure by managers because their career depends on one week's results sometimes. So they never have the courage or the necessary patience, which is understandable, to put a youngster in, because a youngster needs to play for a couple of games, take him out, bring him back in for more, take him out, when they are getting inundated with agents—this is one of the good things of the transfer windows—to buy a ready-made international player from wherever in the world.

These are big issues for clubs and managers. Clubs don't always respect management as it should be respected, albeit the LMA have tried to get qualifications being necessary for the job. Compensation, it becomes very unseemly when suddenly a chap is thrust out of work just because—you have seen what has happened at West Brom and a good young manager who has brought that club up and suddenly hit a bad spell and there is suddenly no faith and they're out. That is not just West Brom of course; you name a club, that has been the situation, but there needs to be a recognition of football management as a proper skill and a profession.

Alex Ferguson wouldn't have been as successful as he has been if his board at the time had been as shortsighted as some of the other clubs. I can remember Howard Kendall, he was on the brink as well and then they had some faith in him and he won the League. You just find those managers, given the chance, will inevitably produce, and it is like that with youngsters. We're getting into a world where everybody wants instant success and it is just not possible. Success needs time and football is as good an example of that as anywhere else.

Q140 Dr Coffey: On players' wages and the financing of clubs, in a different industry actors are starting to take a stake in a film and, if you like, have a lower salary and benefit in the financial success. You were talking earlier about loyalty. Players are perceived to be sometimes disloyal; they can be a hero one week, a Judas the following week. Is there a role for perhaps part of a player's remuneration to be related to the financial success of a club and having shares?

Gordon Taylor: Very much so. Paul made the point that it is not just players who seem to want to go. Often they are encouraged to want to go by other clubs and often they are encouraged to want to go by the manager who suddenly doesn't pick them. I had one youngster who has not had a game for 12 months with a premiership club—the squad is that big and they're not getting games—and that is just not easy. What you are talking about is there, of course but, on the other hand, that is why the bookies are rich, you can't predict sport and you don't know whether you're going to win or whether you're going to lose. But, on the other hand, it is a full-time commitment and giving it a full-time commitment that needs time, that needs energy. They are encouraged to marry young; they have mortgages; they need a basic wage and they need to plan for the future. But, in answer to your question, they get extra money for winning things and if they get relegated we are not averse—and we believe it should happen and now it is probably not as bad because of the parachute payments, but when the gap was so big between the Premier League and the rest we felt it had to be the case that that contract had to be reduced because of the club's income being reduced. Now the same situation will arise if a club gets relegated from the Championship to division 1; the drop in its income from solidarity payments and television will be considerable. But really that is up to the clubs; it is up to anybody. I don't think anybody minds paying out if money is coming in; what is hard is paying out more money if you've failed. It is just like Mr Micawber and Charles Dickens: if your income is comfortably matching your expenditure, okay, and if not you know there is a problem. I know maybe some people would say debt is okay, you wouldn't get debt if you weren't in a strong position, and football does survive sort of on a wing and a prayer because the very nature of sport is it is speculative.

As an administrator you want everybody in every league to feel they have a chance of winning it but sometimes clubs do need to be controlled for their own good because they do get carried away. A bit like Toad of Toad Hall, they think they're going to win and they spend and suddenly they're in big trouble. That is why it needs a strong Football League and a strong Premier League to say, "Your spending is getting out of line; you are not allowed to take on any more players".

In the temporary absence of the Chairman, Mr Tom Watson was called to the Chair for the remainder of the meeting.

Q141 Dr Coffey: I was going to ask Mr Elliott from a player's perspective—you just said the role of the PFA—would that be attractive or would it be risky?

Paul Elliott: I think if you look at the current ratio generally across the board of turnover a large proportion of it is obviously made up in salaries and I think there is a genuine, legitimate case for performance-related structures. Obviously a player has to have a basic wage but I think, obviously subject to negotiation, there are grounds to have a more rounded, inclusive, performance-related structure that supplements that income and runs alongside that. However, I think you have to balance that against the player, the stature of the player, because ultimately I think you have to understand when we are talking about contracts and we are talking about transfer fees, signing-on fees, football is a supply and demand business and you have to accept that clubs are saying if they want the best player they have to pay the best salaries. I think as an ex-player, if I was discussing a potential contract with a club, I know my own worth and I'm doing my optimum and my level best to optimise my value, that is my right. Obviously looking at it now, everybody wants to be part of football at all levels. I am involved in a game at a number of levels from grassroots to the very top level and you have got young parents sitting around all wanting them to be the best but the reality is over 95%, 96% don't even make the grade. I think it is very important to highlight that point so I certainly would be favouring it.

If I could slightly backtrack to a point that Alan made, particularly about the World Cup and to reaffirm a point that Gordon made. I was very fortunate to sit on the board of the World Cup bid as a non-executive director, and that was predominantly because of Gordon and the influence that Gordon had in pushing and promoting myself as a former player who has served the game at various levels from grassroots to the top of the tree. It is important to note in this country that we spent a considerable amount of money on that, the best part of, for argument's sake, £18.5 million if my maths is correct. What was clearly evident, there was a number of reasons why we didn't host the World Cup, politically and otherwise, but I think also as well the process, there wasn't enough transparency in the whole process from the outset, and if we are clear on that then obviously we can make a conscious decision as a board: do we invest in that money or do we say, "No, we're not going to have a real genuine legitimate opportunity. We invest that money back into grassroots, back into CSR, back into women and girls' football, back into the disabled, back into this country in terms of growing our own and our facilities, assisting Trevor Brooking and his age-appropriate coaching"? I'd be happier to have spent the money doing that but it obviously wasn't the case; we weren't aware of that. I think thereafter we always said we would always be FIFA's potentially best commercial partner because of the stakeholders in this game and the Premier League with the FA were very intrinsic to that.

I think that with the foreign players, one of the fantastic things that they provide in this country is for young people to emulate their skills, to see them as role models, to go into stadiums, because of the emphasis that they have on young people. As an ex-player, one of the things that I'm very passionate about has always been about players. One of the main reasons, I think, why we were unsuccessful in the World Cup was because there weren't enough footballing people being part of that process. Michel Platini is a great, great footballing man and on more than one occasion he said, "I want to talk football with footballing people." I think it is very important to highlight that point where players are very, very, very influential.

The players within the PFA have a significant role to play within the structure of professional football to move professional football forward. We have a very intangible balance at the moment between serving the national team; we have looked at where the national team is on the global level, we have looked now where we are post-2018 and there is a lot of rebuilding work to be done among all the stakeholders in this country, because one of the unique factors is the individual stakeholders, there are so many. What we need to adopt is a more collaborative process between all of the stakeholders to ensure that we can challenge and deal with these issues and, very important, reinstate our reputation, not just nationally, which we need to do, but I think internationally with FIFA and with UEFA because there are clearly fractured historical relationships. I think the structure here that we are talking about—the reform of the governance and the structure in the game—is a gilt-edged opportunity to look at ourselves as individually as stakeholders within the Government, within the PFA, within the Premier League, within the FA.

I think we have a very good chairman in David Bernstein who has come in and he has shown tremendous leadership very early on. He is a believer in equality, he is a believer in diversity, and I think equality and diversity has got to be glaringly intrinsic to the future of this football, in this game, in this structure within the FA, because if you look at the game every Saturday, close to 24% to 25% of the players in the game are all from the BME, black and minority ethnic. But where is that visibility in the boardrooms? Where is that in senior management? Where is that in football administration? Where is that at academy levels? Where are the women and the girls? Where are the people that sit in stadiums week in and week out: the disabled, women and girls, footballers, the people who are big contributors into football? Where is their presence on the boards, the councils and the committees?

They are the defining issues. I think it is very important for the FA to modernise and be fit for purpose for the 21st century. The game has got to be far more inclusive, far more diverse and far more welcoming, because these are the key stakeholders and there is room for everybody. I think it is important that we recognise that and have what I call real leadership, collective leadership, by all the stakeholders to ensure that we are fit for purpose for the 21st century, inclusive of all the parties that I've just mentioned.

Q142 Paul Farrelly: Gordon, last week we had a picture painted for us of Dave Richards, Sir David Richards—

Gordon Taylor: Yes, Paul, just for one second could I quickly say that with reference to Alan and yourself, one of the areas where with regard to youngsters getting a chance and regarding what is sometimes envy of our Premier League, with regard to the youngsters coming through and giving them opportunities, sometimes we need rules. Sometimes they will be challenged by Europe, but one good new rule has been the home-grown player rule, irrespective of nationality, to have at least eight out of 25 in your squad. I think that needs to go further and we should have at least three starting on the pitch and if that rule is applied throughout Europe it gives a chance to our next generation to have a chance. I think that is an important rule that we need your support on.

Paul Farrelly: On governance at the top and the FA, the picture was painted of the day before an FA board meeting Sir David Richards and the Football League rep, they all meet to agree the line. Come the FA board meeting, the representatives of the amateur game won't vote against them if they disagree because they know where their bread is buttered, and that leaves the chairman and chief executive, if they disagree, without a paddle between them. Hence, there has been the recommendation, which the Football League in its evidence has supported, of two independent directors coming in on the FA board. That begs the question of how are they appointed and who are they appointed by and what role organisations such as your own might have in that appointment. But you have advanced a different model. You have talked about at least representation from sectional interests on the FA board and you have mentioned at least three: the LMA, the PFA and the supporters' trusts. What would you like to see happen?

Gordon Taylor: I feel very strongly about that because the Football Association is supposed to represent all sectors in the game. The game of football, if nothing else, the players have to be part of that game, it is about playing the game, and from that point of view I believe also the record of the PFA in introducing initiatives. In 1994 we didn't qualify for the World Cup; we found we had just not been getting enough coaches to coach the next generation. We developed our own department of coaches. Our department at the PFA of coach educators is higher than the FA's. In the 1980s, we developed the initiative of saying to clubs, "You can't just be somewhere where people will come if you're winning and won't come as much if you're losing. You need to be a focal point of community activities." We developed about the behaviour, about the anti-racism. We have had good ideas that other bodies have taken on board. We're probably a strong association because we have been kept out of it but it doesn't make it right, if you know what I mean. So I say, yes.

The FA is very big insomuch as amateur and professional, I suppose it is like having your local post office bank with Barclays Global, but the key factor in there are the players and the mangers. We have managers who are not mad, they are very dedicated and they have a lot to offer the game. The football supporters I talked about in the 1980s got themselves organised. As you will know from the background, they have combined together. They are trying to have a voice. They are not lunatics who are going to go to a boardroom and say, "We demand this, we demand that"; they just care about the clubs.

But if the FA can't accommodate—quite seriously, after 100 years, they gave the PFA a position on the council. I go because I respect that but I might as well be, to be fair, a little bit of a nodding dog in the back of the car because there's an executive committee and there's a professional game board and we're not on it. If you think we must have an independent person, well, that would be good if that independent person were somebody like Paul or the trustees we have, your Chris Powells, your Garth Crooks, loads of lads.

But I think at least bearing in mind the amateur game is there, the Football League is there and the Premier League is there, well, where is the PFA, where is the LMA and where are the supporters? It is so glaringly obvious it hits you in the eye. We are so archaic in this country, not just in football but in other sports, and I said to you sometimes we think we're the best in the world and hopefully sometimes we will be, but when you wonder what happened in FIFA you look at every other body. I go to Wembley because I support every game. Their chairman inevitably gets up to say, "Thank you for having us" and he's inevitably a former player who has wanted to stay involved in the game. Everywhere I go it is a former player involved in administration because they care about the game and care about the future. I'm not saying the volunteers don't but I'm saying at least let somebody who has put their life and soul and body on the line for the game be involved in the administration. We are blatantly ignored. From that point of view it is so obvious, if you look for an independent person who won't have a fraction of some of the experience of the people sat behind me.

Q143 Paul Farrelly: Okay, Gordon, it is very good of you to mention an old Stoke City legend, Garth Crooks, but just to use an analogy, yes or no. To use an analogy, is your position on the future governance akin to saying that the unions are on the supervisory boards of German companies, why shouldn't the unions be on the supervisory board of the Football Association, of the football game in the UK?

Gordon Taylor: We'll still work for the good of the game but I can't believe why we are not inside there, as we are with the League and the Premier League, working for what is good with the Football Association. It's just so obvious. They need the players for their cup competition and for England, and it's just so obvious, it's so self-evident, to worry about which independent people they should have when they could have people from those sectors of the game and for once claim to be at least all inclusive. By the way, all those bodies then would have a collective responsibility to make the decisions work but those decisions would be better decisions because they would encapsulate a lot more knowledge in making those decisions.

Q144 Damian Collins: I just want to touch on the football creditor rule which, as you know, we covered in the last session, and ask first Paul Elliott, as someone who has negotiated your own transfers, if the football creditor rule didn't exist and therefore the club went into administration, players might have a greater financial risk because they might lose salaries and monies that are owed to them. Do you think players would be much more careful about the clubs that they sign for and whether the wage offers that are made, attractive though they may be, are realistic and affordable by their club?

Paul Elliott: I think there would be general consideration financially but I think first and foremost, as I speak as a former player, I would look at the club, I would look at the people inside that club, I would look at the aspirational levels of the club, whether that is consistent with my own aspiration, and then thereafter obviously you look at the financial consideration to the club because I have a family, I have other people, I have dependants that I have to look after. But that wouldn't be uppermost in my thinking because first and foremost I'm a professional footballer, I have very big aspirational levels. You want to play in the best stadium, you want to optimise and maximise your skills with the best players in the best stadiums, playing around the country, nationally and internationally. I personally would certainly look at it from a very professional-minded aspect first. Thereafter, obviously I'd give consideration to the financial but ultimately there is a legislation. You have got to think in terms of business, what is the fallout. If you're not going to get paid, then there is legislation that protects the players where the players can go on a free transfer. That is your worst situation but I have never, fortunately, had to think like that or be associated with a club that has obviously been mismanaged in an inappropriate manner. But first and foremost I would certainly look at it from a professional perspective.

Q145 Damian Collins: Yes, because the football creditor rule is there to protect the interests of players and other football clubs in that regard and a lot of what we have talked about today—the higher ticket prices at the grounds, the difficult financial situation of lots of football clubs, the role of television in the game—all of that is linked to money and most of that money is going to players. The machinery of football has created huge amounts of cash and that cash is being used to pay players.

Paul Elliott: Yes, and ultimately, if it wasn't for players there wouldn't be spectators inside the ground, that is the bottom line, and the players are the highest form of entertainers and we are in a supply and demand business. If I'm a player and a club is offering me something that I think is commensurate to my value—whether it be £100,000 or £50,000, whatever the case is—I wouldn't say no to that. If you were a player you would not say no to the same.

Q146 Damian Collins: I think it would be wrong if football was being run for the benefit of the directors of football clubs.

Gordon Taylor: May I just say, Damian, I remember there was a time when there was a limit on players' wages, up to 1961 since about 1888. There was massive crowds, multi-millions, 20, 30, 40 million; we didn't see any great investment in stadiums or wonder where the money went then, from that point of view.

Q147 Damian Collins: The purpose of the question is not to say we should go back to that at all. The question is, to what extent do footballers themselves share the risks that other people in the game do when they are the beneficiaries of the way the wage system works?

Gordon Taylor: Footballers would have to share that risk if you decided there couldn't be a football creditor rule, but what we would do, there would be no player would ever go to that club again. If it reconstructed, it would be at the bottom. The supporters would be absolutely aghast. There would be a terrible loss. Most of those players at that club would walk out and get another club the next day but those supporters wouldn't have a club to support and all the contingent work that is created by that club, with the caterers, if I go through it all it's almost like match funding, if you like. There would be a massive loss and it isn't such a bad rule.

Reference has been made to the St John Ambulance not getting paid. That I can't believe because you see these days they employ their own people. If St John Ambulance needed funding I can assure you there is enough millions going from the PFA and Government and from the Premier League to charities that any local St John Ambulance Brigade need not worry about its future.

Mr Watson: Thank you. Gentlemen, on behalf of all the Committee members can I thank you for a very entertaining session. Gordon, you shared great insight. Paul, can I also say on behalf of the constituents of mine in the north-east part of my constituency in West Bromwich, particularly a Mr Adam Smith, I have to tell you you are a living legend and I have to say hello to you. So, thank you very much.

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